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Downtown Brooklyn Rezoning & Development

In 2004, New York City began an aggressive campaign to add more office space and mixed-residential uses to Downtown Brooklyn by rezoning 22 blocks of the borough’s core. City officials initially estimated the Downtown Brooklyn plan would add 4.5 million square feet of office space and enough room for 1,000 new apartments. A hot real estate market, however, led to many more residential units.

The rezoning also originally was expected to create 18,500 new office jobs; the jobs haven’t materialized as hoped, partly because of the economic downtown. Nevertheless, proponents of the rezoning believe clearing the way for future office development will allow the City to better compete with New Jersey when the market regains steam. In 2000, Sen. Charles Schumer convened the “Group of 35,” consisting of business, real estate, academic, government and labor leaders, to address the City’s future need for office space; Downtown Brooklyn was highlighted as a focal point for future office construction.

During the 1990’s, New Jersey successfully lured businesses to areas including Newport and Exchange Place in Jersey City by offering low rents and developer incentives. In fact, the Jersey City Economic Development Corporation began referring to its growing district as “Wall Street West.” In response, Brooklyn’s business leaders pushed for a rezoning and the City agreed to move forward. The zoning, passed in 2004, calls for office and academic space in the downtown’s commercial core and residential structures with ground-floor retail in the surrounding areas. The downtown area is bounded by Tillary Street to the north, Atlantic Center and Schermerhorn Street to the south, Ashland Place to the east and Court Street to the west.

History of Downtown Brooklyn’s Development:

Downtown Brooklyn’s future as a major office space district got its first boost in 1983 when the Regional Plan Association identified the neighborhood as having the potential to become the City’s third-largest business district. Meanwhile, in the early 1980’s, Polytechnic Institute threatened to leave the deteriorating area. In response, the City worked with Polytechnic and developer Forest City Ratner to develop a plan for an academic and high-tech office complex constructed around a park. The result was MetroTech, a 16-acre corridor with office towers, a new campus for Polytechnic and open space. Businesses including Chase Manhattan, Bear Stearns, Brooklyn Union Gas and the Securities Industry Automation Corporation opened offices at MetroTech throughout the early 1990s. Downtown Brooklyn became a hub for Wall Street back offices by making the area competitive with New Jersey through lucrative tax breaks and other incentives.

The 2004 rezoning allowed the community to envision a new downtown with increased capacity. New York City and the Downtown Brooklyn Council, a nonprofit economic development corporation, envisioned the downtown as a location that maintained its back-office operations core while also drawing “newer, hipper businesses,” such as publishing companies and media firms, whose employees increasingly lived in Brooklyn (New York Times).

The Impact of the Economic Slowdown:

A number of developments have been stalled as a result of the economic downturn. In 2007, 56 projects totaling $9.5 billion in new investment were slated for Downtown Brooklyn; as of 2009, only 20 had broken ground or had financing in place (NY Post). The most high-profile stalled projects include the Atlantic Yards project – located on the edge of the downtown district – and City Point, a planned mixed-use tower at the former Albee Square mall site. No new commercial office towers have been constructed downtown since the rezoning.

The 1.6 million-square-foot City Point building, which will include office, retail, and residential space, received $20 million in tax-exempt bonds from the federal stimulus bond program in September 2009 to help the development get back on track. As a result, the first phase of the project containing 184,000-square-feet of retail space and 260 units of housing is now scheduled to be completed in March 2014.

Recent downtown development has largely consisted of luxury rental apartments and condos. In 2008, the City estimated more than 14,000 new residential units would be built in the area (Mayor's press release) Because of poor economic conditions, however, many projects are stalled and completed projects are struggling. The City’s Department of Buildings as of January 2010 listed 20 stalled construction sites in Community District 2 (which contains neighborhoods including Downtown Brooklyn, Clinton Hill and Fort Greene). Right to the City, an alliance of community groups, in the fall of 2009 found a higher number of distressed projects. The group’s count included both stalled construction projects and buildings with many vacant units – they tallied 126 troubled buildings in the downtown area (the 246-unit be@Schermerhorn condo building, for example, was 93 percent vacant before it was sold in November 2009). In the Right to the City count, the Downtown Brooklyn figure also includes buildings in Brooklyn Heights and Fort Greene.

The 2004 rezoning also spurred hotel development in Downtown Brooklyn. In the 1990s, the Marriott became the first hotel built in Brooklyn in decades; as of 2009, 1,300 new hotel rooms were under construction or in planning phases in the neighborhood (NY Construction).

Other developments:
The rezoning also impacted surrounding developments in the area. In anticipation of the rezoning, work began in 2002 on the Atlantic Terminal Mall above the Long Island Railroad terminal. The mall contains 380,000 square feet of retail and 400,000 square feet of office space; it also connects to Atlantic Center, a 400,000-square-foot shopping center, which opened in 1996 and was renovated during the construction of the Atlantic Terminal Mall. Also during the same period, the BAM Local Development Corporation moved forward on plans for expanding cultural facilities around the nearby Brooklyn Academy of Music and creating a mixed-use cultural district. Meanwhile, Polytechnic and the Brooklyn Law School both constructed dormitories downtown, adding to the growing residential population and aiding its transition to a 24-hour community.

In 2009, the City began a $40 million beautification project in Downtown Brooklyn, with hopes of spurring economic development once the market regains strength. Of that investment, nearly $4 million will go towards a 10,000-square-foot green space near the Dime Savings Bank building and the former Albee Square Mall on Fulton Street. About $15 million will go towards modernizing the Fulton Street Mall, a retail destination that attracts 100,000 shoppers a day and caters mainly to black and Latino clientele.

Despite optimism for the future of Downtown Brooklyn, the plan for the district has not proceeded without controversy. A 2008 study by Urban Justice Center and Families United for Racial and Economic Equality reported that 57 percent of the small business owners surveyed in the area either moved or were forced to close as a result of the 2004 rezoning (Urban Justice report). The rezoning, according to the report, upped real estate prices to unaffordable levels for many small business owners and encouraged developers to build taller buildings (Daily News). With most of the current development being residential, FUREE has also charged the rezoning has not delivered on jobs for local residents.

Another point of contention arose around a 1.25-acre planned park with a 700-car parking garage underneath. The park – Willoughby Square Park – is envisioned to become Brooklyn’s “Bryant Park” and is considered the centerpiece of the downtown plan. In 2004, the New York City Economic Development Corporation announced plans to use eminent domain to seize properties needed to construct the garage and park; included among those parcels were six row houses along Duffield Street, which some historians maintain have ties to the Underground Railroad. The City felt the park was essential to successful development of the downtown. The EDC commissioned a study of the houses, which concluded that the structures did not have Underground Railroad ties but were significant to the abolitionist movement. In 2007, New York City created a panel to develop and implement a plan to commemorate abolitionist history in the area. In 2008, the panel and City announced plans for In Pursuit a Freedom, a project that will include a self-guided walking tour of historic sites in Brooklyn; a commemorative artistic installation in downtown; interpretive exhibits at local centers; an original theater piece drawing on the story of abolitionism in Brooklyn and an interactive Web site.

Despite the City’s action, the owner of 227 Duffield Street sued the City over the eminent domain plans; through a settlement, the City agreed to spare the home from seizure. A group of community stakeholders wants to transform the house into a museum. Neighboring buildings on Duffield Street, however, have not been preserved – some have been bought up by the City and are slated for hotel construction; others were seized through eminent domain.

Last Updated: Jan. 14, 2010

This development is closely interlinked with:
Brooklyn Academy of Music Cultural District
Atlantic Yards
City Point/Albee Square Mall Tower