You can’t talk about Gowanus without talking about Sam Charney.
The T-shirt-and-jeans-wearing, street-art-scene-loving developer is building more new homes than anyone in the gritty neighborhood that’s being transformed into Brooklyn’s latest boom town.
The driving force behind his Charney Companies, Sam is developing four buildings totaling nearly 2,000 units along with his frequent collaborators at Tavros Capital. Charney and his Tavros pals bought their first site shortly before the area was rezoned in 2019, and this past October they struck a deal to buy their fourth, 175 Third Street, from Aby Rosen’s RFR Holding for $175 million.
In total they’ve invested $1.5 billion in the neighborhood. By the time they were thinking about buying their third site, the partners decided to join the buildings into a campus dubbed Gowanus Wharf. And while a project on such a scale will have a huge impact on the neighborhood — for better or worse — Charney said he’s dead set on making sure it doesn’t suck the soul out of Gowanus.
“We are affecting the urban experience for everyone on a daily basis, and if you are throwing up some piece of shit, everybody’s gonna walk around and feel a little worse,” he said.
“And then let’s go and buy local art for the lobbies — Brooklyn-based artists — let’s go and take over all of our construction fences with different local artists. Who wants to walk around and see green construction fence all the time if I can spend a few bucks and put art all over it?”
This isn’t the first time that 45-year-old Charney has zeroed in on a hot outer-borough neighborhood: He got his start in real estate working for the Walentases in Dumbo. When he struck out on his own in 2013, Charney keyed in on Long Island City, where he developed a trio of buildings.
Charney Companies recently doubled the size of its L.I.C. office, which houses its development, brokerage and management arms, to make room for the dozen new employees brought on as part of this growth.
Charney sat down with The Real Deal at his office — adorned with pieces from his extensive art collection — to talk about growing up in the gallery scene, building up his business and his plans for Gowanus.
This conversation has been condensed and edited for clarity.
Born: March 31, 1979
Hometown: Upper East Side, Manhattan
Lives: Pelham, New york
Family: Married, two children
“If you are throwing up some piece of shit, everybody’s gonna walk around and feel a little worse.”
So you just picked up your fourth site in Gowanus. What’s different now from when you got started with the first one?
We know so much more that we didn’t know going in. We know how to remediate these sites, and that was such a challenge. I want to do something really exciting with our new site.
How did you get together with Tavros?
I went to Dalton on the Upper East Side and I teamed up with them through what is now the defunct Dalton Real Estate Group. Nick Silvers (one of the principals) also went to Dalton a few years older than me. We went out to lunch one day; he was developing a project in Manhattan and I had this fully baked project with the Jackson in Long Island City under contract. They came in and brought the capital and it worked out really well. We got along and looked at the Dime in Williamsburg and said, let’s buy this together.
And now you’re doing everything together in Gowanus.
Yeah, we bought 585 Union Street together. After that it was like, we’re in Gowanus together and neither of us is gonna buy a building and do it on our own. So we started buying as much together as we could, and that’s really been the heart of the relationship.
What were you like growing up?
My father is a neurologist. My mother was a professional violist. She passed away a year ago. I got this incredible gift from my mom, this musical talent that led me to art and architecture and real estate development today. And I got this scientific mind from my dad. It allowed me to harness this left-side-right-side-of-the-brain thing.
When did you get interested in real estate?
I grew up with the street-art scene in New York and graduated college with an art history degree. I thought I wanted to be in the art world, so I applied for a job at the Peggy Guggenheim museum in Venice. Fortunately or unfortunately, I did not get it and came back to New York. There’s a program at Harvard called career discovery for people who think they might want to do planning or architecture. I picked up the books and within the first few pages I read about this real estate developer guy. I was like, so he hires the architect and makes all the decisions? That sounds like the person I wanna be like.
How did you get started in the business?
I came back to New York and started at New York University, and in my first semester I took an appraisal class where I chose to evaluate the Empire Stores in Dumbo. I needed information on rental rates, vacancy rates, everything, so I bugged everyone at Two Trees. Finally one guy who was working there said, “Come in and I’ll talk to you, and when you finish with your appraisal project let me know because it just so happens that we are trying to get the Empire Stores right now through an RFP that the city is doing.”
I brought the project back and he looked through it and he said, “Your stuff is pretty good, would you be interested in an internship?” And I was like, “Yes, thank God!” I could finally move out of my parents’ apartment as they were getting divorced. It allowed me to get an apartment in the East Village.
So you started working for the Walentases?
The guy who hired me was burned out and quit and recommended that I take over for him. Jed just one day called me and was like, “I don’t know you from Adam but Isaac says you’re a pretty smart guy. So if you’re interested we’d love to have you start as a project manager.” I was like OK, what’s the starting salary? He was like, “It’s $50,000,” and I was like, “Make it sixty.”
What made you decide to go out on your own?
I worked there for eight years and left in 2013 to start my own company. I quit my job, got married and had a kid — not necessarily in that order — all in the course of 12 months.
