Report: Brooklyn leads in derelict construction sites

Williamsburg’s ‘Taj Mosquito’
The Brooklyn Paper / Ben Muessig

The Borough of Churches is fast becoming the Borough of Empty Lots.

Brooklyn is pockmarked by a disproportionate number of abandoned development sites compared with the rest of the city, according to a report released last week by Eastern Consolidated, an investment services firm in Manhattan.

The boom years of 2005-7 went bust when the global financial crisis hit, causing financing for new development to dry up, leaving half-started brick husks and empty lots as a lasting reminder of the blind exuberance that characterized the boom.

As of May 25, there were 279 stalled sites in the borough out of 615 citywide.

North Brooklyn has been hardest hit by the downturn: Of the 264 stalled Brooklyn sites in April, 73 were in Williamsburg and Greenpoint — neighborhoods that were the stars of the boom, thanks to a 2005 rezoning that had facilitated new residential and commercial development.

Report author Barbara Denham, chief economist at Eastern Consolidated, blamed the “herd mentality” on North Brooklyn’s struggles. “I just think the assumptions were a little too bold,” she said, suggesting that any improvement might be a year away.

One of the most notorious abandoned sites is the massive lot on Bedford Avenue and North 12th Street, which is usually so filled with water that locals call it “Hot Karl Beach,” in honor of project architect Karl Fischer.

A few blocks away, at Driggs Avenue and N. Ninth Street, a developer bailed on his plans for a $25-million, six-story rental building and put up a parking lot instead.

“We saw the handwriting on the wall,” said Neil Dolgin, president of Kalmon Dolgin Affiliates. “It could be temporary or it could be for the next 10 years.”

He blamed the situation on a unbridled enthusiasm facilitated by citywide rezonings.

“When you bring on board 10,000 units at the same time, and have an economy that was only going upward, people started to get carried away and thought it would never come to an end,” he said.

Dolgin concluded that many of the “holes in the ground” would be resold by banks, repurchased and repurposed to fit leaner times.

“They won’t use granite and high-end appliances,” he said. “People will just change the way they design.”

Downtown avoided much of North Brooklyn’s trauma because its rezoning passed in 2004, early enough that a “critical mass of projects [got] financing and got well into the construction process early,” according to Joe Chan, the president of the Downtown Brooklyn Partnership, a quasi-governmental group.

He noted that Downtown’s lone stalled development, a condo project at Schermerhorn and Hoyt Streets, was recently completed.

Fallow sites might do little for the local economy, but they can also pose serious health hazards, according to Councilman Brad Lander (D–Park Slope), who created an interactive Web site, www.stalleddevelopment.com, to track the zombies lurking in his district.

“Unfortunately, Brooklyn will continue to grapple with the detritus of failed development for some years to come,” he said.

But the sites — even the most egregious examples, like a foul-smelling Fourth Avenue lot where oil was reported bubbling from the ground, or a Friel Place property in Kensington where squatters offered the only signs of life — also represent a not-yet-realized opportunity.

“I would rather have them benefit the community than stand as dangerous eyesores,” Lander said.

Lander said that he supports a plan to encourage the construction of housing at derelict locations by giving developers subsidies and other incentives — but only for affordable units.

“But I don’t think we should provide tax breaks or subsidies to jump start market-rate housing in order to subsidize failed speculators,” Lander said. “That would be a disaster.”

There was some good news in the construction reporter: Buildings Department data show that the borough has the most restarted construction sites — 108 projects, with 31 completed.