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♪ [Theme Music] ♪
MICHAEL STOLER: They call it Brooklyn. It is hip. Everyone
wants to live work, shop, visit. Everybody wants to be in
Brooklyn. So today I've assembled this group of very
illustrious individuals who all have an involvement with
Brooklyn, some going back as 90 years, and they're going
to tell you what's happening in Brooklyn. My guests today
include Gregg Popkin who is the COO of RFR Holdings,
Michael Pintchik who is the Principal of Pintchik,
Steve Benjamin who is the COO of the Dermot Companies,
and last but not least the kid from Brooklyn, my friend
Jeff Levine who's the Chairman and CEO of
Douglaston Development and Levine Builders. So how did
you go to Brooklyn? I mean somebody coming back from the
Mayflower, I mean, you didn't know Brooklyn;
this wasn't some-
STEPHEN BENJAMIN: You're not kidding.
I ask myself that all the time.
MICHAEL STOLER: And you entered Brooklyn like in 2005?
STEPHEN BENJAMIN: We did, even a little sooner than that
with a couple of buildings we bought in Fort Green.
MICHAEL STOLER: So why did you go to Brooklyn, I mean,
because you had then so many properties in Manhattan.
You had some in Queens; I know you've developed something
in Queens, but how did you make the decision in
2004 or '05 and today?
STEPHEN BENJAMIN: I think truthfully, we were kind of the
small guys, and Manhattan was awfully big for us and
running with the big fish, and we thought we could be more
effective in Brooklyn and Queens, so that's
where we got started.
MICHAEL STOLER: Now, you took an iconic structure,
which was considered until every new apartment house
that's being built in downtown Brooklyn the tallest building
in Brooklyn. It was 512 feet high.
STEPHEN BENJAMIN: It still is, yeah.
MICHAEL STOLER: Okay, but now it's like tape measures
in real estate, right? You know, you get an extra couple
of inches, you know? So what did you do over there,
for my audience? I mean this was the Williamsburg Bank
Building. Everybody knew it. At one time,
it was considered doctor's haven.
STEPHEN BENJAMIN: Yeah, I mean we were early there
but we thought it was a good place for residential
downtown with all the subways and everything going on.
The stadium had been announced, and we saw the building as
a condominium opportunity, so it ended up being 170
condo units plus a really amazing retail space that is a
historic landmark and one-of-a-kind. There was a
parking lot in the back which we also thought
had some potential.
MICHAEL STOLER: Let's fast-forward 8 to 10 years.
Talk to me about the new property, your new building;
it's finished now.
STEPHEN BENJAMIN: Yeah, one of the lessons learned for
us was rental downtown Brooklyn today is probably better.
The economics for condo are still not really there, so we
saw that. We said we like Brooklyn-Long, we'd like to
have more investments in Brooklyn, and we decided to do a
big rental, and Flapper site came up which we actually
bought before the crisis in 2007.
MICHAEL STOLER: So how many units do you have on this?
STEPHEN BENJAMIN: 325. I mean we're open now. We got the
TCO on December 30th.
MICHAEL STOLER: And how many apartments are
leased over there?
STEPHEN BENJAMIN: About 10. It went in the dead of the season,
unfortunately, with our timing with the construction,
so I think we'll finish leasing the building by the end of '14.
We're opening the amenities in probably April. It's definitely
designed to be the premiere building in downtown Brooklyn
from a rental perspective. I mean,
the finishes are all Manhattan.
MICHAEL STOLER: Mr. Pintchik, is it 80 years that grandpa
started out there?
MICHAEL PINTCHIK: 101 years, actually.
MICHAEL STOLER: Oh, 101 years, okay, I apologize for being
a little remiss over there.
MICHAEL PINTCHIK: No problem.
MICHAEL STOLER: So at one time, it was tile, paint, hardware,
and lots of stores. Today, it's real estate.
