Gilmartin: Atlantic Terminal mall was a huge risk (?), but mitigated by low land cost. Now, a retail mismatch?
Gilmartin also talked of the experience of building the Atlantic Terminal mall a decade ago, at a time when doing anything in Brooklyn was considered a huge risk. For Forest City, the risk was mitigated by the fact that it had secured the land at a low cost and so had a lot of potential upside. In practice, the development has been massively successful by bringing retail to an underserved market. The Target at the property, for example, is now the best-performing location for the department store chain.
At the time, however, Forest City had to convince tenants to lease space at the Atlantic Terminal mall, often on very favorable terms. As a result, today Forest City would like to redevelop the original property and bring it in line with the quality of the more recent Atlantic Yards project, but it’s locked into long-term leases.
“Now you have to figure out ways to change up the mix,” Gilmartin said. “The neighborhoods [sic] has outgrown the center.”
The Atlantic Terminal mall, which opened in 2004, was hardly a huge risk, since Forest City had eight years of experience with the adjacent Atlantic Center mall, which was also "bringing retail to an underserved market."
The developer already could see the steady gentrification trends. After all, Forest City in December 2003 announced Atlantic Yards. (And the retail "quality" of Atlantic Yards, for now, is attached to arena-dependent businesses.)
The "huge risk" line is usually attached to the MetroTech development, which began in the 1980s.
Now? Yes, the area around the intersection of Atlantic and Flatbush avenues has gentrified, but the Atlantic Terminal mall is on top of a transit hub, and, guess what, those teenagers passing through still like to go to McDonald's and Target.
So I'm not sure which retail outlets they'd like to swap out. Maybe, perhaps, the Department of Motor Vehicles, which took hard-to-rent (at the time, and maybe still) retail space at the adjacent Atlantic Center.