The owner of the 11-acre site on the Williamsburg, Brooklyn, waterfront is said to be considering a sale of the property it bought for $55.8 million in 2004. Project was slated to take 10 years.
By Amanda Fung
Ambitious plans to redevelop the derelict yet landmarked Domino Sugar factory on the Williamsburg, Brooklyn, waterfront may be going sour.
Since 2009, CPC Resources has been looking for a partner to recapitalize its 11.2-acre residential development, according to sources. Now the owner, which is the for-profit arm of Community Preservation Corp., and its partner, Katan Group, is considering the sale of the entire site. The project was estimated to cost up to $2 billion initially and was supposed to take 10 years to complete. The sale of the entire site or a portion of it was first reported by The Commercial Observer.
CPC Resources declined to comment. But in January, CPC's newly appointed head, former city Housing Preservation and Development Commissioner Rafael Cestero, told Crain's that the firm was still in the planning process for the project.
“Domino is a big signature project for CPC and the city, and I look forward to figuring out how to move forward,” he said at the time.
It has been a long tough road for CPC and Katan, which paid $55.8 million for the site on the south end of Kent Avenue in 2004, according to city records.
The project's density, height and impact on its surrounding neighborhood initially generated a storm of criticism from the community and local elected officials. After modifications on building height and mass, the plan to rezone the area to residential so that the development can go ahead finally won approval by the city in July 2010. The developers were also sued by a preservation group, but prevailed in that lawsuit in 2011. After passing that last hurdle, CPC said in May 2011 that it would be ready to break ground on the initial residential development on the upland portion of the site in 2012. Work has not yet started.
The overall redevelopment plan calls for a mixed-use development with 2,200 residential units, 660 of which will be affordable. It will also include four acres of waterfront space that will be open to the public and 220,000 square feet of retail, commercial and community space. It would also redevelop the refinery building with its famed Domino sign.
The tough economic environment contributed to the stalled Domino project. Additionally, sources said CPC Resources' parent, Community Preservation Corp., which provides financing for affordable housing development, has itself struggled. Late last year, its founder and long-time leader, Michael Lappin, announced his retirement. Earlier this year, Mr. Cestero was brought into the firm to turn things around, sources said. Last week, the nonprofit got a boost. It announced that it obtained an extension of its credit facility that would allow the nonprofit to finance the preservation and creation of up to 5,000 affordable housing units in the city.
The Domino site is one of the last pieces of prime waterfront property in Williamsburg to be developed. Most of the development to date has centered on the strip further north, on Kent Avenue. Those residential developments, both rental and sales, have been booming since they were restarted or completed post-downturn.
“I don't think there will be a shortage of bidders,” said David Maundrell, p
resident of residential brokerage Aptsandlofts.com, who has no direct knowledge of the Domino sale. “The area has this fantastic sleepy industrial feel that would be very desirable for residents; many people prefer the southside of Williamsburg over the north these days.”
Correction: CPC Resources and Katan Group bought the Domino Sugar site in Williamsburg, Brooklyn, in 2004. The purchase year was misstated in the summary of an earlier version of this article, published March 14, 2012.
Read more: http://www.crainsnewyork.com/article/20120314/REAL_ESTATE/120319951#ixzz1pCOPrMPz
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