"It's disappointing," a spokesman for Mayor Michael Bloomberg says in a statement. "We had an innovative and comprehensive approach that was a faster route to a Superfund-level cleanup and would have avoided the issues associated with a Superfund listing. The project will now move on a Superfund timeline, but we are going to work closely with the EPA because we share the same goal: a clean canal."

Built in the 1860s to allow access into Gowanus Bay, the canal has remained contaminated decades after nearby industrial activity largely came to an end. According to a release from the EPA, the canal, which is surrounded by residential neighborhoods along with commercial and industrial properties, is contaminated with a variety of pollutants, including polycyclic aromatic hydrocarbons, heavy metals, pesticides, polychlorinated biphenyls, metals and volatile organic contaminants. The waterway is still used for commercial as well as recreational purposes.

Last October, the city launched its $150-million Gowanus Facilities Upgrade Project, scheduled for completion in 2013. "By continuing our partnership with the Army Corps of Engineers—instead of risking years of delay through the Superfund process—we can get the canal cleaned up as thoroughly as Superfund, but more quickly and efficiently so that this neighborhood continues to grow and thrive," Bloomberg said at the time. A plan to rezone 25 blocks near the canal is still in the works, although redevelopment could be held up indefinitely as the EPA goes after entities responsible for the pollution.

In a statement Tuesday, Rep. Nydia Velázquez, whose Congressional district includes the waterway, applauds the federal agency's move. "The EPA has the proven expertise to oversee a comprehensive clean-up, while holding accountable those responsible for the pollution," she says. "As this process moves forward, I will continue working to revitalize this local landmark so that it can fully live up to its potential."