The Education of Joe Sitt

By Mr. Sitt’s telling, this odyssey started back at the beginning of the administration in 2002. Mr. Recchia approached him, Mr. Sitt said, as part of the Councilman’s search to find a developer willing to try to invest in the area. Coney Island has been on a gradual decline since its heyday in the early 20th century and is now reduced mostly to vacant lots that are zoned for amusements.

“He had recommended that I proceed and go ahead to purchase property,” Mr. Sitt said. “At his recommendation, I proceeded.”

So Mr. Sitt cobbled up a collection of lots and old properties at Coney—over $100 million worth by 2007—with plans for a giant, Vegas-style new hub that would attract national brands and resorts: Glitzy hotels, apartments, indoor amusements, theaters, retail; outdoor rides. Regardless of the result, he says he “woke up Coney Island” with the new attention.

The city, which would need to approve any new development, generally gave a nod of to Mr. Sitt’s efforts, as the administration, too, wanted to redevelop the area.

The problem, from the administration’s perspective, came with the details. City officials, particularly the notoriously detail-obsessed Department of City Planning director Amanda Burden, took a hard line against Mr. Sitt’s plans to build apartments in the main amusement area. From there, greater chasms became apparent and Bloomberg officials became increasingly worried that Mr. Sitt was nothing more than a speculator who would flip the property—he had no large-scale development experience in the city, after all, and had already flipped some property at Coney Island for a very healthy profit.

Mr. Sitt seemed to go to lengths to try to counter this impression—to show that his firm was legitimate and qualified. He brought on an endless roster of consultants and architects to draw up the plans and designs and sell the administration on them (a few names of those who have been on the Thor payroll: Thinkwell, Callison, Ehrenkrantz Eckstut & Kuhn, The Marino Organization, Wachtel & Masyr, Kramer Levin, Mercury Public Affairs, Capalino + Company; Knickerbocker SKD).

At one meeting at his 39th Street office, two people in attendance recounted, Mr. Sitt shuttled a group of city officials from one Thor staff member to the next. The group walked into successive offices as Mr. Sitt got each staffer to recite their resume and job at the firm in an apparent effort to flaunt their qualifications.

Throughout the first half of 2007, officials from the city’s Economic Development Corporation became increasingly frustrated trying to nail Mr. Sitt down on the details of his plans. He tended to speak broadly, city officials have said, presenting plans with numbers that simply didn’t add up. The city felt misled repeatedly on issues such as the existence of residential in the amusement district (he changed it to timeshares) and the sizes of retail and hotel rooms. (Mr. Sitt denies dishonesty in the process.)

From Mr. Sitt’s perspective, he has told numerous people that he felt the Bloomberg administration shifted course—first by going along with his plans and then, as jobs shuffled between city officials and the issue became higher profile, by refusing to work with him. He has told others that he thought he had a basic deal with the Bloomberg administration in 2006 to develop with some residential. City officials deny this, but regardless, by the time the plans became detailed and vetted by others in the administration, the reaction was a negative one, and officials felt Mr. Sitt overpaid for his land.

The two sides fought—in meetings and in the press—and, by summer 2007, the administration, led by then-Deputy Mayor Dan Doctoroff, changed direction, deciding to remove him from the central amusement area entirely with a land swap. Should he not like that plan—and he didn’t—a buyout was offered.

Since, little has changed, at least in the larger scheme of things. The administration has made countless offers to Mr. Sitt to buy a portion of his land or all of his property, with a ceiling of $105 million being offered (Mr. Sitt wants all his costs back, a minimum of $144 million), but the sides have remained unable to agree on a deal.

This is, according to people who have worked with him, the way he has acted on this project: he is difficult to pin down to specifics, and pushes decisions to the wire.

“The issue for us,” said a city official, “has been that every time we try to make a deal with Joe—as soon as you say yes to Joe, he changes his mind and wants to go somewhere else”

 

YET, GOING INTO THE final days and weeks before a City Council vote, Mr. Sitt has a strong hand. His greatest asset: the support he has won thus far from key Council members and, to some extent, the state Legislature. Without such support, the Bloomberg administration could push the plan through, and eventually push him out through eminent domain (an act that would be made easier given that the city wants to designate his property as parkland).