Isaac Hager sells Crown Heights development site for $40M

Property is subject to a rezoning that could clear the way for a 390-unit rental building

Jul.July 31, 2018 03:30 PM

From left: Carmel Partners’ Ron Zeff, a rendering of 40 Crown Street and 931 Carroll Street in Brooklyn, and Meridian Investment Sales’s Lipa Lieberman (Credit: Privcap, CityRealty, and NYREJ)

Isaac Hager’s Cornell Realty Management sold off a piece of its 565-unit Crown Heights development site to Carmel Partners for roughly $40 million, sources told The Real Deal.

Carmel paid a little more than $40 million, sources said, for the vacant lot at 46 Crown Street, where the developer can build a 390-unit rental building if a controversial rezoning gets the green light.

Representatives for Carmel Partners couldn’t be immediately reached for comment, and Hager declined to comment. Source said Meridian Capital Group’s Lipa Lieberman represented Hager in the deal. He also declined to comment.

Hager bought the site — which includes the adjacent property at 135 Montgomery Street — in 2014 from the Central Service Laundry Corporation, property records show. The company operated a cleaning service out of a warehouse on the lot and owned another property two blocks away at 931 Carroll Street, which it also sold to Hager at the same time.

About two years later, Hager filed an application in 2016 with the city to upzone both lots to allow for larger and taller residential buildings.

If approved, the new zoning would allow for Carmel to construct a 16-story, mixed-use building spanning nearly 428,000 square feet. The Crown Street property will have 390 units, 105 of which will be set aside as affordable rentals under the city’s Mandatory Inclusionary Housing program. The new development will have an address of 40 Crown Street.

The Carroll Street property, which is not a part of the sale to Carmel, would be able to hold a 16-story building with 128 units, 34 of which would be affordable.

The prospective rezoning has not been without controversy, however. Last year, community activists reportedly collected 4,000 signatures for a petition opposing the project on the grounds that it would cast shadows on the nearby Brooklyn Botanical Gardens.

They expressed the same concerns about the site next door owned by Ian Bruce Eichner’s Continuum Companies and Lincoln Equities, which plan to develop a 1 million-square-foot mixed-income residential project.

Hager withdrew the application last year but refilled in April. The application is currently at the community board-review stage of the rezoning process. From there it will go onto the borough president’s office and then onto the City Planning Commission before it comes up for a vote in front of the City Council.

When it comes to land use matters, the Council generally defers to the local council member. In this case that’s Councilwoman Laurie Cumbo, who last year approved the controversial Bedford-Union Armory plan in Crown Heights after initially opposing the project.

Hager is one of the most active developers in Brooklyn, with nearly 700,000 square feet of projects under development at the start of this year, according to a recent ranking by TRD.

Carmel, meanwhile, launched leasing last month at its 483-unit 19 Dutch rental building in the Financial District. The Crown Heights property appears to be the first Brooklyn purchase for the San Francisco-based firm, which in New York has focused primarily on building and investing in Manhattan multifamily properties.

The company in May sold a $1.9 billion, multi-state portfolio of multifamily buildings to Brookfield Property Partners, including the 30-story Financial District rental tower at 15 Cliff Street.

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