As the city begins developing a plan to rezone Gowanus to promote housing development, there are many kinds of stakeholders becoming involved: local families, artists, industrial tenants, and environmentalists, among others. Yet perhaps no one has as great a stake in the game as the existing property owners along the canal, many of whom are shy of the spotlight.
They make up a motley crew. Many are still old Brooklynites that stuck out the worst years, when the banks of the fetid canal, strewn with abandoned power stations and oil tanks, were known for high rates of crime. It’s well known, however, that in recent years big-name developers have been clambering to pick up pieces of the Gowanus shoreline.
The market heated up when the Bloomberg administration released a rezoning plan for the neighborhood in 2008 that would have enabled residential development along those banks. Interest cooled after the canal was deemed a Superfund site in 2010, but has been ramping up in years since, perhaps further inspired by the community discussion about a potential rezoning launched by Councilman Brad Lander in 2013 and encouraged by the de Blasio administration’s announcement of a rezoning study this summer. The landscape now includes real-estate firms with national portfolios, an art-loving philanthropist and a young development company that’s made a name for itself in DUMBO.
The de Blasio administration has promised to preserve the Industrial Business Zone south of Third Street as a haven for industry, but that leaves up for discussion everything from Third Street up to Warren Street, as well as streets on either side of the IBZ, a total of more than 40 blocks. Some believe the blocks immediately adjacent to the canal—which developers envision becoming an attractive, pedestrian-friendly walkway—will be the most valuable Using prior news coverage and property records, City Limits has mapped some of the major owners of the canal’s banks. There aren’t that many: because of the canal’s history as a site for large industrial activities, lots in the area are sometimes as large as a half block or more—enough to fit hundreds and sometimes thousands of apartments, were residential uses allowed.
Whether they can claim Brooklyn Dodgers fandom or not, everyone who owns property who spoke to City Limits—perhaps with the exception of some artist owners—are exhilarated by the looming prospect of a rezoning. They say that industry is already on its last legs in this area and that the area is perfectly poised to become an economically diverse, high-opportunity neighborhood. And of course, they won’t mind if they make a buck or two off the transformation.
Herbert Chaves, a native Brooklynite and real-estate lawyer, is one of the old kings of the Gowanus. His family bought multiple large properties along the canal in the 1940s and 1950s and held onto them in hopes of better days. City Limits found two properties in his name on the northeast side of the canal, as well as one that he sold recently to a new developer. He has tenants who love him, like the television production studio Eastern Effects, while other properties are underutilized.
Chaves thinks it’s a great idea to rezone the area to encourage more housing.
“I’m all for Brooklyn, and Brooklyn has to be brought up to the uses that it’s now being used for,” he says. “There’s so much space and there’s so much property, especially along the Gowanus, that’s just laying there.” He says he used to have more industrial tenants, but many have left as the area has changed—and he swears he didn’t raise their rents.
“I don’t know. I had nothing to do with it. All I know is they stopped coming here. There were cheaper areas for them to move in New Jersey,” he says.
Chaves says he’s getting a lot of interest from developers interested in buying his properties, but he isn’t selling now. He says while he hasn’t thought about what he would do with his properties if there were a rezoning, as a longtime property owner who withstood the hard times, he feels that some profit is deserved.
“I’m not just looking to make a quick buck,” he says. “I’m from Brooklyn. I am Brooklyn—I mean, everything about me. My daughter was born in Brooklyn. I lived on Shore Road [in Bay Ridge]. I grew up in East Flatbush. I went to Tilden High School…I just feel Brooklyn is close to my heart and I want to see it get better.”
There are a few other longtime owners in the area. Daniel Tinneny owns large swaths of two blocks on the southwest side of the canal; one of his tenants is the popular Lavender Lake Bar. In October, DNAinfo.com reported that Tinneny has applied for the Department of Environmental Conservation’s Brownsfield Cleanup Program, which gives financial benefits to developers who clean up polluted sites. A spokesperson for Tinneny told the DNAinfo.com reporter that the owner does not yet have plans for the site, but that by doing the cleanup program he will be “putting his site in position to be an appealing development site.”
