See Why Gowanus -- Home To A Toxic Canal -- Is NYC's Hot New Destination For Startups

Gowanus, the southwestern Brooklyn neighbourhood named for the toxic canal that snakes its way through it, doesn’t sound like a hot destination. But this neighbourhood is thriving — small businesses, artists, and tech startups are moving into the area in droves, taking advantage of the neighbourhood’s relatively low office rents and fundamentally changing its character.

Genius, a website that annotates music lyrics, literature, and news, made headlines in July when it announced the team would be moving to an extensively renovated warehouse building in Gowanus.

Could this industrial neighbourhood, currently undergoing a Superfund cleanup, be the next frontier for New York City tech companies? We headed to Brooklyn to find out.

Gowanus is located in southwest Brooklyn, bordered by Carroll Gardens to the west, Boerum Hill to the north, and Park Slope to the east.

As you walk through the neighbourhood's more residential areas, you'll find wide, leafy streets and classic Brooklyn brownstones. Though the streets of Gowanus may seem relatively pleasant now, it hasn't always been that way. Gowanus has long been overshadowed by the affluent neighborhoods that surround it, at times becoming a hotbed for mob violence and crime.

Source: Village Voice

That's due, in part, to the polluted waterway that snakes its way through the neighbourhood. Built in 1869, the Gowanus Canal was once a major transportation route connecting the Upper New York Bay and the interior of Brooklyn. For decades, the 1.8-mile channel served as a landing point for mills, tanneries, chemical plants, and other heavy industries. But local legend holds that the canal also served another, darker purpose as a dumping ground for unlucky mobsters.

Source: EPA

More than a hundred years later, this canal is filthy. Bubbles can be seen floating to the top of the canal, dispelled from sewage decomposing at the bottom. In March 2010, the Environmental Protection Agency designated the Gowanus Canal as a Superfund site, declaring it one of the nation's most contaminated bodies of water. The Superfund designation comes with a $US500-million cleanup plan, which the EPA hopes will eliminate the vast majority of the contamination the canal currently receives.

Source: EPA

And yet, some forward-thinking tech companies are starting to move in to the neighbourhood. Genius, a web site that annotates music lyrics, literature, and news, is the latest to move its team to Gowanus. The startup is moving its 25-person team into this warehouse building, which was at different times in the past home to a woodworker and an artist. It had sat unused for decades before being purchased by PWR Realty for $US20 million in January.

The office will have semi-private cubicles and plenty of event space when it's finished. 'We want it to be a cultural center, with a venue space where we can have events like book release parties, screenings, and where we can engage with culture,' Ben Gross, a partner at Genius, told Business Insider. They will have some work to do before then -- plumbing and mechanical engineering in the 40,000-square-foot space had to be completely redone to fit Class-A certifications.

They will also have an amazing roof deck, where they can look out on Gowanus and Manhattan during the warm weather months.

Genius isn't the first startup in town. Kitchensurfing, which helps users to find local chefs who will come to their homes and cook a meal for them, bought a townhouse in Gowanus in July of 2012. 'We were looking for a space and a neighbourhood that felt homey. Kitchensurfing is about celebrating the home and some of those joys and comforts,' CEO and founder Chris Muscarella said. 'We also felt like we were a company on a real upward swing and liked the idea of combining our story with a neighbourhood on a similar trajectory.'

Muscarella has his own take on the neighbourhood, which he says is one of the last industrial neighborhoods that's reasonably close to Manhattan. 'Because of this, you have many developers that have bought up the property and are hoping to build large residential complexes,' he said. 'However, due to the Superfund status, it looks like many of those plans are on hold and you're getting very favourable 10-15 year commercial leases. The result is that the neighbourhood looks like it gets to keep some of its character for a while.'

Kitchensurfing recently moved its offices to SoHo in Manhattan, but Muscarella says the team isn't ready to sever all ties with Gowanus just yet -- they will be keeping their beloved Brooklyn townhouse and using it as an event space. 'Gowanus could be an amazing place for tech companies,' he said. 'A little more space gives companies the ability to flex a little and develop their own quirks in their culture.'

Farmigo, an online farmers' market that helps communities connect directly with local farms, moved to an office at the Gowanus Industrial Arts Complex after witnessing soaring rents elsewhere in Brooklyn. 'DUMBO rents are pretty much the same as Manhattan now. We see Gowanus as this up-and-coming frontier,' Benzi Ronen, founder and CEO of Farmigo, said to Business Insider.

'While Silicon Valley is all about deep technology -- algorithms, things like that -- New York is more of an offline-online mix, with the media content New York has always been a leader in. Brooklyn, then, is local and artisanal combined with the media, creative talent of New York City,' Ronen (right) said. 'We want to be part of turning Gowanus into a better neighbourhood.'

Being able to afford a larger space in Gowanus meant the team could play around with the design. They ended up with this multi-level, treehouse-like office, where they host hacker meetups and talks.

