The Commercial Observer:
Congrats on the JetBlue deal. How did you first get involved?
Mr. Brause: Back in 2001 we net-leased the entire building, the Brewster building—400,000 square feet—to MetLife Insurance Company. Two years later, they exercised an option for us to build out another 300,000 square feet in the rear parcel that we’d owned for about 20 years. So they have net-leased until 2023 about 700,000 feet of space. MetLife then decided to move some of their personnel to 1095 Sixth Avenue, and they’re now back subletting that vacant space; so MetLife was looking for a large tenant to take the balance of the space.
JetBlue, the perfect tenant, was looking to move from their headquarters by mid-2012, with about a 200,000-square-foot requirement. They went out to at least five cities across the United States. The top finalists, we were told, were Orlando and New York City, but within New York they toured Long Island City, Jamaica, downtown Brooklyn and downtown Manhattan.
Was it a typical real estate deal or were you dealing closely with the city?
It’s an interesting question because they found us in a multitude of ways. The Economic Development Corp. was very helpful in bringing MetLife to our building back in 2001. They were equally as helpful bringing JetBlue, and retaining them in New York City. Back in July of last year, they contacted me as chairman of the Long Island City Business Improvement District, saying, ‘You are one of the neighborhoods they want to look into. Can you help them learn a little bit more about Long Island City?’ So we prepared a whole marketing description of why Long Island City is a wonderful place to do business: It’s the most exciting neighborhood; it’s an emerging market in terms of offices and retail; and you’ve now got hotels developing; and you’ve got 4,000 rental and condo apartments that have been built over the last five years. The waterfront has exploded in terms of new development, and it’s a great place to live and, now, work. MetLife has found that out. Silver Cup Studios is there. CitiCorp is still there, and UN Federal Credit Union had just moved in.
How privy were you to the horse-trading going on between JetBlue and the city?
My personal role was as a landlord to MetLife and then approving a potential subtenant. But there was a lot of back and forth with what else does JetBlue need to make the deal work. So part of it was what kind of signage would be allowed on the building, which involves the city as well as us as the landlord.
Is that going to happen?
There’s conversation about that and I know it’s still in the works. We would be very much in favor of allowing the JetBlue sign to be on the building. If you look at Long Island City from Manhattan as you’re driving on the F.D.R., you see the CitiCorp sign, you see the Pepsi sign, you see the Silver Cup sign. You’ve got great signage, which is facing Manhattan so you’re facing a huge population center. It’s great to add to that.
Tell me about your pitch to JetBlue.
We brought them over on the Water Taxi from Manhattan to Queens on a great, beautiful summer day. We were the last neighborhood that they were touring in the day so we had a beautiful sunset over Manhattan, and the views of Manhattan are actually not great in Manhattan, but they’re phenomenal in Long Island City. You’re looking across the East River, and you have a great view. So we brought them to the top of the UN Federal Credit Union tower, which had just been built a year earlier. We had the CEO of UN Federal Credit come up. We went to their conference room at the top of the building and brought the CEO of JetBlue, David Barger, to the meeting.
You pulled out all the stops, didn’t you?
Oh, yeah, we did a whole marketing presentation-the aerial view from the top of the beautiful building, showing where we were in terms of Court Square, Queens Plaza, Jackson Avenue, where the BID was and where the Economic Development activities had been in terms of the $80 million that was being expended on the park. MetLife got involved. Silver Cup Studios got involved.
After they did a tour of the UN Federal Credit building, they took a jitney to Silver Cup Studios. It was the night after the Emmy Awards, and 30 Rock had won the best comedy award, so we brought them to the 30 Rock stage and they got to see some of the sets and some of the actors, which was exciting. And after that, they went out for drinks in Long Island City and had a great evening. I think that kind of began the courting of JetBlue to Long Island City.