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Dumbo on His Mind

Dumbo on His Mind

The New York Times 12/30/2011


WHEN a scruffy young man in a tattered sweater stepped up to the podium at the annual fall lunch of the Brooklyn Real Estate Roundtable, he looked more Silicon Valley entrepreneur than big-city real estate tycoon.

But there was little chance that any of the high-powered executives, politicians, bankers and industry bigwigs in the room did not know who he was.

The speaker was Jed Walentas, 37, the dauphin of the house of Walentas and the only son of David Walentas, who almost single-handedly created Dumbo, taking millions of square feet of former factory and warehouse space between the Manhattan and Brooklyn Bridges and building one of the most expensive neighborhoods in Brooklyn.

The empire the father built through his company, Two Trees Management, is now in the hands of the son. And like other scions of powerful New York real estate families — the Rudins, the Dursts, the LeFraks — the younger Mr. Walentas will play a powerful role in shaping the city. His sphere of influence includes not only Dumbo, but neighborhoods stretching from the West Side of Manhattan to Fort Greene, Brooklyn.

Walking around the bustling streets of Dumbo, Mr. Walentas said he wanted to find ways to better connect Downtown Brooklyn with the thriving neighborhoods that ring it. With so many college-age students attending classes — but often not living — in that section of Brooklyn, he said it mystified him that more hadn’t been done to keep them there. Zoning that requires developers to provide public housing as part of their projects is the best way to keep neighborhoods diverse, in his view. But he also said that affordable housing should not mean cheap housing, which is one reason he cited for his willingness to spend money on well-known architects to design his projects.

Mr. Walentas, whose daily uniform usually consists of a hoodie and jeans, lives in an art-filled SoHo loft with his wife, Kate, a photographer, and their newborn son, Theo. At Two Trees, he has assembled a small, tightknit group of people in their 30s to work with him. They are as much friends as employees, including his college roommate, Amish Patel, who is now his No. 2.

Over the last few years, even as the economy has continued to sputter, this team has started work on a number of ambitious projects. The list includes Mercedes House, the sprawling $600 million ziggurat-shaped building designed by Enrique Norten on the West Side of Manhattan, which will have 700 rental units and 160 condos when finished.

Others on the list: a 72-room hotel on the edge of Williamsburg that will feature a restaurant and a rooftop bar; a mixed-use building that has yet to break ground just south of the Brooklyn Academy of Music that will have 350 rental apartments and 50,000 square feet of cultural space; and a controversial, long-planned condominium building on Dock Street in Dumbo that in its latest iteration is to house a public middle school.

Bruce Ratner, the president of the Forest City Ratner Companies, which is developing the Atlantic Yards in Brooklyn, said he had watched Mr. Walentas grow more confident as he took control of the company.

“What is really interesting about David and Jed is that they both have a vision for what they want,” he said. He pointed to other large-scale development projects across the city, saying the extent of their success had been dependent on the developer’s vision.

“Battery Park City is a great place,” Mr. Ratner said, “but it does not have the same sense of character” as Dumbo. Rockefeller Center, on the other hand, has a definitive sense of character, because “the Rockefellers had some idea of what they wanted that place to be.”

In Dumbo, he said, the guiding vision was to retain the area’s industrial flavor (without the industry), while providing a street-level experience both diverse and interesting — even if it means subsidizing rents for small-business owners and declining the high rents offered by big-box stores, or selling off properties and cashing out.

“Jed holds firm to the vision,” Mr. Ratner said. “And that is not a minor comment.”

The Walentases have won admirers for their attention to the aesthetic details of their developments, and for supporting artists, whom they encouraged early on to move to Dumbo. But the family have also made some enemies along the way.

Judy Stanton, the executive director of the Brooklyn Heights Association, has battled with both David and Jed Walentas over numerous projects.

“I think Jed has better manners — which is not to say he is well mannered — than his father,” she said. “He does not come up to people out of the blue and say really crude, rude things.”

David Walentas, whose shirt cuffs bear not his monogram but his motto, “No Guts No Glory,” makes no apologies for the battles he has waged. “I was the lone ranger out there at war with everyone,” he said, noting that his success had allowed his son the luxury of patience.

But critics like Ms. Stanton still get under his skin. “They are up there on the hill, holier than thou,” he said. “But if it had been up to them, there would be no Dumbo.”

Jed Walentas is the first to acknowledge that he has not had to fight and scrap his way to the top as his father did. “We had this massive head start,” he said.