Eduard Slinin owns a one-story building next door to Tinneny and is president of the business there, the car-service company Corporate Transportation Group. He said that in the event of a rezoning, he would be interested in redeveloping his property, perhaps with room to keep the car service on the ground floor. His son Robert Slinin said that their plans will reflect opportunities in the market.
“I think it will become the number-one neighborhood in New York City,” the senior Slinin says.
Another industrial business owner, who like Slinin has title to his land, told City Limits on condition of anonymity that he’s been seeking to purchase a property in the Industrial Business Zone south of Third Street so that he can move his business to that area. If his current property is rezoned, he might sell or redevelop it to be more in keeping with a mixed-use, residential area. He’s already receiving offers from brokers all the time, he says, and notes that many industrial businesses north of Third Street have been bought out in recent years. While he approved of a potential residential rezoning of the Gowanus, he expressed concern about the dwindling manufacturing space in the city overall, and its effect on the working class.
A few of the longtime property owners, however, are concerned they will lose their chance to benefit from potential changes. The city plans to site a sewage retention tanks as part of the Superfund cleanup site on two properties adjacent to the canal, and possibly using a nearby Chaves property occupied by Eastern Effects as a staging ground. One of those parcels, occupied by industrial tenants with long-term leases, is owned by Marino Mazzei. He told City Limits in October that he had dreams of future residential development, but now is in negotiations with the city over the fate of his property, which the city could, as a last resort, take through eminent domain.
There are also plenty of outsiders cashing in, many betting on the potential for high-end residential along the canal.
The most frequently dropped name is the Lightstone Group, a national real-estate company with a $2 billion portfolio and one of the first developers to return to the Gowanus market post-Superfund. Pre-Superfund, the development company Toll Brothers had entered into a contract to purchase two blocks and had them rezoned with the hopes of building an apartment complex. When Toll Brothers backed out of the deal after the Superfund designation, Lightstone jumped in, paying $26 million to the original owner to acquire the rezoned properties, according to calculations made from records and The Real Deal. Lightstone later sold part of the property to Atlantic Realty Development for $75 million. Together, the two developers are building a 700-unit apartment complex.
Canal-side Property: Who’s Sold, Who’s Bought, Who’s Stayed
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Yet while Lightstone might be the canal’s pioneer, the luxury residential developer Property Markets Group (PMG) has been quietly amassing a Gowanus empire. Since 2012, the company has purchased at least five large lots along the Gowanus, some of which have industrial tenants, including a plumbing company and a food-truck parking lot. It has also entered into an agreement with the Victor Allegretti Business Asset Trust to jointly develop two large properties that were once home to the Allegretti family’s Bayside Fuel Oil Corporation. PMG has already paid for the removal of the oil tanks.
PMG has big ambitions for its properties. According to Ethan Geto, a spokesperson for PMG, the company hopes to build residential buildings with some mixed-use space.
“We are very supportive of the Bridging Gowanus basic concepts,” says Geto, referring to the community planning process launched by Lander. “”It’s going to require PMG to adopt an amenities package that is going to be probably the most extensive ever adopted and PMG is very aware of that and is very interested in stepping up to the plate.”
Such “amenities” include workshop space for artists or light manufacturers. The company is also committed to enhancing the remediation of the canal and its banks, and the creation of a resilient public esplanade along the waterway. Geto touted the firm’s employment of Frederick Bland, a well-regarded local architect, and said PMG would like to work with the Fifth Avenue Committee, a local non-profit affordable housing developer and tenant advocacy organization, to reach deep levels of affordability.
In a 2013 presentation, PMG presented itself as part of a larger consortium of property owners who had interest in a rezoning. Properties in that presentation belonged to Tinneny, Slinin, the construction company Monadnock Construction, and PILOT Real Estate, among others.
PILOT is a Connecticut-based firm that bought a large property in 2014 for $12.3 million, according to property records. PILOT’s properties are currently home to The Green Building, an event hall, and Pig Beach, an outdoor bar and eatery. The company said that it hasn’t settled on a development plan yet.
