CB1 Committee Not Digging Plans for Huge Burg Project
Last week Community Board 1’s land-use committee voted 8-1 against approving a zoning change on the South Williamsburg waterfront for a humongous development that’s on the drawing board, according to The Brooklyn Paper. The project slated for Kent and Division, which is known as Rose Plaza on the River, is supposed to consist of three…
Last week Community Board 1’s land-use committee voted 8-1 against approving a zoning change on the South Williamsburg waterfront for a humongous development that’s on the drawing board, according to The Brooklyn Paper. The project slated for Kent and Division, which is known as Rose Plaza on the River, is supposed to consist of three residential towers with 801 units between them. Board members spoke out against the development mainly on the grounds that only 20 percent of its units will be designated affordable housing, and because its proposed unit mix is mostly studios and 1-bedrooms. Is this what you think our community needs? asked Rabbi David Niederman, a committee member and president of the United Jewish Organization. It’s another development that gentrifies a community that is suffering already from a lack of housing. For their part, the development team argued that Rose Plaza would add construction jobs, affordable housing and open space to the neighborhood, and despite Williamsburg’s inventory glut they’re banking on it being a cinch to sell because they anticipate a market rebound.
This ‘Rose’ Has Thorns! [Brooklyn Paper] GMAP
Big in the Burg: Rose Plaza on the River [Brownstoner]
Rendering from The Brooklyn Paper
The application has been in the works for a few years.
Comps? The Domsey parking lot site across the street supposedly went for $42 million in 2007 (they are in foreclosure). The Domino site (about three times larger and yet to be rezoned, but on the water) went for $55 million in 2005 or 2006. The former had an approved residential zoning, the latter not. Make of it what you will.
interesting. seems like they are fishing for an approval with the max economic upside (ie min affordable housing percentage)
if they bought for 800k 30 years ago they need to sell for more than $8 mio to match the return on the SP500.
how much would that land go for today with and without the approval? anyone…
Well in that case, WBer, I guess they can’t lose if they haven’t collaterized too much debt around the land for other ventures/uses. 800 back then is about 2.6M today – so still, a steal. SO WHY DON’T THEY JUST SAY THAT rather than refer to some on-the-horizon market rebound (ha ha!)? What they’re really gonna do (since they can still profit handsomely as labor and materials are plummeting) is send comps down to half off peak, where they should be.
If the board okays it.
***Bid half off peak comps***
Etson and antidope;
Real estate development (much like product development – the game I’m in) is about timing the market cycle right, factoring in your own product development lead time.
It can take anywhere from 3 to 5 years for a building development to actually come to fruition. The developer must project the demand at that time, price points, etc.
They may be making a shrewd move in that credit is cheap right now (if they can access it – meaning that their balance sheet is strong) AND the cost of construction has come down dramatically. They may lock in low hard and soft costs now, and then hit the market with their product when demand and prices are climbing up again. Only time will tell, and that is the nature of development work – making your best assessment of the risk, and then placing your bets.
Five years from now, we’ll be calling this developer either a genius or a fool.
exactly WB, the current owners work is done and when zoning change is passed. Land value then become windfall profit. Doesn’t need to lift a shovel.
Once the zoning is approved, the value of the property goes through the roof. The owner (who paid something on the order of $800K some 30 years ago or so) can flip the property and make out quite nicely, rebound or no. And the rezoning doesn’t expire – so they can decide to sit on the property until there actually is a rebound (and continue to operate their business (Certified Lumber) out of the site).
“they’re banking on it being a cinch to sell because they anticipate a market rebound”
DING…DING…DA PLANE…DA PLANE!!!
***Bid half off peak comps***
The issue here is the TYPE of units they are constructing (studios, 1 and 2brs) that are not going to be large by any relative standards. The Hasidic community obviously wants huge units for their 9 children.
The 20% affordable units is basically the default ratio for the IZ bonus, so I don’t understand why they are objecting to that amount, a larger share is just not possible in this market at all and you won’t see anything larger for years (if ever).
I agree with antidope. Whereas the CB’s reasons for rejecting it are BS, I’m astonished that the developer is proposing such a large project now with so much inventory in the area.