An island in the sun

One New York developer is seeing dollar signs in the rollercoaster, Ferris wheel and boardwalk of Coney Island. By Aaron Lovell.

Last week, New York developer Joseph Sitt and his firm Thor Equities acquired another piece of Coney Island—the three-acre Astroland theme park—as part of its ongoing efforts to redevelop the Brooklyn waterfront. Thor reportedly paid $30 million (€23 million) for the seaside park. 

Astroland, currently operated by Jerome and Carol Hill Albert, opened in 1962, shortly before the close of Steeplechase Park, the last of the three turn-of-the-century theme parks that defined the seaside resort. Since the Second World War, the resort has moved decidedly down-market, but has remained a favorite summer getaway for millions of New Yorkers.

It has seen a resurgence of sorts as more disposable income has migrated to Brooklyn. In 2001, a minor league baseball team, the Brooklyn Cyclones, began playing at Coney Island, while the resort has also hosted a number of indie rock festivals in recent years.   

Located miles away from Manhattan, it does seem like an odd investment for a private equity real estate firm. But it brings Sitt a step closer to his vision for Coney Island: a year-round resort and theme park, combining elements of Las Vegas and the current neighborhood’s history of world-famous amusements, hot dogs and boardwalk.

In an interview with Private Equity Real Estate earlier this year, Sitt—who grew up close to Coney Island in nearby Gravesend—discussed the firm’s approach to the massive development project.

“One of our best assets is knowing how to maximize all the various components,” Sitt said at the time. “At Coney Island, we’re doing entertainment and retail at the base, then doing a hotel at the next level and at the third level we’re doing condos. So we have a three-prong strategy. You’ve got to think multi-dimensionally.”

Sitt’s widely reported plans for the complex include zeppelin rides and an indoor/outdoor water park, in addition to luring entertainment groups like Cirque de Soleil and restaurant chains like the House of Blues to the peninsula. This week, reports surfaced that Viacom has been talking to the firm about a possible hotel based on the children’s cable station Nickelodeon.  

The firm has reportedly been acquiring properties in the Coney Island area in recent years, quietly assembling a portfolio worth more than $100 million. While the project still needs a number of zoning approvals, if things go to plan the new project could be open for business by 2011.

Sitt made his name developing retail and mixed-use properties, largely in large cities in the US. In 2004, the firm raised a $375 million private equity real estate fund. This was preceded in late 2000 by a $185 million vehicle.