Gowanus
May 8, 2008
Inside Third & Bond: Week 36
The main event at Third & Bond this week is working on buy-outs. As we said last week, we need to get to 75% buy-outs to draw more than an initial $3M from our construction loan. Before we have buy-outs, we need enough bids to know what is a good price and then we need our CM to “beat up” the subs. Don’t worry, “beating up” takes place over the phone or in brightly lit conference rooms in which only egos get bruised.
Our buy-out issue of the week? Windows. Normally, we’d go with a high quality aluminum window. At J Condo, we went for triple-glazed to block the noise of the trains on the Manhattan Bridge. But we’re finding that the aluminum window bids are coming in 25% higher than what we budgeted. How did we under-budget by so much? Well, part of it was the NYSERDA Energy Star requirements and our goal of getting to be at least 20% more energy efficient than the standard, ASHRAE 90.1 2004. We had difficulty finding any aluminum windows that met the Energy Star rating, especially in terms of the thermal break. (Thermal break: Used to lessen or prevent the transfer of heat/cold between two surfaces—e.g., to keep the cold air outside from coming inside by traveling through a piece of metal that has surfaces both outdoors and indoors.) We considered using wood windows and cladding them in aluminum. That way we’d have our thermal break and low maintenance windows. The problem? Very, very expensive. It looked like we were at a dead end with the aluminum and the clad-wood windows so we went out on a limb and searched the Internet for vinyl windows.
May 1, 2008
Inside Third & Bond: Week 35
This week on Inside Third & Bond, the Hudson Companies folks provide a play-by-play look at how they got their $25 million loan.
Gloom and doom.
Now that we’ve gotten that out of the way… this week we want to celebrate our construction loan closing for Third & Bond. When we tell people that we’ve closed on a $25 million dollar loan, we get some slightly arched eyebrows like they can’t quite believe it. While terms are changing, banks are still in the business of lending and we took advantage of a long-standing track record with Wachovia to get the best deal we could find.
Not that we want it to sound too easy. After all, so many of our readers seem to love when we recite in painstaking detail all the tasks associated with the development process. (Biff, this one’s for you!)
Step one: Term sheet signed...
April 24, 2008
Inside Third & Bond: Week 34
Today the Third & Bond crew contemplates the financial impact of making, or not making, the 421-a deadline later this year.
With the flowers in bloom (tra-la-la) and sunny 70-degree days here at last, it finally feels like spring. In not too long the City’s 421-a office will start stamping applications, “rejected” and we’ll all know the last residential projects in brownstone Brooklyn to squeak through before the 421-a deadline. Although DOB is still sitting on our underpinning permit – making it impossible to pull the approved new building permits, we aren’t worried about missing the June 30th deadline (yet).
The 421-a abatement for this project means a considerable difference in taxes – our appraisal put the value of the abatement for the project as a whole at $2.7 million. For the buyer of a typical two-bedroom at Third & Bond, we estimate monthly taxes of $63. If the project did not have a 421-a exemption, monthly taxes would be more like $909, a whopping increase of $846/month.
Yikes, right?
If this buyer wanted or had to keep the same monthly carrying costs, then the price she would be willing to pay for the unit without 421-a tax abatement would be substantially less than for the same apartment with 421-a. In other words...
Gowanus Rezoning on the Horizon
Plans for the rezoning of Gowanus, which have been brewing for more than a year now, are about to make their official debut. Yesterday Purnima Kapur, director of City Planning's Brooklyn Office, said that the draft rezoning plan for the Gowanus Canal Corridor will be unveiled next month. "What we're planning to do is go out to the community and start a discussion about the rezoning," says Kapur. The DCP official says that the rezoning plan will more or less adhere to the draft land-use framework released last January (as shown above), and that the department will propose rezoning about 25 blocks. "We studied 60 blocks," says Kapur, "and we came to the conclusion that two-thirds should remain manufacturing." Mixed-use zoning that allows for residential construction will mainly be proposed in the north section of the area under consideration, with the biggest chunk running from 3rd Street to Sackett between the canal and 4th Avenue. Per the draft framework, the rezoning will allow for the construction of building that are largely 6 to 8 stories with limited portions setback from the neighborhood allowed to rise between 12 and 14 stories next to the canal. Kapur says the department hopes to get community consensus on the draft proposal sometime over the summer and then begin working on an Environmental Impact Statement, which should take between 8 and 9 months to complete. If this timeframe is followed, the rezoning will be certified for ULURP sometime in early 2009, before there's a change in the current city administration. Kapur says she's excited about bringing the rezoning to fruition. "We were asked by the community board to look into the rezoning, which is how the whole process started," she says. "Gowanus is a unique area between two thriving communities, and it provides a potential for new uses that could build on its unique character."