Each Friday, the team eats lunch together in their outdoor space, which fronts the Gowanus Canal. The canal is an odd green colour, but for now, they're just glad to be outside while the weather is nice. 'It's pretty until you realise what it is,' one employee laughed.

But at the other end of the complex where Farmigo works, a different group of small businesses has stuck to their Gowanus roots for decades. More than 30 small businesses producing metalworks, furniture, and pieces of public art find their home in the Gowanus Industrial Arts Complex.

At the artist-run New York Art Foundry, castings have been created for well-known artists like Jasper Johns, Marianne Vitale, and Helmut Lang since 1986. The foundry was one of a group of small industrial buildings, perched on the edge of the canal, that were hit hard by Hurricane Sandy.

Holstee, on the other hand, is a newcomer to Gowanus. The company, which creates inspirational posters, decals, and other products that are popular with the startup community, moved to this brand-new design studio just over a year ago. Employees who bike to work are able to leave them unlocked outside on this quiet street.

If you've visited a startup office, you may recognise this poster, which spells out what the company has named the Holstee Manifesto. The inspirational passage went viral after appearing on Tumblr in 2012. Since then, it's been translated into dozens of languages and put on posters the company sells in a variety of designs.

The Holstee team says the Gowanus space is a huge upgrade from their previous office in Manhattan. 'Something about Gowanus feels very right for Holstee,' cofounder Mike Radparvar (left) said. 'There's a real maker vibe, where tech meets hands-on, DIY.' Radparvar is pictured here with his fellow cofounders, Fabian Pfortmüller (right) and brother Dave Radparvar (center).

Twelve people work in this light-filled office, which is located on a street that had been severely damaged by Hurricane Sandy. It feels quiet and removed, but Radparvar says foot traffic has picked up in recent months. 'There's so much market speculation,' he said. 'We have brokers walking in here all the time, asking what we're doing here.'

That increased foot traffic probably has something to do with the giant Whole Foods store located just down the street, which opened to mixed reactions in December 2013. 'There was a lot of pushback. A lot of people don't want a big chain here, especially local makers,' Radparvar said.

This is no ordinary supermarket, however. Wind turbines and solar panels adorn the parking lot, and Brooklyn-based farming company Gotham Greens built a greenhouse on the store's roof.

Ironically enough, the greenest supermarket in New York State boasts seating areas that are merely feet away from the contaminated Gowanus Canal.

Many businesses around town have a good sense of humour about the state of the canal. Lavender Lake, a bar that's popular with Brooklyn twenty-and thirty-somethings, was inspired by a nickname for the Gowanus Canal.

Still, the neighbourhood is changing, and quickly. Everywhere you look, buildings are going up, and new businesses are opening. When Aaron Lefkove and Andy Curtin opened Littleneck, a New England-style oyster shack, in 2012, theirs was one of only a handful of businesses open on now-trendy 3rd Avenue.

The old residential building they leased for their restaurant required intensive restoration work before they could open for business, and Lefkove and Curtin used a Kickstarter campaign to raise some of the money they needed to complete the project. It was a risky endeavour, but it's paid off. Lefkove and Curtin recently opened a Littleneck outpost in Greenpoint.

And now, the neighbourhood's dining scene has exploded, with hip restaurants like the Pines, Runner & Stone, and Fletcher's Brooklyn Barbecue opening along the same corridor on 3rd Avenue. 'Looking back, I don't think this idea could have hap pend in any other neighbourhood. If we had opened the restaurant on Bedford Avenue in Williamsburg, we might have blended in,' Lefkove said. 'Here there's a lot of industrial space, art studios, and a creative community bubbling up. People around here have made it that way.'

And yet these contradictions seem to make sense in a community that is evolving as much as Gowanus. As the neighbourhood becomes more and more trendy, the price of living here is also rising. According to StreetEasy data, the median asking rent for an apartment in Gowanus was $US1,750 in August of 2008. As of the end of August 2014, the median asking rent has soared to $US2,900, compared to $US2,595 in Brooklyn overall.

Source: StreetEasy

Some local organisations are even taking advantage of the waterway, like the Gowanus Dredgers Canoe Club, a group that leads boat tours on the canal. 'Taking any of our tours you will see wonderful things, like the family of raccoons that have moved in, as well as fish jumping at sunset, and it's really exciting to see this waterway that's under restoration,' Owen Foote, who serves as treasurer for the Dredgers, said to Business Insider. 'On the other hand, you also might see floating condoms, tampon wrappers, and other things that get flushed down the toilet and overflow to New York Harbor during a rainstorm.'

The Superfund cleanup could take decades, if not centuries, to have an effect on the state of the canal. Foote hopes that the Dredgers' work could help speed up revitalization efforts. 'The Superfund cleanup will ideally result in a waterway that is slightly better than it is today, but many of us feel that the EPA falls short in the cleaning of our waterway,' he said. 'We started conducting canoe trips on the Gowanus Canal as a way to continue to raise awareness.'

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