The cleanup is coming, but buyers are already here
- Last Updated: 8:53 AM, March 3, 2011
- Posted: 8:51 AM, March 3, 2011
Last year, after the federal government designated Brooklyn’s Gowanus Canal a Superfund site, taking the cleanup of the canal out of the hands of the city and putting it into the hands of the Environmental Protection Agency, there was a momentary panic during which some area investors cut and ran. Toll Brothers, for one, left behind a $5.75 million down payment on land on which it had planned to build a 500-unit condo complex.
But while there were those whose feet grew cold thinking of the cleanup’s uncertain timetable (predictions run from 10 years and up), there remain others who see the great potential of the area, choosing to view the Superfund status as simply a step in the right direction.
“I think anyone who goes there, who knows Brooklyn, knows that it’s a polluted canal. The only thing that’s changed is now there’s a timeline for the cleanup,” reasons Brendan Aguayo, an agent at Brooklyn-based realty firm Aguayo & Huebener.
Supporting his rationale is the speed with which Third and Bond, an eight-building, 44-condo project, has unloaded its units in the wake of the Superfund designation.
Between coming on the market in September 2009 and taking down its construction fence in February of last year, the development unloaded three units total. In the next year, post Superfund, it sold 17. Today, 20 of the 44 units are in contract. Closings have begun, and there are a few units occupied.
“We’ve had a remarkable amount of activity in the last three months; the faucet was turned on,” says James Cornell, senior vice president at the Corcoran Group, which is selling Third and Bond. “A lot had to do with the building being 100 percent finished.”
The sales team is feeling so confident, in fact, that it raised its prices two weeks ago. The building is now on the market for an average of $710 a square foot.
Not a block away, 398 Bond — a newly built 6,400-square-foot, two-family house — sold last summer for $3 million after getting multiple offers in the 45 days it was on the market.
That home “spoke to a specific buyer; you don’t see new houses being built, in general, for one or two families,” says Aguayo, pointing out that the house has its own parking plus a pool on the roof.
“The developer was actually building it for himself. He was going to move his family there and [one of our guys] said, ‘Do you have any interest in selling it?’ And he said, ‘If you can get this price’ — and he did.”
At less than $500 a foot, a house like this looks good compared to the neighboring stock.
“We’re maybe a 10 to 15 percent discount to brownstone Brooklyn,” says David Kramer of the Hudson Companies, which developed Third and Bond.
This is par for Gowanus. When it comes on the market in spring of 2012, the new 333 Carroll St., a former copper mill being renovated into 42 condos that will be sold by Aguayo & Huebener, will likely be priced between $700 and $750 per square foot.
“It’s not like people are kicking our door down wanting to live in Gowanus, but when product does come on the market, it goes,” Aguayo says. “The problem is that there isn’t much product, and there’s very little turnover.”
Much of the buyer interest in the area comes from nearby, often Carroll Gardens or Park Slope.
“Probably more than 80 percent of our contracts already live in Carroll Gardens, which we think is significant because if you open a project in a down market and the people who want to buy are the neighbors, what better endorsement is there?” Cornell says.
Amy Holman lived in Carroll Gardens for nearly 14 years before she bought a two-bedroom in Third and Bond for $761,000.
“I love the sunlight, and it’s modern and new. I like the mix between industrial and residential. Carroll Street had that too — the plumbing contractor and ironworks in between houses,” Holman says. “I think the Superfund designation is a positive thing.”
Hudson, meanwhile, is still planning on leading a team of four developers on a mixed-use project called Gowanus Green, which is 790,000 square feet and calls for 774 residential units (both rentals and condos), 70 percent of which will be affordable housing. Gowanus Green would also offer 65,000 square feet of community and retail space, including a waterfront promenade. But this is all pending the city going through with a residential rezoning.
“The city put [the rezoning] on hold when they were negotiating the Superfund designation. We want to rev it up to keep the project moving,” Kramer says.