Saturday, April 21, 2012

Building Development Heats Up on Brooklyn Waterfront

The tide of development is rising along the Brooklyn waterfront, from Sunset Park all the way up to Williamsburg, with dozens of developers are ready to break ground on new construction projects throughout the Borough.
Riding the momentum, Douglaston Development plans to start work in the late spring on a 509-unit luxury rental tower in Williamsburg dubbed 1 North 4th Place. The $300 million project is situated on a vacant -waterfront lot next door to The Edge, the company's two-tower development that hit the market three years ago with a total of 565 condominiums.

Half a dozen blocks south, CPC Resources Inc. hopes to finally get started on its 2,200-unit, $2 billion redevelopment of the huge old Domino Sugar factory on the river. Meanwhile, five miles downstream at Brooklyn Bridge Park below Brooklyn Heights, three developers are in the running for the right to build a combination hotel and condominium project.

Nearby in Dumbo, developers including one of the nation's largest homebuilders—Toll Brothers—have put up three residential buildings with 209 units, all within a stone's throw of the shoreline.
Down in Sunset Park, the development is of a different sort. There, at the historic 16-building, century-old Bush Terminal, Salmar Properties got the nod from the city to develop a massive, long--shuttered warehouse - known as Federal Building #2 - for light manufacturing.

A mending local economy has much to do with all these projects, as do long-running efforts by the Bloomberg administration.

To get this far, City Hall has used a variety of tools, none more powerful than a sweeping rezoning of 175 blocks of Greenpoint and Williamsburg that paved the way nearly seven years ago for high-rise residential towers along the waterfront.

A number of other initiatives have helped as well. Last year, the city committed $9 million to turn year-round ferry service on the East River into a reality. Today, that ferry links Greenpoint, north Williamsburg, south Williamsburg and Long Island City with Manhattan. The New York Waterway's WaterTaxi has been incredibly helpful in making north Brooklyn a more attractive place to live and work.

Similarly, the Bush Terminal project is unfolding within a larger, city-led effort to modernize the Sunset Park waterfront. The push includes upgrading roads, piers and rail access. However, aged infrastructure in formerly industrial waterfront areas is only one of several obstacles developers face. Building so close to the shoreline brings special engineering challenges as well

An even bigger hurdle has been community resistance.

The Domino Sugar project, for example, is proceeding only after six years of planning, hearings and legal challenges. To move forward, developers CPC Resources Inc. and Isaac Katan had to expand a substantial affordable-housing component and lop six stories off the two 40-story towers designed by architect Rafael Viñoly.

For developers as well as city officials, the struggle is worth it.

Making use of the waterfront, however, requires money, a factor that more than any other has held back development since the financial collapse in 2008. Even today, the lingering effects of that can be seen in the marked preference of residential developers and their lenders for rental apartments over condominiums.

Conversely, making 1 North 4th Place a rental building gave developer Douglaston more flexibility in case of another market downturn. Developers have only so much flexibility on the sale price of condominiums because they get to sell them just once. Rents, however, can be far more easily tailored to the market.

In the end, he insists that demographic pressures being what they are in the city, more housing will need to be built, and much of it will come on the Brooklyn waterfront.