The tone of a City Council hearing last week on Mayor Bloomberg’s major Coney Island redevelopment plans was music to Joe Sitt’s ears.
The red-carpeted Council chambers in City Hall quickly became an interrogation room as successive Council Members took their turns bellowing aggressive questions and assertions at a trio of Bloomberg economic development officials.
Why not rule out the use of eminent domain? Where is the needed government funding going to come from? Why designate a private landowner’s property as parkland? Doesn’t the city government have a bad track record redeveloping Coney Island? Why use city money to bus in supporters to testify in favor of the city’s plan?
It just so happens that each of these questions had been urged by Mr. Sitt, the private landowner who has bought up the better part of the central amusement area in the onetime entertainment hub and who is now vigorously fighting key elements of the Bloomberg plan.
“I was pleased,” Mr. Sitt said. “It was the first honest forum on the future of Coney Island that’s ever been held, where every side and every perspective had to be upfront and candid.”
A previously low-profile and relatively little-known landlord, Mr. Sitt now finds himself planted squarely in Mayor Bloomberg’s path to victory on one of his top economic development priorities–in an election year, no less. It’s a standoff that is rapidly headed toward a final round in coming weeks (the City Council must deliver a thumbs up or down on the mayor’s plan by early August).
The city’s vision for the area imagines new rides, hotels and retail in the main amusement area, and a large swath of parkland that would be city-owned—land that Mr. Sitt now, in large part, controls.
And for two years now, city economic development officials have been desperately attempting to extricate him from the amusement district, but throughout, the Brooklyn native has proved astoundingly obdurate, resisting overtures, followed by demands, to vacate in an attempt to strike a better deal. What is remarkable, thus far, is that he is still in place and dominating discussion, displaying an ability to beat back the Bloomberg steamroller politically, as, at least for now, he has the ear of local Councilman Domenic Recchia, whose support is considered essential for the plan’s passage in the Council.
Now, as the Bloomberg administration is averse to any sort of defeat on its Coney plans, the question for Mr. Sitt becomes how much more fight does he have, or what kind of deal can he strike to make an exit?
THE CHAIRMAN OF THOR Equities, which owns and has redeveloped retail nationwide, Mr. Sitt, 45, doesn’t come across as the typical New York landlord of a multi-generational real estate dynasty that would typically undertake one of the city’s major development projects. His background is in retail for low-income areas, and he has no large, ground-up developments to his name in New York. Unlike many of the clubby real estate industry’s top names, he is a first-generation large-scale landlord. He grew up in South Brooklyn and carries a thick accent to show it. He has short black hair, an average frame, and frequently puts on a teeth-baring smile that overtakes his face, adding to his salesman-like charm.
His involvement in Coney Island has been a nauseating up-and-down ride filled with the closure of numerous attractions at Coney Island including the signature Astroland, a public relations war, the creation of a less-than-popular flea market where rides once stood, and a rare attempt by the city to remove the private landlord (not usually the course of action for the developer-friendly Bloomberg administration). He is reviled by organized amusement supporters trying to preserve the freakish nature of Coney Island and his fight with the city has dominated discussion on the topic, obscuring other issues that are perhaps more consequential in the long run (for one: how big should the amusement area be?).
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).
At the center of the standoff is Mr. Recchia, the colorful local councilman who has backed Mr. Sitt numerous times throughout the years of discussions, unabashedly presenting himself as close to the developer. His main goal seems to be a deal between Mr. Sitt and the administration that will take the landlord out without leaving him bitter. Politically, a deal would allow him to show progress to constituents on his key issue, without a protracted legal battle obscuring a victory.
“He was there when nobody else wanted to be there,” Mr. Recchia said of Mr. Sitt. “He’s the one that said, ‘Alright, I’ll put the money up.’”
He seems frustrated that the city’s offer has not led to a deal with its price that Mr. Sitt says is far too low.
“You have to keep an open mind – and look what they did in Willets Point and look what they spend money on,” he said, referencing the hundreds of millions devoted toward the Willets Point development. “You know what? We’re going to spend what we need to spend to get this project done.”
And throughout all of this, Mr. Recchia has had the backing of an important friend, Councilman Simcha Felder. The Borough Park councilman is an administration ally and has worked mostly behind the scenes, particularly in the efforts to reach a deal late last year, joining Mr. Recchia in meetings with top city officials as they urged the city to make an offer (they ultimately resulted in more deadlock).
The administration’s line on the issue has been the same for months now: it has an offer on the table and it isn’t offering more money to reward a speculator who overplayed his hand. “W
If it has done anything for the public review process, the Sitt-related imbroglio has obfuscated the litany of other issues that typically surround such a major development project and dominate debate in the Council. Affordable housing groups have been pushing for more low-income housing, a long list of unions wants various wage guarantees for contractors and workers, and there is not enough money in the city budget to carry out the plan, as officials acknowledge it would require hundreds of millions of dollars in infrastructure work.
Further, the loud group of well-organized amusement enthusiasts and Coney Island freaks, joined by the Municipal Art Society, has raised seemingly legitimate concerns about the density the city has proposed for the amusement district in its plan. Much like Mr. Sitt’s plan, the city envisions a modest outdoor amusement area of about 9 acres next to the Cyclone roller coaster, along with indoor amusements and a large set of hotels that were planned in part to subsidize the indoor amusements. But the Municipal Art Society and other groups say the hotels crowd out the amusements, which are too small to create the critical mass necessary to revitalize Coney.
Mr. Sitt’s main end-game is to get to a more favorable deal, something he says he still thinks will happen. Just how long Mr. Recchia will stay on his side is a key question. Given the councilman’s rhetoric about the need to revitalize Coney Island, it’s hard to see a situation where he votes against the plan in some form, particularly should the administration begin adding more pressure.
Speaking by phone Monday evening, he expressed backing for Mr. Sitt in principle—saying he was the first developer there, and shouldn’t be punished for that.
But when asked if he was in Mr. Sitt’s corner, he was non-committal.
“I am in everyone’s corner,” he said. “I aim to get something done.”