Saturday, February 06, 2016

The backlash against comments from Yormark (not a hockey fan until now) continues; why not dynamic pricing?

On Lighthouse Hockey, Dan Saraceni writes an open letter to Barclays Center/Nets/Islanders CEO Brett Yormark, who recently provoked lots of negative coverage by encouraging visitors in the obstructed-view seats to check their phones or the scoreboard: Dear Brett Yormark: Please stop talking. Signed, an Islanders fan.

Saraceni makes three key points:
  • Hockey fans never forget a mistake...
  • Hockey fans are always upset or outraged about something...
  • Hockey fans want hockey. Good, fun, winning hockey and a lot of it.
He reminds us of a very interesting admission. "I've never really been a hockey fan," Yormark said at about 2:26 of this interview, "and I'm becoming one very quickly." (Remember, Marty Markowitz said he never was a basketball fan.)

Various commenters suggest ways Yormark could have finessed the issue with apologetic candor and empathy.

Separately, a columnist suggests Yormark should step away from the Islanders, which ain't gonna happen. Another catalogued Brett Yormark’s Many PR Gaffes.

Three suggestions

On IslesBlog, Joseph Buono suggests 3 Ways To Improve The Obstructed View Seating Experience
1) Brand it “The Barn”... Hand out rally towels, props, something that makes fans sitting in those seats feel a part of the game. Make the overall game experience in these sections different and not just because they can only see one goalie.
2) Tarp It / Horse Shoe Configuration... It would be far from ideal, but it would be unique, maybe even charming over time....
3) Incentivize the Experience... Dynamic Pricing or no dynamic pricing, these seats should not cost more than $10-15. If you are going to charge more, make other aspects of the Barclays Center experience more affordable for these fans.

All good ideas, especially the third one.

Construction workers eating and resting on neighborhood stoops: a regular occurrence (despite developer's pledge)

As I commented, this is a consequence of shoehorning a project of this size into a residential neighborhood and... a reminder of one of the unstated (or less stated) arguments for modular construction: fewer workers on-site. But modular hasn't worked out.

At the last Community Update (aka Quality of Life) meeting, in December, when the issue of workers eating/resting on stoops was brought up, Forest City Ratner External Affairs VP Ashley Cotton commented, "We have gone to them again, to say 'stop sitting on people's stoops.' It's absolutely not acceptable."

That hasn't worked.

Friday, February 05, 2016

In Times Real Estate section, 461 Dean gets promotional treatment (no mention of modular troubles; affordability misleading)

Somehow the troubled B2 tower, aka 461 Dean Street, gets prominent position--a photo at the top of the web version--of an upcoming front-page New York Times Real Estate section article headlined
New York’s New High-End Rentals (and in print " Advance of the Rentals").

Notably, there's nothing in the article about how this building has taken two years longer than promised, that developer Forest City Ratner and former modular factory partner Skanska are locked in litigation over huge cost overruns, and that lower floors of the building were plagued by leaks and mold.

Nor is there mention of Forest City's claim that it had "cracked the code" for modular construction, but this is the only Atlantic Yards/Pacific Park building to be built modular, as Forest City aims to sell the factory it operated with Skanska and then operated itself to finish the modules.

Nor that people are--hello--living next to an arena, with attendant crowds, some of them loud, and an arena loading dock that does not operate seamlessly as promised but sometimes stalls trucks on the street, snagging traffic.

What's the affordability?

But that's not all. The article misleads people about the affordability. Here's the relevant text:
One new rental in the current crop, 461 Dean Street in Brooklyn, will be split almost evenly between apartments with below-market rents and market-rate apartments.
The 363-unit project from Forest City Ratner Companies, which is made of prefabricated modules, will have 181 apartments with lower rents. About 40 percent of the affordable units, or 72, will be for people making 100 percent to 160 percent of the area’s median income, or up to $124,000 for a family of four. That family could end up paying $2,800 a month for a two-bedroom, said Susi Yu, an executive vice president of Forest City.
Interestingly enough, that ignores the 109 affordable units for lower- and moderate income people, who perhaps are not expected to read the Times.

Also, that misstates the current Area Median Income (AMI) and projected rents, since it relies on 2012 numbers. And it fails to point out that, while income limits are 160% of AMI, the rent for that cohort is calculated from 150% of AMI.
From FCR presentation

When the building launched in of 2012, when AMI was $83,000, income limits (160% of AMI) were $132,800, according to a Forest City presentation. See chart at right.

However, since rents would be set at 150% of AMI, for the best-off "affordable renters," rents would be calculated at 30% of $124,500. 

That should equal $3,112.50. (Here's the math: [$124,500 x .3]/12.)

But yes, in 2012, the New York City Housing Development Corporation (NYC HDC) did estimate rents at $2,740 a month, so obviously there's an adjustment factor. See chart below.

Today, the most recently available AMI, according to the NYC HDC, is $86,300 for a four-person household. 160% of AMI is $138,080. Now, it's possible the AMI has dipped down or nudged up for 2016, but it's clear Yu's $124,000 figure is wrong.

Rents will be set based on 150% of AMI, or $129,450 for a four-person household, based on 2015 numbers.

That should equal $3,236.25. (Here's the math: [$129,450 x .3]/12.)

Again, however, there's clearly an adjustment factor. 

Let's look at it another way: the most recent AMI, $86,300, represents a nearly 4% rise from $83,000. Apply that percentage to the previous figure of $2,740, and the monthly rent should be $2,849.

That's not too far from Yu's estimate--a little less than 2%--but its far enough off that they shouldn't be rounding off the numbers.

