Lloyd Blankfein came back to Brooklyn yesterday, to the nexus of one of its poorest neighborhoods. Though even today, poor in Brooklyn is relative, as the borough’s gentrification continues inexorably, slowed–but only just so–by the recession.
The occasion was the groundbreaking of the Bradford, named for a tree native to the borough. Located on a lot that had been recently cleared of condemned rowhouses to make way for a low- to middle-income apartment building, the project will provide some refuge before the next wave of development hits and the surrounding brownstones are once again commanding seven-figure price tags.
It should be noted that middle income in this case, which comprises about 80 percent of the building’s 105 units, translates to a family of four making between $99,000 and $127,000 a year. The other 21 units are set aside for those making less than $24,000 a year, which seems much closer to the realities of Bed-Stuy and Crown Heights. At the same time, those sorts of families do not make for the best return on Goldman Sachs (GS)’ $6.5 million investment in the $45 million project.
All the expertly tailored pinstripe suits–probably more than the neighborhood has seen in one place for decades, excepting at church on a Sunday–seemed rather out of place, though not as much as the very presence of the vampire squid on this busy stretch of Fulton Street, down the block from Pasha Discount 99¢ and Mother’s Kitchen $3.99 and Up Jamaican Restaurant, Mr. Liquor and a jam-packed McDonald’s.
On the walk to the event, The Observer saw only African-American and Caribbean faces. Inside the event, there were about as many Caucasians as not. In the gleaming rendering for the project, the whites outnumber the blacks and browns. There, for the grace of Goldman Sachs, goes the neighborhood
It is a place Blankfein knows well, even if he has left it far behind. The banking chief grew up four miles away, in the Linden Houses of East New York–then a Jewish ghetto, now a black one. His father was a postal worker, but that did not stop young Lloyd from going to Harvard at 16. Will the residents of the Bradford have it so good? Maybe this is what Blankfein is hoping. Maybe it is even a possibility. Maybe for those growing up in the fancier apartments.
“I knew things would be better when I got back to native soil from far across the sea in Manhattan,” Blankfein said at the outset of his short ceremonial remarks. Nothing like a homecoming, even if his real home today is at the illustrious Central Park West.
Yet it is easy to wonder if that $27 million apartment, reportedly paid for with cash, was not financed at least in part by the subprime mortgages that have ravaged this corner of Brooklyn. The neighborhood has more problems then just gentrification.
But here is Goldman to help, bringing the power of its $1.2 billion Urban Investment Group to bear on this rundown neighborhood. So what if the project will could earn the company 8 to 10 percent on what its website calls a “featured transaction.” This is about the people.
“The returns from this investment will be some of the greatest for Goldman Sachs,” Blankfein said, smiling the Cheshire grin he wore all afternoon. At first he seemed to be saying that what he and his company valued most was the investment in his old neighbors. But maybe, as always, it was just the profits.