City One: News

Jun 12, 2000 -- Last year, eager to find a new home for his manufacturing company, Peter Sardis took a chance. Ignoring the high-crime and low-security reputation of the East New York section of Brooklyn, he drove out and took a look.

What he saw so impressed him that he decided to move his firm there from Richmond Hill, paying $450,000 for a 12,000 square-foot building on Montauk Avenue. "I think the neighborhood is going to be even better five years down the road," says Mr. Sardis, president of Distinctive Displays Inc., a producer of showroom, trade show and retail displays

These days, many other business owners share Mr. Sardis' optimism and his taste for real estate. They have been won over by East New York's improved outlook, its tax incentives and, more important, by the fact that it offers something unavailable elsewhere - large blocks of affordable industrial space.

Word Is out

In the last few years, a number of new companies have moved in. They range from Hena Inc., a coffee roaster; to DXB Video Tapes Inc., a high-tech videotape, DVD and CD producer; to Renaissance Woodcarving, a custom furniture manufacturer. In addition, weedy lots, once strewn with trash and inhabited by vagrants, have been snapped up as future sites for distribution and manufacturing facilities.

"The network of industrial companies and suppliers has been getting the word out about East New York," says Joseph Chan, manager of the Brooklyn Chamber of Commerce's Real Estate and Business Services Program. "It's not the place It was."

Surely not. Thanks to the strong economy and the crackdown on crime, East New York is a safer place these days. Within the 75th Precinct, which also encompasses Cypress Hills and Starrett City, crime has plummeted 58.9% since 1993.

"Crime was a concern, but once we drove around, our concerns were put to rest immediately" says Scott Tauber, co-owner, along with his brother, Lanny, of Hena, which they moved to East New York from Park Slope two years ago.

Today, affordable space Is growing scarce even in East New York. "Five years ago, you probably had at least 20 properties available at any given time," says Avi Feinberg, a partner in City One Real Estate in Greenpoint. "Now, you can only show a third or less of that."

In response, prices have soared. A one story building, which rented for $3 to $4 per square foot five years ago, now commands $5 to $6 per square foot. On the sales side, one-story industrial buildings that sold for between $20 and $35 per square foot five years ago now snare $55 per square foot.

The price is right

Dominick Vitucci, whose Dom's Truck Sales has been based in East New York since 1963, is among those who have cashed in on the neighborhood's rise.

Three years ago, he purchased a long-dormant, burned-out building. He paid $400,000 for the 32,000 square-foot space and then poured $500,000 into renovations. Before the work was even finished, he had signed up his first of two tenants. The second tenant committed to the space the morning Mr. Vitucci ran a classified ad for it.

Aaron Menche, president of DXB Video Tapes is also a believer in East New York. Since purchasing his 90,000 square-foot building in September 1997 for less than $30 per square foot, he has invested an additional $1 million in renovations and $4 million in equipment. Now, Mr. Menche says he is in "preliminary negotiations for two more sites in the area for new and related businesses."

Making that kind of commitment even more attractive is East New York's status as a New York State Economic Development Zone, which gives businesses a variety of Incentives such as tax credits and reduced utility costs "If I was smart, I would have bought a lot more property a long time ago," says Mr. Vitucci.