Behold: The day of the biggest real estate sale to hit Brooklyn in decades is nearing and a swelling crowd of potential beneficiaries is salivating. At stake are 34 mint-condition properties in Brooklyn Heights and Dumbo that the Jehovah's Witnesses spent decades accumulating and now are considering selling as they ponder a headquarters move upstate. All told, the portfolio spans 3.2 million square feet—more than the entire Empire State Building—and is worth well over $1 billion.
"There is great potential here to transform the surrounding neighborhoods," said Marty Markowitz, Brooklyn borough president.
Even with the sale likely a few years away, he and others are dreaming big about what could be. For the city, the sales could return the holdings of the largest landlord in Brooklyn Heights and vicinity—the nonprofit Watchtower Bible and Tract Society of New York, the Witnesses' business arm—to the city's tax rolls. The move could net City Hall millions of dollars a year in revenue.
Meanwhile, backers of the nearby Brooklyn Bridge Park have already tentatively factored the sale of some of the Witnesses' properties into the park's long-range funding plans, and developers are eyeing the possibility of vast amounts of new housing and office space. The Witnesses themselves offer some other suggestions.
"These would be good for universities or a senior-housing operator," said Richard Devine, a spokesman for the Witnesses, referring to half a dozen buildings linked by brightly lit, spotless tunnels that the Witnesses dug over the last 35 years.
It wouldn't be the first time schools have put Watchtower properties to use. Brooklyn Law School and New York University snapped up 89 Hicks St. and 67 Livingston St., respectively, for dorms when the Watchtower started selling properties in 2004.
Since moving its headquarters to Brooklyn in 1909, the group has built a sprawling, self-sustaining community. It keeps all of its properties in mint condition, a stewardship so good it has even been commended by the city Landmarks Preservation Commission. The properties are loosely arranged around the 305,000-square-foot headquarters at 25 Columbia Heights at the edge of Brooklyn Heights, where most of its holdings are used for housing. In Dumbo and a narrow slice of downtown Brooklyn, the Witnesses own buildings used for storage and maintenance facilities, as well as lots for parking.
The Witnesses' first big shift came seven years ago when they shipped their printing plant off to Wallkill, N.Y. There, it primarily turns out two monthly publications, Watchtower and Awake!, which boast a combined circulation of more than 70 million.
"Brooklyn was known as the center of publishing and a shipping hub," said Mr. Devine, who notes that today, his organization has 1,500 members living in the borough, less than half the peak number. "Our reasons for being in Brooklyn are no longer valid."
That is why the Witnesses bought a 250-acre forested site in Warwick, N.Y., two years ago. It is now pursuing plans to build a campus there. Next month, the Witnesses will present their final environmental impact study, a crucial step in their effort to get approval to build. If all goes well, the Witnesses could get a green light to proceed within a year, observers noted.
Meanwhile, the Witnesses have put eight Brooklyn Heights properties—ranging from a carriage house to a seven-story apartment building, with a total of 58,000 square feet—on the block with an asking price of $37.25 million.
Mr. Devine declined to comment on the time frame for the sale of the rest of the properties and on the group's Brooklyn exit, but it looks inevitable. The timing could not be better.
"The city needs more housing, and that will only become truer as the decade progresses," said Hugh Kelly of consultancy Real Estate Economics, who is also a clinical associate professor at the NYU Schack Institute of Real Estate. He notes that with all the office development at the World Trade Center and elsewhere in lower Manhattan, more employers are drawing staff from Brooklyn—and that Dumbo and Brooklyn Heights are seen by many as ideal hotbeds of such creative talent.
Housing development has already begun. The Witnesses' old warehouse on the waterfront, which sold for $205 million in 2004, is now a 438-unit luxury condo.
Home builder Toll Brothers is among those interested. David Von Spreckelsen, a senior vice president at Toll, said he has expressed interest in all the properties, particularly those in Dumbo. He calls them "blank slates to work on."
The 3.1-acre parking lot on 85 Jay St. that is already zoned for residential development is a prime example. Several years ago, the Witnesses got city approvals to build a tower with nearly 1,000 residential units there, but pulled back on those plans due to the recession, according to Mr. Devine.
At the other end of the spectrum is the elegant Hotel Bossert at 98 Montague St., where the Brooklyn Dodgers celebrated their only World Series win in 1955.
Lots of interest
The properties' appeal is already becoming evident. Since the Witnesses put five residential properties up for sale last month, Ellen Newman, the Corcoran Group broker exclusively marketing the houses, said she has had dozens of showings.
Massey Knakal, the brokerage marketing two residential buildings and one five-story townhouse for the Witnesses, also reports a high level of interest.
"Every type of buyer is interested: developers looking to convert the properties to condo, institutions that want to use the properties or rent them out," said Robert Knakal, chairman of the brokerage.
The options for the properties are endless. Mr. Markowitz said a new hotel or an economic development incubator would be feasible in areas that are not zoned residential. Businesses would also benefit. There are more than 90 tech startups and hundreds of creative firms in Dumbo, according to Alexandria Sica, executive director of the Dumbo Business Improvement District.
"We need space for growth," she said.
Oddly enough, after decades of complaining about the Witnesses and their huge presence in the area, some longtime residents are already saying that they will be missed.
"They are good neighbors," said Judy Stanton, executive director of the Brooklyn Heights Neighborhood Association, adding that they keep their buildings in top shape.
But more important, "many people in the Heights take advantage of their skilled workforce, their carpenters, stonemasons and plumbers," said Ms. Stanton, who used a Witness to paint her house.