Wednesday, April 30, 2014

Atlantic Yards and the Culture of Cheating (links)

I offer a framework to analyze and evaluate Atlantic Yards and the Barclays Center: Atlantic Yards and the Culture of Cheating.

Note: this post is post-dated to remain at the top of the page. Please send tips to the email address above, rather than posting a comment here.

Thursday, April 24, 2014

Open space was once an enthusiastically promoted new resource. Now the delays/deficits are minimized.

I've already reported on the slippery claims in the Draft Environmental Impact Statement (Draft SEIS) regarding open space.

As a public hearing approaches April 30 a key thing to remember, as noted below, is that the claims regarding no significant adverse impact should be contextualized by the loss of streets, which should increase the amount of open space far more than planned.

Also, until and unless Forest City Ratner and its joint venture partner/overseer construct a deck and then build over the railyard above Pacific Street, there wouldn't be much open space, as suggested in the Intermediate Stage (below right) from a potential Construction Phasing Plan.
Phase II buildings on terra firma, none over railyard

The overview

As stated in the Executive Summary, there will be more open space, but less per person, given the huge new population--but that's not a problem because, natch, there are big parks a long walk or short subway ride away:
Due to the new open space resources that would be provided by Phase II, and the availability of open space resources not included in the quantitative analysis (in particular, Prospect Park and Fort Greene Park, two destination parks within walking distance of the Project site), the decreases in the active residential ratio would not be considered a significant adverse impact. Overall, there would be no significant adverse indirect open space impacts associated with Phase II of the Project under the Extended Build-Out scenario, under any of the three construction phasing plans.
From May 2004 flier
This legalistic analysis contrasts significantly with the claims in the initial Atlantic Yards promotion, such as the fliers excerpted at right, about the benefits of open space to "Brooklyn."

Or the Rev. Herbert Daughtry's expansive invocation at the March 2010 groundbreaking, citing "a space to walk and/or sit amidst green grass, shrubbery, trees, blooming flowers, and decorative fountains of spouting water."

Orwellian, almost

Consider this passage from the Construction, Open Space chapter of the Draft SEIS, which essentially says something is better than nothing, and that a delay is not meaningful:
From Oct. 2004 flier
The ratios of acres of total, passive, and active open space per 1,000 residents in the ½-mile study area would continue to be substantially less than the DCP's planning guidelines, but the open space to be provided in Phase II would generally help to alleviate this shortfall, compared with the Future Without Phase II. However, the timing for elimination of the open space impact in the non-residential study area resulting from the Phase I development would be extended under the Extended Build-Out Scenario, as discussed in Chapter 3E, “Construction Open Space.”
The Operational Open Space chapter notes:
The adequacy of open space in the study area was quantitatively and qualitatively assessed for existing conditions, the Future Without Phase II, and the Future With Phase II. According to CEQR guidelines, the quantitative assessment is based on ratios of usable open space acreage to the study area populations (the “open space ratios”). These ratios were then compared with DCP’s open space guidelines for residential and non-residential populations. The following guidelines are used in this type of analysis:
For non-residential populations, 0.15 acres of passive open space per 1,000 non-residents is typically considered adequate.

For residential populations, there is a citywide median open space ratio of 1.5 acres per 1,000 residents, which is used as a guideline. In addition to this median ratio, DCP has set an open space ratio planning goal of 2.5 acres per 1,000 residents. This second ratio includes 0.50 acres of passive space and 2.0 acres of active space, and serves as an ideal benchmark.
Because these ratios may not be attainable for all areas of the city, they are considered benchmarks for comparison rather than policy or thresholds for determining impacts.
...Although the total open space ratio would remain below the city’s recommended guideline of 2.5 acres per 1,000 residents, this ratio would increase as a result of Phase II of the Project, due to the eight acres of new publicly accessible open space that would be created. Likewise, although the passive open space ratio would remain below the city’s recommended guideline of 0.5 acres per 1,000 residents, Phase II of the Project would have a beneficial impact on this ratio by providing new publicly accessible open space. With regard to active open space, Phase II of the Project would result in a decrease of 5.6 percent, compared with the Future Without Phase II, and the active open space ratio would remain below the City’s guideline. As noted in the CEQR Technical Manual, the city guideline is seldom achieved in densely built portions of New York City, and therefore does not constitute an impact threshold. While the total, passive, and active open space ratios would be below city guidelines in the Future With Phase II, the overall effect of Phase II of the Project on the availability of open space resources in the study area would be beneficial. In addition, study area residents would have access to Prospect Park and Fort Greene Park, which would continue to be flagship resources that draw residents from the study area.
(Emphasis added)

Another way to look at it

So the report says there would be no significant adverse open space impacts in the 1⁄2-mile study area. Keep in mind, however, what Brooklyn Views blogger Jonathan Cohn wrote in December 2005:
The City’s CEQR Technical Manual provides guidance for open space requirements for projects. 1.5 acres of City Parkland per 1,000 residents is the median community district ratio, although the citywide average is 3.5 acres per 1,000 residents. While not a regulatory standard (unfortunately), “For planning purposes, the city seeks to attain a planning goal of 2.5 acres per 1,000 residents”. This 2.5 acres is relative to the city's existing pattern of streets and blocks, where the streets provide additional open space that is not counted in the ratio. If we didn't have streets, the requirement for open space would be much greater, so we can't count the street area when comparing the amount of open space required by a project to the city standard that assumes 70' wide streets every 200 feet. (In addition, “.15 acres of passive open space per 1,000 workers represents a reasonable amount of open space resources for that population”). 
(Emphases in original)

Some mitigation

The Mitigation chapter of the Draft Supplementary Environmental Impact Statement suggests that local workers, not residents, are the ones that may get a boost:
Chapter 4C, “Operational Open Space,” finds that Phase II of the Project would not result in significant adverse impacts related to open space upon the Project’s completion. However, the 2006 FEIS identified a temporary significant adverse impact on passive open space resources in the non-residential (1⁄4-mile) study area during Phase II construction. This impact would continue until a portion of the Phase II open space is phased in. As analyzed in Chapter 3E, “Construction Open Space” the Extended Build-Out Scenario would prolong the temporary significant adverse impact on the passive worker ratio in the non-residential study area that was identified in the FEIS by between approximately 7 and 9 years, compared with the Phase II schedule analyzed in the 2006 FEIS (the analysis in Chapter 3E uses the commercial mixed-use variation and assumes that all of the Phase I buildings are built by 2018).