You've been involved, as a grandchild, you were there as
a kid, you know, you've seen the evolution. What's happening?
And a lot of yours are right near the arena. Talk to me
about what's happening in Brooklyn and what you're doing
with your properties.
MICHAEL PINTCHIK: Well, I guess I've been involved since
'74, and during that time, originally we bought a few
properties as a protective measure because a company like
a Martin Paints would come in, and we'd do battle with them.
MICHAEL STOLER: It's interesting, if we said
Bergen Tile, Martin Paint -- they wouldn't even know about
a paint store, you know? Home Depot, Lowe's,
something like that.
MICHAEL PINTCHIK: Right, it's a different day.
So we bought some property as a protective measure;
my dad did, and then when I came into the business after
he passed away, we decided we would start buying in the
neighborhood, and we were fortunate to be able to create a
real critical mass to the point where we can affect what the
neighborhood looks like in our little corner, so we've been
really editing carefully. We're trying to have a more artisanal
feel to the neighborhood as opposed to say a Fulton Street.
MICHAEL STOLER: The second Shake Shack,
I mean Brooklyn, you know?
MICHAEL PINTCHIK: Shake Shack we're very thrilled that
they're coming. We're in construction right now in the
worst weather that you could ever imagine. We're putting
in a TD Bank. We're also bringing in some great
restaurateurs, who unfortunately we can't announce today but are
extremely well known, and we're sequencing a bunch of
retail spaces so that we can keep the pipeline going in term.
MICHAEL STOLER: Now you also said to me, prior to this show,
that you're going to be taking some of these sites, and you're
going to be building like seven-story buildings where
you'll have retail on the ground floor and then six
floors of residential.
MICHAEL PINTCHIK: Correct. Yeah, between Grand Army Plaza
and Atlantic Avenue, we have three sites which will support
buildings ranging from about 40,000 to 55,000 feet each,
and we want to be able to create some spaces so we can bring
in some bigger retailers so that there'll be a nice mix.
We're envisioning bringing in some home fashion,
home furnishing retailers, things like that.
MICHAEL STOLER: Mr. Popkin, you are a hotel owner,
luxury apartment owner, luxury office building owner,
people who take over properties and change their way,
you know, like 350 Madison Avenue, the other property
downtown on 5th Avenue. Now you are in Dumbo Heights?
GREGG POPKIN: Dumbo Heights.
MICHAEL STOLER: A.k.a. Jehovah Witnesses, Watchtower?
GREGG POPKIN: The old Watchtower buildings, formerly
Watchtower buildings. We see an opportunity to create something
that hasn't existed in Brooklyn before, and our value
proposition has been in Manhattan. We're taking that to
Brooklyn which is adaptively repositioning an opportunity or
property to create jobs, bring employment to Brooklyn,
expansion, growth in the retail sector, and develop what we
hope will be a community that embraces the existing residents
in the area and also encourages people to migrate.
MICHAEL STOLER: Last year, they didn't accept the REET
program again. They stopped the REET program which was the
relocation program which gave a landlord as much as $12 in
rent savings. Do you think the fact that the REET program has
not been approved, continued, will have an effect on some of
the rents, or do these companies who you're targeting really even
knew what a REET program was?
GREGG POPKIN: I think what you said is probably accurate.
A lot of the companies aren't familiar with that. I don't
think that the type of tenancy that we're targeting will feel
that impact. The tenancy that we're looking for are companies
that are visionary. They're in media technology, advertising.
They have a very strong creative sense. We do benefit from ICAP
at those, well, five properties, actually, some more than others,
so there are some benefits that are driving a tenant to
consider on the rent side, but what they're really looking
for is the ability to have expansive creative space that's
unencumbered in a modern facility but that has an
eclectic edginess to it, and that's what
we're trying to impress.
MICHAEL STOLER: You know you bring up edginess.
We have to talk about the person from The Edge.
