Monday, August 29, 2016

Strong hint that developer plans only fractional office space at Site 5 tower project

It was just an aside from Swathi Bonda, Forest City Ratner's Project Manager for the 535 Carlton affordable housing tower, but it struck me as meaningful.

Introducing Atlantic Yards/Pacific Park on 8/17/16 at a session for people interested in affordable housing, she described the overall project as including not only 8 acres of open space and 250,000 square feet of retail but also 1 million square feet of office space.

If so, that suggests that the two-tower project planned for Site 5, now home to P.C. Richard and Modell's, would likely contain mostly apartments, not office space.

That's a big deal.

Keep in mind that a major justification for Greenland Forest City Ratner's plan to move the bulk of the unbuilt B1--the tower planned over the arena plaza--to Site 5 is to create an "iconic" office tower.

However, as I reported in City Limits, plans presented in January to the Department of City Planning indicated four scenarios. In only one scenario would the larger of the two Site 5 towers house office space. In another scenario, there'd be no office space at all.

In two scenarios, the smaller tower would contain some 350,000 square feet of office space. Those seem most likely as of now.

Why do I say that? Because the developer also wants to flip B4, at the northeast corner of the arena block, from residential to office space, and that building is quite large, with more than 750,000 square feet.

Tentative plan; no longer accurate, but at least shows configuration
Not set in stone

Of course, "Projects change, markets change," as former Forest City executive Jim Stuckey once said famously. So this isn't set in stone.

They could get to 1 million square feet of office space, for example, by putting more than 600,000 square feet in the larger of the Site 5 towers and turning B4 into a hybrid building.

And of course, they could increase or decrease the total amount of office space from the 1 million square feet Bonda mentioned.

But until there's evidence to the contrary, this number--and configuration--should be our working assumption. (And not the 336,000 square feet in somewhat stale project press kit.)

Sunday, August 28, 2016

In Greenpoint historic block, echoes of "blighted" Dean Street row houses

Via YIMBY: current view in Greenpoint, house at left
A 7/5/16 post by New York YIMBY, Landmarks Approves Restoration Of 218 Guernsey Street, Greenpoint, discusses the 1870-era home in Greenpoint's historic district.

It includes some great architecture and some buildings that have been modified but are worth saving, because they convey the neighborhood's fabric (and thus were included in the district when it was designated in 1982).

The building at issue is the modest, two-story building at left in the photo at right.

About blight

Note the rather unbecoming wall covering and modest size of the building, which is apparently 28 feet high. It may be built out to less than 60% of the allowable height--remember, the arbitrary blight designation with Atlantic Yards--given that R6B zoning, at least for new buildings, requires a base height before set back between 30 and 40 feet, and the maximum height is 50 feet.

The Floor Area Ratio, or FAR, allows a lot coverage of 2.0; the lots size is unclear. But it seems to me a determined condemnor might find the house blighted and thus get it demolished.

Via YIMBY: renovation plans
Instead, the proposed restoration is at left.

To quote YIMBY's Evan Bindleglass, the architects "have probed the structure to find evidence of its past glory and plan new cement board cladding with wood door and window elements, plus the restoration of the cornice, in wood."

Indeed, they have. It's a nice restoration.

And in Prospect Heights

The cluster of three houses reminded me of the three houses recently demolished on Dean Street east of Sixth Avenue (below), part of a larger group of five houses (further below) demolished to create--initially--a staging area for Atlantic Yards arena block construction and new await a 27-story tower (aka 664 Pacific) with a school in the base. The blight, I wrote in 2006, was arbitrary.
December 2015 photo
August 2006 photo

Saturday, August 27, 2016

Real blight: "War Zone" South Bronx, at the Museum of the City of New York

100 feet of blight on Dean (2 of 5 parcels said to be blighted)
In the memorable words of academic Lynne Sagalyn, blight is "when the fabric of a neighborhood is shot to hell."