While the temporary significant adverse impact on passive open space resources in the non-residential study area would be fully mitigated by new Phase II open spaces that would be gradually completed during the construction of the Phase II buildings, Phase II under the Extended Build Out Scenario would prolong the duration of the temporary significant adverse impact, compared to the Phase II schedule analyzed in the 2006 FEIS. In response to this finding, the project sponsors and ESD will explore additional mitigation measures between the Draft and Final Supplemental Environmental Impact Statement, which could be implemented to improve passive open space conditions in the non-residential study area in the event there is a prolonged delay in construction.
What's the practical meaning of this? Office/retail/construction workers need a place to have lunch, so instead of going to the Dean Playground on Dean Street between Carlton and Sixth Avenue, where adults unaccompanied by kids are officially barred, new options might emerge.

Here are the potential on- and off-site mitigation measures:
These measures include creating new public open spaces on-site or elsewhere in the study area of the type needed to serve the proposed population and offset their impact on existing open spaces in the study area, and improving existing open spaces in the study area to increase their utility, safety, and capacity to meet identified needs in the study area.

One or more of the following plaza or open space areas could be improved as a mitigation measure to address a prolonged construction-period open space impact (see Figure 5-1):
  • Times Plaza: currently an approximately 0.17-acre triangle formed by Flatbush Avenue, Atlantic Avenue, and 4th Avenue is occupied by a paved sidewalk area, bike racks, and the Times Plaza Control House (an MTA structure, built in 1908 as a subway entrance, which today functions as a skylight for the Atlantic Avenue-Barclays Center subway station). 
  • Lowry Triangle: this 0.11 acre New York City Department of Parks and Recreation (DPR) open space is bounded by Atlantic Avenue, Underhill Avenue, Washington Avenue, and Pacific Street. It contains passive open space features such as seating and plantings. 
  • Cuyler Gore Park: this 1.16 acre DPR open space is bounded by Fulton Street, Carlton Avenue, and Greene Avenue. It contains passive open space features such as seating and plantings. 
Such improvements could include seating, plantings and other open space amenities. And it's possible that a Phase II building construction site may be used as temporary open space.

Ratner finally cares?

If improvements at Times Plaza are paid for by Forest City, then the 4/25/05 New Yorker profile, MR. BROOKLYN: Marty Markowitz-the man, the plan, the arena. contains an anecdote that seems quite relevant:
[Markowitz] met next with a group from Boerum Hill, the residential district of brownstones and town houses near downtown Brooklyn. The residents were campaigning for street plantings at the site of a recently restored subway kiosk dating from 1908, at the corner of Flatbush and Atlantic Avenues. Markowitz’s driver approached the intersection from Fourth Avenue, heading down what was formerly an industrial strip that was recently rezoned to permit the construction of apartment buildings.
...In the car, Markowitz’s cell phone rang, and the voice of a female assistant announced that “Bruce” was on the line.
“Yes, sir, how are you doing, Bruce?” Markowitz said, picking up the handset and falling silent as he listened... Markowitz, whenever he could get a word in, tried to be both conciliatory and upbeat.
Across the street, a small huddle of Boerum Hill residents handed Markowitz a sheaf of plans showing an arrangement of planters and greenery they would like to see in front of the restored subway kiosk. Perhaps, a resident suggested, Forest City Ratner might be persuaded to contribute the funds.
“Does Ratner want to prove he cares?” someone asked.
“I haven’t asked him,” Markowitz replied testily. 

For the Brooklyn Nets, just 15,000 home fans is fine. In New Jersey, it wasn't.

The transformation of the forlorn, swamp-dwelling New Jersey Nets into the hip, urban Brooklyn Nets is one of great recent re-brandings in sports, right?

After all, the Nets have a buzzworthy new arena, a new look and logo, scads of sponsors, a valuable TV contract, and a deep-pocketed principal owner, Russian billionaire Mikhail Prokhorov, willing to spend big to win now. Their first home playoff game this season is tomorrow night.

While the Brooklyn Nets have built a new fan base, both locally and beyond, they actually haven't had--though it's far less obvious-- that many more fans in the seats. In the first season, according to figures not previously released, gate count averaged approximately 14,974.

Different setting

Still, 15,000 fans in the Barclays Center, which seats 17,700 people, sure makes the Brooklyn arena feel more full than when 15,000 came to the cavernous Izod Center, which seats more than 20,000. It doesn't hurt that the Barclays Center deploys dark, theater-style lighting.

"We don't want the space to ever look empty," said MaryAnne Gilmartin, CEO of arena builder/operator Forest City Ratner.

So what if the Barclays Center isn't always packed. Brooklyn trumps New Jersey thanks to luxury suites, sponsorships, and higher ticket prices. No longer do the Nets just give tickets away to the general public (though there are periodic discounts).

But it's remarkable how attendance of 15,000 counted as a failure in New Jersey.

In July 2004, sports columnist Wallace Matthews suggested that developer Bruce Ratner, who bought the Nets to leverage a real estate deal in Brooklyn, was focused on the big-market future.

“Whether due to the outrageousness of NBA ticket prices, the location of the arena, or a general distaste for the product, the Nets could barely put 15,000 people in the building on any given night, even during the two seasons they went to the Finals,” Matthews wrote in the New York Sun.

On opening day in 2005, the Nets announced a full house, indicating all tickets were distributed. Given numerous empty seats, WFAN hosts Mike Francesa and Chris (Mad Dog) Russo flayed Nets CEO Brett Yormark for claiming attendance of 20,098.

"I was trying to be charitable at 15 [thousand]," Francesa said, claiming others estimated far less. "There were so many empty seats it was a joke.” The official gate count that game, it turned out, was 15,504.

Looking at the numbers

The Nets averaged 13,961 in their last season in New Jersey, 2011-2012, after drawing 14,179 in 2010-11, 13,103 in 2009-10, and 15,147 in 2008-09. In their first Brooklyn season, the official attendance was 17,187.

That was clearly a fig leaf, since announced attendance does not equal gate count.

A recent report by Empire State Development, the New York state agency that oversees the arena and larger Atlantic Yards development project, aimed to analyze the traffic impacts of the arena, noting, "Actual attendance during the 2012-2013  season (including Playoffs) averaged approximately 14,974."

Not once did 17,700 fans fill the seats. The game with the highest attendance drew about 16,900 people, according to Appendix C/Operational Transportation to the Draft Supplemental Environmental Impact Statement. (Previously, a memo from transportation consultant Sam Schwartz suggested that average gate count was closer to 15,500.)

Sure, even accounting for no-shows, Brooklyn still trumps New Jersey, at least since the Nets drew 16,925 in 2006-07.

What if Gehry's design had stuck?

Still, the Brooklyn Nets might have to try much harder--or discount more--to fill the originally planned Brooklyn arena, an 850,000 square foot behemoth, aimed to accommodate basketball and hockey, designed by starchitect Frank Gehry.

