The firm, which has managed a number of notable projects in the city including the construction of both Prada’s and Uniqlo’s retail space in Soho, will take the roughly 110,000-square-foot building’s entire 12th floor from jewelry company Nadri. Samco Properties owns the building but, because it was a sublease, was not involved in the transaction.

45 West 36th Street (Courtesy Property Shark).

The term of the sublease stretches for six years and is priced in the $20s per square foot, said sources familiar with the offering.

Jeff Nissani, a real estate broker who operates his own brokerage business with twin brother Erik, represented Richter+Ratner. The company will be relocating from 1370 Broadway, where it had experienced an unexpected hiccup when the tenant it was subleasing from there, a pharmaceutical sales and marketing firm called PDI, went bankrupt.

The dissolution of that firm nullified Richter+Ratner’s lease, though the firm was able to strike a deal with 1370 Broadway’s landlord Joe Sitt in order to stay in place for the remainder of its five year lease there.

When it came time to go back out to market to find a new location, Richter+Ratner still was willing to brave the sublease market in order to capitalize on the deals that subleases offer. Sublease space typically comes at a discount to space directly offered by landlords.

The firm was more aware, however, of the stability of the tenant it was working with, Mr. Nissani said.

“In the case of Nadri, we really looked at the firm to be extra sure that we were stepping into a solid situation,” Mr. Nissani said. “But the truth is, taking a sublease is always going to carry a level of risk.”

Mr. Nissani said that he and his brother had dealt with the instabilities of a sublease situation themselves. JSN Properties, the firm that the Nissani brothers operate, subleased space at the Flatiron office building 20 West 22nd Street when they found out that the tenant they were leasing the space from had stopped paying the landlord.

“We went to the guy and told him that we knew he wasn’t paying the rent,” Mr. Nissani said. “Needless to say, when it came time to renew with that sublandlord, we didn’t.”—DGeiger@Observer.com

Nine boardwalk businesses found out their leases would not be renewed today. With the exception of Nathan's and Lola Star's, many of Coney Island stalwarts will not be returning next summer, including the 76-year-old Ruby's bar and the always enjoyable Shoot the Freak. The latter is a sad casualty given that its owner supported the redevelopment under the expectation he would have a place in developer Joe Sitt's Coney 2.0. It will be curious to see whether he, or any of the misfits, who have helped keep Coney afloat over the years will have a place in its future.

If not, it would not exactly be a surprise, as so much of the Island has already been subjected to the wrecking ball. The Cyclone will be staying, as it is a landmark, but Carol Alpert, who has run the rollercoast for three decades, as well as the now-gone-and-partly-forgotten Astroland, has given up her license amidst mounting costs to run it.

The place has seen a banner year since it was saved last winter from Sitt, but that is no reason to sacrifice it to the prevailing whims of newfound business partners and BroBo wimsy--a Brooklyn Brewery is reportedly in talks to move to the boardwalk, as much good news as bad.

What a day at Coney needs is watery Bud and corn dogs, not microbrews and artisanal brats. Has the boardwalk jumped from the sinking ship into the stormy sea? Let's hope not.

mchaban [at] observer.com | @mc_nyo

[A] slew of potential buyers had been whittled down to a mere five finalists. Along with Sitt, those included Vornado Realty Trust; a group that included David Werner; Jeff Sutton with SL Green Realty; and what turned out to be watch retailer Swatch.

The slender 20-story building, on the east side of the tony block between 53rd and 54th streets, contains a mere 97,500 square feet. The pricing equates to about $1,450 a foot. Most prospective buyers had talked of leaving the bottom two or three stories as retail, with the rest turned back into boutique offices for investment-type tenants.

More here.

drubinstein@observer.com

Coney Island's oldest building will soon play a role in its oldest rivalry: the vying for the biggest, baddest freak show. Texan sideshow owner John Strong is making a bid for the title, signing a new lease at the Grashorn Building on Surf Avenue, according to the New York Post. His competition includes Dick Zigun's Coney Island USA Circus Sideshow, and, if a deal with the city is finalized, an amusement park run by Zamperla, called Luna Park.

Built in the 1880s, the Surf Avenue building was home to Grashorn's Hardware, which outfitted much of early Coney Island's burgeoning amusement industry. The Municipal Art Society has made a push for the city to recognize the building as a landmark, so far to no avail.

The building is owned by developer Joe Sitt, who bought up much of Coney Island in recent years for a proposed amusement park called Dreamland. When Mr. Strong first came to town last summer, he leased part of the former Astroland site, which Mr. Sitt has since sold to the city.

