The “Superfund stigma” has claimed its first victim, as a development company that once envisioned a 500-unit complex along the banks of the fetid Gowanus Canal has officially bailed on its five-year pursuit of the project saying that it can’t wait for the federal government to complete its proposed 10-plus year clean-up.
Toll Brothers walked away from a $5.75-million down payment it had made on canal-front land just south of the Carroll Street bridge, making good on a promise to abandon its plan if the federal government designated the waterway a Superfund site, as it did in March.
“It just didn’t financially make sense to close on the properties and then have to wait 15 to 20 years until we could develop them,” said David Von Spreckelsen, senior vice president for the mostly suburban development company. “Fifteen years of having our money out the door and not having a return didn’t make financial sense.”
Toll had entered a contract to purchase the property from Joseph Phillips and Citibank in 2004, and made its down payment on the eventual purchase price of $20.6 million, according to court papers filed last year.
“They are keeping the property and we made non-refundable deposits,” Von Spreckelsen said, referring to a settlement of the case that was quietly made last month.
Had the project advanced, Toll would have purchased a total of three parcels on two adjoining blocks to build a mixed-income project with 477 apartments in a complex of townhouses and buildings scaling as high as 12 stories.
That vision had already worked its way through the city’s land-use review process. As a result, Toll was one of many developers and property owners who blasted the Environmental Protection Agency for naming the canal a Superfund site, arguing that the stigma of the designation would forestall development for years.
“These were never just idle threats,” Von Spreckelsen said. “I spent five years of my life working on getting this done, and I don’t think anything is going to happen there for a very long time.”
The city opposed the designation and predicted it would jeopardize more than $400 million of private investment, including the Toll Brothers complex.
The EPA was mum about Toll’s departure, putting out a statement that the agency “continues to focus on the extensive investigation into the contamination of the canal [to] ensure the health and safety of the surrounding community through an effective cleanup,” which is expected to cost $500 million.
Superfund supporters said good riddance to Toll — which last week was ranked first among home building companies in Fortune Magazine’s “World’s Most Admired Companies.”
“This is the right thing for the Gowanus corridor,” said area resident Linda Mariano. “The land might sit there for now, but we still have a future. We want healthy water and healthy land and open space. It shouldn’t just be for people who live in condos and co-ops.”
©2010 Community News Group
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