Hudson Companies David Kramer Talks Brooklyn Heights Library

Brooklyn Heights Blog sat down last week with the Hudson Companies’ David Kramer to discuss his company’s latest deal—one of Brooklyn’s most contentious—for a signature residential tower and new library branch on the current site of the Brooklyn Public Library’s Brooklyn Heights branch.

The full interview, available on BHB, reveals how Hudson Companies bested 13 other bidders for the opportunity to develop one of the Heights’ most desirable sites.

Mr, Kramer walked back his statement at the Brooklyn Heights Library Community Advisory Council meeting on October 7 that the deal’s full value of was $70 million, a figure far exceeding the $60 million valuation BPL President Linda E. Johnson made when announcing the deal on September 16.

“I don’t know if it was that much,” said Kramer last Wednesday in his Greenwich Village office. “$52M is the net number to Brooklyn Public Library. But we’re spending a million dollars on the interim library and we have to pay to convert the social hall at Our Lady of Lebanon into a usable library…. There’s a huge cost for that interim space and that’s a cost we’re paying.”

Kramer suggested that the cost for the core and shell of the new library, which Hudson will build, was “$8 millionish,” making the total deal approximately $60 million—not including City-mandated affordable housing, to be built at a yet-to-be-determined location.

The $52 million figure will not all be applied to BPL’s $300 million in deferred capital needs as an estimated $10 – $12 million will be spent to build out the new branch, leaving approximately $40 million for repairs at other branches.

The way you know the right price is to have a spirited competition from as many respondents as possible, bidding up the price as high as possible, and then that’s the number...
David Kramer, Hudson Companies

Project opponents—led by Michael White and Citizens Defending Libraries—contend that no matter what price the New York City Economic Development Corp. (EDC) might negotiate for BPL’s most marketable asset, it won’t be enough, a view Kramer dismissed

“The way you know the right price is to have a spirited competition from as many respondents as possible, bidding up the price as high as possible, and then that’s the number,” Kramer said. “When we were interviewed, we heard that this was the most responded to RFP in the history of EDC. There were 14 responses from legitimate developers. And they narrowed it down to seven, then to three, and then two. What they did along the way was to constantly poke and prod the respondents [by] saying ‘Why don’t you sharpen your pencil?’”

The deal must go through ULURP, the City’s public land review process, to gain approval. White and his supporters content that the process is rigged so that only the most well-connected bidders succeed.

“There are plenty of respondents to Pier 6 or Pier 1 or Brooklyn Public Library who are very active in municipal circles who didn’t get designated,” said Kramer, disagreeing with project opponents about why Hudson’s proposal won. “If you look at any of the respondents and say should any of them have been designated for the Library, how did they come across in terms of their design their purchase price, their generating affordable housing? I think that we were designated on the merits.

Citing the tenacity of EDC and BPL staff, the Brooklyn Heights resident said: “[The] RFP process stretched out over 15 months and in those 15 months, our bid kept on increasing. EDC did a masterful job playing all the developers off against each other to get the highest purchase price while trying to get as much affordable housing as possible.

You could just sit on your hands and say ‘This is a very valuable site and one of these days when we really need it we should use it. Until then let’s not do anything.’ That’s what they’re doing now.

Despite the risks, Kramer stressed there is a substantial payoff for Hudson. With approximately 130 condominium units— likely be in housed in a “tall, thin building... [t]hat reduces the shadow impact and lets more light and air go to Clinton Street”—the library site will be among the Heights most valuable properties.

“To me the obvious comp is Pierhouse. It’s a high-end condo with great views. I actually think this is a better location. And Pierhouse is doing great.”

Kramer also detailed how Saint Ann’s, a private school adjacent to the Brooklyn Height branch location, became part of the conversation.

“I only started talking to them because they were at the informational sessions and interested in partnering with developers. We have partnered with non-profits in all sorts of RFPs…. in this case it [is] a partnership where Saint Ann’s is putting up their own money for their own space and they’re reimbursing Hudson dollar-for-dollar, whatever it costs us, for their space.”

Discussing a Smorgasburg-curated pop-up space, to occupy one of two ground-floor retails spaces, Kramer became quite animated.

“Smorgasburg’s John Butler mentioned EDC had done a study about food entrepreneurs. They had come to the conclusion that there wasn’t a good interim step between all of these vendors setting up shops on weekends, between their pop-up, Smorgasburg food courts and then actually running a restaurant.”

“[W]e started thinking ‘What would it be like if it rotated?’ and gave vendors a chance to test their operation in a bricks and mortar setting for a month. If they were successful maybe that would give them and their investors the confidence to think about opening up a store.”

Despite many hurdles still to come, Kramer is optimistic his proposal is best for BPL and the Brooklyn Heights community.

“You could just sit on your hands and say ‘This is a very valuable site and one of these days when we really need it we should use it. Until then let’s not do anything.’ That’s what they’re doing now.”

“The way I see it, you are retaining the same amount of square footage for the library as currently exists…. you’re getting slightly more square footage [than in the existing building], you’re getting a new facility, you don’t have the HVAC / maintenance costs going forward, and you have $52 million dollars and rent-free space in the interim library space, I think that’s a great public / private partnership.”