Reaching the better off

From the article:
“This is actually a segment of the market that really has been overlooked,” Ms. Yu said, referring to the income bracket of that same family of four.
Well, it may have been overlooked by developers--what middle-income household doesn't want a deal?--but actually the segment is a tiny fraction of New Yorkers, and hardly those who most need subsidized housing. See the chart at right from the Association for Neighborhood Housing and Development.

What's market rate?

From the article:  
Forest City has not yet determined what a market-rate two-bedroom would cost in the building. In December, the median price of a two-bedroom in Brooklyn was $3,350 a month, Elliman said.
That's only a 17.6% premium. That said, the median price in the area for new construction may be higher. StreetEasy says the least expensive two-bedroom rental in a new or newly converted building in Downtown Brooklyn is $3,754, while in Park Slope, Boerum Hill, Fort Greene, and Prospect Heights it's $3,300. (That's eliminating one cheaper anomaly.)

While 461 may offer some luxury amenities, the location and troubled history may make it difficult to get premium prices.

About the lottery

The article states:
To score one of the coveted reduced-rent units at 461 Dean, renters must enter a lottery, which will be organized by Forest City and the city’s Housing Development Corporation.
When the lottery is announced, which is expected “imminently,” according to a project spokeswoman, applicants will have 60 days to register at the New York City Housing Connect web page, or by paper application. To get the word out about the application process, Forest City will contact labor unions, community boards and churches.
Each applicant will receive a number. If that number is drawn, he or she must submit tax returns, landlord references and bank statements to verify eligibility. Priority will be given to people with visual impairments and other disabilities, and secondarily, to those who live within the boundaries of Brooklyn Community Boards 2, 3, 6 and 8. Municipal workers also will have an advantage.
(Emphases added)

Note that, in public discussion (and, yes, most of my coverage), mention of the lottery cites the 50% priority to residents (or recently-departed residents) of the three Community Districts.

As I wrote in July 2006, covering an affordable housing information session:
There is a housing lottery, but the preferences announced, required by city regulations, deflated some people in the room. Half the affordable units—1125 of 2250—would be reserved for residents of the three Community Boards, CBs 2, 6, & 8. Five percent would go to police officers and another five percent to city employees. Five percent would go to the mobility-impaired and one percent each to the sight- and hearing-impaired. That’s two-thirds of the units, plus ten percent for seniors, though there could be some overlap.
Note that that was before the preference was expanded to residents of Community Board 3. Also note that the preferences may be re-allocated depending on different buildings. But it also means that a lot of people, especially those seeking low-income units, will be frustrated. 

On Instragram: can anyone help with this Pacific Park translation?

As I commented: Can someone help me with the narration here? Sounds like, "The New York way of life is a place that largely happened by accident. But what if it happened on purpose?" But maybe I'm hearing it wrong?

Either way, it sounds... pretty odd for a Pacific Park promotion.

A video posted by Pacific Park Brooklyn (@pacificparkbk) on

Thursday, February 04, 2016

Mission creep: Sixth Avenue between Dean and Pacific now closed more of weekend for crane assembly/installation (updated)

Update Friday 3:55 pm: The installation has been canceled, and will be rescheduled.

A community notice circulated yesterday indicates that, to accommodate assembly and installation of construction crane for the 38 Sixth Avenue tower (aka B3), Sixth Avenue between Pacific and Dean streets will be closed to through traffic beginning Saturday February 6 at 6 am until Sunday February 7 at 9 pm.

From Construction Alert
Note that this represents mission creep from the Construction Alert circulated two days earlier, which forecast the closure from 6 am to 6 pm Saturday and from 6 am to noon Sunday.

Local traffic, bicycles and emergency vehicles only will be permitted access. The east sidewalk of Sixth Avenue will remain open. Traffic Enforcement Agents and flaggers are supposed to be on site to assist with vehicular and pedestrian movements.

Yormark: "There are many ways to view the game if you’re in one of those obstructed seats."

From an interview with Barclays Center/Nets/Islanders CEO Brett Yormark (who said "attendance since the first nine games is up 23%") by Sports Illustrated's Jeremy Fuchs:
JF: I have to ask about the obstructed view seats. There’s been a lot of criticism. How much have you heard from fans and is there any movement to change it? 
BY: Our seating capacity is over 15,700. Within that capacity there’s a lot of great seats. Do we have some obstructed seats? Yes we do. Are fans aware of those obstructed seats before they purchase them? Yes they are. There’s really nothing we’re going to do from a capital improvement standpoint. You can watch the game on your mobile device. The game is on the scoreboard. There are many ways to view the game if you’re in one of those obstructed seats. We aren’t going to be able to change the seats in the building. That is what it is. But there are certainly other ways we can enhance the experience.
Even if Yormark meant people should consult the scoreboard at only certain times in the action, that didn't sit well. Dan Saraceni, on Lighthouse Hockey, commented:
(Also, memo to Brett Yormark: No one in their right mind is going to an arena to watch a hockey game on their phone. Erase that bullet point from your script, please)
As I wrote last June, arena officials in June 2012 said there'd be only 14,500 seats for hockey, of which about 1500 would be obscured. That was then increased to 15,813, then tweaked to 15,795. They're selling a lot more than "some" obstructed seats.

Wednesday, February 03, 2016

Lost in translation: how exhibit/book obscure story and controversy behind Gehry's Atlantic Yards

Exhibit at LACMA; photos by Norman Oder
When the massive Frank Gehry retrospective opened at the Centre Pompidou in Paris in 2014, Los Angeles Times critic Christopher Hawthorne suggested the exhibit drew a "sociological blank," as it omitted controversy, including "the political uproar that greeted his plan, sponsored by Bruce Ratner, to drop more than a dozen separate buildings and an NBA area into the middle of Brooklyn."