And that applies not so much to gentrifying blocks in Prospect Heights--remember the "cappuccino test" at Vanderbilt Avenue and Dean Street? or the strip of houses magically claimed to be blighted on Dean east of Sixth?--but the South Bronx in the 1970s.

Consider the following photos I shot after visiting the fascinating Museum of the City of New York exhibit, IN THE SOUTH BRONX OF AMERICA: PHOTOGRAPHS BY MEL ROSENTHAL, which continues through 10/16/16.
CAPTION: Deserted, desolated buildings: "War Zone."
The description:
Scenes from the South Bronx, 1976-82.
The 1970s marked the start of a tumultuous period of decline in the South Bronx, brought on by a loss of manufacturing jobs, reductions in municipal services, plummeting property values, a mass exodus of its residents, and rampant arson. Photographer Mel Rosenthal (b. 1940), who grew up in the South Bronx, was determined to give a public face, and a voice, to those who had been left behind by the area’s evolution. In the South Bronx of America features images taken by Rosenthal at the height of the area’s devastation, focusing on the resilient residents who refused to abandon their neighborhoods.
Join the conversation. #MelRosenthal
My photos, of course, don't do full justice to the collection, but I wanted to reproduce the captions. Here's coverage from Untapped Cities, the Times. Here's Rosenthal's 2001 book, In the South Bronx of America.

CAPTION: "Life carries on in the War Zone"

Friday, August 26, 2016

Utility work on Pacific between Sixth/Carlton now may close street to vehicles temporarily

Yesterday came an update to a previous notice about a public infrastructure upgrade on Pacific Street between Sixth and Carlton Avenues. It didn't specify what exactly is new, but a comparison between it (below) and the previous notice (further below) shows this text is new:
Expanded construction and underground field conditions may require temporary or intermittent closures to vehicles on Pacific Street between 6th and Carlton Avenues.
In other words, previously, they weren't going to close Pacific to vehicles, and now they might.

It does not, by the way, mention, work on backfilling the Long Island Rail Road retaining wall between Sixth and Carlton, though that was mentioned in the earlier notice and in the two-week Construction Update issued 8/15/16. We'll see next week if it's ongoing.

The previous notice

From the Construction Update:
Backfilling of Pacific Street Retaining Wall is expected to begin during this reporting period. This work will be performed from the sidewalk/parking lane on the north side of Pacific Street nearCarlton Avenue. Parking will be closed off in this area during the work. The work will be coordinated with the utility work being performed on Pacific Street in order to minimize parkingimpacts. The sidewalk on the south side of the street will remain open to pedestrians

Islanders looking into buses to bring fans from Long Island

So, the Islanders are looking into charter buses to bring fans from Long Island to the Barclays Center, some some don't like the Long Island Rail Road, or don't find it accessible or reliable. Except the arena is not exactly set up for large-scale bus use.

Where do they go?

According to the Bus Transportation page on the Barclays Center web site:
Proud Charter Bus Sponsor of Barclays Center
Offering 10% off for all groups traveling to Brooklyn Nets games and Barclays Center events
Visit Best Trails & Travel, call 212-206-6974 or email
To better accommodate your bus pick up and drop off for an event, we strongly recommend registering your bus information in advance.
Please note, due to limited space, all shuttle/bus drivers must be with their vehicles once staged.
And where do vehicles--not just buses--drop off?

As shown in the graphic at right, they're supposed to drop off on the limited area of Flatbush Avenue and Atlantic Avenue outside the arena, and pick up just on Flatbush, but, in the past, they've used Sixth Avenue, which is now taken for construction staging.

After the B3 tower (aka 38 Sixth Avenue) opens, more space will open up, but I can't imagine those residents want the sidewalk outside their front door used by arenagoers.

Stay tuned.

As noted below, there's a serious tailgate culture on the LIRR trains to hockey games, so some families might want to avoid that. But there's also traffic on the highways, too.