In 2008, to save money and focus on basketball, Ratner dumped Gehry and commissioned a new arena, essentially plunking Indianapolis's Conseco Fieldhouse (now BankersLife) near the angular intersection of Atlantic and Flatbush avenues. 

After a leaked rendering of the arena, derided as an "airline hanger," surfaced in the press, Ratner hired the buzzy architecture firm SHoP to add the unique rusted-metal skin and signature oculus (oval opening that juts from entrance) to brand the Barclays Center as post-industrial Brooklyn.

The tight arena, some 675,000 square feet, puts attendees close to the action--though the cheap seats give some visitors vertigo. The arena redesign, a Forest City Ratner executive acknowledged, represented a conscious decision to preclude major league hockey.

Hockey coming

On that, the developers lucked out. After voters in nearby Nassau County voted down a replacement for the Nassau Coliseum, the NHL's New York Islanders, not wanting to leave the region and a lucrative local TV contract, will move to Brooklyn by 2015.

At the time, the Barclays Center was said to seat just 14,500 for hockey, with an awkward off-kilter layout. They've since increased up hockey seating up to 15,813 (or, now, 15,795), by selling obstructed-view seats. That's not much below the current capacity in Nassau of 16,170.

There may be better hockey sightlines in Nassau, but the market in the nation's media capital rules. So even if the Islanders don't sell out Barclays after they move--they were at 14,740 this year, after 13,306 last year--it's another reminder that fannies in the seat are only one measure of sports business success.

After all, the Nets have seen their value skyrocket, according to Forbes, from $357 million in 2012 (#14 in league) to $530 million last year (#9), to $780 million this year (#5), the largest increase in the NBA, thanks in large part to the new market and the arena.

The Nets, with a huge payroll, still lose money, and Forbes's numbers may be suspect, as sports facility maven Neil deMause suggests. Even if they're off significantly, they still indicate that Brooklyn trumps the 'burbs. Perhaps Islanders owner Charles Wang, who's said to put the money-losing team up for sale, has run the numbers too.

Wednesday, April 23, 2014

As Rapfogel pleads guilty, some potential Forest City connections left a mystery

The New York Times reported today, in Rapfogel Pleads Guilty in Scheme to Loot New York Charity:
A community leader with longtime ties toSheldon Silver, the New York State Assembly speaker, admitted in court on Wednesday that he stole more than $1 million from one of New York City’s most influential social service organizations by colluding with an insurer to inflate bills and skim off cash.
The leader, William E. Rapfogel, 59, who led the Metropolitan Council on Jewish Poverty for two decades, entered a guilty plea before Justice Larry Stephen in State Supreme Court in Manhattan.
The plea marked a stunning downfall for a man once considered one of the city’s most respected philanthropists, whose work and close ties to Mr. Silver, a Manhattan Democrat, gave him influence and prominence in political circles. But in the end, Mr. Rapfogel entered his plea alone: His wife, Judy, the longtime chief of staff to Mr. Silver, was not there, and neither was Mr. Silver.
Mr. Rapfogel sat grim-faced and quiet, reading a well-thumbed copy of the Torah, just before his guilty plea to grand larceny, money laundering, tax fraud and filing false documents to the city campaign finance board.

In exchange for his guilty plea, Mr. Rapfogel will be sentenced to 3⅓ to 10 years in prison and must pay $3 million in restitution; to date, he has repaid $1.8 million. If he fails to pay the full restitution by his sentencing date, July 16, he will be sentenced to four to 12 years in prison, Gary T. Fishman, an assistant attorney general, said in court.

The former chief executive of the council did not apologize publicly as he pleaded guilty and gave only a short explanation of what he had done, saying he had “knowingly helped steal more than $1 million from the Metropolitan Council on Jewish Poverty as part of a scheme in which insurance premiums were overstated.”
Pending questions

However, the Plea Agreement, other Court Information, and the press release do not provide answers to a couple of potential Forest City Ratner connections. While Rapfogel acknowledged giving $350,000 in stolen monies to "my son," the latter is not identified. (An earlier report had the gift at $100,000.) So it's not clear if that son was Michael Rapfogel, who works for Forest City, or one of his brothers.

Also, while Rapfogel's co-defendent David Cohen asked their co-conspirator at insurer Century Coverage Corporation to make campaign contributions--using straw donors, in some cases--to candidates they thought would help the Met Council, there's no explanation regarding specific acts.

As I wrote, it didn't make sense for College Point, NY resident Deborah Auletta, a Century employee, to give $175 to Delia Hunley-Adossa's longshot 2009 challenge to popular 35th District Council incumbent Letitia James, the leading Atlantic Yards opponent. But we don't have an answer at this point.

In Times coverage, Forest City claims neutrality regarding which Community Board oversees Atlantic Yards. But I don't think they want CB 8.

Yet another new Brooklyn reporter for the New York Times, Vivian Yee, gets a crack at Atlantic Yards coverage, and her first effort, A Community Tug of War in Brooklyn, about the efforts to resolve the Atlantic Yards split among three community boards, isn't bad. But it does contain a couple of glaring errors that remind us why it's so important to have continuity among reporters or editors regarding this project.

And though it doesn't really say so, the article leaves clues regarding why Forest City Ratner, though ostensibly neutral, might prefer Community Board 2 takeover of the project site, and reminds us to think about some history that I and others haven't recently ventilated. And that history supports an increased role for Community Board 8, as it seeks.

Uniform take?

The article states:
For the members of these community boards, the issue has a personal resonance. Though many of them spent nearly a decade battling to keep Atlantic Yards from rising in the first place, they have come to feel possessive about it. If they must live with it, they argue, they should have some say over its impact.
This is a bit of a generalization regarding the boards' past and current stances. In 2006, Community Board 6 took a harsh stance toward the project, but later saw several members not reappointed, as Borough President Marty Markowitz and Council Member Bill de Blasio enacted some revenge. Since then, CB 6 has been fairly quiet, especially since Atlantic Yards has not had as large an impact in the district as feared.

Community Board 2, which would include the largest amount of the site, did not officially oppose the project, but issued a series of harsh recommendations that would drastically change or block the project. It's been fairly quiet since then.

Community Board 8, with a significant number of project supporters on its board, instead sent committee and individual criticisms of the Draft Environmental Impact Statement.

Since then, however, CB 8 has been more likely to hear concerns about project impacts from residents, including a few on its board. It's paid the most attention.

Why the geography?

The article states:
Geographically, the project appears to sit in Prospect Heights, most of which falls under Community Board 8. The top half of Atlantic Yards belongs to Community Board 2, which also covers Fort Greene to the north and Downtown Brooklyn to the northwest, among other neighborhoods. Community Board 6, which covers Park Slope, has a triangle of land that bites off part of the bottom half of the arena.
This Frankensteinian patchwork, the precise reasons for which have been lost to history, did not matter much when the area was just a railyard. Now, with a sports arena and hundreds of thousands of square feet in offices, shops and apartments at stake, the situation seems untenable.