I’d always wanted to be an entrepreneur. For me, getting into real estate was like this glamorous version of being your own boss. My wife — who was my girlfriend at the time — got pregnant and I said if I don’t leave now then I’m probably never gonna because you just get more and more responsibilities as time goes on.
What drew you to Long Island City?
I always liked L.I.C. It kind of feels like Dumbo 20 years ago.
What was your first deal?
I put a deposit down on a piece of land here called the Jackson. I was way too honest with the seller. He was a really awful human being, but I didn’t know that at the time. I said to him, “This is my first deal. I’ll pay your asking price but I need a year to close,” and he was ecstatic because he was asking a silly number. I went and raised a million bucks from friends and family and what happened is, the market took off. I was in the land for 200 bucks a foot and over the next six months it went to $300 a foot. He saw that and was like, I’m not selling to you anymore.
But you had a contract?
I was like, “Oh, fuck, what am I going to do?” He knew that I didn’t have the money to sue him. I paid him an extra million dollars to close because at that point I had investors who were like let’s just get the deal done.
How did you build the company?
I remember trying to hire top-tier construction personnel. Younger guys or women are like, oh this is cool I can wear whatever I want to work. You’ve got a ping pong table and nice tequila. But the seasoned construction guys or real blue collar supers who live on a couple of acres in Pennsylvania and get up at 4:30 in the morning to commute to the city — those guys want consistent work. They would come and interview with me, and they were like, “So why would I work for you over Skanska or Tishman?”
There was a real struggle to get construction personnel initially to be able to build a project.
And you’re still hiring now.
I think we’re one of the only development firms that’s hiring in New York right now because we have close to 3,000 units in our pipeline.
Do you give young people breaks like the one you got?
I give everybody who contacts me an opportunity to get on a 15-minute Zoom or Google Meet or even come to the office and talk.
Do you have a preference to lean towards condos or rentals?
My preference is to be building affordable housing for people that really need housing because I grew up in Manhattan in the ’80s and ’90s when it was a super cool place to be. I can’t stand going to Manhattan anymore. I stay as far out of the city as I possibly can. I love Brooklyn and Queens. They remind me of what New York was back then.
Didn’t you just buy your first property in Manhattan?
We did, in Manhattanville — so a different slice of Manhattan. We looked at the Claremont. It’s a spectacular building that you could not replace today. It was built by skilled masons in the early 1900s by John D. Rockefeller.
I’ll tell you, a lot of developers and a lot of private equity will look at [the Claremont] and say, “Oh it’s so scary. You don’t know what’s behind the walls. You don’t know what the structure of the foundation is.” I’ll take that every day of the week over what’s below the slab at grade. New construction, you go in the ground and you have no idea what you’re going to find.
What’s the scariest thing you found?
I wouldn’t say it was the scariest but it was really cool. I’ve found work animals excavating before — like skeletons of massive oxen. That’s how they would bring materials to the site. I found an oxen skull and a rib cage in Dumbo excavating. The good thing in Gowanus is that everything has been overanalyzed by the E.P.A., the D.E.P. and the D.E.C. I know exactly what I’m getting there.
“I was way too honest with the seller. He was a really awful human being, but I didn’t know that at the time. I said to him, ‘This is my first deal. I’ll pay your asking price but I need a year to close,’ and he was ecstatic because he was asking a silly number.”
Do you have any relation to Leon Charney?
None.
Do you get asked that all the time?
When I started out I got a call from Leon’s wife and she was like I’m so happy to see that there’s another Charney getting into real estate. She was extremely kind and nice. I know about him from growing up in New York because he used to have a public access TV show.
Has it been a net positive? Like did having the last name Charney help get some phone calls answered early on?
He had an unbelievable reputation. He is known for being a guy who would treat the guy throwing the garbage out in the building the same way as he would treat his banker.
How did you feel about 5Pointz?
I was sad to see 5Pointz go, but at the same time as a developer I’m a big believer in land ownership and that you have the ability to do what you want with your building.
Tell me about your art collection.
I think every piece of art here has a story about when I got it. There’s this piece by Honor Titus. He started making artwork and I could not get an Honor Titus and tried forever to buy one. I bought this piece shortly after we capitalized and closed on our construction loan for 251 Douglas.
Are there any other things you splurge on?
I do love to travel. I love traveling to Europe because the time zone difference allows me to disconnect in a special way. I can wake up in the morning, respond to emails while I have my coffee and then effectively have my entire day to go just with my kids and wife because work in the U.S. doesn’t start again for another six hours.
Do you have a work-life balance?
It’s tough. I’d say the past month or so I have been out nonstop. Really over the past two years because we were very actively involved in speaking with as many state level politicians as possible about what to do with the 421a expiration and 485x program. And then meeting with council members because of City of Yes.
Do you think about leaving a legacy?
There’s no doubt in my mind I want to be building affordable. I’d like to be doing it with a real social services component. My mother had serious mental health issues. She was bipolar, schizophrenic, you name it. So if we can be producing really top-quality affordable housing — bringing our sense of design and aesthetics and quality to those buildings — we can do those buildings with true social services where there’s no stigma associated with the building.