Thursday, August 25, 2016

SI: "Brooklyn’s roster is the worst kind of depressing"

Sports Illustrated does not think much of the Brooklyn Nets' off-season, in which they tried to rebuild but couldn't snag some middling restricted free agents:
Forget about Jay-Z. Memphis Bleek and Amil wouldn’t be caught dead sitting courtside at a Nets game this year. Brooklyn’s roster is the worst kind of depressing: it’s loaded with veterans but lacking in star power. Simply put, there’s not much to cheer for in the short term and there’s not much to dream about in the long term, either.
Unfortunately, that was going to be the case no matter what new GM Sean Marks did this summer, as Brooklyn’s previous regime will be shouldering the bulk of the blame for the state of the Nets roster for at least the next two or three seasons.
Brooklyn’s guiding principle this off-season seemed to be: “Avoid making the type of big mistakes that got us in this mess in the first place.” As such, the team failed to acquire any players that generate true excitement or optimism. Jeremy Lin is likely to be a fan favorite and he’s set up for success thanks to an established relationship with new Nets coach Kenny Atkinson, but he’s not cut out to be a franchise savior.
Then again, the Nets' "boring" summer got only a C- grade.

And the Knicks...

SI gives even lower marks (D) the Knicks, suggesting that their expensive upgrades, signing former Chicago stars Joakim Noah and Derrick Rose, are very high risk:
The only things standing between the Knicks and an “A” for their off-season grade is a time machine and an invincibility cloak. Unfortunately, Phil Jackson’s major additions are living in 2016, rather than 2011, and they are burdened by years of accumulated health concerns.
Sounds a little like the Nets' unsuccessful acquisition of aging Paul Pierce and creaking Kevin Garnett, though the Knicks didn't mortgage the future in the same way.

AY down the memory hole: 22-acre site "eyed for a transformation since the 1950s"

So, amNY tells us Pacific Park in Brooklyn is beginning to take shape after years of setbacks, with a verrry potted history:
The 22-acre area defined by Vanderbilt Avenue, Atlantic Avenue, Flatbush Avenue and Dean Street, has been eyed for a transformation since the 1950s. The rail yards, weeds, garbage and a couple of unkempt buildings stood out among the homey, brick town houses and apartments that surrounded the section.
Everything from a new stadium for the Brooklyn Dodgers, to apartments for low income New Yorkers were proposed. However, a lack of capital and disagreements from the community, state and other parties kept the neighborhood’s upgrade in limbo.
Um, no. And no. And no. And no.

Video: tractor-trailer blocks Sixth Avenue southbound lane outside B3 for 30 minutes

At about 6:30 am today, an 18 wheeler idled outside of the B3 site at Sixth Avenue near Pacific Street, as shown in the two videos below.

That blocked the southbound lane--already narrowed by the construction fence for the tower-- and posed hazards for drivers and bicyclists in both directions.

As shown in the screenshot at right, northbound traffic was unimpeded, as long as the southbound traffic was paused near Pacific Street.

Otherwise, the constriction forced the southbound vehicles to move into the northbound lane.

Avoiding truck congestion was one of the justifications for the now-abandoned plan to build the entire project via modular construction, wasn't it?

And why shouldn't such incursions generate fines?

In Queens, another developer uses weasel words like "our intention"

One of the lessons from the Atlantic Yards/Pacific Park saga is that weasel words like "intend" or "aim" leave those using them a lot of leeway not to fulfill what some hear as promises.