(Emphasis added)

While indeed no one has publicly explained the reasons for the patchwork, I suspect the extension of Community Board 2 below the natural border of Atlantic Avenue to Pacific Street, the bottom border of the Vanderbilt Yard and Site 5, relates to the 1968 establishment of the Atlantic Terminal Urban Renewal Area (ATURA), which is outlined in red in the graphic at right.

The Atlantic Yards site, which is outlined in blue, including the blue stripes, overlaps ATURA in part.

Note that the original version of the article, before I and Eric McClure posted criticisms on Twitter, inaccurately called the "area" an "abandoned railyard." It was never abandoned. And the "area" never consisted only of a railyard.

Why CB 2? Is Forest City really neutral?

The Times article states:
Forest City Ratner, the project’s developer, has remained neutral. Ashley Cotton, a spokeswoman for the developer, said all the districts would share local hiring and affordable housing opportunities regardless of what happens.
Yet Community Board 2 members cited those benefits when it voted on April 9 to corral the rest of Atlantic Yards without consulting the other two boards — “sort of kicking Community Boards 6 and 8 in the shins,” said Rob Perris, the district manager of Community Board 2.
Actually, CB 2 members barely cited those benefits during the April 9 vote, though they had been cited in the committee vote a week earlier. No one made an energetic explanation for the vote. CB 2's rationale remains fuzzy. (And, unmentioned, Board Chair Shirley McRae voted no.)

Yes, Forest City has stayed out of the debate. But now we know that Forest City Ratner plans this year to start three towers, two on Block 1129. It would certainly be in Forest City's interest, even if Cotton wouldn't say so, to have a few of the "complainers" on CB 8 removed from any jurisdiction.

And wouldn't it be in Forest City's interest to have residents on the south side of Dean Street opposite Block 1129 in another community board so their complaints and concerns would have less weight?

Harmonizing service and focusing one district

The article notes that Sanitation is split among two districts, though the 78th Police Precinct, which otherwise serves CB 6, was expanded to encompass the arena.

And while the article ventilates the arguments for CB 2 (a continuation of high-rises) and CB 6 (co-terminality), it ends with a partial recognition of the argument for CB 8:
But Gib Veconi, an advocate for Prospect Heights who waged a bitter campaign against Atlantic Yards, believes residents in his neighborhood will bear the brunt of the project’s ill effects. Keeping the project under a single board would focus community participation — and, if need be, opposition — as Atlantic Yards and its successors are built, he said.
“This project is going to evolve and all sorts of things are going to happen that nobody’s even thought of yet,” he said. “Beyond that — my God, look at the pace of development in Brooklyn. How long does anybody expect things to stay the way they are?
Actually, as I tweeted, Veconi never "waged a bitter campaign against Atlantic Yards." Though he's often been a forceful critic, he's been a leader of BrooklynSpeaks, a group I've characterized as "mend it, don't end it," in comparison to Develop Don't Destroy Brooklyn, which tried to stop the project. Since then, both groups filed lawsuits, later joined, that led to a court-ordered Supplemental Environmental Impact Statement, with a public hearing scheduled for April 30.

And Veconi, who tweeted that "seems bitter on this end," has argued that the site be bid out to other developers. But I'd still argue that his positioning with BrooklynSpeaks, which avoided the eminent domain lawsuit that aimed to kill the project, makes a difference.

Veconi, in a post on Patch, made a more elaborate and compelling argument regarding "community participation":
For instance, Vanderbilt Avenue bisects the Prospect Heights Historic District. Since property owners must have major plans reviewed by the local community board before being heard by the Landmarks Preservation Commission, separate community board committees would be passing on projects in the west and east sections of the district, potentially allowing the Historic District to develop differently on each side of Vanderbilt Avenue. Community boards must also approve exceptions to the State Alcoholic Beverage Control Law’s “500-foot rule” which limits concentration of bars in a neighborhood. Considering the pace at which new restaurants and bars are opening on Vanderbilt Avenue, it’s easy to understand why splitting this responsibility down the middle of the street between two community boards would be a bad idea. Community board support has also been important for other community-wide initiatives like the recently-approved Neighborhood Slow Zone.
...The current carve-outs on the north and west sides of district 8 can no longer be justified as being consistent with the intent of the Charter. And moving them further into Prospect Heights would lead to disenfranchisement of neighborhood residents and business owners. Economic, demographic and land use changes are coming too quickly in Prospect Heights to let that happen.

Tuesday, April 22, 2014

That platform is key: six towers over the railyard would account for 65% of the Phase 2 housing units

Illustrating plan to move school from B5 to B15
However much Forest City's new joint venture partner/overseer, the Greenland Group, accelerates housing construction on terra firma (like Block 1129, currently used mainly as a surface parking lot), the big lift for Atlantic Yards would occur when and if the developers build a deck over the Vanderbilt Yard, a precursor to vertical construction.

After all, as I calculate below, the six towers over the railyard--of 11 towers in Phase 2--would account for nearly 65% of the units, housing an estimated 6844 people.

It's long been known--see graphic below--that the towers over the railyard would be taller and bulkier than the towers facing Dean Street on Block 1129, but I hadn't seen a population count.

Timetable for the platform

The developer must start construction of the platform over the railyard no later than May 2025--a 15-year window from the project Effective Date, subject to "Unavoidable Delays," which include infrastructure failures, inability to procure labor, equipment, materials or supplies (but not customary delays), which are not attributable to improper acts or omissions by the developer--or any litigation.

According to the Development Agreement, the failure to do so (see graphic at right) means the loss of future development rights. That's obvious, because no deck means no construction.

I've suggested they might use EB-5 funds to pay for the deck, as is being done at Hudson Yards. Or--who knows--perhaps Mayor Bill de Blasio will kick in.

Looking at the numbers

A chart (below) from the Construction Open Space chapter of the Draft Supplemental Environmental Impact Statement indicates that Buildings 5 through 10, which would be built over the railyard (see bottom graphic), would house a total of 6844 people. That leaves 3,711 in the other five towers.

The total population would be 10,555, assuming an average household size of 2.14--a far cry from the significant number of family-size units sought and promised in the affordable housing.

In other words, while six of 11 towers make up 54.5% of the Phase 2 buildings, they'd account for  64.8% of the population
From the Construction Open Space chapter
Maximum buildings heights and square footages

This does not incorporate Forest City's pledge to reduce the height of Building 1
The configuration

Yellow border illustrates plan to move school from B5 to B15

The Draft SEIS offers illustrations of potential construction, but they don't predict schedule

Now that we know that Forest City Ratner and joint venture partner/overseer, the Greenland Group, plan one tower on the arena block and two on the southeast block, Block 1129, it's clear that the phasing plans presented in the Draft Supplemental Environmental Impact Statement (Draft SEIS) are, as warned, hardly illustrative.

