PMG to pay $50M for large, vacant Gowanus development site

Developer in contract for contaminated 332K sf lot bordering canal

TRD New York /
Jul.July 15, 2016 12:33 PM

UPDATED, 5:49 p.m., July 15: Property Markets Group is in contract to acquire a development site with 332,000 buildable square feet along the Gowanus Canal for about $50 million, or $150 per buildable square foot, sources told The Real Deal.

The contaminated site at 455-459 Smith Street is one of the last large, undeveloped parcels in Brooklyn’s Gowanus neighborhood. It is a 166,000-square-foot lot with a maximum floor area ratio of 2.

Sources familiar with the deal said the development firm led by Kevin Maloney is considering building a mixed-use property that would contain a mix of offices, a hotel and retail. The lot, located in an M3 district, is zoned for manufacturing.

The seller is clothing magnate Henry Abadi, who demolished the one-story warehouse on the site in the early 2010s.

National Grid is currently responsible for environmental cleanup on the site, which borders the Gowanus Canal on the eastern side. Contamination stems from the production of coal at the former Citizens Manufactured Gas Plant years earlier.

According to a National Grid spokesperson, the company “is presently working with the New York State Department of Environmental Conservation on a design for the cleanup.  The future site cleanup will be coordinated closely with the current owner or any new site owner and the U.S. Environmental Protection Agency in support of the expected Gowanus Canal Superfund site cleanup.”

In 2014, Abadi told TRD he was not planning to sell the site since it’s contaminated and therefore not ready to be sold.

Over the past four years, Maloney’s firm TRData LogoTINY has picked up a string of low-rise industrial buildings throughout Gowanus. In 2012, PMG paid $9 million for a 78,300-square-foot site at 404-428 Carroll Street and $14 million for a 204,100-square-foot site at 300-344 Nevins Street, property records show. In 2014, it paid $3.5 million for a 10,800-square-foot site at 131-135 3rd Street.

As of 2014, the developer was waiting to see what happened with the neighborhood and zoning before filing development plans, Richard Lam, a principal at PMG, said at the time.

A Pinnacle Realty team led by David Junik brokered the deal. Representatives for Pinnacle and PMG declined to comment.

In late March, PMG and JDS Development Group announced that they would be delaying sales at 111 West 57th Street, citing a slowing luxury condo market.

The Real Deal reported last week that PMG and the Hakim organization were looking to sell the 1 million-square-foot, 800-unit Clocktower site in Long Island City.

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