Remember how, when asked in July 2009 if Forest City Ratner expected to ask for more subsidies, executive MaryAnne Gilmartin responded, “Forest City does not expect to ask for more subsidy”?
The Queens Courier yesterday reported, Some say 5Pointz developer broke promise to use all union labor for Long Island City project
Several hundred union workers joined Building and Construction Trades Council (BCTC) President Gary LaBarbera and Councilman Jimmy Van Bramer in Long Island City on Tuesday to rally against developer G&M Realty, which they say broke a promise to use all union labor for an upcoming project.
G&M Realty will turn the former 5Pointz graffiti mecca at 45-46 Davis St. into two residential buildings. According to Van Bramer, owner Jerry Wolkoff pledged to use all union labor when building the towers....
But he didn't. He just left an impression that he would:
In a letter signed by Wolkoff, he wrote, “it is our intention to engage contractors which employ individuals represented by labor unions that are affiliated with the Building and Construction Trades Council of Greater New York for construction … as well as members of 32BJ operating the building.”
He also wrote that the construction will create 800 “good paying construction jobs” and 200 full-time jobs on site.
In a phone interview, Wolkoff said that he didn’t lie and that he still intends to use some union labor, including 32BJ if the contract is “reasonable.”
The lesson: get it in writing, ironclad.

Wednesday, August 24, 2016

Forest City selling (its 51% of) Brooklyn malls, other retail properties, to focus on mixed-use projects

After selling a 49% stake in its major Brooklyn malls (and other retail properties) in 2011, and after selling 49% of other malls in 2013, Forest City Realty Trust (formerly Forest City Enterprises) aims to get out of the retail business almost completely.

That means a sale of the majority stake in the Atlantic Terminal and Atlantic Center malls opposite the Barclays Center, and a presence in retail limited to mixed-use, "placemaking" projects.

That includes retail in places like the MetroTech office park and includes Pacific Park Brooklyn, so, despite no discussion of the paused proposal to build a glitzy mall at Site 5, currently home to Modell's and P.C. Richard, I assume that's still the plan.

But Atlantic Yards/Pacific Park, it seems, remains something of an anomaly.

After all, if Forest City aims "to redeploy the value from our retail portfolio into apartment and office assets that align with our focus on core markets and urban, mixed-use placemaking projects," as CEO David LaRue said in a press release 8/22/16, this is one mixed-use project that they decided was too tricky to pursue on their own.

Instead, they found not merely a 49% investor, as in many other projects, but a new majority investor, in this case Greenland Group, which bought 70% of the project (excepting Forest City's share of the Barclays Center operating company and also the B2 modular tower) going forward.

A big sale

Overall, Forest City cited "ownership interest in 14 regional malls in markets around the country, and 19 specialty retail centers, which are located primarily in New York City.

"Over the past five years, we have made tremendous progress transforming Forest City by focusing on core urban markets and products, reducing complexity, paying down debt, driving operational excellence and converting to REIT status,"  LaRue said in the press release. "As part of this ongoing transformation, and after careful consideration, we have made the decision to explore strategic alternatives for our retail portfolio. We intend to look at a range of options and expect the review process to be concluded by the first quarter of 2017."

The stock market responded positively to the announcement, as can be seen in the screenshot below from Yahoo.

Forest City's New York-area retail properties include Westchester's Ridge Hill, among regional lifestyle centers; Atlantic Center, Atlantic Terminal Mall, Brooklyn Commons, Castle Center, East River Plaza, Harlem Center, Queens Place, Shops at Atlantic Center Site V, Shops at Bruckner Boulevard, Shops at Northern Boulevard, among urban retail; and East River Plaza and Shops at Gun Hill Road, among big box retail (which has overlap).

Drilling down

LaRue, speaking yesterday to investment analysts, said "our strength and competitive advantage in urban, mixed-use placemaking aligns better with apartments, office and amenity retail rather than standalone retail centers or regional malls."

He added that "our pipeline of entitlements concentrated in placemaking projects totals more than 20 million square feet," calling it "a significant growth opportunity."

A good chunk of entitlement is with Atlantic Yards/Pacific Park, more than 6 million square feet, but I'm not sure if they count all of it, since they're not the majority owner any more.

Brooklyn questions

Asked if this planned sale of retail replaced the company's (actually, the joint venture's) aim to sell three development sites at Pacific Park (B4, B12, B13), LaRue said no, and provided no details on progress. "We are going to proceed with that discussion and see how that plays out."