The condominium proposed for Dock Street has met with an outcry from community groups worried about the impact it will have on the view from the Brooklyn Bridge.

“The bridge is set off so beautifully by the fact that there are not tall buildings around it,” Ms. Stanton said in an interview.

In 2004, when Two Trees proposed the Dock Street project, an 18-story residential building on the site of St. Ann’s Warehouse, city officials shot it down amid fierce opposition.

But Two Trees did not give up, and on the latest go-round, with Jed Walentas at the helm, it aggressively courted community groups from poorer neighborhoods, promising to build a public school. And with the project stalled, the company was able to buy a neighboring building, which allowed it to tweak the design.

This time Mr. Walentas won approval. The proposed building is now 17 stories high and set back slightly. A lawsuit has since held up construction, but he hopes the way will be clear by summer.

When he joined Two Trees in 1998, Jed Walentas played a central role in selecting the kinds of retail outlets that would give Dumbo a distinctive ambience. He sees it as the duty of the younger generation to be more assertive in defending the real estate industry and what it means to New York.

“The older generations are less interested in really battling on certain issues,” he said. “They are, rationally, extremely risk-averse, and they will often choose comfort over progress. I think the public and the elected officials underappreciate how genuinely civic-minded the real estate industry is and how closely aligned the long-term interests of the city are with our industry.”

Several weeks ago, when the Occupy Wall Street movement was nearing its peak, he explained why he thought his way of making money was very different from what others do to create wealth.

“Unlike someone on Wall Street, who can make a lot of money in New York and then move on,” he said, “we are in it for the long term.” He was standing in the construction zone for the second phase of Mercedes House, so named because the ground-floor commercial space is leased to a Mercedes-Benz dealership. “This building will be here for a hundred years. It’s not like we can load it onto a 747 and move it. And for it to be successful, the neighborhood needs to be successful.”

Still, there is no getting around the fact that new construction in New York’s prime neighborhoods is geared toward the wealthy.

When David Walentas bought two million square feet of space in Dumbo in 1981, he paid $12 million. Today, a single penthouse apartment in the ClockTower building in that neighborhood is listed for $23 million.

So it comes as little surprise that developers are often accused of creating playgrounds for the privileged.

The younger Mr. Walentas said he understood the concern. But, he argued, it is the conditions surrounding new construction that often drive up costs for everyone.

“The reason real estate is so expensive is because it is so difficult to build,” he said.

The best way to keep costs down across the board, he added, is an aggressive approach to changing zoning laws — specifically, rezoning land in transitional neighborhoods to allow for housing. More supply, he declared, will translate to lower prices. Even so, the ultimate success of both his projects and the city depends on continuing to attract a diverse group of talented people.

“What New York cannot become is homogenous,” he said. “We need to find ways for the world’s most curious and interesting and passionate and energetic people to come here and explore themselves and their ideas.”

Although Mr. Walentas is now fully engaged in the real estate world, he was not always sure he would go into the family business.

At the University of Pennsylvania, he worked as a sports reporter for the campus paper. When he graduated in 1997, he was offered a job at The New York Post.

But he turned down working the night shift on the sports desk to take a day job with Donald Trump.

“I had no concept of what I was doing, but a weird amount of confidence,” Mr. Walentas said.

The men do not seem natural soul mates. Mr. Trump, known for building his own brand as much as buildings, is not shy about displays of wealth and status. Mr. Walentas says he doesn’t see the point in putting his name on buildings, and wears his wealth lightly. But the two clicked and still speak very highly of each other.

After a year, Mr. Walentas went to work at his father’s company. Now, he said, his father is largely hands-off, involved in only a small number of major decisions and some details that interest him personally.

“I have been very good at letting go,” David Walentas said. “A lot of people want to hang on and dominate. I think you have to let people burn their fingers and skin their knees a little bit.”

With the advantages he has been given, Jed Walentas said, he believes it is important to give back, and he supports projects involving education, cultural institutions in Brooklyn, and art in public spaces. He has hired Lisa Kim, an art adviser, to guide him in that effort.

He said that if his wife did not keep him in check, their loft, an old theater space that he converted himself, would be even more crammed with art.

His one “absurd” purchase, he said, was the vintage bubble hockey game he keeps in his home office.

“I was totally obsessed with that game as a kid,” he said. “My grade-school friends still come over and we act like we did when we were playing it in arcades at age 12. I think we were better then, though.”