The original Luna Park and Dreamland were among Coney Island's first competing amusement parks. At Luna Park, a herd of elephants roamed the land, including one who was electrocuted by Thomas Edison. The proprietors of Dreamland, meanwhile, recruited 300 little people to live in a small-scale village called Lilliputia and, to gain a wider audience, encouraged the community to engage in sexually promiscuous behavior.

egeminder@observer.com

The gods of denim will soon be squeezing into the meatpacking district. With a new lease on West 14th Street, the Levi's store will be stocked full of skinny jeans to accommodate a "mecca for savvy, creative and artistic consumers," as Levi's vice president Joelle Maher put it. (O.K., possibly it will have other jeans, too.)

The 2,616-square-foot store will open next fall in the recently reconstructed 414 West 14th Street, owned by the Carlyle Group and SITT Asset Management. The Carlyle Group's Mark Schoenfeld attributed the area's retail boom, in part, to recent developments such as the Standard Hotel and High Line, both "attracting more than 100,000 people to the area in a given week." Neighbors include the Apple store, Hugo Boss, Stella McCartney, Puma, Diane von Furstenberg, Scoop, Vince and Tory Burch.

Both the owners and Levi's were represented in the deal by Laura Pomerantz of PBS Real Estate.

GlobeSt.com and the New York Post had news of the deal last week.

egeminder@observer.com

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.

The rezoning plan would turn vacant lots currently zoned for amusements into a residential area, and would allow some hotels, retail, and indoor amusements into the central amusement area of the historic entertainment hub. The plan, which has been in the works for nearly eight years, must now pass through the chaotic gates of Albany before it’s signed into law.

It remains unclear exactly how much land the city will claim. But Domenic Recchia, Coney Island’s representative on the City Council, said that the amusement parkland will have between 9.5 and 10 acres. He added that developers will most likely build two high-rise hotels, though the legislation allows for up to four. Mayor Bloomberg said after the vote that the city is hoping to develop an amusement district that totals 27 acres. It would stretch between Surf Avenue and the Boardwalk.

The plan’s three main proponents on the City Council—Council Speaker Christine Quinn, Land Use Committee Chair Melinda Katz, and Mr. Recchia—emphasized throughout the afternoon that the legislation would revive the world’s former playground into a year-round destination.

“Clearly, Coney Island’s luster isn’t what it used to be,” Ms. Quinn said. “What we did today, and what this whole process has been about, is to keep what was best about Coney Island but also to move it forward.”

After touting a new shark exhibit for the aquarium, 35 percent affordable housing, a new gym for the school district, renovation of the Boardwalk, and a $137 million investment in renovating the sewage system, Mr. Recchia said, before voting yes, “Any single one of these things would be a huge benefit to Coney Island. The fact that the commitment has been made to provide all of these is truly remarkable.”

Ms. Katz said at the vote that the plan would create 6,000 permanent jobs and 25,000 construction jobs, in addition to 4,500 new housing units, over 5,000 square feet of new retail, and 900 hotel rooms. Overall, she said, the plan would add a projected $14 billion in economic activity to the area over the next 30 years.

Who that economic activity would benefit, however, has been a point of heated debate.

Protesters relegated to the mezzanine clapped and cheered when City Council members like Charles Barron of Brooklyn lambasted the Bloomberg administration for putting corporate interests first.

“This is a plan to make Coney Island more feasible for the business community, more attractive to the business community,” Mr. Barron said, “and not for the local grassroots, indigenous people there that are struggling each and every day.”

Mr. Barron and Tony Avella, a Democratic candidate for mayor, were the only two City Council members who voted against the plan, while Rosie Mendez abstained. Opponents did not protest on City Hall’s steps (restaurant workers lobbying for paid sick days did instead) because they were expecting Mr. Recchia to work out a deal with the Bloomberg administration for 50 percent affordable housing, according to Carmen Gonzalez, the head of Coney Island’s ACORN chapter.

As those hopes were not realized, local activists maintained that corporate interests would benefit the most from the rezoning. “The hotels are getting more than the people in the community,” Ms. Gonzalez said.

Juan Rivero, Save Coney Island’s spokesperson, argued that since the amusement area would shrink and be dwarfed by new development, the plan would destroy Coney Island’s distinct character.

“If the administration lacks the perspective, humility, or wisdom to fix its plan in its implementation,” he said, “then this rezoning will be viewed in the same light as the demolition of the old Penn Station: a disgraceful moment in the history of New York City.”

