Joe Sitt is pacing the Coney Island Boardwalk.
“Imagine something like the Bellagio hotel right now—just stop and see it,” he says, sweeping his hand in a long, slow arc over his head. “The lights. The action. The vitality. The people. We wanna evoke the same feeling you get when you’re in Vegas. It’s exciting. It’s illuminated. It’s sexy.”
Behind him is an aggressively down-market stretch of fast-food stands, dingy arcades, and cheap souvenir shops that have as much in common with the Bellagio as does a three-card-monte table. But when this wiry, frenetic 41-year-old looks at the seediness, he sees an opportunity to do something big. And he can—because all those ramshackle properties belong to him.
Over the past few years, Sitt’s real-estate company, Thor Equities, has quietly spent nearly $100 million buying up a huge swath of Coney Island from multiple owners, painstakingly overtaking perhaps twelve acres of land along the boardwalk, mostly between KeySpan Park, home of the Cyclones, and Deno’s Wonder Wheel Amusement Park. Sitt, a little-known Manhattan mogul who’s made his fortune building inner-city shopping malls across the country, now lays claim to Coney’s prime turf, its real-estate trophy. It’s no surprise, then, that Sitt’s mysterious plans have stirred plenty of rumors among Coney locals, who worry he’s plotting to develop a shopping mall or a Wal-Mart on their hallowed grounds.
But Sitt’s scheme for reviving the world’s once-premier amusement park is far more ambitious than the whispers suggest. He plans to build a glittering resort paradise right next to the Coney Island boardwalk—a retail and entertainment colossus every bit as outrageous and flamboyant as the Bahamas’ Atlantis. The plan includes megaplexes. An indoor water park. A 500-room, four-star hotel—four stars, in Coney Island!—and, at the center of it all, an enormous, psychedelic carousel laced with visual cues to a Coney Island that Timothy Leary could have dreamed up. Equally spectacular, Sitt hopes, will be a blimp that will take off from the complex’s roof, carrying tourists on joyrides over the city as it flashes the resort’s name in giant technicolor letters: THE BOARDWALK AT CONEY ISLAND. “The dirigible will leave every ten minutes,” Sitt says, jabbing his finger excitedly toward the sky. “On an ongoing basis. Another. Another. Another. Lifting off and taking people on a tour, spreading the message that this is the place to be.” The total price tag: $1 billion, which Sitt hopes to raise from private investors. Sitt has seen Coney Island’s future, and it looks like Vegas—turned up a few notches.
As we talk, Sitt’s cell phone repeatedly interrupts his reverie. He takes the calls, standing not far from a wooden sign advertising a game called SHOOT THE FREAK, a glaring reminder of the enormous gap between Coney’s present state and Sitt’s decadent vision. He’s in the middle of closing a $230 million deal to buy the Palmer House Hilton in Chicago, an old, underperforming property he hopes to turn around. This is how Sitt has gotten rich—by pouncing on real-estate and retail opportunities others have overlooked, either because they were decrepit or in undesirable neighborhoods. The son of a Brooklyn textiles merchant, Sitt had his first big financial success in 1990, when, at the age of 26, he took a then-unusual gamble and founded Ashley Stewart, a chain of shops for plus-size, upward-aspiring African-American women.
Sitt was among the first to sense the vast untapped purchasing power of urban ethnic customers, then being ignored by national retail chains. As Alan Barocas, senior vice-president of real estate for the Gap, puts it, “When national retailers were concentrating on suburbs and exurbs, Joe saw a void. Instead of running, he saw opportunity.”
Not long after founding Ashley Stewart, Sitt had a second revelation: The inner-city landlords renting to his stores were asking for far less rent than he—and other retailers, he suspected—would willingly pay. So Sitt began buying up cheap properties in decaying urban areas and opening malls on them. Thor Equities eventually amassed an empire of about 14 million square feet in a dozen cities.
Though Sitt’s scheme for Coney Island is also a massive gamble on a down-on-its-luck part of the city that many have written off, this deal has another element: personal nostalgia. Sitt grew up in nearby Gravesend, and trips to Coney were an integral part of his childhood in the late sixties and early seventies, when memories of Coney’s glorious early-twentieth-century heyday were already fading. He still lives near Coney (albeit in a much bigger house) and jogs on the boardwalk. “I love Coney Island,” he says, frequently—giving in to a gushing sentimentality about the project that worries some of his Thor executives. To them, the scheme seems fraught with frightening unknowns: Will the right mix of businesses agree to take a chance on a neighborhood that remains something of a dump? Can a high-end hotel survive so far from midtown? Would a Vegas-style entertainment complex shatter the patchwork quality that gives Coney its mystique?
