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NTY: Seeking Revival, City to Buy Land in Coney Island

November 12, 2009

For those of our readers interested in the continuing developments (or lack thereof) in the Coney Island area, I thought I would alert you to this story in today’s New York Times:

After a year of ultimatums, threats and stop-and-go talks, the Bloomberg administration has agreed to pay $95.6 million to a developer for seven acres in the heart of Coney Island, according to executives on both sides of the negotiations. It is a crucial step forward for the city’s vision of turning the faded and mostly dormant seaside amusement district into an exciting destination reminiscent of its heyday.

The city’s deal with the developer, Joseph J. Sitt, capped a long standoff between the two sides, with each claiming it had the best plan for the revival of the fabled playground, but neither able to bring its plan to fruition in a deadly real estate market.

The city will announce the deal on Thursday, but the reality of a revived Coney Island remains a long way off.

Mr. Sitt began buying land in Coney Island in 2005, evicting tenants and promising a modern, Las Vegas-style resort with hotels and condominiums among the rides. Today, much of the land sits vacant. While the Cyclone roller coaster, the Wonder Wheel and Nathan’s hot dog stand remain, the Thunderbolt, Child’s restaurant and even the Astroland amusement park are gone — cleared away for new ventures that were never built.

This summer, with Mr. Sitt and the city in heated negotiations, neither side wanted to be accused of stunting the area’s growth, so each brought in competing attractions. City Hall had Ringling Brothers open a circus tent, and Mr. Sitt unveiled a tent colony of sideshows. The tents are now empty, torn by the November winds that sweep across the neighborhood.

“It doesn’t look good,” Dick Zigun, who runs the Coney Island Museum and the annual Mermaid Parade, said of the area. He said he was hopeful that the city “is as good as its word.”

Each side claimed victory, though no one wanted to comment for the record before Thursday’s announcement. While Mr. Sitt got much less than the $140 million he had wanted for 10.5 of the 12.5 acres he owned, the $95.6 million for 6.9 acres came to more than $300 a square foot — a huge amount in the current market. Mr. Sitt, chief executive of Thor Equities, plans to develop hotels and stores on his remaining 5.6 acres.

City officials did say that in the next few days they would begin soliciting offers for an interim amusement operator before seeking potential developers to create a year-round destination, which would ideally include a diverse mix of thrill rides, games and attractions between the Cyclone and the KeySpan ballpark. As a first step, the administration is sending representatives to the annual convention of the International Association of Amusement Parks and Attractions in Las Vegas next week.

The city now has the opportunity to entice a range of operators whose competing visions would make for a dynamic Coney Island, rather than a single vision that turns Coney Island into an amusement mall, said Michael Immerso, author of “Coney Island, the People’s Playground.”

Mr. Sitt founded the Ashley Stewart plus-size clothing chain, and his company controls about 12 million square feet of retail, hotel and commercial property in cities across the country.

Mr. Sitt often abandoned his high school classes in Brooklyn to spend time in Coney Island. His proposal called for a $1.5 billion Las Vegas-style resort with a huge glass-enclosed water park, wild rides, many stores and condominiums or time-share hotels in tall towers near the beach.

But he clashed with city officials, who said that housing in the amusement district would inevitably conflict with the flashing lights, clanging and dinging of the rides. In 2007, Deputy Mayor Robert C. Lieber described Mr. Sitt’s scheme as a “wolf dressed up as a sheep.”

Mr. Sitt’s land, however, was key to the city’s redevelopment plan, because it sat in the heart of the amusement and entertainment district.

A year ago, Mr. Lieber offered $110 million for 10.5 acres of Mr. Sitt’s property, saying the price would go down if the deal was not accepted immediately. Mr. Sitt, who had asked for more than $140 million, went on vacation.

In April, the city offered $105 million. “The bottom line is we can only pay so much,” Mayor Michael R. Bloomberg said at the time.

Over the summer, the city rezoned a 19-block area of Coney Island, including a 27-acre amusement and entertainment district and, to the north and west of the district, almost 5,000 apartments and 500,000 square feet of retail. Given the deadlock and Mr. Sitt’s eviction of many tenants, neither side wanted to be blamed for the final decimation of the Coney Island amusements — hence this summer’s competing attractions.

The $95.6 million covers 6.9 acres, most of it along the Boardwalk, between the Cyclone and KeySpan Park , including the former home of Astroland.

The city’s plan bars residential development within the amusement district east of the ballpark and south of Surf Avenue. Yet, it does provide for the development of up to 4,500 new apartments, with 840 set aside for low- and moderate-income tenants. On the six blocks west of the ballpark in what the city now calls Coney West, developers could erect as many as 2,700 units.

Also, up to 1,800 apartments can be built in Coney North, five blocks on the north side of Surf Avenue, between Stillwell Avenue and West 20th Street.

One residential developer, Taconic Investment Partners, controls about 10 acres where it could build 2,000 apartments.

“I think the city made a good choice in buying the land in order to protect the area along the boardwalk for amusements forever,” said Dennis Vourderis, who family runs the only amusement park left, Dino’s, and the Wonder Wheel, a city landmark. “It won’t be threatened by the development of apartments, shopping malls or anything else. Now the question is, Who do we bring in to build this billion-dollar amusement park?”

But Juan Rivero, a spokesman for Save Coney Island, a community group that has been critical of both Mr. Sitt’s and the city’s plans, said that even though only amusements would be allowed in the special district, apartments and high-rise hotels up to 27 stories would be allowed right next to it. He worried that this proximity could “permanently compromise Coney Island’s potential to once again become a world-class destination.”

Mr. Sitt has done very well buying but not building things in Brooklyn. In 2005, he bought a parcel west of the amusement district for $13 million and sold it 14 months later for $90 million. He also bought the Albee Square Mall in Downtown Brooklyn for $25 million in 2001, vowing to renovate. He sold it in 2007 for $125 million, without the makeover.

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