Gowanus Apartments Snare $300M in Construction Loans

In 2021, NYC rezoned 82 blocks of mainly industrial property in the neighborhood surrounding Brooklyn’s Gowanus Canal to allow mixed-use developments in the hope of generating more than 8,500 new apartments, about a third of which would be reserved for affordable housing.

At least 18 Gowanus projects were initiated but building them got mired down due to a variety of factors, including the expiration of 421a tax breaks in 2022.

Numerous developers rushed to pour foundations in order to meet the June 2022 deadline to qualify for the 421a tax credits, but a frozen lending market in 2023 put most of those projects on ice without hope of meeting a 2026 deadline for completion required under 421a.

In 2024, the market dynamics are shifting, thanks to an extension until 2031 of the deadline for completing 421a projects and new sources of financing.

Tavros Capital and Charney Companies have secured $300M in construction loans for one of the largest housing projects in Gowanus, two towers encompassing a total of 631K SF and 668 units at 310 and 340 Nevins Street.

The partners have announced that Affinius Capital and Kennedy Wilson provided a $160M loan for 340 Nevins Street and TYKO Capital provided $140M for 310 Nevins Street. A Newmark team arranged the financing.

The 2.3-acre project will include ground-floor retail space and a public waterfront esplanade designed by James Corner Field Operations, with 25% of the apartments designated as permanently affordable, according to a report in New York YIMBY.

Tavros and Charney bought the full-block site from Property Markets Group for $102M in 2022. The project is in an Opportunity Zone between Union and Carroll Streets on the eastern side of the canal.

Prior to the rezoning, the Gowanus Canal area was a decaying industrial zone filled with vacant lots. The canal itself—for decades a toxic waste dumping ground for coal tar from manufactured gas plants in the area and combined sewer overflow—was in the midst of a federally financed cleanup.

In 2010, the Gowanus Canal was designated a federal Superfund site by the US Environmental Protection Agency, which began a decade-long $500M cleanup that involved dredging an average of 10 feet of contaminated sediment from the bottom of the canal. A cap also was installed on the native sediment below the pollutants that were removed from the canal.

The Superfund project at the canal—said to be the largest ever undertaken by the EPA—was spearheaded by the Gowanus Canal Community Advisory Group, including the Gowanus Canal Conservancy.

In October 2021, the EPA completed the initial phase of dredging north of the 3rd St. Bridge in Brooklyn, removing an estimated 35,000 cubic yards of contaminated sediment from the ground.