In a reworking of a previously announced plan, the project to develop the Brooklyn Navy Yard into a Hollywood-style movie studio has been secured by a group led by real estate development company Steiner Equities, Roseland, N.J. A 70-year lease with a group led by that company was signed last week (10/12), and Mayor Rudolph Giuliani acknowledged the agreement in a press conference.
As outlined at an announcement in May (SHOOT, 5/14/99, p. 8), the Navy Yard development project was to have involved Miramax Films, New York; actor Robert DeNiro’s Tribeca Productions, New York; and Vornado Realty Trust, Saddle Brook, N.J. At that time, the three companies had expressed their intention to commit $35 million to the project and were to be granted a $25 million low-interest loan from the city in addition to an $8 million grant from the Brooklyn Navy Yard Development Corporation. Other companies, including Plaza Construction, New York, and Keyspan Energy, an electricity provider, had made capital and infrastructure pledges to the project.
Mayor Giuliani said that the Navy Yard development deal would now go forward with the Steiner Equities group, which includes New York Studios, a company led by president Cary Hart and CEO Louis Madigan. Giuliani said the decision to go with the Steiner Equities group was made by the board of the Brooklyn Navy Yard, which concluded that the terms of the deal with the Steiner Equities group would be sweeter and swifter than the deal with the group led by Miramax and Tribeca. "The Brooklyn Navy Yard board believes that the deal with … the Steiner group would bring about $60 million more in revenue, and it was a more realistic deal that they could start faster—meaning within the next three or four months—and they did not require a $25 million loan," said Giuliani.
New York Studios, which had commissioned architectural plans for the Navy Yard soundstages and continues to use the site for commercial and music video production, was also involved with the May announcement. There were rumors floating at the time that New York Studios had the ability to make or break the proposed Navy Yard deal because the company ultimately held the legal rights to develop the Navy Yard property. In his comments last week, Giuliani acknowledged that the Steiner Equities group did have a "preexisting contract." The contract could have led to a lawsuit against the city if it had allowed anyone to develop the Navy Yard without New York Studios’ legal consent.
"So it was the choice of the board of the Brooklyn Navy Yard that the Steiner deal was a much, much better deal for the city, and it was the advice of the [city’s] corporation counsel that both from a contractual point of view and a legal point of view, it was the safer thing to do," Giuliani said.
Giuliani emphasized that in the initial May announcement, the city had agreed only to "explore" an arrangement with the group led by Miramax Films and Tribeca Productions. "It was explored," he said. "That’s what the word ‘explore’ means; it doesn’t mean ‘agreement,’ it doesn’t mean ‘deal.’"
In a prepared statement, Miramax’s co-chairman Harvey Weinstein and Tribeca Productions’ partners Robert DeNiro and Jane Rosenthal expressed dismay that the Navy Yard development project was awarded to another development group. They said they became involved with the Navy Yard at the invitation of Mayor Giuliani and "were shocked and perplexed that the Mayor announced a deal with a new developer." The triumvirate contended that they agreed to the initial Navy Yard announcement because they believed their participation was on terra firma. "In getting us to agree to a press conference … to announce the plan, the Mayor told us that we had a deal [original emphasis]; all that remained to do was dot the i’s and cross the t’s."
Weinstein, DeNiro and Rosenthal also claimed that their proposal to develop the Navy Yard was "better for Brooklyn and the needs of the city."
Doug Steiner, president of Steiner Equities, said that his company became involved with the Navy Yard in March of this year after being approached by New York Studios. After looking at the Navy Yard property and considering the demand for soundstages in the New York area, Steiner Equities made a commitment to the project. "We looked at the property, talked to [New York Studios] about it, talked with some other people, did some homework, and decided that the demand was tremendous and [the project] made sense," said Steiner. "We share [New York Studios’] vision."
Steiner emphasized that the Steiner Equities group is "continuing to have talks with DeNiro and Miramax, which may or may not come to fruition." While he said he would like to have Miramax and Tribeca on board, he noted that other companies "more on the cutting edge of the Internet and digital media" had approached Steiner Equities to participate in the Navy Yard development. "[Miramax and Tribeca] would bring a lot to the table, but there are other [companies] that bring different things as well as the same things to the table," Steiner observed.
With or without additional participants, Steiner said that construction would begin at the Navy Yard in six to eight weeks, and construction of the studios would take between 18 and 24 months to complete. The project will cost between $90 and $120 million, and Steiner said the financing for construction was now in place. Steiner Building Company, a subsidiary of Steiner Equities, will oversee the construction at the Navy Yard, and Steiner added that Keyspan Energy would remain involved with the development of the project.
If completed, the Navy Yard project would consist of 11 state-of-the-art stages ranging in size from 12,000 to 40,000 square feet (the plan announced in May outlined 12 soundstages). The project would also include support and production space.
While Steiner Building Company has not built any studio soundstages, they have constructed other large developments, such as AT&T’s basic research headquarters in Middletown, N.J., a 1.8 million square foot facility; and Continental Insurance’s Cranbury, N.J. complex, which is 500,000 square feet. The company’s constructions have included corporate headquarters, warehouses, computer centers and shopping malls.