Meanwhile, the power struggle between council and the administration remained an undercurrent. “The problem is it was the city’s plan,” Mr. Avella said before voting no. “We wind up tweaking the [rezoning] application as much as possible, but it’s never really a cooperative relationship.”

But it’s a conflict that Mr. Recchia and Mr. Bloomberg seem to have moved past—for the most part.

“Now the star of the day,” Mr. Bloomberg said at the end of his remarks at a post-vote press conference, “the one, the only, the indomitable—I was looking for a word other than insufferable, and I came up with indomitable—Domenic Recchia!” 

bkavoussi@observer.com

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 20^th 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 39^th 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. "We’re simply not prepared to make concessions in Coney Island that infringe on our plans to expand and protect the amusement district," Deputy Mayor Bob Lieber said in a statement of Mr. Sitt. "He bought the site on speculation, and we’re prepared to pay him a lot of money for it. I can think of more than a few real estate speculators that are in a worse spot than he is.”

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.”

ebrown@observer.com

Despite many an overture to elected officials in southern Brooklyn, the administration has been unable to get anyone in Albany to carry a bill “alienating,” or declassifying, as parkland a large parking lot for the KeySpan Park baseball stadium, a measure that is central to the city’s plans. And the clock is ticking: The legislative session wraps June 22.

Albany legislators are resistant to act on the Bloomberg administration’s plan before the city reaches a deal with Joe Sitt, the major landowner in the amusement area, who has been sparring with city officials for more than two years now.

The central fight is over private developer Mr. Sitt’s land, which the city has unsuccessfully tried to buy, an issue that has drowned out the numerous other criticisms and unresolved problems with the city’s plan. This act stands to come to a close, in some form, by August, when the City Council must vote to approve or reject the mayor’s plans to remake the amusement hub with new rides, housing and hotels.

The alienation from parkland to housing needed from Albany is key to the city’s proposal. Without it, the number of new apartments that could be built in the area would be drastically reduced; developer Taconic Investment Partners says it will also be unable to build on much of its adjacent land due to parkland regulations. (The city has estimated that over 1,900 housing units would go unbuilt if the parkland were not alienated.)

The city wants to alienate the KeySpan parking lot as parkland and, in turn, then designate much of Mr. Sitt’s land as parkland, perhaps rendering it difficult or impossible to sell.

“Legislators have a problem with doing something that could appear to be taking somebody else’s property,” State Senator Diane Savino, who represents the district, said. “We would prefer that they come to a resolution with Thor Equities so we can move forward with this process.”

Should Albany indeed wrap this month without acting on the legislation, it would make the administration’s push to win approval from the City Council that much harder, leaving another loose end at Coney.

With this in mind, city officials have been pushing to get something done legislatively this month, and last week presented a revised plan to local elected officials that would effectively make the alienation of the parkland conditional on reaching a deal with Mr. Sitt. The plan would perhaps allow Taconic to start building regardless of what happens with the parking lot.

Ms. Savino said she is considering that plan, but encouraged a deal with Mr. Sitt.

Seth Pinsky, president of the city’s Economic Development Corporation, expressed confidence that the Coney plan would go forward whether the parkland is alienated before the City Council vote, though he acknowledged that it is harder for the city if Albany doesn’t act now.

“If we don’t ever get the alienation, that’s a big problem, but whether the alienation comes first or second is of less consequence,” he said. “In an ideal world, we would have it done before” the Council vote.

But even if the city does ultimately strike a deal with Mr. Sitt—which would seem to go a long way toward assuaging Ms. Savino’s concerns—there is still the issue of Carl Kruger. Chairman of the State Senate’s Finance Committee, Mr. Kruger has been vocally opposed to the whole concept behind the city’s proposal for the area, characterizing its plans as pie in the sky.

“The proposal is DOA,” Mr. Kruger said Tuesday. “They have no developer, they have no operator, they have no funding source, they’re short on affordable housing and they’re high on market housing.”

The amusement area at Coney is not his district—he represents neighboring districts, including Brighton Beach—but he is an unpredictable figure in an unpredictable chamber, and earlier this year he held up two major votes in the nascent Democratic majority. 

Mr. Kruger also seemed less than impressed by the mayor’s efforts to buy out Mr. Sitt—officials have offered him $105 million, and are seeking land from other landowners—saying that the city should not be spending so much to “warehouse dirt.”

With an eye toward resolution, Ms. Savino said she spoke with Senate Majority Leader Malcolm Smith about the issue and is trying to set up a summit of sorts with him, the city, local elected officials and Mr. Sitt before the session’s end.

ebrown@observer.com