After observing the re-mounted and expanded retrospective (open through March 20) at the Los Angeles County Museum of Art, and perusing the accompanying 2015 book, Frank Gehry, I'm afraid that Gehry's Atlantic Yards (mis)adventure is even more ill-treated.

LACMA exhibit panel

Sure, it's but one episode in Gehry's vast, mostly lauded career, one that went unnoticed in recent reviews.

But the failure to describe Atlantic Yards clearly thus obscures the mutually beneficial relationship between architects and real estate/political officials that helps gets projects built, especially in cities like New York.

The first gaps

First, Atlantic Yards--announced in 2003--goes unmentioned in the exhibit chronology, which skips from Gehry's 2001 Guggenheim exhibition to Sydney Pollack's 2006 documentary film, finally mentioning Gehry's 8 Spruce Street tower in Lower Manhattan, which opened in 2011.

(By the way, The wall text notes the building was also known as Beekman Tower, but omits developer Forest City Ratner's marketing name, New York by Gehry.)

Approaching the model of the 16-building project, even the caption attached--"Brooklyn Atlantic Yards Masterplan, model, 2003-2008 (unbuilt)"--is insufficient.

Sure, Gehry's buildings remain unbuilt, as he was dropped as architect during the 2008 recession. Developer Bruce Ratner ran the numbers and concluded that Gehry's voluminous arena, which would share mechanicals with four towers around it, would have to be shrunk and stand alone, at least for a while. (Two towers are now under construction on the arena's flank.)

LACMA caption
But Gehry's plan, indeed, had been approved in 2006, involving a significant override of city zoning by the Empire State Development Corporation, the state agency overseeing and shepherding the project.

Today, the 22-acre project--renamed Pacific Park in 2014--is being built out at the approved 8 million square feet, a huge change in scale, especially when approaching the site from the residential blocks to the south and east.

Looking at the plan

Gehry got results. The presence of a world-famous architect helped neutralize resistance to Ratner's massive plan, which also involved significant public assistance (subsidies, tax breaks, low-cost land) and the state's use of eminent domain in a gentrifying neighborhood.
Gehry's Atlantic Yards plan
As I've noted, the model shows a new--and, obviously--scrapped version of the tower at Site 5, the current home of low-rise Modell's and P.C. Richard. It shows the B1 office tower, currently on hold, as well as designs for five towers.

Dissecting the book text
From the book

The accompanying book, by the Pompidou's Frédéric Migayrou and Aurélien Lemonier, muddies the project's history.

Lemonier's academically abstract language, which caused me to shake my head, probably made more sense in the original French:
Two scales are combined here: that of a growing need for housing and offices for the city of New York, and that of the renovation of the Atlantic Yards sector in Brooklyn. The proximity of one of the hubs to the metropolitan transit system at Atlantic Terminal allowed the neighborhood to be easily accessed. In order to increase the attractiveness of the site for companies, entertainment infrastructure was later associated to the project The stadium--the Brooklyn Arena at the intersection of Flatbush Avenue and Atlantic Avenue--was designed for the NBA basketball team, the Nets. A series of buildings of around 30 stories each constituted the new physiognomy of this neighborhood (which was not very developed at that time), combining the various scales of offices, housing, and shops. The work on positioning the buildings, along with the creation of pedestrian access to the center of the plots arrayed in strips, produced a hierarchy in the forms of circulation and gave rise to variety in the public spaces.
Let's look closely.

The "growing need for housing and offices"? Well, Atlantic Yards, upon launch, was promoted as "Jobs, Housing, and Hoops," but most of the promised 10,000 office jobs were quickly swapped for condos. In other words, the developer and city had misread the need for offices.

The "Atlantic Yards sector of Brooklyn"? There was never such thing. "Atlantic Yards" was a brand name conceived by Ratner's firm, cleverly yoking privately-owned land and city streets to an 8.5-acre railyard, not a cohesive location. The association of the project site with the railyard, formally known as the Vanderbilt Yard, obscured the need for eminent domain.

Nor could there still be an "Atlantic Yards sector," since the name vanished in 2014 after Ratner acquired a new joint venture partner/overseer, the Shanghai government-owned Greenland Group.

Was "entertainment infrastructure was later associated with the project"? Hello, the arena--built to house sporting events, concerts, and family shows--was from the start used to leverage Ratner's pursuit of the larger site.

A "series of buildings of around 30 stories each"? Actually, the buildings on the southern flank of the site are generally smaller--a few about 20 stories--while the tallest exceed 50 stories. Gehry, to his credit, tried to punctuate the skyline rather than create a monolithic project.

Was the "neighborhood... not very developed at this time"? Well, the 22-acre site wasn't a neighborhood, but rather a section of Prospect Heights. (Still, the developers today tout Pacific Park Brooklyn as "Brooklyn's newest neighborhood.")

The book
If it was "not very developed," it was undergoing change. Blocks in the site included handsome row houses and three former industrial buildings rehabbed as condominiums and office space, and, yes, fallow buildings and empty lots.

Ratner cleverly proposed a project just before public officials and neighborhood activists began to grapple with rezonings and/or the sale of railyard development rights.

Finally, regarding pedestrian access, the Atlantic Yards design was widely criticized (including by the Municipal Art Society) for demapping a major street at the center of the eastern segment and providing enclave-like open space mainly aimed at residents, rather than the public at large. Today, Greenland Forest City Partners misleadingly proclaims the open space a "park."

In 2005 Gehry said that typically he would have brought in "five other architects" to work on such a large project, but his client Ratner required him to design it all. Today, four firms [SHoP, CookFox, KPF, Marvel] are working on six towers, and a fifth firm [Ellerbe Becket] collaborated on the arena. But Gehry's Atlantic Yards master plan was far more of a success than the exhibit suggests.

