Two weeks ago, Port Authority boss Chris Ward declared that one of the biggest projects the city could undertake would be the redevelopment of Red Hook. Not only would it vitalize another corner of the Brooklyn waterfront, but it would also become a critical connection to burgeoning development on Governors Island.
At the time, this sounded like pontification—Mr. Ward fought to keep the container terminal active at his previous job running American Stevedoring—but now it is looking more like prognostication.
Last week, it was revealed that the Port Authority had quietly cancelled its lease with American Stevedoring, which has led a handful of outlets to speculate that Red Hook’s redevelopment is in the near future. According to a highly placed source at the Port Authority, though, it will be at least a decade before the port ships out for good and the BroBos can move in.
The Red Hook Star Revue first got wind of the American Stevedoring buyout, revealing that the company had refused to pay rent on the piers even after it had won a contentious agreement to continue to manage them in 2008. The Post then reported that Pheonix Beverage was taking over the container terminal, and because it only had a year-lease, it was simply a placeholder.
“Phoenix is a holding pattern until the city and the Port Authority reignite the intensive development unveiled in 2003,” said a source familiar with the buy-out deal. At that time, the city proposed a visitor-friendlier waterfront and angled to wrest control of the piers from ASI.
But The Observer has learned that the one-year lease is merely a holdover until the Port and Phoenix can work out a longer 10-year deal. The hope is this will give it enough volume to move its operations elsewhere, likely to Sunset Park—the sort of move Mr. Ward advocated. “There is no abrupt getting rid of containers in the near term,” our source said. “The idea is Phoenix will build up its business, grow its market share, and when it is ready to move, it will move.”
Phoenix executives could not be reached for comment.
The Post argued that Phoenix had no experience running a port, but the Port official told The Observer it is actually a far better deal for the city than American Stevedoring because it will ferry goods back and forth from New Jersey, whereas the former operator often returned with its hulls empty. As a result, American Stevedoring received millions of dollars in subsidies to remain viable, whereas Phoenix is getting none.
Phoenix has in fact been at the terminal for almost two years now, a move that has angered neighbors who feel its beer trucks cause excessive congestion on the streets. Whether its expansion will improve or worsen matters is not clear, but The Observer did learn one fun fact: alcohol is the fourth biggest commodity to move through the region’s ports—which is what makes Phoenix such an attractive operator for the container port. As it was explained to us, Heineken is the Walmart of beers and Phoenix controls Heineken, so the scalability and success of its operations is seen as highly likely.
As for what comes after Phoenix’s eventual departure, there are no concrete plans in the works at either the city or the Port, though there is interest in keeping at least part of the space for active, working waterfront uses. “It’s not going to flip back to the Dan Doctoroff days of a glitzy Sydney waterfront,” the Port official said.
That does not mean redevelopment will not continue of its own accord elsewhere in Red Hook. The waterfront has already begun making its transformation, with Fairway, IKEA and maybe a huge new mall colonizing some of the old piers. Adding to that, Brownstoner hears a huge warehouse may be headed for a rental conversion. It turns out 160 Imlay Street is across the road from the container terminal, so its nascent conversion only underscores the uncomfortable, should-to-shoulder transition within the neighborhood.
Correction: A previous version of this article mistated the location of 160 Imlay Street. It is not next door to Fairway. The Observer regrets the error. We have been to Red Hook and love it there. Great book shelves…
Also, Mr. Sifton has informed The Observer that he has moved, but not “moved out.” He still proudly calls Red Hook home.