No one knows the answers, which gives rise to even bigger questions: Is Sitt’s Coney scheme the product of the same business acumen that created Ashley Stewart and his real-estate empire? Or is it merely a hugely expensive sentimental journey for Sitt, a nostalgia-fueled boondoggle-in-the-making?
To realize his vision, Sitt needs the support of another New Yorker who hopes Coney’s best days are ahead: Michael Bloomberg. City officials say they’re not prepared to publicly comment on Sitt’s plan until they review it in detail, but they’re generally supportive. “Although we haven’t gotten into specifics of his plan, I’m confident we’ll be able to get together on a project that helps achieve our vision for Coney Island,” says Josh Sirefman, City Hall’s point man on Coney redevelopment. While city officials have worked successfully with Sitt before—such as on an office tower he’s building in downtown Brooklyn—and are encouraged by his ideas for a water park, carousel, and music venues, there are still potential sticking points. For instance, they don’t want to see Coney Island become “a huge mall gussied up with a bit of entertainment,” one Bloomberg aide says. “We want a large entertainment component, because that will preserve Coney’s heritage and protect its authenticity and uniqueness.”
Another potential cause of friction, they say, could arise over the project’s scale. To be economically viable, Sitt says, the complex has to be at least 2 million square feet, a size that could overwhelm the low-rise neighborhood. “We have a lot of work to do—we have to figure out the appropriate scale for Coney,” the aide says.
Mindful of the powerful symbolism of reviving Coney, the Bloomberg administration has invested tons of capital, political and otherwise, in the area. Last spring, officials unveiled a new $240 million subway terminal at Surf and Stillwell Avenues, Coney’s main intersection. And last Wednesday, Bloomberg journeyed out to Coney’s boardwalk to announce that the government was committing a total of $83 million for neighborhood improvements such as new parking and a community center. He also said the city had completed a master plan for the area, a general set of guidelines meant to encourage private developers—like Sitt—to try to turn Coney into a revitalized, year-round destination.
But the dream of a reborn Coney has proved elusive since the sixties, when Mayor John Lindsay built the low-income housing that hastened the neighborhood’s decline. Since then, a string of failed revival schemes have come and gone. Ed Koch’s plan for casinos tanked when the State Legislature failed to legalize gambling. A subsequent plot by Horace Bullard, the flamboyant founder of the Kansas Fried Chicken chain, to rebuild Coney Island’s historic Steeplechase Park died amid a bitter squabble with the city.
Coney’s historical resonance as the birthplace of the beach-based amusement resort—not to mention the hot dog—has made its decline all the more dispiriting. Unlike other historically significant neighborhoods—places like Times Square and 125th Street, whose heydays, declines, and subsequent rebirths have embodied the larger story of New York—Coney hasn’t rebounded. The 2001 opening of KeySpan Park has given only a modest boost to local merchants because fans largely disappear after games. Come autumn, everyone disappears. Six months of the year, Coney Island is desolate—or, as Gregory Bitetzakis, who owns two restaurants there, puts it, “cold. Very cold. Not a soul around.”
Who in their right mind would travel to Coney Island in February? Sitt’s biggest problem, so far, is that his plan conspicuously lacks a single economic engine, the way Atlantic City has casinos. He’s got his blimps, his carousel, the fireworks he wants to launch from a new pier jutting into the Atlantic Ocean. He also hopes to entice Cirque du Soleil, the House of Blues, and other name-brand draws. Another idea is turning Coney’s major winter liability—proximity to the wind-whipped beach—into a visual asset. “Imagine kids going down a 100-foot-tall waterslide in an indoor water park on a frigid day in January, staring at the ocean outside,” Sitt says. But he says he needs 13 million people a year to spend money in his complex. That’s going to have to be some waterslide.
Another big challenge for Sitt is attracting the right retailers. Sitt says he’s currently in talks with movie-theater companies Loews and UA/Regal, the Ripley’s Believe It or Not museum chain, and Cold Stone Creamery ice cream. Done right, the complex could entice New Yorkers who now drive to Atlantic City or Great Adventure. But well-heeled retailers may yet conclude that the neighborhood’s traffic is too shallow-pocketed to support them, and Sitt could find himself stuck with down-market chains (Foot Locker, Tad’s Steaks). Think Rye Playland in the middle of a freezing, forbidding urban landscape.
Experts say that for the project to work, its stores need to command about $400 or $500 per square foot in sales. (By way of comparison, Times Square retailers net up to $1,000 per square foot, experts say.) Those are ambitious numbers, but they’re in the realm of what other big retailers, including Banana Republic, the Gap, and Express, make in places like the Kings Plaza mall or Brooklyn Heights, according to Gene Spiegelman, executive director of Cushman & Wakefield real estate and the company’s expert on Brooklyn retail.