Other perspectives

The Los Angeles Times's Christopher Hawthorne 9/29/15 wrote:
The result is a view of Gehry that is deeply informed if always admiring — and one that is given plenty of room to unfurl, with space at the close of the show for a number of the oversized models that he and his design partners rely on, a major omission in Paris.
..If it also fails to confront with any force the weaknesses of the Gehry projects that have slid off track — the Experience Music Project in Seattle, Stata Center at MIT and the IAC building in Manhattan are among the most flawed — it joins not just previous Gehry retrospectives in that reluctance but also Paul Goldberger's new biography of the architect
Curbed's Alexandra Lange wrote 10/15/15:
But Gehry has tried and tried again to build them bigger, as at the Atlantic Yards project in Brooklyn, represented by an enormous model in the exhibition (Gehry's proposal for the development was ultimately scrapped). In enlarging his idea of difference, Gehry seems to lose the small, material-based touches that make his early work endearing in its awkwardness. And when you go big, you tend to lose touch with the street. What would Gehry have done at the ground level in Brooklyn? We'll never know, and so his ability to design space between the skyscraper and the house is still an enormous question mark.
Another Gehry view

I took a photo of his much lauded Disney Concert Hall in Downtown Los Angeles.

Tuesday, February 02, 2016

As plans for Times Plaza public space emerge, stakeholders say upgrade must be coupled with safety measures

Times Plaza, featuring a landmarked transit structure and a pedestrian pavement extended by the demapping of one street segment, is a small but important island flanked by three major roads: Atlantic Avenue, Flatbush Avenue, and Fourth Avenue.

Improvements to some 4,530 square feet on the west side of the plaza, including planters, portable tables and chairs, and new benches, are on tap, thanks to a state-required contribution by the developers of the adjacent Atlantic Yards/Pacific Park project. No budget or timing has been announced announced.

Nearby residents and stakeholders, however appreciative of the upcoming improvements, registered distinct unease at a public meeting last Wednesday night, held at the YWCA at Atlantic and Third avenues.

They said that such changes had to come in tandem with long-delayed safety changes at the intersection, where pedestrians and bicyclists feel threatened by vehicles moving aggressively. Neck-downs extending the sidewalk or more perpendicular crosswalks were suggested.

Planned addition of benches, planters, tables and chairs, lights, and more
Keith Bray, the Department of Transportation’s Brooklyn Borough Commissioner, pledged that such changes (such as an extended median on Flatbush) were, indeed, under consideration. Bray acknowledged the possibility of adding neckdowns but said DOT did not envision closing any lanes to traffic.

Plans are due by spring, he said, pledging to update those interested, as well as Community Board 2. The eastern portion of the plaza, controlled by the Metropolitan Transportation Authority and guarded by bollards, is not part of the plan.

But the history of delays, as well as general uncertainty about plans, left some skeptical. “I don't know how to evaluate this project without thinking about safety,” one resident said. After all, as shown in the slide below, there's a lot of traffic nearby on the avenues, and it's not always easy to cross the street.

The history

Times Plaza, named for the nearby offices of the Brooklyn Daily Times newspaper, features a terra cotta-clad Control House built in 1908 as an entrance to the subway, later used for retail purposes, and restored in 2005.

The former Control House and adjacent space guarded by bollards, owned by the MTA, will not be part of the plaza upgrade. But an approximately equal adjacent space, 4500 square feet (1/10 of an acre) will get the upgrade.

That space was augmented by the demapping of northbound Fourt Avenue between Atlantic and Flatbush avenues, a procedure driven by the Atlantic Yards environmental review, which diverted some traffic from the Barclays Center. As shown in the slide below, that added a significant amount of pedestrian space.

The plan

Mike Russell of Stantec, which is working for Atlantic Yards/Pacific Park developer Greenland Forest City Partners, described a relatively simple plan, given the constraints of space and the inability to dig under the sidewalk and disturb utilities: benches seating some 40 people coupled with six planters serving as a “vegetative buffer,” and place tables with a capacity for 20 people. There also will be bike racks, recycling and trash bins, and space for a mobile concession such as a food cart.

(The presentation is on the DOT web site, and at bottom.)

I asked if this would impede pedestrian movement. Russell said “the width of the space where pedestrians could go [is] comparable to what's there now,” which strikes me as worth further examination.

After all, when the plaza is “programmed” for visitors and passersby to linger, that could impede the sometimes significant pedestrian through-traffic.

The upgrade is being paid for by Greenland Forest City, though Bray, when queried, could not identify a budget or a maximum budget.

Oddly enough, the formal reason for the upgrade, disclosed in 2014 in the court-ordered Atlantic Yards Supplemental Environmental Impact Statement, is to mitigate a deficit of public space for workers in the area. While workers surely will use the space, no one at the meeting mentioned that formal justification—clearly, the stakeholders are more diverse.

Russell cited a “dynamic scoring pattern” for the sidewalk that’s already been approved for the Brooklyn Cultural District, where the pattern changes to highlight particular aspects of the plaza. The poured concrete will contain an additive to make it sparkle. In-ground light fixtures will be similar to those at the Barclays Center plaza and the Brooklyn Cultural District.

The plaza will be managed by the MetroTech Business Improvement District, which last year got approval to extend its boundaries southeast to encompass the Atlantic Terminal and Atlantic Center malls.

Times Plaza is at very bottom of extended MetroTech BID
I wonder if this new linkage to Atlantic Yards/Pacific Park—though the plaza is indeed public—nudges forward the potential to extend the MetroTech BID to Atlantic Yards/Pacific Park, thus further privatizing control of the property.

