Seeking to capitalize on the city real estate frenzy, the Brooklyn Academy of Music plans to develop the neighborhood around its theaters as an arts and entertainment district. Using stealth rather than the verve with which it promotes the ballets, operas and films it presents, the Academy has completed a strategic plan, hired staff and raised $300,000 to bankroll a long-dormant Local Development Corporation that will coordinate real estate development around BAM.

Fort Greene, the neighborhood that has hosted BAM since 1908, has greeted the news with cautious optimism. Optimism, because residents feel the area, which is peppered with vacant lots and empty storefronts, could use some new development. Caution because the arts center has a reputation for paying more attention to international performers and Manhattan patrons than to Fort Greene and the rest of Brooklyn.

To BAM, its role is benign. “We want to create a vibrant 24-hour mixed-use cultural district right in the area around BAM,” says Jeanne Lutfy, who was recently hired as president of the LDC. “We don’t want to disrupt the community. We want to weave this into the existing fabric of the community.”

Lutfy, who ran public relations and marketing for the city’s Public Development Corporation under mayors Koch and Dinkins, insists BAM doesn’t want to build the Lincoln Center of Brooklyn. She says the LDC’s master plan, which is expected to be completed by summer, will include improvements like tree planting, installation of new signs and new street lighting. BAM’s LDC will also most likely advocate some development, with housing, stores and arts space all potential parts of the mix.

But some Fort Greene residents fear that BAM’s plans will further fuel the real estate fervor that has just put one brownstone on the market for the unheard-of price of $1 million. The artists and retailers who have made Fort Greene a mecca for African and African-American culture are likewise discovering that they cannot take the character of their neighborhood for granted.

“It’s sort of like a takeover. That’s what it feels like,” says Lucille Kenney, who has lived on Cumberland Street, a few blocks from BAM, for about 30 years. Kenney contends that news of the proposed cultural district has generated many unsolicited visits from real estate agents. She fears that all the interest in the neighborhood--BAM’s LDC, the plan to build movie studios at the Brooklyn Navy Yard, the recent idea of putting a Greyhound bus depot on Myrtle Avenue and the redevelopment of several buildings along Hanson Place--has prompted realtors to pressure her and other long-term homeowners to sell their properties.

Realtor Eva M. Daniels, who has been selling homes in Fort Greene since 1982, points out that real estate throughout the city is commanding top dollar; Fort Greene is simply part of the trend. At the same time, she concedes sadly, the rocketing values have changed the neighborhood. “It still has a large percentage of African-Americans,” she says. “But it’s not as much as it was even two years ago.”

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From the 1970s to the 1990s, as impresario Harvey Lichtenstein transformed BAM from a second-rate theater into a tabernacle of the avant-garde, the Academy thought and acted globally, bringing Swedish theater, Japanese dance and German performance art to Brooklyn. But locals have long groused that BAM seems more interested in servicing patrons from Manhattan--BAM even runs vans to ferry ticket-holders from across the river to its shows--than developing an audience and artists closer to home.

Fort Greene, a middle- and working-class black neighborhood, has creative assets of its own. Artists such as jazz singer Betty Carter and director Spike Lee have called it home, and local venues like the Paul Robeson Theater and Brooklyn Moon Cafe promote homegrown musicians, poets and artists. Only recently, with the opening of the BAM Cafe, has BAM regularly showcased local performers.

Now Lichtenstein, who has retired from BAM but pushed to create the LDC and heads its board, is leading the charge into development. Fort Greene residents and merchants wonder whether he will finally push BAM to knit itself into their community.

“What the BAM LDC is doing will almost certainly benefit our merchants,” says Errol Louis, executive director of the Bogolan Merchants Association, a group of businesses clustered along Fulton Street just east of BAM that cater to the black diaspora--American, African and Caribbean. (The group takes its name from bogolanfini, a mud-dyed ceremonial cloth from Mali.) “Anything that brings more cultural dollars and tourism and arts and entertainment has got to be a good thing.”