“That’s a sign that the Brooklyn market remains very underserved by retail—which suggests that this project can move those numbers,” says Spiegelman. “Across the country, there’s typically an average of twenty square feet of retail to each person. In Brooklyn, the ratio is six to one, and that’s in a community—Brooklyn—with 2.5 million people.”
Then there’s the problem of getting a big hotel operator. Sitt’s own analysts say it would have to charge from $250 to $300 per night and have at least 70 percent occupancy year-round. “To achieve that, we’ll need to figure out how to position the hotel—whether as a meeting place for conventions or more as a resort-type tourist attraction,” says David Malmuth, managing director of Robert Charles Lesser & Co., which Sitt has hired to crunch the plan’s numbers.
In Sitt’s conviction that retailers and hotel operators will come, it’s easy to hear echoes of his softheaded side. “Quality purveyors will fit right in here,” he insists. “It’s got the beach, the boardwalk, the brand—Coney Island! It’s got sooo much potential!”
Sitt, of course, is hardly the only person enamored of Coney Island’s “brand,” and his billion-dollar vision is stirring some worry among locals who harbor their own deep nostalgia for the place. Take Dick Zigun, the unofficial “mayor” of Coney and founder of Coney Island USA, which runs the Mermaid Parade and the Coney Island Museum. He hopes Sitt’s cosmopolis will help the community, but as the self-appointed guardian of Coney Island kitsch, Zigun feels protective of the neighborhood’s heritage. His museum is housed on a property not owned by Sitt, and he worries about eviction. What better way for Sitt to prove good intentions toward Coney, Zigun asks, than to rent the museum a home in the new complex?
“We’d like him to rise to the occasion and earn us as his partner,” Zigun says. “He hasn’t said no, but he hasn’t said yes, either.”
Zigun also wonders about the fate of locals operating food shacks and souvenir stands on Sitt’s property. “There are businesses here I love very much, like Ruby’s Bar [on the boardwalk],” he says. “Let’s be realistic—some of them won’t be able to afford the new rents, thanks to what’s unofficially called ‘progress.’ ”
Sitt is working to win over the locals. Mindful that an isolated monolith could be unpalatable to the community, his chief designer, Stan Eckstut, is working on a plan to weave the complex seamlessly into the neighborhood beyond. “This can’t be self-contained, like something in downtown Stamford,” says Eckstut, who also designed the MGM Mirage City Center in Vegas. “It has to be accessible to everyone—kind of the town center of Coney Island.”
Or, as Sitt puts it: “Our vision is lights, camera, action, entertainment. But it can’t be too cleaned up. It has to have that special Coney flavor.”
Though such hopes have proved vain for nearly half a century, the moment may be ripe for Coney’s big comeback.
He’s promised local merchants whom the project will displace that they will get first crack at renting space in the new project. And as Sitt well knows, his local-boy-made-good bio is a big help in selling his scheme. He often makes the rounds among Coney locals, always calling himself “Joey.”
These efforts have slowly made Coney denizens warm up to Sitt—perhaps partly because they’re all desperate for a cash infusion into the area. “Joe is a Brooklyn guy that wants to do right by Coney Island,” says Dennis Vourderis, who’s owned Deno’s Wonder Wheel Amusement Park with his brother for almost 25 years. “The general consensus here is, we would love him to succeed. If he succeeds, so does Coney Island.”
Though such hopes have proved vain for nearly half a century, the moment may be ripe for Coney’s big comeback as the next step in Brooklyn’s astonishing resurgence over the past two decades. The irony is that until now, big builders have played little role in Brooklyn’s bounce-back, achieved largely by gradual gentrification, through entrepreneurship and the rehabbing of neighborhoods one warehouse at a time. The result has been an enormous boost of disposable income that’s made Brooklyn safe for big-time investment. In other words, after all the hard work by small businesspeople and fixer-upper homeowners, the cashing-in stage has arrived for the big developers: Witness plans for high-rises on the Williamsburg waterfront; Bruce Ratner’s planned arena on the Atlantic rail yards; and now, Sitt’s plan for Coney Island.
It’s tempting to see Sitt as a kind of Coney Island Bugsy Siegel (sans the wiseguy ties), the notorious gangster who reimagined a grubby little town in the Nevada desert as the gambling mecca of the United States. “I feel like him,” Sitt says. “Bugsy Siegel went into a town and there were a couple of small gambling casinos. His dream was to take the inspiration from what was there before and magnify it. Give it more variety. Give it choices … That’s exactly the turnaround opportunity that we see here in Coney Island!”
Sitt starts jabbing at the air again. “People said I was nuts for opening upscale stores in the middle of some of the toughest African-American neighborhoods in the United States,” he practically yells. “You know what? They were wrong.”