Gowanus Rezoning: Complete Chaos [Brownstoner]
Gowanus Rezoning Proposal by Late Spring or Summer [GL]
Gowanus Canal Corridor Framework [nyc.gov]
April 18, 2008
Gowanus Green: Bells, Whistles, and Rain Gardens
The preliminary site plan for Gowanus Green, the development that a consortium led by Hudson Companies will build next to the canal, is shown above, and it includes plenty of interesting amenities. The developers intend to have retail space in the ground floor of the buildings fronting Smith Street, a bar and restaurant near 5th Street and the canal, a bike shop on the ground floor of one of the Smith Street buildings, a daycare, a wellness center, an amphitheater, a playground, and a rain garden. The rain garden "incorporates some of the storm water features we're using and is supposed to be an interpretative educational feature that draws people in from the playground," according to Michael Wadman, a principal for Hudson Affordable Housing. The wellness center, meanwhile, will probably have things like doctors' offices and acupuncturists, says Wadman, that will be partially geared toward the senior population that will live in some of the affordable units set aside for them in the development. Here's a full breakdown of the number of units and height of the buildings currently being planned:
Building A: Low-income rental with 94 units; 6-story base with a setback to 8 stories.
Building B: Mixed-income condo with 47 units; 6-story base with a setback to 8 stories.
Building C: Low-income rental with 136 units; 6-story base with two setbacks to 10 stories.
Building D: Mixed-income rental with 149 units; 8-story base with two setbacks to 12 stories.
Building E: Mixed-income co-op with 150 units; 6-story base with three setbacks to 12 stories.
Building F: Mixed income co-op with 61 units; 8-story base with setbacks to 12 stories.
Building G: Mixed-income condo with 90 units; 6-story base with three setbacks to 12 stories.
Building H: Mixed-income condo with 45 units; 6-story base with a setback to 8 stories.
Building I: 3-story community facility with space for the Gowanus Dredgers.
Density is concentrated near the canal, which meshes with City Planning's draft framework for rezoning the area, says Wadman. Timing-wise, what needs to happen first is the remediation of the property, which is being spearheaded by National Grid. The city is hoping that clean-up begins this year and is completed sometime in 2010, "which would allow us to get all our approvals in order and go through ULURP," says Wadman. The total budget for the project is $285 million, and the 70 percent of it that has affordable components will receive subsidies. Wadman says that right now the plan is to build in two phases, with the buildings fronting Smith and 5th streets, which will primarily be the low-income housing, completed first.
Hudson Companies Chosen to Develop Public Place Site [Brownstoner]
Renderings of the Related and Hudson Public Place Plans [Brownstoner] GMAP
Vying Public Place Plans Get an Airing [Brownstoner]
Gowanus Roundup: Public Pl. Bids Whittled, Builders Bullish [Brownstoner]
April 16, 2008
Hudson Companies Chosen to Develop Public Place Site
This morning the Department of Housing Preservation and Development announced in a press release (full copy on jump) that a consortium comprised of the Hudson Companies, Inc., the Bluestone Organization, the Fifth Avenue Committee and Jonathan Rose Companies was selected to redevelop the Public Place site in Gowanus. The bid, as rendered above, beat out a competing plan put together by a development team helmed by the Related Companies. Hudson's project, as currently envisioned, will involve 774 units of mixed-income housing; 615 of the apartments will be affordable to low- and middle-income families, including 120 units of low-income senior housing. Per the press release, "The mixed-use development will feature over 25,000 square feet of cultural space, 38,000 square feet of ground-floor retail and nearly 100,000 square feet of public open space located along the canal. The canal-side park, in addition to landscaped waterfront space for passive and active recreation, will feature arts and educational programming and significant recreational opportunities for the surrounding community." The site, between Smith Street and the canal, used to contain a gas manufacturing plant.