It looks like they'll be building faster on Block 1129 than in any of the three scenarios presented--which are supposed to illustrate the potential impacts of delay-- but it's not clear whether and when open space--beyond courtyards for the two towers--will be available.

For now, some version of Construction Phasing Plan 1 or Plan 3 seems plausible, since they both start with construction (other than arena block construction) on that southeast block. However, documents indicate a plan to build a school in Phase 2, likely Building 15, which is east of Sixth Avenue between Dean and Pacific Streets.

That might come before Block 1129 is finished, but who knows. B15 requires the acquisition and demolition of existing, active residential buildings, as well as an industrial building.

From the document

According to Chapter 3A: Construction Overview:
This chapter frames the analyses that will assess whether the construction of Phase II of the Project under the Extended Build-Out Scenario and changed background conditions since the 2006 FEIS would result in any significant adverse impacts not previously disclosed, and whether any additional mitigation measures beyond those identified in the 2006 FEIS and the Amended Memorandum of Environmental Commitments (MEC) would be warranted and are practicable.

As discussed in more detail below, there are three illustrative construction phasing plans that are analyzed: Construction Phasing Plan 1—continuous sequential phasing with Block 1129 first; Construction Phasing Plan 2—continuous sequential phasing with Building 15 on Block 1128 first; and Construction Phasing Plan 3—start and stop sequential phasing with periods of more intense construction activities. These illustrative phasing plans are not intended to serve as a prediction of the exact schedule and sequence of the Phase II construction, but rather have been developed to illustrate how the timing of the construction of certain project components may vary and to provide for a reasonably conservative analysis of the range of environmental effects associated with a delayed build-out of Phase II. The three illustrative construction phasing plans serve as the basis of analysis in this chapter because they provide a range of potential impacts within the envelope of the reasonable worst-case construction schedule under the Extended Build-Out Scenario.
(Emphasis added)

Plan 1 Early Stage

Plan 1: Intermediate Stage

Plan 1: Late Stage

Plan 2: Early Stage

Plan 2: Intermediate Stage

Plan 2: Late Stage

Plan 3: Early Stage

Plan 3: Intermediate Stage

Plan 3: Late Stage

Average number of workers/trucks

Forget Phase 1

Note that the projections regarding workers and trucks are for Phase 2 only, and ignore any simultaneous work on the Phase 1 site, including Building 1 (replacing the temporary arena plaza) and Site 5 (currently occupied by P.C. Richard and Modell's). The document states:
For Construction Phasing Plan 1, the average number of workers throughout the entire period would be approximately 347 per day. The peak number of workers would be 793 per day, and would occur in the 3rd quarter of 2030 when construction of Building 10 and the platform over Block 1120 would be simultaneously occurring. For truck trips, the average number of trucks throughout the entire construction period would be 99 per day, and the peak would occur in the 3rd quarter of 2032 when construction of Buildings 5 and 6 and the platform over Building 7 would be simultaneously occurring, with 207 truck trips per day.

For Construction Phasing Plan 2, the average number of workers throughout the entire period would be approximately 347 per day. The peak number of workers would be 932 per day, and would occur in the 4th quarter of 2028 when construction of Buildings 8 and 9 and the platform over Block 1121 would be simultaneously occurring. For truck trips, the average number of trucks throughout the entire construction period would be 100 per day, and the peak would occur in the1st quarter of 2028 when construction of Buildings 7, 8, and 9 would be simultaneously occurring, with 210 truck trips per day.

For Construction Phasing Plan 3, the average number of workers throughout the entire period would be approximately 442 per day for the period when construction activities are occurring. The peak number of workers would be 1,356 per day, and would occur in the 1st quarter of 2032 when construction of Buildings 5, 9, and 10 and the platform over Block 1120 would be simultaneously occurring. For truck trips, the average number of trucks throughout the entire construction period would be 127 per day, and the peak would also occur in the 1st quarter of 2032, with 327 truck trips per day.
These of course are scenarios, not plans.

Regarding the platform

The document describes construction techniques, which differ whether construction is on terra firma or over the railyard:
Platforms would be built over the open, below-grade portions of the newly relocated Vanderbilt Yard. One platform would span over the below-grade portion of Block 1120 and a second platform would span over Block 1121. The platform would provide a base for the Phase II buildings on Blocks 1120 and 1121 (Buildings 5, 6, and 7 on Block 1120 and Buildings 8, 9, and 10 on Block 1121). The construction techniques and sequencing for both platforms would be basically the same. Columns and shear walls would be constructed on the mat foundations for future buildings. Large steel trusses, running north to south, would be supported by the columns and the shear walls. Concrete would be poured upon decking, which would have been placed on the steel trusses to form and finish the platform. Equipment that would be used during platform construction would include cranes, lift trucks, concrete pumps, compressors, and generators.

Buildings 11 through 15 would require excavation and foundation activities. Excavators and front end loaders would be used for the tasks of soil excavation. The soils would be loaded onto dump trucks for transport to a licensed disposal facility or for reuse on a construction site that needs fill. The dump trucks would be loaded in the excavation area itself, and a ramp may be built to the street level. Next, the concrete footings and walls would be erected and subsequently the cellar floor would be installed. A spread footing foundations system is expected to be used for the project buildings. In this type of foundation system, concrete column footings would be used to accommodate the concentrated load placed on them and to support the structure above. These concrete footings would be reinforced with rebar as they are traditionally done. Equipment that would also be used during excavation and foundation would also include the use of cranes, backhoes, drill rigs, bulldozers, concrete pumps, compressors, and generators.

Monday, April 21, 2014

Accountability, trust, and oversight: the Independent Compliance Monitor is not the state's business, and neither is new Atlantic Yards construction promise

In Saturday's New York Times, we got official confirmation that Forest City Ratner's ambitious modular construction plan isn't working too well, given that the B2 tower, long said to be finished by December 2014, is a year late.

But we also learned that Forest City's new partner, the Chinese government-owned Greenland Group, is planning to start not one but three towers this year, using conventional construction techniques, building one condo tower and two towers with subsidized housing.

That's a reflection of the market in Brooklyn, the cheap financing they've raised through EB-5, presumably commitments from the city for tax-exempt housing bonds, and--who knows--maybe a desire to make a splash.

It also changes the equation for the hearing April 30 on the court-ordered Draft Supplemental Environmental Impact Statement, which aims to analyze the potential impacts of a 25-year project buildout.

