The Daily Dirt: Time is running out to apply for 421a alternative

Gowanus developers have until the end of the month to apply for a 421a-alternative. 

In July, Gov. Kathy Hochul unveiled a plan for certain projects in the Brooklyn neighborhood to receive tax breaks similar to the expired incentive. Under the program, the state will take over the sites and rent them back to developers through long-term ground leases. Property owners will then make payments in lieu of taxes, or PILOTs, at a discount to what they would normally pay in property taxes. 

Projects that vested under the old program — those with at least foundation footings in place — can apply. The deadline is Sept. 29. 

Several developers showed interest in the proposal. Vorea Group, Domain Companies, Tavros Holdings, RFR Holding, the Brodsky Organization, Midwood Investment & Development, Monadnock Development and MacArthur Holdings attended an information session about the program last month, according to Empire State Development. It was not immediately clear how many of these developers plan to or have already applied for the governor’s program.  

Most of these developers have pending projects in Gowanus that have yet to secure construction financing, meaning it’s likely they will be unable to meet the June 15, 2026, deadline necessary to receive 421a. For that reason, the governor’s program may be the best option for those projects. 

Gowanus could be a test case to determine if the governor’s program is expanded to other parts of the city. That is, if the property tax break is not revived in another form. 

What we’re thinking about: Will other landlords follow DivcoWest’s lead and sue WeWork to recoup unpaid rent? Or will landlords ultimately opt to cut a deal with the struggling coworking firm? Send a note to kathryn@therealdeal.com; 

A thing we’ve learned: The Real Estate Board of New York is keeping track of the number of approvals of multifamily projects through the city’s Uniform Land Use Review Procedure. From April 27 to Sept. 12, there were at least five instances where there were no such approvals for a two-week stretch or more. Of course, that is partially due to the fact that community boards are not required to meet in July and August. But there were no such approvals in June, and none so far in September. Since May, developers have withdrawn four applications for projects that would have created 335 housing units, according to City Planning’s website. 

It remains to be seen how these gaps compare to previous years or if we will see a drop in rezoning applications, given the lack of 421a. 

Elsewhere in New York…

— Billionaire Charles Cohen claims the water coming out of the faucets in a co-op unit he co-owns at 190 East 72nd Street is brown, unsafe to drink and causes skin rashes, Crain’s New York reports. The water has been this way for two years, according to a lawsuit filed by Cohen against the co-op board. 

—  The Transportation Security Administration has seen a spike in the number of guns caught at airport checkpoints, Gothamist reported. So far this year, the agency has confiscated 32 guns across New York’s three major area airports. 

“Our officers have caught more guns in the first nine months of the year than we have ever caught in a full year,” Thomas Carter, the TSA’s federal security director for New Jersey, said in a statement. “We are at a point where each gun that is caught sets a new record. It’s as though there is an epidemic of guns showing up at our checkpoints.”

— Tens of thousands of protestors flooded Midtown streets on Sunday to call on President Biden to stop the issuance of permits for new oil and gas drilling, the New York Times reported. The president arrived in the city on Sunday for various fundraisers and to speak at the United Nations General Assembly session on Tuesday. 

Closing Time

Residential: The priciest residential closing Monday was ​​$32.5 million for a condo at 200 East 83rd Street in Yorkville.

Commercial: The most expensive commercial closing of the day was $40 million for a 15-story, 54-unit apartment building at 841 7th Avenue in Midtown.

New to the Market: The priciest residence to hit the market Monday was a condo at 145 Hudson Street in Tribeca asking $13.5 million. Akam Sale & Brokerage has the listing.