Today’s news:

Shaya defies Ratner, moves ahead with Atlantic Yards hotel

The Brooklyn Paper

A developer is moving forward with plans to build a hotel smack-dab in the middle of Bruce Ratner’s proposed Atlantic Yards site.

Scaffolding has been erected around the former Pecter’s baked goods factory at 800 Pacific St., which is owned by Shaya Boymelgreen, who has become a major force in Brooklyn real estate development over the past five years. He plans to convert the massive building into a franchise hotel, which current zoning on the site allows.

But this puts Boymelgreen at odds with Ratner, since the hotel would rise where Ratner would put the bulk of the housing in his Atlantic Yards plans. The city Economic Development Corporation and Empire State Development Corporation say they intend to condemn, under the power of eminent domain, up to 10 acres of private property, including the Boymelgreen site, for use under Ratner’s Atlantic Yards project.

Mayor Michael Bloomberg and Gov. George Pataki last week committed $100 million each in public funding for that proposal.

But that has not dissuaded Boymelgreen and his Israeli partners in the international development company Leviev Boymelgreen, from planning the 150- to 200-room hotel, which was first reported by The Brooklyn Papers, on Nov. 27.

Boymelgreen’s headquarters are just a block away, in 700 Pacific St. That building, the Newswalk condominium conversion, was one of Boymelgreen’s first developments in Brooklyn. The former Daily News plant was purposely drawn out of Ratner’s Atlantic Yards proposal at a time when the two developers may have shared a more cordial business relationship.

“Scaffolding is going up for predevelopment purposes,” said Sara Mirski, development director for Leviev Boymelgreen. She defined the predevelopment phase as “anything that you need to do to prepare a building.”

She avoided elaborating, other than to say, “We have something advertised and we’re working on predevelopment.”

James Dariel, of the commercial real estate firm Kalmon Dolgin, who is handling the marketing for the hotel, said discussions were ongoing.

“We’re talking to public and private institutions,” Dariel said, noting that he was surprised at the “positive response” he had received from area residents and interested parties who had placed calls to his office about 800 Pacific St.

“Word is out that there’s possibly a hotel coming,” he said, “and there seems to be a quite positive response. In a lot of communities it seems like no matter what you put in there, the community disagrees. But this has gotten a really surprising and positive response.”

He added that the developers were still doing feasibility studies to determine the “demographics of the surrounding areas and figure out the needs in this location.”

A notable lack of conference space and business accommodation was prevalent, Dariel said, noting that the hotel’s character “may be a type of fusion between business and boutique.”

A Department of Buildings spokesman said that other than for scaffolding, Leviev Boymelgreen had applied for no other construction or demolition permits for 800 Pacific St.

“That’s it,” said spokesman Kenneth Lazar, leading to suspicions among some area residents that Boymelgreen hopes to get the Board of Standards and Appeals to grant a variance that would allow him to build a housing development rather than a hotel.

As a hotel, however, the development could have the protection of new incentives that may be introduced by one of Atlantic Yards’ political promoters, Bloomberg, who has decried the sudden and rapid conversion of hotel rooms to condos and co-ops in the wake of the current real estate boom.

The New York Times reported on March 6 that although New York City has the highest occupancy rate for hotels in all the major U.S. cities, it is suffering from a high loss of rooms to high-end luxury condo conversions.

In 2004, the city lost 1,093 rooms, while only three new hotels in the city opened, bringing 339 rooms, according to the Times, citing Price Waterhouse Cooper.

With the creation of new tourist destinations, said sources cited in the article, the city will be facing a shortage, and needs to create 5,000 new hotel rooms to match proposals that would bring an influx of tourists, such as the city’s 2012 Olympic bid, and the expansion of the Jacob Javits convention center on Manhattan’s West Side.

Ratner’s plans for Pacific Street, which would be developed in Phase I of his construction, according to plans released with the agreement, would eliminate the Pacific Street street-bed, and erect some residential buildings and ground-level retail, open space and parking.

Because they could not argue that Boymelgrween’s plan falls under the heading of blight, condemning his property under eminent domain could require the Empire State Development Corporation to determine that a greater economic benefit to the public rests in Ratner’s plan over Boymelgreen’s.

Henry Weinstein, who owns the properties from 730 through 752 Pacific St., has told The Brooklyn Papers that he intends to develop office buildings adjacent to Boymelgreen’s hotel. His property would also be condemned if Ratner’s plan succeeds.

“I guess I’d be foolish not to have the concern,” Weinstein said this week, “but now that the MTA is saying they’re going to open up their property for bids, and we’re preparing to bid on these properties, if it’s going to be an open market to bid on those railroad yards, we are going to bid on them.”

Asked if that meant he and Boymelgreen had something in the works, he said, “No comment on the details yet.”

“I don’t know anything about [Boymelgreen’s] plans,” said Ratner spokesman Joe DePlasco. “I have no comment.”

Patti Hagan, a Prospect Heights resident and ardent opponent of the Atlantic Yards project, said she doubted Boymelgreen’s hotel development could be condemned.

“I think Shaya Boymelgreen is a formidable developer,” Hagan said. “The state would really think three times before attempting to condemn and seize his land. He’s an equivalent weight, he has the throw-weight, to counteract Ratner, to challenge him.

“I really don’t think the state would dare do it.”.

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