The questions

Asked if the Control House could be augmented, perhaps with light, or the public space could be extended past the bollards (or the bollards moved), Bray said said discussions with the MTA would be needed. (No MTA rep was present.)

Jim Vogel, an aide to state Sen. Velmanette Montgomery, pointed to a letter sent last year to DOT about safety at the intersection.

“The answer we got was that we'd be hearing very shortly,” by last fall, about the results of the DOT study, he said.

“We are a little delayed in that timeline,” Bray acknowledged. “We are going to be addressing that.”

Asked about planned programming, the Downtown Brooklyn Partnership’s (DBP) Ryan Grew said it was still under consideration. He said they’d look at other spaces where people pass through quickly. He cited lunchtime concerts at Willoughby Plaza in Downtown. Later, Josef Szende of the Atlantic Avenue BID proposed instead visual art, given the cacophony at the intersection.

The tables and chairs, Grew said, would be either locked up at night on the site, or put in DBP storage. Given the difficulty in getting water to the site, concessions—which help offset maintenance costs—“would have to be lighter weight.”

Joanna Oltman Smith, of the 78th Precinct Community Council and Community Board 6, said she understood “the desire to expedite the project by using design elements already approve,” but suggested safety concerns should lead to “harder infrastructure... low planters with ornamental grasses is not going to do the trick.”

Will there be advertising on bollards, asked resident (and Atlantic Yards/Pacific Park monitor) Wayne Bailey, mindful of the advertising that appeared on the bollards on the arena plaza. Bray said there were no plans for such advertising but acknowledged he didn’t know if they’re permitted.

A photo taken last Wednesday night, after the meeting
Pacific Street resident Mae Taliaferrow noted continued problems with public urination from arenagoers in Times Plaza as well as nearby at the Brooklyn Bear’s Garden and the exterior of the adjacent Modell’s store. Grew and a DOT official pledged enforcement and clean-up.

Summing up, S.J. Avery of the Park Slope Civic Council’s Forth on Fourth Campaign, which aims to improve Fourth Avenue, observed, “While people are interested in something here, many of us are concerned about approving this, absent a better sense of the safety plan... and why the MTA is not involved.”

Bray said he recognized the importance of integrating all the elements, and drew some applause at that recognition. Representatives of local elected officials, including Council Member Brad Lander and Assemblymember Jo Anne Simon, also pledged to help. with the MTA.

A couple of flashbacks

This plaza has gotten some interesting attention over the years. From a 10/16/15 New York Times account, Aldo Tambellini’s ‘Atlantic in Brooklyn’ Chronicles a Grittier Time:
This area was far different when Aldo Tambellini made “Atlantic in Brooklyn” in 1971. Using what was then new portable video camera equipment, Mr. Tambellini recorded the parade of humanity passing on the streets below his studio at Flatbush and Atlantic. The edited footage was first shown in 1972 on three monitors at the Kitchen, and is on view here in six giant video projections, on three walls, that run for one hour.
And yes, there were efforts a decade ago from people who hoped to spruce up the plaza--though tat that time, the space was controlled only/mainly by the MTA and likely not as flexible. Not that officials were into it. From a New Yorker profile of then-Brooklyn Borough President Marty Markowitz, 4/25/05
When Markowitz met some Boerum Hill residents who suggesting planters and greenery that might go near a restored subway kiosk near Atlantic Terminal, one proposed that Forest City Ratner—a major donor to Markowitz’s concerts—might supply some funds. “Does Ratner want to prove he cares?” another resident asked. “I haven’t asked him,” Markowitz replied testily.

From the latest Construction Alert: Sixth Avenue closed this weekend; significant overnight/weekend work starts in two weeks

According to the latest two-week Atlantic Yards/Pacific Park Construction Update, dated today and released Monday morning (rather than before the work began), a crane for the B3 tower (38 Sixth Avenue) is scheduled to be installed Saturday, February 6 from 6 am to 6 pm and Sunday February 7 from 6 am to noon.

That means Sixth Avenue between Dean Street and Pacific Street will be closed. (A Community Notice will be distributed to confirm that the work is going ahead.

The document also warns of significant overnight and weekend work beginning the weeks of February 15 and 22, as deliveries of equipment for Long Island Rail Road electrical substations is expected.

Saturday work should continued at B2 (461 Dean Street, Modular Residential), B3, B11 (550 Vanderbilt), B14 (535 Carlton), and B15 (664 Pacific).

Below is new work, as described verbatim in the document.

B3 - 38 Sixth Avenue
• Waterproofing and backfill of the foundation walls as well as installation of the tower crane will occur during this reporting period.
• Commencing of superstructure with the construction of 1st floor will begin in this reporting period.

B11 – 550 Vanderbilt Avenue
• Crawler crane will be removed during this reporting period. A community notice will be distributed when details are finalized.

B14- 535 Carlton Avenue:
• Topping out with the pouring of the 19th floor, bulkhead and EMR will occur during this reporting period.
• Combined sewer/storm water connection will occur during this reporting period.

Monday, February 01, 2016

"Affordable" 535 Carlton apartments will cost a lot (2BRs > $3200), which is why developer keeps mum

Pacific Park’s First Affordable Building Tops Out At 535 Carlton Avenue, reported YIMBY this morning. Curbed essentially re-blogged that article, and DNAinfo published a similar story.