Renderings of the Related and Hudson Public Place Plans [Brownstoner] GMAP
Vying Public Place Plans Get an Airing [Brownstoner]
City Picks Hudson Companies' 'Gowanus Green' for Public Place [Curbed]
Gowanus Roundup: Public Pl. Bids Whittled, Builders Bullish [Brownstoner]
Continue reading "Hudson Companies Chosen to Develop Public Place Site"
Gowanus Group Proposes 'Sponge Park' to Soak Run-Off
The Gowanus Canal Conservancy unveiled a rendering of its proposed esplanade along the canal, adorably dubbed "Sponge Park" (you know, because it will absorb runoff that contributes to the sewage overflow problem). The above rendering, by local landscape architecture firm dlandstudio, is a view from Third Street looking north. The project assumes a 40-foot easement alongside the canal, consistent with waterfront access requirements elsewhere in the city. Like Williamsburg and Greenpoint, any rezoning of Gowanus would likely require public waterfront access and design standards so, for example, the street lamps and park benches are consistent along the entire esplanade. Gowanus presents a unique challenge because its crumbling bulkheads are expensive to replace and obtaining a waterfront permit is a complicated venture that has been one of many vexing issues for Whole Foods. The dlandstudio plan is interesting because, judging from the fast-moving slide show on their website, the waterfront is lined with retention basins and filtration systems that would prevent some runoff from pouring directly into the canal—although the main source of oily runoff is the Gowanus Expressway that looms above, creating grotesquely beautiful swirls of color the day after a long-awaited rain. Yum. The Conservancy will be hosting its public presentation April 21, 6:30 p.m. at P.S.58, 330 Smith Street at the corner of Carroll Street.
Gowanus Photo Gallery [Brownstoner]
DOB Puts Partial SWO on Whole Foods Site [Brownstoner]
April 14, 2008
Closing Bell: Gowanus Gallery
Saturday was the perfect day for a bike ride around the Gowanus Canal, and we weren't the only one with the idea. Once Brooklyn's industrial backbone, the street life over the weekend was decidedly residential—bikes, couples pushing strollers or snapping pictures, hipsters carrying lattes, dog walkers, and ball games were all regular sights. Above are images from a few blocks the Department of City Planning is considering rezoning to officially allow residential use for the first time in over a century. What do you think Gowanus will be like in 15 years?
Plan for Third Ave. Hotel Brings Gowanus Total to Seven [Brownstoner]
Reps From Toll Brothers Detail Big Gowanus Development [Brownstoner]
Shucks! Oyster Bar Dredges Up Controversy on Hoyt
For the past several months, a Community Board 6 committee has been considering a local business owner's application to get a liquor license for a bar he wants to open on Hoyt and Union. The board examined whether zoning allows for a drinking establishment in the building, which is adjacent to the Black Mountain Wine Bar, and also heard from some neighbors (especially a group called the Hoyt Street Alliance) who were opposed to the proposed business for a number of reasons, including the fact that it's near a school and the stretch of Hoyt it would open on is primarily residential. After chewing on the application for a long time, CB6 finally voted in favor of the liquor license application last week, but controversy about the establishment and the board's vote (which is ultimately only advisory, though it's weighed by the State Liquor Authority) is still alive on the web. Pardon Me For Asking has penned a couple of withering posts on the topic, writing, "As far as I am concerned, C.B.6 just signaled to all restaurateurs that this district is a free for all and that residential streets are as good as any to open bars," and also including commentary from former CB6 member Barbara Brookhart about the decision. Brookhart said "it appears that the Board gave more weight to a few residents that approved having the restaurant and bar, than the block association's petition of about 300 names against the approval of the license." Meanwhile, on the Carroll Gardens Neighborhood Association message board, a couple people have had a more tempered opinion of the board's actions. One CB member, who voted against the liquor license, nevertheless notes that "commercial use is legal, although non-conforming to current zoning at that location," while another nearby resident wrote, "Actually, I think the folks on Hoyt have a point, though having the existing bar there has been an amenity which brightens an otherwise isolated area, and impacts positively on our community." The business owner who made the application for the oyster bar is Jim Mamary, the successful Smith Street restaurateur who was behind Patois and other notable eateries.
Community "Business" Board 6 Sticks It To Hoyt & Bond Residents [Pardon Me For Asking] GMAP
April 10, 2008
Inside Third & Bond: Week 32
What do you call someone who compiles and analyzes voluminous data of problematical accuracy from sources of dubious veracity and derives therefrom a numerical quantification of value commensurate with ambient configurations of the open market and promulgates thereby a precise written declamation which delineates his observation, deliberations and conclusions all done while he feigns absolute ignorance of the machinations of Buyers, Sellers, Brokers and Lenders, compensated only by that penurious stipend known as the professional fee?
An appraiser, of course!
Okay, so that joke, which we got from an appraiser humor website, would have gotten high-fives in an appraisal office but will probably earn us crabby comments here. Still, it’s an apt lead-in to this week’s topic of appraisals, something that ends up sounding much more complicated than it needs to be in part because of the layers of jargon that come along with it. It’s really pretty simple: the bank wants an independent opinion of the market value of the project they are lending money on and we want a high appraisal so the bank will lend us as much money as possible and we can spend our equity elsewhere.
It’s not quite white-knuckle time, but we are watchful of the appraisal inputs and outputs...