Domain Closes $176M Loan for Gowanus Towers

Domain Companies has closed on a $176M construction loan for a 360-unit multifamily development that will feature two apartment towers at 420 Carroll Street on the Gowanus Canal waterfront in Brooklyn.

JLL Capital Markets arranged the financing from Bank OZK for Domain and its partners in the project, including Vorea Group, Silverstein Properties and affiliates of Cantor Fitzgerald.

The waterfront development, now under construction, will include a 20-story tower, a 15-story tower, more than 27K SF of retail space and a publicly accessible connection to the Gowanus Canal promenade, according to a report in NYYimby.

About a quarter of the apartment units at the project will be designated as affordable housing, reserved for households earning 40% to 100% of the area’s median income. Amenities at the development will include coworking space, a resident lounge and a fitness center.

Domain acquired 420 Carroll from Property Markets Group for $47.5M in 2018. Total development costs are estimated at $295M. Because the foundation for the new apartment towers was put in before the end of June, the project will be eligible to receive NYC’s 421a tax abatement, which expired on June 30.

“We’re excited to support sustainable development in the Gowanus neighborhood,” said Matt Schwartz, Domain’s co-CEO, in a statement. “This closing marks an important step forward in delivering much-needed mixed-income housing for Gowanus and New York City.”

The Carroll Street development, which is scheduled to be completed in 2024, is part of an 82-block area surrounding the Gowanus Canal that was rezoned to facilitate the construction of more than 7.6M SF of new residential space as well as 1.5M SF of new commercial property.

Until the rezoning in 2019, the Gowanus Canal area was a decaying industrial zone filled with vacant lots. The canal itself—for decades a toxic waste dumping ground for coal tar from manufactured gas plants in the area and combined sewer overflow—was in the midst of a federally financed cleanup.

In 2010, the Gowanus Canal was designated a federal Superfund site by the US Environmental Protection Agency, which began a decade-long $500M cleanup that involved dredging an average of 10 feet of contaminated sediment from the bottom of the canal.

A cap also was installed on the native sediment below the pollutants that were removed from the canal.

The Superfund project at the canal—said to be the largest ever undertaken by the EPA—was spearheaded by the Gowanus Canal Community Advisory Group, including the Gowanus Canal Conservancy.

In October 2021, the EPA completed the initial phase of dredging north of the 3^rd St. Bridge in Brooklyn, removing an estimated 35,000 cubic yards of contaminated sediment from the ground.