YIMBY gave us some details that hint at the not-so-affordable nature of the building:
Future tenants will come from “low-, moderate-, and middle-income households,” which ranges from 40 percent of the Area Median Income to 165 percent AMI. For a family of four, that means tenants can earn as little as $34,520 (40 percent AMI) or as much as $142,395 (165 percent AMI).
Half the apartments will rent to the wealthiest income bracket (165 percent AMI), and a quarter of the units will be reserved for families who earn 60 percent AMI, or $51,780 for a four-person household. Only 15 apartments will go to families at the low end of the spectrum, which is 40 percent AMI. The chart below shows what percentage of apartments will be set aside for families at each income level.
The bottom line

But missing from that article, as well as the others, was the bottom line: what's the rent? Is it too damn high? Here's a chart I prepared based on this and the similarly 100% affordable 38 Sixth Avenue:
Rents estimated as of 2014; increase for 2016 should be about 3%
Note that the income range is up to 165% of AMI, but rents are set at 160% of AMI. Given the 3% increase in AMI since 2014, that suggests two-bedroom apartments would cost $3,234 a month.

In other words, most of the "affordable housing" won't help those who marched for it. But it will help some lucky middle-income people.

Note that the YIMBY writer, Rebecca Baird-Remba, tweeted that the developers claimed they didn't have the rents. Well, then, it's the job of journalists to try to figure it out.

Students study the Barclays Center and environs; CEO calls arena a lesson in perseverance (WTF?)

This week's edition of The Appraisal column in the Times is For a Group of Ninth Graders, Barclays Center Becomes a Classroom, published online today for publications tomorrow in print:
It was [teacher Teresa Genaro's] idea three years ago — when the school replaced midterms with two weeks of intensive, single-subject symposia — to have students study Barclays Center, as well as Ebbets Field, and the ways sports shaped Brooklyn, and by extension the world. With the assignment of producing a multimedia blog chronicling their discoveries, the students were playing the part of a junior Frank Deford and Jane Jacobs, scouring the neighborhoods, bleachers and news reports of the venues to create stories of their own about an ever-changing, ever-cheering borough.
That a group of ninth graders could spend more than a week scrutinizing Barclays Center with the same attention they would give to “The Scarlet Letter” or a science fair frog was another reminder of just how fixed the arena has become in the modern identity of Brooklyn — and how even at a young age, New Yorkers can feel conflicted about this or any development project.
They do feel conflicted, having seen the vital-but-dated documentary Battle for Brooklyn (as well as a film on the Dodgers) and debated eminent domain. The found mixed opinions in the neighborhoods around the arena. 

One student acknowledges being mad about "what they did about the brownstones... But then you see what they’ve done for all the businesses, and that was good.” That's simplistic; several mom-and-pop businesses have been pushed out, while food and beverage establishments have proliferated.

And the closing quote is a something of a shrug as a student, taking in the changes wrought by Ebbets Field and Barclays Center, suggests, “I don’t know if it’s any worse or any different. It’s just what happens in New York City.”  (Reporter Matt Chaban, on Twitter, agreed with my observation that it was a superficial conclusion.)

Thing is, the story is by no means over, as neighbors pursue more accountability and developer Forest City Ratner continues to mislead the public.

The bottom line: a lesson in perseverance?

Notably, the students visit for an Islanders hockey game, and the only outsider quoted is arena/Nets/Islanders CEO Brett Yormark. (Reporter Matt Chaban did contact Goldstein, who didn't get back to him in time, but he might have tried someone else.)

So here's Yormark:
Brett Yormark, the chief executive officer of Barclays Center, said its complicated history offered a lesson in perseverance. “If there’s one message I want kids to understand, it’s dreaming big and reaching as high up as you can,” he said in an interview, “and the Barclays Center embodies that.”
Really? I think the bottom line is that the developers of a project like this will do whatever it takes to move it along. (Here's the unreliable Yormark, on audio.) Goldstein, not dissimilarly, thinks it's about crony capitalism.

Some discussion on Twitter

Tainted Barclays agrees to pay $70M for misleading investors and violating securities laws

A press release today, excerpted below, explains that Barclays Capital, already a felon paying huge fines for exchange rate manipulation, will pay $70 million to the state of New York and the Securities and Exchange Commission as a penalty for misleading investors and violating securities laws regarding high-frequency trading.

Notably, Barclays "exposed its clients to the predatory traders from whom it promised to protect them," according to the press release from New York State Attorney General Eric Schneiderman.

Here's coverage from the Times and Reuters, and Bloomberg. Below is the press release.
A.G. Schneiderman Announces Landmark Resolutions With Barclays And Credit Suisse For Fraudulent Operation Of Dark Pools; Combined Penalties And Disgorgement To State Of New York And Sec Of Over $154 Million
Barclays To Pay Total Penalty Of $70 Million – Largest Penalty Ever Levied On A Dark Pool Operator; Admits To Core Facts In The Attorney General’s Lawsuit; Admits To Violating Securities Laws; Agrees To Install Independent Monitor To Oversee Reforms To Its Electronic Trading Business
NEW YORK – Attorney General Eric T. Schneiderman today announced that Barclays Capital Inc. and Credit Suisse Securities (USA) LLC will pay a combined $154.3 million to the State of New York and the SEC to settle investigations into false statements and omissions made in connection with the marketing of their respective dark pools and other high-speed electronic equities trading services. Dark pools are private exchanges for trading securities that are not viewable by the general public and are completed outside of public stock exchanges.

Barclays admitted to core facts set forth in the Attorney General’s Complaint from June 2014 alleging misrepresentations about how it operated its dark pool, "Barclays LX," including that it misled investors and violated securities laws. Barclays will pay a penalty of $70 million, split equally between the State of New York and the SEC, and will install an independent monitor to ensure proper operation of its electronic trading division.