Okay, what a perfect lead-in, and there's a double point.
You've been a visionary at the Northside Piers with the Edge.
The Edge opened up, as Steve would say, in the worst time
in the recession. Fortunately, the apartments have done,
everything has sold, and then the retail now has been
fortunate that you've sold the retail. What's happening in
Williamsburg and then we'll talk about other things?
JEFFREY LEVINE: Well, Williamsburg, as you know,
has evolved tremendously over the past 10 years, in part due
to the large buildings that the rezoning brought to the
waterfront that we have built and continue to build, but
essentially where Williamsburg as a bedroom community was
discovered first by the art community, the hospitality
community, the hipsters, so to speak, it's now become
everybody's community.
MICHAEL STOLER: You're too old. You're too old.
JEFFREY LEVINE: I'm not speaking for myself.
What I'm saying is the rest of Generation X has now followed,
whether they be bankers, lawyers, accountants, from all
walks of life, have now found the lifestyle of living in
Williamsburg as a result of the social amenities that exist in
the community and the availability of easy transit
to go to other parts of the borough and to Manhattan to
all types of employment, so it's universally
appealing at this point.
MICHAEL STOLER: So The Edge was finished,
and now you're building a second building.
JEFFREY LEVINE: Well, as you know, we completed The Edge
in the worst of times and the best of times, and fortunate for
us the value was there, and we sold all the units, and we
rented the portion which was a rental, and now we have gone
on to, during the downturn, purchase an adjacent piece
which was supposed to be the third phase of what was known
as Northside Piers, and we are now finishing up construction
on a 40-story, 509-unit rental which we're excited very about.
MICHAEL STOLER: Of which 20% is affordable.
JEFFREY LEVINE: Well no, the 20% of affordable for that
project has already been built and has been in operation for
2 to 3 years, similar to what we did at The Edge, so that's very
exciting; and within the next few months, we will be going
into the ground with the final phase of The Edge which will
be another 40-story building on the waterfront. As a rental.
MICHAEL STOLER: So why not a condominium?
JEFFREY LEVINE: Well, as my associate here has said,
the reality is that the condominium market in Brooklyn
is very strong, not on the same price point as the
condominium market in Manhattan. We all know that,
in the last two to three years, from the low post-recession
values of say $1,200 a square foot, you're not able to buy
an apartment in Manhattan for less than $1,000 to
$1,800 today, and those prices are only getting higher with
the land escalation which is occurring. In Williamsburg,
land prices too have gone up. That combined with the
superheated cost of construction in a positive market makes
profitability in a condominium, even at the price points in
Williamsburg, which have gone from the low points of
$800 to $900 to $1,200 to $1,000 at this juncture, makes it still
very hard in an ordinary income environment to turn a profit.
MICHAEL STOLER: You own properties that we just
discussed that you've acquired or the family's acquired over
the many years. Your land basis is much less expensive
than the land bases that Steve and Jeff and what Greg
are doing. You could build condominiums, and you can build
an affordable condominium, as one person would say, and
probably sell it out because of the convenience to
mass transportation.
MICHAEL PINTCHIK: You know, you do what you were taught
to do, and I was always taught it's better to have the
cow than to sell the cow.
MICHAEL STOLER: Keep the ownership.
MICHAEL PINTCHIK: Yeah, and it's worked for us.
MICHAEL STOLER: No, no, I wasn't, I'm just trying to --
now here's another thing. If you would have looked at
Dumbo Heights to acquire, which you might have wanted to
acquire, would have you done the same approach that they're
thinking of or would you have done more of a mixed-use
where, because some of the buildings are relatively high,
where you could probably do the special retail that Gregg is
talking about, some office over here and some apartments
on top, in a way like the Puck Building is today?
