Gowanus Development Site In Contract for $160M-plus
Initially introducing the sale offering in June 2019, RFR Realty has reportedly entered into contract to sell an approximately 2.77-acre development site along Brooklyn’s Gowanus neighborhood. The former 3-parcel assemblage that goes by 175 3rd Street, with an alternate address of 225 3rd Street, was acquired by the developer in April 2018 for $115 million; and is located across the street from the Whole Foods Market at 214 3rd Street. The transaction as financed by a $74 million loan provided by Maryland-based Union Labor Life Insurance Company which consolidated an existing $40 million mortgage with a newly originated $34 million gap mortgage according to city records. The site fronts the Gowanus Canal, which has long served as a center for heavy industry; and due to underground chemical storage, the canal became highly contaminated and spread toxins throughout the area resulting in the 2010 listing by the U.S. Environmental Protection Agency (EPA) on its National Priorities (Superfund) List. However, in July 2024 a press release by the EPA announced a new milestone in the cleanup effort of the Gowanus Canal Superfund Site that in total is estimated to cost over $2 billion. The contract vendees, a development team of Charney Companies and Tavros, have agreed to pay more than $160 million for the site. Located within the 82-block area of the neighborhood that was rezoned in 2021 to promote increased affordable housing development, opening the door to an up to 22-story, 800,000-square-foot mixed-use residential and commercial project versus the allowable approximately 280,000 square feet under the site’s former M2-1 zoning which allows a floor area ratio (FAR) of 2.0 according to earlier reports. In addition, new construction will benefit from the 421-a tax abatement that the site qualifies for since ground was broken prior to the June 15, 2022 deadline, with the construction completion deadline for projects recently extended by Governor Hochul from June 15, 2026 to June 15, 2031.