..."These cases mark the first major victory in the fight to combat fraud in dark pool trading and bring meaningful reforms to protect investors from predatory, high-frequency traders,"Attorney General Schneiderman said. "This effort, which began when we first sued Barclays, includes coordinated and aggressive government action which forced admissions of wrongdoing and record fines. We will continue to take the fight to those who aim to rig the system and those who look the other way."
In March of 2014, Attorney General Schneiderman called for tougher regulatory oversight and market reforms to eliminate unfair advantages provided to high-frequency traders at trading venues. In a speech delivered at New York Law School on March 18, 2014, the Attorney General committed to cracking down on “fundamentally unfair and potentially illegal” arrangements that give certain traders early access to market-moving information at the expense of the rest of the market. As part of those efforts, Attorney General Schneiderman launched investigations into Credit Suisse and Barclays, the largest and second largest dark pool operators at the time, in order to expose illegal practices and ensure a level playing field for all investors.

Since that time, the Attorney General has reached agreements with Thomson Reuters, Business Wire, and others to end business practices that provided high frequency traders an unfair advantage.

As set forth fully in the Amended Complaint filed in New York Supreme Court in February 2015, the Attorney General uncovered evidence that Barclays made knowing and systematic misrepresentations to investors about how, and for whose benefit, Barclays operated its dark pool called “Barclays LX,” and exposed its clients to the predatory traders from whom it promised to protect them. As a result of that fraud, Barclays grew its dark pool to be the second largest in the United States.
In January 2015, the court upheld the Attorney General’s jurisdiction over Barclays’ fraudulent conduct when it denied Barclays’ motion to dismiss the Attorney General’s Complaint. In today’s resolution, Barclays admits that it violated the securities laws by making material misrepresentations to investors regarding a wide range of issues, including:
  • Barclays misrepresented how it monitored its dark pool for high-speed predatory trading. Despite repeatedly telling clients that it used sophisticated tools to monitor for “latency arbitrage,” and ran weekly surveillance reports, Barclays in fact did neither.
  • Barclays’ “Liquidity Profiling” service, which was supposed to allow traditional investors to opt-out of trading with the most aggressive high-speed traders in Barclays’ dark pool, was in fact riddled with exceptions for favored high-speed clients, meaning that traditional traders who thought they were trading only against the safest counterparties were in fact trading with some of the most aggressive and predatory high-speed traders in Barclays’ pool.
  • Barclays overrode the “Liquidity Profiling” rating of its internal high-frequency trading desk, making it appear to be a “safe” trading partner, when in fact Barclays knew it to be among the most predatory in its pool.
  • For several years, Barclays disseminated to investors an analysis of the trading in its dark pool, from which Barclays intentionally deleted the largest, most aggressive trader, in order to make its pool appear safer than it really was.
  • Barclays repeatedly told investors that it used the fastest market data feeds from all major exchanges to price trades in its pool; in fact, Barclays did not do so.
Barclays also acknowledges, consistent with the court’s ruling, the Attorney General’s jurisdiction under New York’s Martin Act. Barclays will also install an independent monitor to conduct an in-depth review of Barclays’ electronic trading business, and to propose further reforms to ensure that the company complies with New York law.

Those undertakings are in addition to actions taken by Barclays in the immediate wake of the filing of the lawsuit, which included the suspension from duties of William White, then-head of the Electronic Trading Division, and the removal of David Johnsen, White’s second-in-command, from his formal supervisory roles over the electronic trading division.

The Attorney General also thanked the Barclays insiders that provided valuable assistance with the investigation. “It is critically important that those with knowledge of fraudulent conduct continue to contact my Office, to share what they know in confidence. As today’s resolution with Barclays illustrates, my Office takes seriously all allegations of wrongdoing and takes appropriate action. I personally thank the individuals who spoke out against the misconduct at Barclays for their valuable service to the people of the State of New York.”

Forest City details arena/Nets sale: only $54M in cash after taxes/closing costs, two loans totaling $217.7M, at 4.5%

A press release today, headlined FOREST CITY CLOSES SALE OF EQUITY INTEREST IN BARCLAYS CENTER, BROOKLYN NETS TO ONEXIM SPORTS AND ENTERTAINMENT, offers some intriguing numbers about the sale to Russian billionaire Mikhail Prokhorov's company, which was already 80% owner of the team and 45% owner of the arena operating company.

While the Nets were valued at approximately $875 million and the arena holding company at $825 million, inclusive of debt, Forest City received far less than its 20% interest in the team and 55% interest in the arena held by its subsidiary, Nets Sports and Entertainment (NS&E).

Nor did it get much cash or a high interest rate on the notes. That's because of other obligations, apparently.

The purchase price for NS&E's interest in the team was $125.1 million, which is actually about 14.3% of $875 million. For its interest in the team, NS&E received a 5.5-year promissory note totaling $125.1 million, with interest at relatively low 4.5% a year.

The purchase price for NS&E's interest in the arena was $162.6 million--about 19.7% of $825 million--which takes into account "certain outstanding capital obligations between NS&E and Onexim."

NS&E got $70 million in cash at closing, before transfer taxes and closing costs, which lower the take to $54 million. Prokhorov also offered a 3-year promissory note totaling $92.6 million, again paying 4.5%.

In case Prokhorov sells or recapitalizes (restructures) either asset, the deal requires accelerated repayment.

Drilling down

"Based on total 2015 unaudited net operating income for Barclays Center, the purchase price for NS&E's interest in the arena represents a cap rate [rate of return based on investment] of approximately 5 percent."

In other words, Prokhorov isn't expecting to make much money (yet) from the arena, though that could change. Perhaps that's why the promissory notes have such a low interest rate.

That cap rate is relatively low compared to other Forest City asset sales. For example, it sold shares in its New York retail portfolio in 2011 at a 6.9% cap rate, shares in eight regional malls in 2013 at a 5.75% cap rate, and the full sale of a Philadelphia retail center in 2014 at a 6.5% cap rate.

