Coney Island keeper
Thor Equities’ Joe Sitt gives city a ride for its money
Giving a reporter the tour of a half dozen of his Manhattan properties, Joseph Sitt stops in front of each, reeling off details on everything from their architecture to the history of their leases. But when it comes to his most controversial project, Mr. Sitt gets choked up.
“It’s my passion to make Coney Island better,” says the suddenly teary-eyed chief executive of Thor Equities. “It is the place where I played hooky and grew up. I want to give back to the neighborhood and to New York City.”
Trouble is, many people simply don’t believe him.
In 2000, Mr. Sitt sold his successful women’s apparel chain, Ashley Stewart, and announced plans to focus on developing retail and mixed-used properties in distressed urban areas. He envisioned himself in the mold of the comic-book hero he named his firm after. Today, his record is mixed at best. Critics, which include city officials, insist that he’s just another speculator looking for a quick profit.
On Coney Island, Mr. Sitt is locked in a battle with the Bloomberg administration, which plans to develop the depressed area into a thriving year-round amusement district with housing. To accomplish that, it needs the 10.5 acres that Mr. Sitt assembled over seven years at a cost of $93 million.
The 44-year-old developer originally hoped to build a $1.5 billion entertainment district with rides, shops and high-rise hotels. That proposal failed to win over the community and city, which left Mr. Sitt little choice but to sell. However, he has stubbornly held on to the acreage during months of intermittent negotiations. Most recently, he turned down cold the city’s offer of $105 million.
“We’re not surprised Thor is trying to flip their Coney property for the biggest profit possible—it’s what it does,” the mayor’s office and New York City Economic Development Corp. said in a joint statement in response to a reporter’s questions. “But we … refuse to pay more for the property than what it’s worth.”
Mr. Sitt has done well with other Coney Island land. He paid $13 million for the 168,000-square-foot Washington Bath House site in 2005, selling it a year later to Taconic Investment Partners for $90 million.
He has also made a killing in downtown Brooklyn. In 2001, he bought the ground lease for Albee Square Mall on Fulton Street for $24 million with a promise to transform it into a vibrant shopping mecca. Instead, he made only superficial improvements and in 2004 sold the property to Acadia Realty Trust for $125 million.
“I cleaned up the mall and made it safer,” Mr. Sitt says. “I executed for our investors. It was time to move on.”
The son of a maker of kids’ apparel, Mr. Sitt grew up in the Sephardic community of Gravesend, Brooklyn. A former comic-book collector, he considered being a history teacher but created Thor in 1986, while studying for his M.B.A. at NYU’s Stern School. After graduation, he went into retail, founding plus-size women’s clothing chain Ashley Stewart and turning it into a $400 million company.
“He is a brilliant businessman,” says Terry Stanley, a real estate executive and member of the Coney Island Development Corp. “When he wants something, he gets it.”
Mr. Sitt controls more than 16 million square feet in the United States and South America. He scored what some consider his biggest triumph in Chicago. He bought the historic Palmer House, once the world’s largest hotel, for $240 million in 2005 and won several awards for his painstaking, $170 million restoration.
The developer, who was a Crain’s “40 Under 40” in 2004, lives in Brooklyn with his wife and four sons. He intends to build a couple of retail properties in the borough, including one on a site near the Ikea store in Red Hook. Zoning changes are needed for him to move ahead with the project.
“He has gotten a bad rap,” says Chris Havens, head of Brooklyn-based brokerage Creative Real Estate Group. “He wants to build.”
The momentum seems to be against Mr. Sitt on Coney Island. Two weeks ago, the Planning Commission approved the city’s plan, though it also needs the City Council’s nod. Additionally, a bill is pending in Albany that would designate a 10.8-acre swath of Coney Island a park—effectively killing whatever aims Mr. Sitt has for his holdings, whose value is shriveling along with the rest of the real estate market.
All is not lost. If Councilman Dominic Recchia, a childhood friend of Mr. Sitt’s, voices objections to the city’s plan, the rest of the council would probably go along and vote down the entire thing.
“I am an eternal optimist,” says Mr. Sitt, who claims that he will work with the city on Coney Island. “I want to make everyone happy.”
By Amanda Fung