A waterfront location typically makes real estate more — not less — desirable. As waterfront goes, though, the Gowanus Canal is anything but typical.
Long a dumping ground for all manner of industrial waste (and, if local rumors are to be believed, the corpse of an unlucky mobster or two), the canal is one of the most polluted bodies of water in the city. It’s so filthy, in fact, that in 2010 the Environmental Protection Agency declared it a Superfund cleanup site.
This pollution — along with neighborhood zoning tilted more toward light manufacturing than residential use — has kept the surrounding blocks largely free of big-time development. Bordered by Carroll Gardens, Cobble Hill and Boerum Hill to the west and Park Slope to the east, the area has instead played host to a wave of artists, entrepreneurs and small-scale investors who over the last decade have set the canal’s banks abloom — opening galleries, bars and restaurants, renovating rowhouses, turning warehouses into studios and loft spaces.
But dirty waters or no, given the Brooklyn real estate boom and Gowanus’ choice location, it was only a matter of time before serious money moved in. And that time appears to be now, as a number of large developers are charging ahead with plans for the area.
Among the most prominent projects is the Lightstone Group’s 700-unit rental complex at 363 and 365 Bond St. Slated to open in two phases — the first scheduled for the fall of 2015 and the second for 2016 — the development sits on land Lightstone purchased from builder Toll Brothers, which had originally planned 450 condominiums for the site.
Toll Brothers abandoned that project in 2010, scared off by the sluggish economy and the canal’s freshly garnered Superfund status. Presented with the opportunity to snap up the parcel, Lightstone “jumped all over it,” says the company’s senior vice president Scott Avram.
Gowanus “is just ripe for growth,” he says. “It’s surrounded by some of the best neighborhoods in all of New York . . . along with restaurants, boutiques and bars — everything you’d look for in a residential community.”
Indeed, over the last several years, Gowanus has become known for hotspots ranging from The Bell House concert hall to the Brooklyn Boulders indoor rock climbing gym to highly touted restaurants like Littleneck, The Pines and Runner & Stone.
This month brought the arrival of the Royal Palms Shuffleboard Club, a much anticipated bar-cum-shuffleboard court at 514 Union St. And, of course, no rundown of Gowanus would be complete without mention of the new Whole Foods that opened in December at 214 Third St. at Third Avenue.
Such neighborhood additions, along with the improving economy, have prompted builders to take the plunge despite lingering pollution concerns, says Aaron Koffman, director of affordable housing at developer The Hudson Companies, which aims to open a 790,000-square-foot mixed-use development at Smith and Fifth streets in 2017.
Named Gowanus Green, the project will feature 774 units of rental and condos, with 70 percent of the units to be affordable housing, including more than 100 rental units for seniors.
“I would say that in 2010, in the depths of the recession, everyone took a pause,” Koffman says, adding that developers were particularly concerned that the Superfund designation would make it difficult to round up private sector investment.
“I think in 2014 there’s a little more optimism, and certainly Gowanus has exploded. So I think people are now taking that risk.”
In addition to Lightstone and Hudson, Sterling Equities also has a project planned for the neighborhood — a 30-unit condo building at 345 Carroll St. And developer Property Markets Group last year snagged a 25,000-square-foot warehouse at 318 Nevins St. for $14 million, likely to become a residential project.
“We’re going to see a lot of bigger development,” says Michel Cohen, a neighborhood resident and small-time investor. The founder of Tribeca Pediatrics, Cohen moved to Gowanus four years ago, drawn, he says, by the area’s diversity and abundant (by Gotham standards, anyway) light and open space.
Cohen owns four properties in the neighborhood, including a three-story townhouse at 463 Carroll St. that he has put on the market for $2.65 million. While he still considers Gowanus a good investment, rising prices have made it less so.
“A few years ago it was a very good place to invest,” he says. “With the Whole Foods and everything, though, prices have gone up, so you’re not going to make a killing now.”
Prices still remain significantly lower than in surrounding neighborhoods. According to numbers from Ideal Properties Group, in the fourth quarter of 2013 average price per square foot in Gowanus was $665. This compares to $804 in Park Slope and $965 in Carroll Gardens.
“It’s still, in the scheme of things, relatively affordable,” says Douglas Elliman broker Rachel Weiss, who lives on the border of Gowanus and Carroll Gardens. She notes that one factor keeping prices down is the area’s housing stock, which consists primarily of smaller rowhouses, as opposed to the large brownstones found in the adjoining ’hoods.
This modest character will likely change as larger projects rise along the canal’s banks. And, while Weiss views the new developments as a good thing, she acknowledges that not everyone feels that way.
Community groups like Friends & Residents of Greater Gowanus have raised concerns about area development ranging from its potential impact on local infrastructure to its effect on the neighborhood’s industrial character.
Councilman Brad Lander, who is leading a community effort to develop a new zoning plan for Gowanus, has called for Lightstone to halt work on its rental complex until the neighborhood puts in place comprehensive infrastructure and land use plans. Lightstone’s development is allowed under the site’s existing zoning. Developments including Gowanus Green, however, will need either a spot variance or broad rezoning of the area.
To Cohen, the coming change is both “good and bad. I love it the way it was, but you cannot be nostalgic.” he says. “It is bound to happen.”
“But I do think it is going to lose a little bit of its edge.”