It turns out that the lines Red Hook boosters have been casting have been coming up mostly empty.
Despite hype about the neighborhood being oh-so-hip, a lack of inventory is discouraging buyers. Yet brokers are still hopeful that new projects in the area may help turn the tide.
Pioneers are moving ahead and opening businesses on Van Brunt Street. The anchor is the 52,000-square-foot Fairway supermarket in a Civil War-era warehouse, which will have rental apartments above it. The street has also developed into a little restaurant row, with restaurants such as the Good Fork and 360. IKEA is planning to open on Beard Street in 2008, despite opposition from preservationists.
There are new condominiums going up on Tiffany Place, Richards Street and Carroll Street, as well as a mixed-income project on Wolcott Street. A six-story condominium project at 160 Imlay Street has been in dispute since 2004.
But there are also several obstacles to Red Hook’s renaissance. Most of the neighborhood is zoned for industrial, manufacturing, transportation and utility usage. The housing supply for buyers is low, and that won’t change without modifications to zoning laws. This would require various interest groups and politicians to agree on the future composition of Red Hook — a task that has been left unfinished for the last 20 years.
First impressions
Red Hook itself doesn’t always make a favorable impression on potential buyers. During the daytime, the neighborhood’s streets can seem rather empty, and many houses appear run down or shuttered. To be sure, residential development takes many years to make its mark, but residential Red Hook seems far behind the pace of other waterfront areas in the borough.
“The neighborhood hasn’t progressed as fast as other neighborhoods,” said local developer Gino Vitale of Red Hook-based Vitale Builders, one of the few builders taking a chance on the area. Vitale is a 10-year veteran of the neighborhood, where he is building 180 new units.
“There’s not much for sale in Red Hook,” noted Vitale.
He has developed the 18-22 Dikeman Street condominiums, a row of three attached houses, each with three floor-through apartments, around the corner from U.S. Fried Chicken & Pizza. The complex has a brick façde and two parallel granite staircases coming down from the second-floor apartments. The back of the building overlooks the Red Hook Brooklyn Public Library branch next door.
Nearby are dilapidated homes and a brick warehouse, an empty parking garage, a tire yard and school bus parking area.
While the housing stock is low, what is available is considered reasonably priced, especially compared to nearby Park Slope and Carroll Gardens. Condo prices reportedly run about $550 per square foot, while houses with commercial space on the ground floor sell for about $1.5 million. Rents range from $1,500 to $2,000 per month for a one-bedroom.
On a recent blustery weekend, there were only three open houses advertised in Red Hook. At the open house for 18-22 Dikeman Street, a lone potential buyer stopped by before 1:30 p.m.
“They’re really about the only condos in the neighborhood” on the market now, said listing agent Kim Soule of Corcoran. “It’s not for everyone, but it’s a very special place.”
A short walk away, at a 25-foot-wide, five-story building at 300 Van Brunt Street, Fillmore Real Estate agent Vanessa Tortorice held another open house. The building sits next to a paper goods warehouse where trucks load boxes of paper towels and various products. Across the street is Luce, a boutique clothing store.
New developments
Tortorice predicted that the barren areas around Dikeman Street will soon be filled.
“There are some large projects that are in the pipeline right now,” said Kenneth Freeman, a director of sales at Massey Knakal specializing in Red Hook.
He cited the Revere Sugar Factory as an example. Reportedly, Thor Equities is demolishing the vacant plant to make way for a six-building residential and commercial project.
“[Thor] paid a big number [$40.5 million],” Freeman said, which he offered as proof that changes are really happening in Red Hook now. Big deals attract more interest, and rezoning will follow, Freeman added. “The people developing now are pioneers,” he said. “I don’t think five years ago there were the visionaries that there are in the market [today].”
The year ahead
The oversight of piers 7 through 12 in Red Hook is supposed to be transferred from the Port Authority of New York and New Jersey to New York City by the end of this year. The city wants to replace the container port with a cruise ship terminal, brewery and ferry service. But some City Council members oppose kicking out American Stevedoring Inc., which runs Brooklyn’s last remaining container port. They cite the loss of local jobs and an increase in the cost of goods for New Yorkers, who would have to rely on ports in New Jersey. Activity at American Stevedoring Inc. has been relatively slow for many years.
Despite little in the way of new housing in Red Hook, notably neither the city’s plan by the Economic Development Corporation, nor the opposition, are calling for additional housing in this battle.
Anecdotally, however, real estate insiders say interest has increased.
Last June, Nicole Galluccio, a Fillmore broker, sold a two-family home in Red Hook for more than $1 million. Galluccio argues that now is Red Hook’s time.
“I do see residential development,” she said, while noting that zoning does present a problem. It’s a very costly process for developers to obtain variances to be able to construct residences in industrial zones, she explained.
“I am getting calls every single day from people who want to move into the community, and I don’t have enough inventory to sell them,” said Galluccio.
“Everyone has a lot of faith that the city is going to do something productive with the waterfront,” she said.