JEFFREY LEVINE: Well, we're all the victims of our life's
experience, and I have always preferred residential
development to commercial development. You know, the age
old expression that a commercial developer can wake up in
any given morning and a major tenant, be it Time Warner,
could announce they're moving to a new building, whereas
in a residential building, if you have 1,000 tenants in a
million square feet, well, if 10 or 12 move in any given day,
that's a bad day, so we like to say that commercial developers
eat well and residential developers sleep well.
GREGG POPKIN: There's a lot of truth to that.
MICHAEL STOLER: Okay, Steve has his building over there.
Jeff, you've gone to Clinton now, Fort Green?
JEFFREY LEVINE: Fort Green.
MICHAEL STOLER: Fort Green. You're in Dumbo.
You're predominantly in downtown, over there. Do you
see other opportunities today in other parts of Brooklyn?
I mean, because of the cost element of the land
being so expensive in downtown Brooklyn? Steve?
STEPHEN BENJAMIN: Yeah, I do. You know, we've been finishing,
we got very active after the recession, and we bought some
sites, and we restructured some things with some I think
good financing, and we're finishing quite a bit of work
both in Manhattan and Brooklyn, so we're very much looking
forward to new sites. There's nothing in our radar at the
moment. For myself, I'm sort of waiting to see how the
administration starts to roll out. I think it's very
difficult on the housing side, until these things get a little
more clear. The bonding capacity at the state level is also
in high demand, and it's hard to see how their pipeline's going
to unfold the next two years or so, so you got to be really
careful. We like a bunch of neighborhoods, submarkets
as we would call them.
MICHAEL STOLER: I mean, there's been a lot of
development that's not too far from you, Clinton Hill.
Clinton Hill they're building-
STEPHEN BENJAMIN: It's very good, Fort Green.
MICHAEL STOLER: Fort Green, Clinton Hill, it's very hot.
What about 4th Avenue? We were talking about that before.
We mentioned a McDonald's site which sold for a very
large price. People say 4th Avenue, and I say,
"It's called Sunset Park." They say, "It's Park Slope.: I said,
"That's not Park Slope; it's Sunset Park." I mean,
do you see those areas? I mean, especially since you've
been like the king of Brooklyn even though Jeff and I
were born and bred here?
MICHAEL PINTCHIK: Aha. I like Gowanus.
MICHAEL STOLER: You do?
MICHAEL PINTCHIK: Yeah, I love Gowanus. It has an
ethos that appeals.
MICHAEL STOLER: Wait, what about Red Hook?
MICHAEL PINTCHIK: Red Hook has a transportation
issue. It's just too far out there whereas Gowanus,
it's amazing what's happening there, even right now at night.
There's just a very strong vibe, energy. It's great.
MICHAEL STOLER: Here's an interesting question really
for Gregg and for Jeff because both of you are in the hotel
business. The chic hotels in Brooklyn, okay, or the more
established like our friend Josh Musters, the Marriott of the
Brooklyn Bridge, the Wythe Hotel, those hotels have done
well. The other ones, I call them the Gene Kaufman
Erector Set hotels which have 180-square foot rooms, and they
don't care how they run. Do you see the possibility, do you
see anything going on Flatbush Avenue that's
going to be chic because of the hospitality market?
JEFFREY LEVINE: Well, obviously, it has to happen because
of the affordability.
MICHAEL STOLER: So can I see a Gansevoort.
JEFFREY LEVINE: By all means, the reality is that the
chic or the boutique hotel business is driven not by the
bed-and-breakfast so to speak, but by the food and beverage.
It's a huge accelerant to the development capability, having
that food and beverage profitability finance the
building along with the room rates. Having said that,
with the predominance of young people moving because of the
affordability of market-rate housing in that downtown
Brooklyn area, you're going to have to give them the amenities
that they crave which is a place to go out to dine,
to drink, to socialize.
MICHAEL STOLER: Which is why what Michael said
about this major restaurateur going to take some space over
there because people are looking at the market.
