By Adam Pincus
As the curtain rises, it’s 2004 and a young developer from a branch of Brooklyn’s Hasidic community, Isaac Hager, is scouting out a Sunoco gas station on a triangular parcel in Downtown Brooklyn formed by the intersection of Flatbush Avenue Extension, Tillary Street and Duffield Street.
The intersection forms an elbow with Flatbush as the forearm extending to the approach of the Manhattan Bridge and Tillary forming the upper arm leading to the entrance of the Brooklyn Queens Expressway. At the time, it was an automotive-focused district, with a car wash, the Sunoco station at 85 Flatbush Avenue Extension, and other low-rise and industrial buildings. The city under the business-focused Mayor Michael Bloomberg had just rezoned a large swath of Downtown Brooklyn south of Tillary, and real estate developers were buzzing.
Hager, at the time in his late 20s or early 30s, was working closely with several investors, but most publicly with the Brooklyn diamond merchant and real estate developer Chaim Lax. Hager and his North Development Group were at the start of an acquisition tear that would last three years and spend at least $78 million amassing six development sites.
Hagar would personally sign for $154 million in debt and was involved in other projects as well, but not the named signatory.
The projects were all in Brooklyn. A project about a block from 85 Flatbush dubbed Nassau Condos was the first that Hagar personally signed for, according to a review of city records by PincusCo. In July 2004, just two weeks after the City Council approved the rezoning, two parcels that Hager would subsequently buy, 168 and 174 Nassau Street, were in contract.
Three months after signing the Nassau contract, Hager had in contract the first of three parcels that would make up the assemblage at 85 Flatbush. It was for the Sunoco gas station. The other two parcels were locked in contracts in February 2005, and the three parcels closed at the end of June 2005 for $10.3 million. Hager planned to build a 21-story condominium building.
A few months later in November 2005, Hager closed on 20 Bayard Street, a new construction project facing McCarren Park. On the same date, he signed for his first big loan, this one for $35.3 million for that project.
By early 2006, Hager had closed on all three Nassau Street parcels, for a total of $9.6 million.
Then came 2007, the year the banks swung open their coffers to Hager and of course many others. All told he borrowed $99.8 million for three projects that year including at 85 Flatbush and Nassau Street.
The recession took a steep toll on all city development. But Hager received a personal hit as well. In November 2008, his partner Lax died of stomach cancer at the age of 58. The death was not simply a blow to a partnership. It was reported that Lax and his family were allegedly involved in schemes to hide Lax’s income from the federal government and other business partners.
U.S. Bank, the lender on 85 Flatbush, filed to foreclose in the fall of 2009 on the $50 million in recorded debt. The property was taken over by Robert Wolf’s Read Property Group and the Chetrit Group, which ultimately completed the building in 2015, with 174 hotel rooms on floors two through six, and 64 apartments on floors seven through 12. The hotel portion of the building is known as the Tillary Hotel, and the residential portion as 60 Duffield.
Then, in an unusual move, Hager last week bought the building back. Since the downturn, Hager formed a new company called Cornell Realty Management, and once again has become one of the city’s most active developers.
Hager partnered with Lipa Rubin of Rubin Equities Inc. to purchase 85 Flatbush, on September 20, for approximately $95 million, or nearly 10 times what he and Lax paid 14 years earlier. It’s not clear what Hager’s plans are, and he did not respond to requests for comment.