The executives were not asked if Forest City still plans residential towers above the Atlantic Center mall, a plan that surfaced in 2006.

I doubt they'd simply give up that entitlement. In fact, in what may be a hint of long-gestating plans, Atlantic Center is cross-listed in Forest City's category of residential retail, which contains this general description:
Forest City develops and manages premier residential communities in major markets across the country. Many of our properties feature convenient retail options for our residents.

Retail progress

The 49% sale of shares in the malls in 2011 to Madison International Realty was an effort to raise cash during a time when Forest City had been slowed, and to a firm whose president said they needed money for Atlantic Yards. The 2013  sale of non-New York retail properties to Australian investor QIC was also seen as raising money for Forest City to move forward.

Forest City CFO Bob O'Brien said that the sale price would be well above the company's basis in cost, so likely the proceeds would be redeployed into mixed-use projects to avoid capital gains and to be tax-efficient.

A shift for Forest City

The Plain Dealer of Cleveland reported with some context:
Shedding most of its retail properties would be a landmark shift for Forest City, which opened its first community shopping center in 1948 and its first regional mall in 1962. Today, the company's portfolio includes 14 regional malls across the country and 19 specialty retail properties, including entertainment-and-shopping complexes in New York City. 
....The company, which is in the midst of a headquarters search, doesn't have a retail footprint in Cleveland anymore. Earlier this year, Forest City sold the Avenue at Tower City, its mall in the heart of downtown, to affiliates of Bedrock, a Detroit-based real estate company that's part of the Rock Ventures family of businesses formed by billionaire and Cleveland Cavaliers majority owner Dan Gilbert.

Tuesday, August 23, 2016

Why were buses idling for hours outside the Barclays Center this morning?

Buses presumably associated with the Barclays Center were idling on Sixth Avenue for hours, according to photos and video. (Note: there's no direct evidence regarding the buses, but it is not unusual for buses associated with the arena to idle nearby, and four days of wrestling events ended last night.)

A video posted by resident Wayne Bailey, shot after he returned from a run, indicates that two buses idled for more than 30 minutes on Sixth Avenue just below Pacific Street.

But the AY Cam trained on Sixth Avenue shows buses idling on Sixth Avenue above Pacific, starting at about 3:20 am, and lasting through about 4:05 am. It shows (the same?) buses idling again on Sixth below Pacific, starting at 4:20 am, and lasting through about 5:45 am.

When I know more, I'll update this. But I have to imagine that, when more people move in nearby, there will be many more complaints.

Yormark: Nets' move delayed by "some nuances in Brooklyn"; team hopes to return to China (EB-5?)

NetsDaily points to an interview in China with Nets/Barclays Center CEO Brett Yormark. I'll just point to a couple of things.

"The move [to Brooklyn] was somewhat delayed," Yormark says at about 3:28, "because of the economy and some nuances in Brooklyn." Yeah, right.

Though Yormark does say, of the 2015-16 season, "It candidly was a disappointing season," at about 4:15 he salutes Brooklyn as a "basketball market," and adds, "because we had six years to start seeding the brand, there was incredible anticipation for the arrival of the Brooklyn Nets, and we've been feeding off it ever since."

Except for last year, when gate count fell well under 12,000.

Now, the Nets have "ten-plus new players," he says, which is another reminder that fans are rooting for the clothes.

Return to China?

He talks about using Jeremy Lin to connect with a new fan base--they're branding "BrooklLin," as noted by Nets Daily--and leaves a hint.

At about 12:04, he says, "Hopefully, we'll return here in the fall of 2017 with the NBA to play here in China. Hopefully, we'll continue to fuel the excitement for our team here in China and be considered maybe behind Houston as the second home team of the fans here in China."

If the Nets return, would that be coupled with another effort to recruit immigrant investors to provide cheap financing in exchange for green cards under the sketchy EB-5 program?