They need something. You know, my joke over the years was,
hey, how many places could Juniors feed, I mean one
Trader Joe's? At least now you have a Whole Foods
in the Gowanus, you have a different market over there.
Do you think RFR one day would venture into-?
GREGG POPKIN: Technically we bought a hotel. One of the
buildings in the Watchtower Properties is a hotel.
We're not closing on that for another couple years as part
of the structure of the deal but I absolutely agree that
a boutique hotel would do very well.
There's plenty of opportunity for several boutique hotels.
Every day you hear announcements of new, great restaurants
coming to the area, and as we're able to create more opportunity
for office space, Brooklyn will grow with new jobs.
The population is on the growth spurt again.
I just think there's huge opportunities in
Brooklyn at every level.
MICHAEL STOLER: And we were talking before about Marty
Markowitz, probably during his 12-year reign, one of his
biggest items was "I want that Apple store. I want that
Apple store." Now there's rumors that Apple is going to
be in downtown Brooklyn.
MICHAEL PINTCHIK: We wanted it in the worst way,
and they just weren't ready. They couldn't see it, because
our site directly across the street from the Arena was like
picture perfect for them. Now, apparently, they understand,
they're ready, and Marty's going to get his Apple store.
MICHAEL STOLER: So my question is, let's talk about the Arena.
How has the Arena helped Steve's property, your properties?
In general, how has the Arena been a preponderance
of creating business in Brooklyn?
JEFFREY LEVINE: If I can say, I think the Arena has done
more than create business. It has created an iconic feeling
to Brooklyn. Brooklyn now, when you think of
Los Angeles, you think of the Lakers.
When you think of Brooklyn today-
MICHAEL STOLER: We don't think of the Dodgers,
what happened?
JEFFREY LEVINE: Well, unfortunately the
Dodgers have left.
MICHAEL STOLER: Or the Cyclones, what is this?
JEFFREY LEVINE: It's given an identity, a presence.
It's put Brooklyn on a larger map, which when you consider
that it is a borough of almost 2.6 million people, one of
the largest cities in the United States of America just on its
own account, it deserves to be on the map, and I'm thrilled
to see that it is.
GREGG POPKIN: I can attest to that. I do a lot of
international travel, and if you took Brooklyn on its own,
it would be I think the fourth largest city in the country.
You go to Europe, everybody knows about Brooklyn.
Brooklyn's hot. I mean, they sell Brooklyn T-shirts,
Brooklyn hats. They want to know about Brooklyn.
It's amazing.
MICHAEL STOLER: Hey, Jay-Z got his piece of the Arena.
Barbara Streisand opened up at the Arena.
I mean, it's different. Do you see the Low East Kings,
where I graduated high school from, being renovated?
Do you see that part of Flatbush Avenue as a
potential growth area?
JEFFREY LEVINE: Well, I see inner Brooklyn far more
so than I see the outreaches of Coney Island, again, because
of the transportation that exists.
MICHAEL STOLER: If we went to Coney Island and the same
way that Williamsburg has the ferries, can't we have a
ferry from Coney Island coming to Manhattan?
JEFFREY LEVINE: If you'd study your map, it's a long
way around the horn to go by ferry.
STEPHEN BENJAMIN: It would be 150 bucks a trip.
JEFFREY LEVINE: And the reality is the ferry is wonderful.
As you know, we have a ferry stop at the Pier, at the
Williamsburg edge of development, and it's a
wonderful asset. It has increased traffic but it's
rough in the winter.
MICHAEL STOLER: What about a light rail?
STEPHEN BENJAMIN: Those are not, truthfully, very-
GREGG POPKIN: Where's the money going to come from
for a light rail?
JEFFREY LEVINE: There's no question, Coney Island with its
beaches would be a wonderful amenity for all of
New Yorkers if the transportation issue could
be worked out, and God willing maybe it will be some day.
MICHAEL STOLER: Coney Island, do you see, I mean not in
the current administration of Governor Cuomo, but do you see
potentially Coney Island becoming more of a casino?