From Draft SEIS, showing two towers on Block 1129,
well ahead of slow-buildout scenario; the open space
appears to be mainly courtyards for tower residents
It suggests that more affordable housing will come online, and some open open space will become available.

(Based on the graphic at right, it looks like Pacific Street will be used as a staging area, not open space, and the open space created will serve mainly as courtyards for the towers.)

The real issue: accountability

The suggestion seems to be: if they can start three towers this year, maybe they can get three more started in two years, and have the whole project finished in a decade.

Maybe, maybe not. But here's the thing: that schedule--even the start of three towers--is not memorialized in any contract or document. We have to take it on trust.

That raises the fundamental issue regarding Atlantic Yards: accountability, trust, and oversight.

And Forest City Ratner, and by association its new partner, has proven unaccountable, sacrificing that trust, and deserving of new oversight.

The compliance monitor

The clearest, most basic example of Forest City Ratner's failure of accountability is the failure to hire the Independent Compliance Monitor required in the Community Benefits Agreement, a monitor Forest City executives initially promised again and again.

According to the Response to Comments document that's part of the environmental review, BrooklynSpeaks dutifully raised the issue:
Comment 125: On June 27, 2005, FCRC signed a Community Benefits Agreement (CBA) with eight community groups. The CBA requires the board to establish an executive committee, and the executive committee is supposed to hire an independent compliance monitor (ICM) whose job is to ensure the contractual obligations in the CBA are met. The monitor's job covers a range of issues from the delivery of benefits and jobs to meeting environmental commitments. The ICM is responsible for oversight of the project developer's, arena developer's and coalition members' obligations under the agreement, investigation of complaints brought against the developers, and review of the developer's reports. FCRC is obligated to pay the ICM's salary. At the commencement of the agreement, FCRC was supposed to place the equivalent of a year's salary into an escrow account and to replenish the account as necessary.
The monitor was supposed to be hired "as soon as reasonably practicable" following the signing of the agreement in 2005. Later, FCRC stated the monitor would be hired six months after the groundbreaking of the arena, which occurred in the spring of 2010. In November 2011, the developer stated the monitor will be hired for the residential phase of the project. However, at an Atlantic Yards Quality of Life Committee meeting in February 2013, a representative for the developer stated that the ICM had not been hired and there was no date planned to do so. The SEIS must assess the impact of failing to hire the ICM on the incidents of violations of the MEC [Memorandum of Environmental Commitments' during arena construction.
The SEIS must also propose how an environmental compliance function  accountable to the local community will be provided for future phases of construction that will not suffer the same fate as the ICM. (Brooklyn Speaks)
The response, a stonewall

Empire State Development said, as it has in the past, that the Community Benefits Agreement is none of its business:
Response: ESD is not a party to the CBA. The SEIS will not examine commitments that the project sponsors have made in the CBA.
By contrast, as I wrote, an August 2007 message from ESD staffer Jennifer Maldonado presaged a meeting that Pat Foye, then ESDC's top official, planned to have with the CBA Executive Committee.

Foye, according to the message, "will stress that while the State is not a party to the agreement, ESDC does support the agreement and spirit of cooperation between the community and FCRC."

Looking at the CBA promise, on video

Consider former Forest City point man Jim Stuckey at a public meeting in November 2004.

"Let’s talk about Community Benefits Agreements," Stuckey said. "We doing something here that is historic. Never been done in New York City before. And what we’re doing is that we’ve agreed to enter into a legally-binding Community Benefits Agreement that will be monitored by an independent monitoring group not associated with anybody who actually negotiates that agreement."

Note the enthusiastic claps by supporters who thought that a validation of the company's plan.

Video by producers of Battle for Brooklyn

"And we’re doing that because not only do we believe that we should do the things that we say we will do, just as we have in the past"--note Stuckey's somewhat defensive tone--"but we also believe that should set the bar. We also believe that what we do should be done by others."

Another promise, on video

In the video below, from that same event, Stuckey cited "a legally binding contract that will be enforceable the way any contract under law will be enforceable."

Video by producers of Battle for Brooklyn

"Whether or not that becomes part of the public approval process, and part of the city and state's development plan, remains to be to be seen," he continued. "But if it's not, in and of itself, we have agreed it will be a legally binding agreement, enforceable, under law, with an independent monitoring body."

"Which law?" shouted a skeptic.

Another promise

Around the same time, Stuckey spoke at a meeting of Community Board 2.

"And a Community Benefits Agreement is something that we believe is more than just talking about what few things we can do for the community," he said. "It's a chance to talk about systemic change. It's a chance to talk about the jobs and housing and the other things that will result from this project and talk about ways that those things can in fact be a part of the community."

Video by producers of Battle for Brooklyn

"So we began earlier this year," Stuckey said, "in fact, we were first invited, I guess back in April by the Downtown Brooklyn Leadership Coalition, and we were asked, Would you be willing to enter into a Community Benefits Agreement?, and we said yes. We were asked, Would would you be willing to have that be a legally binding agreement?, and we said yes. And we were asked, Would you be willing to have that be monitored, an independent monitoring, to be sure that what you say you'll agree to you in fact will do?, and we said yes."

Actually, they weren't first invited "I guess back in April" but rather helped establish the CBA in meetings that February at Forest City offices.

Forest City's deflections

“Atlantic Yards is setting a new standard for inclusion and community involvement for a development, and the ICM [Independent Compliance Monitor] will be everyone’s watchdog to ensure we reach all of the goals and benefits we have agreed to in the CBA [Community Benefits Agreement]," Atlantic Yards developer Bruce Ratner said in March 2007.

As I've written, the developer has steadily avoided that contractual responsibility. “Hopefully we'll get it done soon," executive Jane Marshall said in November 2010, claiming the CBA only went into effect when the arena broke ground.

They [FCR] are going to retain a compliance monitor per the CBA, but they are going to wait until the housing phase,” a spokesman told the Brooklyn Daily Eagle in January 2012.

The Rev. Herbert Daughtry of the Downtown Brooklyn Neighborhood Alliance told the Eagle: "The point is that I feel, whether they [FCR] have reneged on promises, I’m not concerned about it."

By contrast, in March 2005 he said of Ratner, “If he doesn’t honor this agreement I will do all in my power to make downtown Brooklyn as ungovernable as possible.”

Bertha Lewis, the former CEO of ACORN, did not respond to the Eagle's query, but in May 2006 defended the CBA by noting that it calls for an independent monitoring body that “does not have a dog in this fight” to oversee implementation.

Questioning FCR

FCR had not been publicly questioned about the ICM until a 9/29/10 public information session at Brooklyn Borough Hall, mainly concerning the planned arena plaza.

