News
03.29.2012
Domino Falls Down
Lawsuit yet another blow for developer of problematic Williamsburg site.
The Domino Sugar factory on Brooklyn's East River.
Emmanuel Huybrechts/Flickr

As the development story of Brooklyn’s Domino Sugar refinery continues to unfold, it appears to have all the flawed heroes, hubris, and possibly catharsis of a real urban drama. The project’s lead, Community Preservation Corporation Resources (CPCR), has lost a top-level leader, defaulted on major loans, and now is being accused of betrayal by a former partner: The Katan Group, CPCR’s development collaborator at Domino, has filed a lawsuit amid reports that CPCR was looking to sell part or all of the 11-acre property without Katan’s knowledge.

CPCR is the for-profit arm of Community Preservation Corporation (CPC), a nonprofit consortium of banks established in 1974 to help fund affordable housing projects in the New York area. Its counterpart, CPCR, was founded in 1992 so that the group could act as a proactive developer as well as an investor. Other affordable housing developers, such as Enterprise Community Partners, operate simultaneously as both nonprofit and for-profit; however, one big difference, said sources familiar with the corporate structure, is that at CPC-CPCR, both its nonprofit and for-profit branches are directed by the same person. Until last November, that was Michael Lappin, who abruptly retired after 31 years with CPC. In January, Lappin’s post was filled by Rafael Cestero, former commissioner of New York’s Department of Housing Preservation and Development.

Domino's six-block massing breakdown.
Courtesy City Planning
 

Cestero will be responsible for addressing Domino’s future as well as the bigger question of whether, given its mission, CPC-CPCR should have been involved with such a project in the first place. Domino’s sheer scale—the plan includes 2,200 units, with 660 set aside for affordable housing—was unprecedented for CPC-CPCR and the aspect of the project that the local community objected to the most. A design by architect Rafael Viñoly and a mandate to work around newly landmarked factory buildings exponentially increased the price tag, and, following the financial crisis, the project simply ran out of cash. Katan Group is now suing CPCR, stating in a March 5 court filing that the lead developer “has effectively depleted all of the refinery’s available capital, while virtually no construction work has been performed.”

But this drawn-out development saga could still have a happy ending, according to Williamsburg Independent People (WIP), a community group with an alternative vision for the site. WIP is seeking financial backing for a plan that creates a mixed-use arts development and promises affordable housing as well as new jobs. Meanwhile, every twist and turn of the development drama has been captured by a documentary team. Megan Sperry, one of the filmmakers of the forthcoming The Domino Effect, said “CPCR has been looking for investors for two years, and now they’re getting desperate.”

Molly Heintz