The large property across the street from Whole Foods, now a Verizon parking lot, could also be redeveloped in the event of a rezoning. In 2014, The Real Deal reported that Kushner Companies and the DUMBO developer LIVWRK were in contract to buy the block for between $70 and $80 million. A spokesperson for the development team said in an e-mail to City Limits that the development team, which now also includes SL Green, is “committed to putting forth a plan for the site that respects the context of the neighborhood and responds to the voices of local stakeholders.” (Sometimes real-estate makes for stranger bedfellows than politics: Kushner Companies is headed by Donald Trump’s son-in-law Jared Kushner, while SL Green is run by the brother of progressive former Public Advocate and Trump-basher Mark Green.)
Last but not least, the city is transferring a large, contaminated public property known as “Public Place,” the former home to a manufactured gas plant, to a team of developers including Hudson Companies, the Bluestone Organization, the Jonathan Rose Companies and the Fifth Avenue Committee. The property will be developed with a project called “Gowanus Green” that includes nearly 800 units of housing, of which 70 percent will be below-market units, as well as commercial and community space.
The Artists and Art Lovers
In addition to the longtime owners and the moneyed newcomers—groups that are often on the same page—there is another contingent of owners who are interested in preserving some of the existing character of the canal.
As industry has abandoned the area, its warehouses and old factory buildings have become home to a thriving community of artists. Some have already fallen victim to the area’s increasingly hot market for commercial development. According to The Real Deal, developer Eli Hamway has evicted hundreds of artists from warehouses on 9th street and is converting the buildings to office space, which is permitted under the current manufacturing zoning.
Some artists, however, own their studios. In 2004, the artist-tenants at 543 Union Street formed a board and purchased their building from Indigo Realty. They now operate it as a “commercial condominium,” with each artist owning a portion of the building. These artist-owners are now debating what a rezoning would mean for them.
According to artist-owner Elizabeth O’Reilly, the building’s artists are a loyal community and don’t want to see their spaces go “residential.” Yet staying zoned as manufacturing could also be a risk: the building is in need of major renovations and maintenance costs are steadily rising. She, as well as fellow artist JoAnne McFarland, believes that the solution would be to designate the building a “live/work” space, allowing artists to both live and work in their studios. This measure, she said, would take the financial burden off of artists and ensure they continue to have a space along the Gowanus while reducing the risk that anyone would sell their space to a more profitable commercial enterprise, as did Hamway on 9th street.
“I would like Live/Work so that I could keep doing what I’m doing. The maintenance increase was several hundreds of dollars already and then the special assessment [for a new elevator] was almost $500 a month for me,” says O’Reilly.
City Limits’ Adi Talwar talks with Elizabeth O’Reilly
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Abby Subak, another artist-owner, says that any rezoning to live/work ought to be accompanied by a deed restriction that specifies that only active artists can live in the space, or that the spaces should be managed by a mission-driven non-profit. In the past, the city’s live/work spaces have been difficult to maintain, with properties sold to non-artists over time.
Another, somewhat grittier artist haven in the area will certainly see major changes. The BRT Powerhouse—a.k.a. the “Batcave,” the former coal-burning power station for the Brooklyn Rapid Transit Corporation on 2nd street—has long been a favorite spot for graffiti artists, punk performers and squatters. According to Gotham Gazette, the decaying building was purchased for $7 million by the art-loving philanthropist Joshua Rechnitz, who has locked out the squatters and intends to clean up the space and build artist studios and exhibition spaces. While artists may soon be able to enjoy the space without worrying about PCE soil vapors at 10 times the legal limits, it is yet to be seen whether the Powerhouse Environmental Arts Foundation, the arts nonprofit established to run the space, will make the space finally accessible to a diverse array of artists.
“Affordable and accessible space for manufacturing and production is increasingly scarce in New York City,” the organization notes on its website, adding that “workshops in wood, metal, ceramics, textiles and printmaking will provide sophisticated production capabilities and also support training and exploration.”