Real-Estate Developer Hopes to Mix It Up by Adding Office Space to Williamsburg Landmark Plans
By ELIOT BROWN And LAURA KUSISTO
Amid a sea of new apartments popping up in the Williamsburg section of Brooklyn, Jed Walentas has an alternative idea: office buildings.
Last October, Mr. Walentas’s company took control of one of the most valuable development sites in Brooklyn, the former Domino Sugar factory on the Williamsburg waterfront. Since then the company, Two Trees Management Co., has been figuring out what to do with the 11-acre site which has sweeping views of the East River and Manhattan.
Now his vision for the site is beginning to emerge, and it looks different from the all-residential plan that had been envisioned for the site earlier. Instead, Mr. Walentas wants to include in the complex enough office space for as many as 3,000 to 4,000 workers.
Mr. Walentas says he’s adding office space to his plan to make the development more vibrant than other large projects that have risen in recent decades. These projects, including some in Long Island City and other parts of Williamsburg, are sterile because they only have apartments, not a mix of uses, he says.
“They don’t make great urban places, they don’t integrate into the neighborhoods,” he says. “What we’re trying really, really hard to do here is to mix in enough commercial office space to give this neighborhood and this community a sense of that feeling of vitality.”
Mr. Walentas’s plans for office space and other changes would require approvals from the City Council and city agencies. The former industrial site was rezoned in 2010 to include 2,200 apartments, but no office space.
The inclusion of such commercial property would be pivotal for the Brooklyn neighborhood that’s been one of the most rapidly evolving corners of the city over the past decade, becoming a magnet for young workers in creative industries. A rash of building that followed a 2005 rezoning of the area has caused an outbreak of new luxury apartments on the sites of former warehouses and industrial space. Chic restaurants and boutiques have sprouted along the sidewalks.
Mr. Walentas’s Two Trees Management paid $185 million for the one-time sugar refinery that still was being used by Domino as recently as 2004. He says he plans to convert the signature weathered-brick building on the site into office space and include offices in at least one new building, for a total of 630,000 square feet.
Most of the rest of the site would be residential. Two Trees executives are still working on determining how many units to include.
Getting city approval for the change is by no means certain. The 2010 rezoning by the site’s prior owner, CPC Resources Inc., was contentious and community groups and elected officials are expected to review closely the plan for office space and other changes to the plan.
Councilman Stephen Levin, who is poised to play a key role, says he supports adding office space and reducing the residential footprint, but stopped short of endorsing the plan overall. “I’m supportive of mixed-use development all up and down the waterfront,” he says. “To me it seems pretty clear that what makes a vibrant neighborhood is the ability of folks that live there to also work there, or for folks that commute in to work there.”
The Walentas family made a fortune in Dumbo by converting former warehouses to apartments and offices. Mr. Walentas, 38, who is a habitually casual dresser, has mostly taken the reins from his father, David Walentas, and is overseeing the Domino project.
Mr. Walentas, who is hoping to duplicate his family’s Dumbo success in Williamsburg, says he doesn’t expect the addition of office space to pay off in the short term. Apartments could bring in as much as four times more income, at least at first, he says.
While that’s much cheaper than space in Manhattan, it isn’t clear whether it would be enough to attract tenants to a site that’s more than one half-mile from the nearest subway stop.
It would be an especially lengthy commute for residents in New Jersey and some neighborhoods in Brooklyn and Manhattan. “You’re drawing people largely from that community. Nobody really wants to go from Jersey to Manhattan and over to Williamsburg,” says Sean Black, a broker at Jones Lang LaSalle JLL -0.86%.
But long term, the mix of uses should create more value in a neighborhood that has very few office buildings. According to research service CoStar Group Inc., CSGP -2.24%there are just 10 office buildings larger than 20,000 square feet in the neighborhood, with a total of around 350,000 square feet.
Demand has been growing rapidly for more than two years for unconventional office space throughout the city. Technology startups and new media companies that eschew the higher costs of Midtown, as well as its more button-down character, have been flocking to neighborhoods like Midtown South. Dumbo has also been a major beneficiary of that trend, and Mr. Walentas is using it as the model for Williamsburg.
In one of Williamsburg’s few office properties, called the Yard, tenants include Indmusic, a YouTube music network that moved from Dumbo about one year ago. Brandon Martinez, Indmusic’s 29-year-old co-founder, says Williamsburg has a variety of restaurants and other retail like retro-record shops that makes the neighborhood appealing for young workers.
“We’re a Brooklyn company,” Mr. Martinez says. “We live here. We do everything in Brooklyn.”
Write to Eliot Brown at email@example.com
A version of this article appeared February 4, 2013, on page A18 in the U.S. edition of The Wall Street Journal, with the headline: Back to Work at Domino Factory.
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