After all, original developer (and owner of the arena operating company) Forest City Ratner went to China three times, the latter two in partnership with the Greenland Group, its new joint venture partner/overseer, each time coupled with Nets visits.

My first thought was no. After all, Forest City and Greenland are no longer connected to the arena, so the owner of the team and the arena operating company, Mikhail Prokhorov's Onexim, wouldn't have that connection to the Chinese market.

But Atlantic Yards is a "never say never" project." I wouldn't be surprised if they found a way to make that connection. After all, Prokhorov just refinanced the Barclays Center debt to save money

Why wouldn't he want to save money--or split a project with Greenland Forest City Partners to save money jointly?

Basketball is huge in China. It can obscure many ambiguities.

AY down the memory hole: Vanderbilt Yard improvements portrayed with no mention of shrunken railyard, bargain on development rights, and source of funds

Again, Atlantic Yards down the memory hole, with the sunny side of a revised deal gaining notice, while the developer's savings are ignored.

Yesterday amNY published As part of 'West Portal' LIRR project at Vanderbilt Yard in Brooklyn, crews cut through 100-year-old rail tunnel:
Construction crews have punched through a 100-year-old rail tunnel in the LIRR’s Vanderbilt Yard as part of ongoing work to modernize the Brooklyn storage facility.
Underneath congested Downtown Brooklyn streets, the 4-foot-thick concrete wall of the tunnel was blasted open this summer to build a direct train path between the yard and Atlantic Terminal for the first time.
The connection will be known as the “West Portal,” one of several operational enhancements that Greenland Forest City Partners, a joint venture between developers Greenland and Forest City Ratner, are delivering to the yard as part of a real estate deal to build part of its $5 billion Pacific Park project above the facility.
Here's the key section:
That process blocks other trains from using the tunnel for six to eight minutes at a time, which adds up to about two hours of wait time each day, according to the MTA.
The upgrade was a condition in the MTA’s deal to sell the air rights to the developers for Pacific Park, the 22-acre, mixed-use commercial and residential space formerly called “Atlantic Yards” that, after several delays, will be built over the next decade.
Along with the portal, crews will install electric signals to replace manual counterparts. Sewer connections will be built out from one to all nine of the yards’ tracks. The enhancements will also give MTA staff more space to navigate train cars.
(Emphasis added)

An MTA spokeswoman says that improved service will "sift down to benefit the customers."

No doubt.

What's missing

I bet this article was pitched by the public relations firm representing the developer. 

Here's what's missing: the lowered cost of the railyard, the bargain on development rights, and the source of the money for the railyard. 

As I wrote last November, keep in mind that the 2005 deal to build a modernized replacement Vanderbilt Yard to store and service Long Island Rail Road trains was revised, at Forest City Ratner's request, in 2009, and accepted by the Metropolitan Transportation Authority.

The permanent railyard, instead of having nine tracks with capacity for 76 cars, will have seven tracks with capacity for 56 cars. While there would be several improvements, the new railyard would be valued at $147 million, while the MTA's Gary Dellaverson in 2009 said the previous iteration could be worth $250 million, after inflation.

Also, as I wrote last November, the sale of development rights nearby suggests the value of the Vanderbilt Yard development rights would be worth $948 million before subtracting the additional cost of the new railyard, deck, and transit entrance--plus the benefit to the affordable housing.

But Forest City in 2005 promised $100 million in cash, then renegotiated an extension in 2009, at a gentle interest rate. At the very least, the MTA should have asked for a piece of the potential upside when it had leverage in 2009.

Moreover,  as I reported 5/8/15, Forest City and Greenland raised $249 million in the second round of cheap EB-5 financing from immigrant investors, which can be be used to build that railyard. 
A September 2014 letter) from Empire State Development, the state agency overseeing/shepherding Atlantic Yards/Pacific Park, makes it clear: