The Real Deal New York

The anatomy of gentrification: How the Clock Tower building is changing the
South Bronx

Carnegie Management's building opened in 2002 and is helping usher in a wave of development
By Eddie Small | May 18, 2017 12:45PM

Clock Tower building at Bruckner Boulevard and Lincoln Avenue (Credit: Google Maps)

In Williamsburg, the slow crawl of gentrification kicked into sixth gear following the 2005 rezoning. In Long Island City, the City Lights co-op spurred a kingdom of high-rise luxury towers. And in Mott Haven, it started with the Clock Tower.

In 2002, well before the cranes, sushi restaurants and cafes sandwiched themselves between rows of brick townhouses and Robert Moses-era public housing, Carnegie Management converted a former piano factory into lofts. The 90-unit rental on the main commercial drag at 112 Lincoln Avenue boasted features seen in trendier locales — a rooftop deck and chic restaurant — and the developers placing the biggest bets in the South Bronx today credit the project with putting Mott Haven on the development map.

Carnegie, led by Isaac Jacobowitz, is now doubling down on its investment by building an adjacent six-story rental building at 23 Bruckner Boulevard that could be ready to open within the next four or five months. The project would include 130 new apartments, an enclosed swimming pool and a gym, and although it will be separate from the original Clock Tower, tenants in both buildings will have access to the pool.

Based in Williamsburg, Carnegie owns multiple residential buildings throughout Brooklyn — including the McKibbon Lofts, a famed engine of gentrification in East Williamsburg and Bushwick — but it’s made a name for itself in the Bronx with a patient approach to development. It bought two parcels for the upcoming development in 2000 and 2011 for a total of just $150,000, according to property records, and later tapped Karl Fischer Architect to commission a design.

Since the Clock Tower opened, real estate investment in the 10454 ZIP code has exploded — it rose from about $1.9 million in 2003 to about $111 million in 2016. The average sale price has spiked from roughly $265,000 to roughly $3.1 million, and the total number of properties sold per year has more than quadrupled, rising from 10 to 46 (though a recent analysis by The Real Deal found many of these transactions to be speculative).

According to a StreetEasy analysis, rents at the Clock Tower building between 2011 and 2017 ranged from $1,350 to $3,500, well above median asking rents in Mott Haven, which in 2016 checked in at $1,795. As a whole, the Bronx median asking rent in 2016 was $1,529.

Ariela Heilman, a broker with Halstead Property, referred to Mott Haven as “an old story in a new neighborhood,” maintaining that people were attracted to the area because they had been priced out of other neighborhoods and were looking for more space.

“It’s definitely a lightning rod,” she said of the Clock Tower. “Both physically—the way it stands out, its placement, its beauty, the exterior, the brick work—and that it was a repository for like- minded people pretty much coming to this realization at the same time.”

Keith Rubenstein, a founder of Somerset Partners, said the success of the Clock Tower building played a key role in convincing him to move forward with his potentially transformational waterfront project, describing the building as one of the first things he noticed when he first visited Mott Haven.

Rubenstein and partner the Chetrit Group are planning more than 1,300 apartments across seven buildings, betting that the 20-minute commute to Midtown and amenities including a pet care room, ground floor cafe and a waterfront trail will entice new renters to the area. They’re in the market for a construction loan of up to $500 million, which would likely set a record for the borough.

“I think that their presence in the Clock Tower reinforced my decision to move forward, and my decision to move forward may have reinforced their decision to build phase two,” said Rubenstein.

In the last few years, developers and entrepreneurs have opened a range of higher-end businesses, targeting current residents and first-wave interlopers with amenities like the sushi restaurant Ceetay and the combination fashion gallery/art boutique 9J. Major nearby projects including a 25-story residential tower at 198 East 135th Street and the roughly $43 million redevelopment of the Bronx General Post Office are underway as well.

However, for as long as development has been coming to the South Bronx — investment was up to $3.3 billion last year, up from about $1.8 billion in 2009, according to the Bronx Borough President’s office — residents have expressed fear that they’ll be pushed out.

Mychal Johnson, a founder of the local community group South Bronx Unite, said he believed the Carnegie development had a mixed impact on the neighborhood overall, noting that many Clock Tower residents seem fairly cut off from the rest of Mott Haven and that the building’s rooftop deck and restaurant can make it an insular place.

Overall, he said that the Clock Tower has changed Mott Haven dramatically and said that the units coming to the new building looked like they would be too pricey for borough residents.

“It doesn’t look like something that is in The Bronx—not to say that we don’t deserve nice things,” Johnson said. “It’s that the price of this rental will be exorbitant. I’m sure it will be extremely high.”

(To view new development projects underway in the Bronx, click here)