As shown in the video below, Carlo Scissura, then Chief of Staff to the Brooklyn Borough President, read a question submitted by an audience member (me). "Forest City Ratner was supposed to hire an independent compliance monitor for the CBA. What happened to that monitor and who is it?"

The misleading, somewhat uncertain response came from Forest City Ratner executive Jane Marshall.

Video shot by Jonathan Barkey

CBA timetable

"The CBA agreement was signed a long time ago," Marshall responded. "It didn't actually go into effect until we broke ground for the arena."

The CBA was signed 6/27/05. The ceremonial arena groundbreaking was held 3/11/10. The CBA clearly contradicts Marshall's claim. Also,  in several places the CBA indicates that implementation would begin soon after it was signed, rather than some unspecified later groundbreaking.

FCR's Marshall finished up: "And the other thing is that, when we do that, it will be something that the executive committee, the groups themselves, probably issue an RFP and select a monitor, based on the scope of work that they--have deemed is directly related to everybody's mandate, and hopefully we'll get it done soon, but I don't have the timetable right now."

Actually, such an RFP began in March 2007. They just never followed through.

And they still get away with it.

From Response to Comments: no analysis of undervalued public land acquired by (or on behalf of) Forest City Ratner (and benefiting the Chinese government)

Yes, the Supplementary Environmental Impact Statement (SEIS) is out, and there's a public hearing April 30.

But the Response to Comments document produced by Empire State Development to accompany the release in in February of the Final Scope for the SEIS still has some nuggets worth noting.

One commenter briefly referenced my analysis that Forest City has significant uncounted savings--perhaps more than $100 million--from land, including former public streets like Pacific Street between Carlton and Vanderbilt avenues, that it was either given or sold well below market.

The comment generated an oblique response:
Comment 33: We need to recover the value of the undervalued public land that Forest City was given under the public streets. (Ettlinger)
Response: Comment noted.
While he did say that in public testimony, his written comment was more specific: "The value of the public street being turned over to private use must be surveyed."

It won't be.

The Executive Summary of the Draft SEIS stated:
The street bed on Pacific Street between Carlton and Vanderbilt Avenues has been acquired by ESD (and has been leased to the project sponsors). It is used as a construction staging area and for access and egress to the Block 1129 parking lot.
So, at least for now, it hasn't been sold or given to Forest City, just leased. But it's highly doubtful Forest City paid significantly for it.

And guess what that means? The Chinese government-owned Greenland Group, the expected new majority owner of the remaining Atlantic Yards project, gets the benefit of free (or below market) public property.

Sunday, April 20, 2014

In account of Barclays-MSG rivalry, CEO Yormark claims there are "385 country bars" in Brooklyn (!); Brokelyn tries to check

The Hollywood Reporter offers Barclays Center vs. Madison Square Garden: New York's Latest Rivalry Heats Up, pointing out how Barclays rose while MSG was closed for renovations:
"Barclays got a stroke of luck that the Garden was closed," sniffs heavyweight music manager Irving Azoff (the Eagles, Van Halen and Christina Aguilera, among others), who last year partnered with MSG on a new management-publishing-production company called Azoff MSG.
...Of course, the view from the other side of the East River is totally different. With more than 300 events since opening, Barclays was the top-grossing venue in the U.S. last year. It has been averaging $6 million a month from live concerts (including many by former shareholder Jay Z) and has branched out to event programming like the Rock and Roll Hall of Fame's induction ceremony. And while it doesn't have MSG's cash-cow sports franchises, like the Knicks and the Rangers, it does have the Nets, and soon the building will be getting ice ready for the relocating Islanders.
Unmentioned is that the Barclays Center is making far less money than predicted.

The country boom and Yormark's whopper

The interesting stuff comes when Barclays Center CEO Brett Yormark yammers:
"There are areas we haven't done as well as we would have liked," concedes Yormark. "Country music is the perfect example. Many artists haven't been to Brooklyn. They don't understand that there are 11 subway lines and the Long Island Railroad here -- that it's easy to get fans from all over the tristate area. We have to educate them about the fact that there are 385 country bars in the borough."
Wow, "385 country bars" in Brooklyn. Maybe 385 bars with someone with the letters H-A-N-K in their name. I queried Shannon Brown of Gotham Holler, which keeps a country music calendar, and she wrote:
I would consider a "country bar" means the bar plays country music almost exclusively, and/or has live country/bluegrass/Americana bands performing the majority of the time. I'd also expect some country food, booze and atmosphere.

I'm pretty sure 385 country bars is a huge exaggeration. If that were the case my band, Trailer Radio, would be gigging every night. I would estimate more like 10 exclusive country bars in Brooklyn (not including Long Island).
NYC Mayor Fiorello LaGuardia once said, "When I make a mistake, it's a beaut.'' When Brett Yormark tells a lie, it's a whopper. When I tweaked him on Twitter, Yormark, ever defensive, tried to attack me.

Brokelyn explores
Brooklyn is a borough of many tastes all colliding together at once, which gives you plenty of options when it comes to nightlife. If you’re into it, we probably have it. With that being said, it still struck us as odd that Barclays CEO/sentient hashtag Brett Yormark told the Hollywood Reporter that Brooklyn has 385 country bars (thanks to a heads up from Atlantic Yard Report’s Norman Oder). That’s a lot of twang! And also possibly just made up out of thin air? Join us in trying to name all of these bars.
...I had a friend who did a country music residency at Union Pool for a few weeks, but that seems like a stretch. One Brokelyn contributor offered the theory that Yormark meant “385 bars that play Johnny Cash singles sometimes,” but then we’d think the number would be higher. Oder checked with an actual country fan who told him that she could name ten country bars, which still leaves us 375 short. We really want to know where those 375 bars are though, so we can add them to our thriving tour business. If you’ve got some we missed, leave them in the comments.
Some of the answers are kinda fanciful, like "Jasper T. Jowls’ Moonshine Distillery, Atlantic Terminal."
The rivalry

In the Hollywood Reporter article, Azoff calles Barclays' early success "fluffy numbers," which reflects--unmentioned--that the Brooklyn arena has reportedly made deals very favorable to lure artists. 

The Hollywood Reporter says the math backs Azoff:
Since reopening in October, MSG has sold about 35 percent more tickets than Barclays, with the Garden averaging 10,682 per live concert versus 7,287 for Barclays, according to Pollstar.
Meanwhile, booker Larry Webman says Barclays offers more flexibility than busy MSG and "more favorable union arrangements and a better curtaining system." So there may be more money to be made in Brooklyn.


The Daily News, in a gee-whiz 4/21/14 article headlined Barclays Center looks to cash in on Brooklyn country, reported:
The nod toward Nashville comes a week after Barclays CEO Brett Yormark cited a search of country bars in Brooklyn that he said turned up a whopping 385 Yelp results.
My comment: Brett Yormark's skills at using Yelp are limited. See for example
That doesn't get you close to 385. Or Brooklyn.