It seems to me that Prokhorov ultimately had more leverage; the NBA wanted Prokhorov to own both the team and arena, thus restricting Forest City's ability to sell its shares And Forest City was very eager to divest itself of the two holdings before the end of 2015, so as to complete its transition to a real estate investment trust (REIT).

The press release in full below
Forest City Realty Trust, Inc. (NYSE: FCEA and FCEB) announced today that its subsidiary, Nets Sports and Entertainment, LLC (NS&E), has completed the previously announced sale of its equity interests in both the Barclays Center arena and the Brooklyn Nets basketball team to Onexim Sports and Entertainment Holding USA, Inc. (Onexim). As previously disclosed, the transaction values the team at approximately $875 million and the arena at $825 million, inclusive of debt for each asset. The transaction was approved in December by the Board of Governors of the NBA, and achieves the NBA's objective of having ownership and control of both assets under one owner.
"We are pleased to complete this important transaction, which aligns with our strategic focus on core retail, office and apartment assets in strong urban markets, and on using proceeds from non-core asset sales to further improve our balance sheet and selectively invest in entitled development opportunities in our core markets to drive future growth," said David J. LaRue, Forest City president and chief executive officer.
The purchase price for NS&E's non-controlling 20 percent equity interest in the team was $125.1 million. For the arena, the purchase price for NS&E's 55 percent equity interest was $162.6 million, after adjusting for the settlement of certain outstanding capital obligations between NS&E and Onexim. Based on total 2015 unaudited net operating income for Barclays Center, the purchase price for NS&E's interest in the arena represents a cap rate of approximately 5 percent.
Forest City owns approximately 62 percent of NS&E. NS&E expects to receive total proceeds, in a combination of cash and notes receivable, of approximately $287.7 million. For its interest in the arena, NS&E received $70 million in cash at closing, before transfer taxes and closing costs, together with a 3-year promissory note with principal of $92.6 million, paying semi-annual interest at 4.5 percent. Of the cash at closing, Forest City expects to receive approximately $54 million, after closing costs and estimated transfer taxes, in reduction of a priority loan advanced on behalf of the NS&E partners. For its interest in the team, NS&E received a 5.5-year promissory note with principal of $125.1 million and interest at 4.5 percent per annum accruing through maturity. Onexim principal Mikhail Prokhorov provided credit enhancement of the notes with an Operating Support Agreement. The terms of the notes include accelerated repayment provisions in the event of a sale or recapitalization of either asset prior to maturity. NS&E also has limited rights to transfer, assign or sell the notes, subject to approvals from Onexim and the NBA.
Evercore ISI advised NS&E on the sale of its interests in the team and arena and provided a fairness opinion to NS&E.

Barclays Center releases February 2016 calendar: 25 events (yes, Islanders help)

According to the latest event calendar released by the Barclays Center, February 2016 is expected to host 25 events: 7 Brooklyn Nets games, 5 New York Islanders games, 5 concerts, and 8 circus appearances (which will continue into March).

The estimated crowds are boilerplate, of course, but I'm not sure it's realistic to expect 15,000 fans for midweek Nets or Islanders games. Among the concerts, Il Volo is expected to draw 5,500, Def Leppard 10,000, and Janet Jackson 13,500. The circus is expected to draw 5,000.

By comparison, the arena in February 2015, without the Islanders, hosted about 25 events, albeit with days left unscheduled to prepare for NBA All-Star Weekend and and 20 circus shows over ten days. (This year the circus calendar runs through March 6.)

In other words, the Islanders sure help keep the building busier. Note that starting tonight it looks like they're trying to save money by opening the arena for Nets games only 60 minutes before tipoff.

Sunday, January 31, 2016

NY1's update on Atlantic Yards parrots "new neighborhood, "public park," "30 lawsuits"

NY1's Atlantic Yards Gets New Name for New Life, broadcast yesterday,  is a remarkable, if perhaps unsurprising by now, piece of lapdog journalism.

It's keyed to the topping out of the 550 Vanderbilt condo and the 535 Carlton "100% affordable" building, but the new name, of course, was announced in 2014.

From the piece:
The development initially was called Atlantic Yards after the Long Island Rail Road yard beneath Atlantic Avenue, but after some 30 lawsuits attempting to stop the project, the developers think the original name has too much history.
Pacific Park refers to Pacific Street, which is being de-mapped and turned into a public park. It's a marketing strategy to attract buyers for condos that run from $845,000 for a one bedroom to nearly $7 million for a penthouse.
In contrast, the 298 rental units at the Carlton building will be 100 percent affordable, supported by the city's affordable housing program.
"For a family of four now, it would range from $24,000 in terms of income on the lowest band up to $124,000 for a family of four for a two bedroom unit," Yu said.
My comments below

Some 30 lawsuits? Not true in the slightest. Did you ask for a count?

A 22-acre neighborhood? That crosses wide Flatbush Avenue? And takes only a part of the block between Dean and Pacific Streets?

A "public park" that is *not* a public park, because it's privately operated open space, with shorter hours and more limitations than a park?

An income range up to $124,000? Forest City's *own* chart says $138,435 for a family of four, based on a 2014 income base.

And that has risen nearly 3% to $142,394 by 2016, given the rise in Area Median Income (AMI) from $83,900 to $86,300 for a four-person household.

Nor did you mention how the affordable units in the two "100% affordable" are skewed to households earning well over $100,000. Not what the typical Brooklynite thinks "affordable" means:

These are the projected rents as of 2014 for 535 Carlton and 38 Sixth, about $3000 for a 2-bedroom unit. The numbers should now be bumped up nearly 3%.