Watermark Plans 99-Unit Mixed-use Building on Empty FiDi Lot

A Brooklyn developer is moving ahead with plans for one half of its recent acquisition in the Financial District.

Wolfe Landau’s Watermark Capital Group filed plans last week with the Department of Buildings for a mixed-use development at 78 Pearl Street, an empty lot sandwiched between two buildings. The developer is eyeing a 39-story property with ground-floor retail, 10 stories of office space and 99 residential units, according to the plans. 

Shmuel Wieder of S. Wieder Architect P.C. will design the building. 

Landau purchased the empty lot, along with an adjacent building, earlier this month for a combined $35 million from the family-owned Milstein Organization, which has owned the pair of properties since the 1970s and ’80s. 

The adjacent building, 46 Water Street, is being prepared for demolition, the New York Business Journal reported. The block-through assemblage runs from the south side of Pearl Street to the north side of Water Street.

The project’s planned unit count is no accident: the number is just under the wage requirement threshold in the state’s new 485x tax abatement program. The abatement requires developers to pay a construction wage of at least $40 per hour on buildings with 100 units or more to qualify for a property tax exemption. 

The law has inadvertently incentivized developers to cap projects — often located right next to each other —  at 99 units, narrowly avoiding the wage requirement.

While FiDi has historically been a hub for office buildings, the area has become a residential hotspot after a wave of office conversions delivered thousands of new units, with more in the pipeline.

Watermark has only recently expanded outside of its home turf in Brooklyn, where it owns most of its property. The developer secured $125 million in construction financing for an office-to-resi conversion in Dumbo last year.

Watermark did not respond to requests for comment.

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