Ahoy, Brooklyn! Defying Recession, Developers Drop Anchor Along East River

Park Tower earned much of its good will by helping to shape the rezoning that made over Williamsburg and Greenpoint during the past decade. Dreamed up in 2003, a year after Park Tower took its stake in the borough (previously, it had developed and later sold off marquee office towers in midtown), the rezoning passed in 2005. Due to the expense of building on the waterfront, even during the boom, only four towers got off the ground, two by McMansion builders Toll Brothers at Northside Piers, two by Douglaston Development at the neighboring Edge.

Both projects foundered, coming online after Lehman collapsed, despite being in the beating heart of Brooklyn gentrification, North Sixth Street. (Ever been to the Thai restaurant Sea on a Friday night?) Even facing its challenges, the Edge became the best-selling building in the city this past year, moving 260 units. Douglaston has since taken over phase three of Northside Piers and is planning to build the first 40-story tower of the rezoning (at least a dozen are possible), which will house 500 luxury rentals.

“I’ve always been a big believer in Williamsburg because Williamsburg created itself,” Douglaston chairman Jeff Levine said. “Unlike some of the other areas that were built up through subsidies or rezonings first, Williamsburg was somewhere that built itself up, and then the city came in later and improved it.”

Park Tower, which has been quietly preparing its project while the gold rush was on, is making the same calculation. “The project has been there a long time, but now the market is finally there for us,” a person involved with the project told The Observer. “The only difference is we’re not looking at condos anymore.” If last decade’s boom was defined by the condo taking hold in New York, this decade, at least in the outer boroughs, will be defined by a rental resurgence. The banks are mostly to thank for this trend. The condos that remain are hard to purchase due to a lack of mortgage financing, which means greater risk, which means lenders are less likely to give money to condo projects. Meanwhile, vacancy rates hover around 1 percent across the city, even lower in the coves of Brooklyn’s gold coast.

Inside Park Tower Group’s mammoth Greenpoint project >>

Not all projects have faired quite so well, however. Besides Park Tower’s Greenpoint colossus, the biggest development in the works on the waterfront, and the most contentious by far, is the conversion of the Domino Sugar refinery.

Its developer, CPC Resources, is said to be in financial trouble, according to a number of sources, and some of the city’s top developers have looked at the site beside the Williamsburg Bridge. So far none of those deals have worked out, but project manager Susan Pollock said the developer is about to reach a deal with a partner to revive the project. “It was always our understanding we would bring someone in with the experience to build tall towers,” she said. Rose Plaza, located on the south side of the bridge, is similarly on hold, as are a handful of developments in southern Greenpoint.

What unifies many of the projects making less progress are those that were not part of the city’s rezoning or that have tried to go above and beyond it, incurring extra costs and commitments—like Domino, like Rose Plaza. The India Street pier is part of one such project, a development proposed by Jonathan Bernstein that is trying to turn the surrounding streets into parkland, adding a public amenity but also many thousands of square feet to the project, as well as adding a recreational pier on Java Street that would further bulk up his project. Many in the community are against the streets-into-parks plan and even object to the second pier—while it improves waterfront access, it also gives Mr. Bernstein more air rights. “It’s the same thing we’re seeing down at Occupy Wall Street,” local City Councilman Steve Levin said. “Is this a public benefit, or it a private benefit?”

Ahoy, Brooklyn! Defying Recession, Developers Drop Anchor Along East River