I'm just asking.
JEFFREY LEVINE: I don't profess to be an expert on the
world of casinos. I know there is discussion over casinos going
into upstate New York with just approved-
MICHAEL STOLER: I'm talking about the future.
MICHAEL PINTCHIK: There would be a better chance of
that than it being a successful bedroom community.
MICHAEL STOLER: Right, because I think, if you look at
that approach, what has happened where my friend lost the site
in Queens, where Genting over there. The Genting Casino
is doing enormously well. It's one of the highest-grossing
casinos around over there. Here is one of the big questions
which we briefly discussed prior to the show- the question
of affordable housing, the lack of it, the high cost.
How do we build, how do we satisfy? I mean fortunately,
depending on your land base, as you say construction costs
are going up, we have an 80/20 program which has helped
you to build your new building, 80/20 program which has
helped you build your new building. We hear from all the
articles and all the new administration that they want
higher number of affordable. As a developer,
is this doable? Steve?
STEPHEN BENJAMIN: I think it's going to be really hard.
I think the economics of rental housing right now
in New York are severe from the developer's point of view.
Severe, I mean I'm in my mid-40s, and I have been doing
it about 20 years. It's as severe as I've seen it in my
period of time, not doing it nearly as long as Jeff,
but to make the numbers work and all, even to do the old scheme
is truly challenging on the financials, so to change it,
it's going to be a combination of like zoning favors and --.
It's got to be a public-private adjustment. You just can't make
50% affordable and build housing. You just can't do it.
MICHAEL STOLER: Jeff?
JEFFREY LEVINE: Speaking about the new administration,
I've had the opportunity during his term as advocate now and
his campaign for mayor to get to know Mayor de Blasio
reasonably well. I think he's very intelligent and very
rational. I think I have heard him say that in his effort to
create more affordable housing, which is
unquestionable needed here in New York City.
MICHAEL STOLER: No question.
JEFFREY LEVINE: It's a wonderful building block for taking those
communities which need to be uplifted. I've done it in
West Harlem, in East Harlem, in Brooklyn. He has been amenable
towards larger envelopes, more entitlements, and I
think so long as he respects the economics of the numbers,
that giving more entitlements which will result in more
affordable units by virtue of a piece of a larger whole, you
can achieve your goal of creating more affordable units.
I think his appointment of Alicia Glen as the deputy mayor
overseeing both EDC and HPD indicates his recognition that
the numbers are what are going to create affordable housing,
not simple mandates, and I think he made a very good choice
in that selection as she had worked not only as a deputy
commissioner on the Bloomberg but also at Urban Initiatives
at Goldman-Sachs where she saw both sides of the coin.
I think that'll be very beneficial towards the future
creation of affordable housing.
MICHAEL STOLER: What about taxes for you on Dumbo Heights?
GREGG POPKIN: Well, as I said, we're fortunate to be
part of the ICAP program, and we feel that those incentives will
really help us attract a certain tenant base. Right now, we don't
have complaints on the taxation issue other than for the
fact that there's been a lot of discussion about raising
real estate taxes on the commercial side of the
equation, and I think the timing for that would be very poor as
we're coming out of a recession. We want to have an opportunity
to create jobs and create opportunities for businesses
to expand, and if we're going to saddle them with significant
increases in real estate taxes, that's going to
become very problematic.
MICHAEL STOLER: You can't talk about Brooklyn in 30 minutes,
so hopefully later on in the season I'm going to have a
return of the Brooklynites over there, and then we can find
out what's happening in Dumbo Heights. You'll find out who
are the new restaurants. You'll tell us what's happening over
there. We'll see how you're doing in rentals. So I'd like to
thank everyone, Gregg Popkin, Michael Pintchik,
Steve Benjamin, and never forget Jeff Levine.
See you--
♪ [Theme Music] ♪