City Pays Dearly for 7 Acres of Coney Island

sitt City Pays Dearly for 7 Acres of Coney IslandAfter a long standoff with would-be developer Joe Sitt, the city agreed today to buy 7 acres of his Coney Island holdings for $95.7 million–or more than $300 dollars per square foot.

It’s a nice haul for Mr. Sitt, who began buying up Coney Island’s boardwalk in 2005 for what he hoped would become a $1.5 billion dollar Las Vegas-style development. But Mr. Sitt and the city had trouble agreeing on a deal, and the developer alienated community groups by evicting longtime amusements. As Eliot Brown summarized it:

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).

Late in the summer, the city and Mr. Sitt finally agreed to a deal, wherein the developer would keep some of his land, and sell the rest to the city. But they had yet to agree on an exact price. Now, one week after Mayor Bloomberg won a third term, the city finally budged, with a price that’s well above the current rates in the slumping market.

Not everyone is excited about the deal. The community group Save Coney Island sent out a statement calling the purchase a “critical first step,” but not enough. “Unless the City purchases the rest of Thor Equity’s land, a large portion of the amusement area will remain subject to the whims of real estate speculation and the future of Coney Island will remain at risk,” said spokesman Juan Rivero.

This isn’t the first time Mr. Sitt has made money by not developing. He bought and re-sold a different stretch of Coney Island a few years ago, and turned a handsome $100 million profit on Brooklyn’s Albee Mall without ever completing some promised renovations.