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BROOKLYN, NY-Acadia Realty Trust has agreed to purchase the leasehold interest of Gallery at Fulton Street mall here and an attached parking garage for $120 million. The purchase was made through Acadia's Fund II New York Urban-Infill Redevelopment program in conjunction with P/A Associates and Washington Square Partners' Paul Travis.

New York City-based Thor Equities had operated the mall since 2001. The Gallery at Fulton Street's fee position is currently owned by New York City, but part of the leasehold purchase deal gives Acadia the option to acquire the fee position after some time has passed.

Acadia and its partners plan to tear down the current facility and construct a 1.6-million-sf mixed-use complex. The project, to be called the Center at Albee Square, will include retail, office and residential units and could be developed by MacFarlane Partners and possibly AvalonBay Communities Inc. MacFarlane and AvalonBay are currently in talks regarding the residential part of the project. Acadia and its acquisition partners will not participate in the development or ownership of the roughly 1,000 planned residential units.

Acadia and MacFarlane will jointly develop the 475,000 sf of retail and 125,000 sf of class A office space for the Center at Albee Square. The new building will be environmentally friendly and preliminary plans call for it to qualify for LEED silver standards.

"We are committed to making significant, positive contributions to Downtown Brooklyn, which is already one of the largest and most active shopping and office centers in the City," says Paul Slayton, principal of P/A Associates, in a statement. In addition to putting up a 1.6-million-sf building in Downtown Brooklyn, the project is expected to employ 2,800 construction workers as well as create 1,600 permanent jobs.

"We have all worked for months to arrive at a project which is both economically and environmentally sustainable," says Acadia president and CEO Kenneth Bernstein. "The Center at Albee Square will give a tremendous boost to Downtown Brooklyn by creating jobs, homes and an exciting shopping environment with both local and national tenants."

Instant Insights /

Acadia Plans 1M-SF-Plus Mixed-Use Tower

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