At the same time, some Bogolan members say, BAM remains insular. Merchants laugh as they describe having to take Lichtenstein and other academy bigwigs on a tour to introduce them to vibrant artistic businesses located just a few blocks from the theaters. “The idea of making this a cultural district on the face of it is good,” says Selma Jackson, who owns 4W Circle of Art and Enterprise, a fashion and art boutique two blocks from BAM on Fulton Street. Yet the cultural institution hasn’t done what it could, she says, to put Fort Greene’s existing creative culture on the map. “This is already a cultural district. Why are we reaching outside the community and not reaching to the people who are here?”

One clear answer is that culture means different things to different people. Whenever an institution talks of creating a cultural district, Louis points out, “you get into some very sticky questions as to whose culture or what culture or why certain choices are made.” To make sure the LDC reflects the community, Bogolan is asking the LDC to add two merchants to its board.

For now, the only local representative on the board is the district manager of Community Board 2, which covers Brooklyn Heights as well as Fort Greene. The LDC also tapped several real estate developers for the board, most notably Bruce Ratner, who also chairs the Academy’s board. Brooklyn’s leading builder, Ratner created downtown towers for Morgan Stanley and Metrotech and put suburban-style retail around the corner from BAM in the Atlantic Center mall. As the designated builder for two nearby urban renewal sites, he stands to benefit from the dollars and development opportunities the LDC can bring to the area.

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At this stage, it’s hard to say exactly what the LDC wants to do. Lichtenstein hints that the group may be involved in a new charter school. Others talk about retail development.

Lutfy refused to provide City Limits with the LDC’s strategic plan, insisting that it was an internal “think piece.” But a copy obtained elsewhere shows the LDC is contemplating some big real estate maneuvers.

The report presents three scenarios. First, BAM could develop what it calls a “big bang”--a gigantic $100 to $200 million arts pavilion along the lines of the New Jersey Performing Arts Center, which opened two years ago in downtown Newark. The report notes that this scenario could run into community resistance and would take years to implement.

The second approach would create market-rate housing, possibly reserving 20 percent of units for low-income renters. Apartments, the consultants argue, would add to the vitality of the streets around BAM and could throw off as much as $7 million to endow the LDC’s future operations. The report also suggests that a mid-size “boutique” hotel could be a strong addition to the area.

Finally, the third concept would have the LDC function more like a merchants’ association, creating an urban design scheme to unify the neighborhood. The report cautions that this strategy wouldn’t necessarily raise BAM’s profile or create a cultural hub.

Marilyn Gelber, head of the Independence Community Foundation, which gave the BAM LDC a three-year, $300,000 grant, expects Lichtenstein, Lutfy and company to start their effort by planning for Ratner’s two nearby urban renewal sites. Each has many vacant parcels where buildings were demolished long ago. There are also a few tracts that were mapped for urban renewal but never condemned, including a block between Flatbush Avenue and Fulton Street. Gelber figures these sites could accommodate housing, retail and art studios.

BAM’s move into development is possible now because the Manhattan real estate boom is proving a bust for many arts groups. Already, several major dance companies--including Trisha Brown, Laura Dean, Paul Taylor, and Twyla Tharp--have said they expect to be forced out of their current spaces as their leases expire over the next few years. BAM is counting on Manhattan’s loss becoming Brooklyn’s gain. “You have as an anchor the oldest performing arts center in the country,” says Gelber. “There’s a great community in Fort Greene. Why not build on these strengths? The arts will be a growing sector of Brooklyn’s economy.”

Even now, Fort Greene is attracting arts groups. Early this year, the Alliance of Resident Theaters/New York plunked down $1.25 million for a building on South Oxford Street to provide office space for 19 small theater companies. And though construction has not yet started, the Mark Morris Dance Company says it plans to move its headquarters and rehearsal space to a building across the street from BAM by the end of the year.

Bogolan’s Errol Louis says there’s still time for the arts groups and the neighborhood to come together. He hopes BAM’s LDC will make the effort. “Nobody’s terribly upset that they’re making plans for the area and haven’t shared them with us,” he says. “But if the attempt through the LDC is once again taking one person’s vision and attempting to hardwire it in, I just don’t think it will work.”

Robert Neuwirth writes on urban issues and is working on a project reporting on squatter communities in the developing world.