Saturday, April 19, 2014

Times scoop: Forest City's new partner, Greenland Group, plans to start three (conventional) towers this year; new push for subsidies; much unmentioned

The New York Times, which astoundingly had not reported on Forest City Ratner's joint venture with the Chinese government-owned Greenland Group to buy 70 percent of the remaining Atlantic Yards project, today has a scoop: the first tower is delayed one year (also disclosed to SEC), signaling that Forest City has not quite "cracked the code" as claimed for modular construction, and Greenland has big plans:
Now the developer is completing a deal to bring in a Chinese partner and the company says it will accelerate construction and will start work later this year on three additional buildings, comprising over 900 apartments.
But the three new residential towers would be built conventionally, not with the pathbreaking modular, or prefabricated, system that Forest City had said would provide quick delivery and millions of dollars in savings.
The developer’s new partner, Greenland Holding Group, which is buying a majority stake in the development, is eager to build quickly in Brooklyn’s booming market. Indeed, its executives have said they want to complete Atlantic Yards within eight years. But real estate executives said the Chinese company was not persuaded that the modular construction was preferable.
Forest City executives said for the first time that they had trouble working out all the kinks at the factory in the nearby Navy Yard, where 145 workers transform tubular steel chassis into fully equipped apartments. 
Only 122 of 930 needed modules have been delivered and installed. “It’s been terribly frustrating," CEO MaryAnne Gilmartin told the paper. "But I don’t think this is a referendum on modular. The best way to prove that this works is to build B2.”

Which buildings?

One rental tower will be erected next to B2, according to the Times, which means that B3, at the southeast corner of the arena block, will get started.

Also, a rental building and a condo building will be built on Block 1129, the southeast block of the project, now used mainly as a surface parking lot, which is barely used.

This adds a gloss on the effort by Community Board 2, which generally encompasses Downtown Brooklyn and Fort Greene (and has Forest City Ratner's MetroTech project/hq as a major constituent), to extend its borders to include the entire Atlantic Yards site--and the resistance from Community Board 8.

I've already reported on how Gilmartin has said they want to build on the arena block and the southeast block before tackling an expensive deck needed for vertical construction over the railyard, located north of Pacific Street.

Business bonus

As noted, Brooklyn's "booming market" means it's apparently profitable enough for Greenland to build conventionally, after Forest City said it wasn't.

If modular is not working out (yet), the partnership with Forest City has already reaped dividends, via the $249 million in cheap capital reportedly coming, a fact unmentioned in the Times article. That could save the joint venture tens of millions of dollars, maybe more than $100 million. That makes it more plausible to build conventional.

Consider that Greenland (which the Times doesn't mention is owned by the Chinese government) could not on its own have gone out and hawked EB-5 investments to green-card seeking Chinese investors. That would have been way too circular.

Also note that, perhaps, Greenland doesn't need as large a return as Forest City thought it needed, and/or Greenland wants to make a big splash in Brooklyn.

New subsidies?

The Times reports, yes, on the next push for subsidies:
In recent days, Ms. Gilmartin has met with Alicia Glen, the deputy mayor for housing and economic development, to talk about the next three buildings and the possibility of additional housing subsidies for apartments for poor and working-class families.
“We’re going to drive a tough but fair bargain so we can get this project moving,” Ms. Glen said. “We’re not happy about the pace of construction. But we think that modular is something we should continue to pursue across the city.”
Mr. de Blasio is a longtime supporter of the project, and Ms. Gilmartin served on the mayor’s transition team.
“I’m glad that Greenland wants to make this a priority,” said Letitia James, the city’s public advocate and a longtime critic of the project. “We need to start the affordable housing promised to Brooklynites.”
Plan for first tower, based on 2012 Area Median Income,
which should be higher when tower opens in 2015
Unmentioned is that with the first tower Forest City has reneged on its promise to ensure that half the subsidized units, in floor area, be devoted to two- and three-bedroom apartments. Also the fraction of two-bedroom units is skewed to the moderate-income rather than lower-income "bands."

As I've long suspected, Forest City--which already has a history of trying to renegotiate settled deals--is trying again.

Alicia Glen's quote--"we think that modular is something we should continue to pursue across the city"--sounds very much like a willingness to offer special funding to ensure that modular works out.

Forest City wants to make modular a whole new business line, and the city wants to lower construction costs, so even if it doesn't work with the first building, they may both in the long run want modular to work.

A supportive critic

So Public Advocate Letitia James, however much a critic of the project, falls into Forest City Ratner's trap by advocating that the affordable housing gets done. However much she wants "affordable housing"--who doesn't?--that doesn't mean Forest City and its new joint venture partner deserve special favors.

The issue should be: can Forest City and its new partner be trusted? The answer--regarding everything from the oversight of construction to the failure to hire a promised Independent Compliance Monitor--is no.

James was more on point at the August 2006 hearing on the Draft Environmental Impact Statement, declaring, "It's not about the local economy, but about the developer, his investors, and their economy. And rank politics at its worst."

Video thanks to Battle for Brooklyn producers.

Potted history

The Times offers some potted history:
Little has gone according to plan at Atlantic Yards since it was conceived in 2004, when Bruce C. Ratner of Forest City bought the Nets with the intention of moving the basketball team to a new home in Brooklyn that would be the centerpiece of a large residential development.
Mr. Ratner’s ambitious development plan called for an 18,000-seat arena at the intersection of Flatbush and Atlantic Avenues, a park, an office tower or hotel, and 14 residential buildings with over 6,000 apartments, including 2,250 for low-, moderate- and middle-income families. The city and state provided hundreds of millions of dollars in subsidies.
Mr. Ratner agreed to pay $100 million to the Metropolitan Transportation Authority for the development rights to a rail yard and to build a new rail yard.
The proposal was buffeted by lawsuits, a recession and persistent opposition from some residents objecting to the impact of what they said was an oversize complex.
Actually, the project was conceived as early as 2002, and announced in December 2003. (See the original public relations materials.) At that time, it the arena was part of a project that was not merely a "large residential development" but rather four office towers and eleven residential towers, with 4,500 units, and space for 10,000 office jobs. (Later, one more tower was added, at Site 5.)

Initially, the arena was supposed to seat 20,000 people; it was later downsized to 18,000 seats. There was no "park" but rather publicly-accessible, privately managed open space. So it wasn't merely an "office tower or hotel."

The $100 million Ratner pledged to the MTA was--it goes unmentioned--renegotiated, with Forest City getting the authority to agree to accept $20 million for the plot of land needed for the arena, and to allow 21 years to pay the remaining $80 million, at a gentle interest rate.

The deal

The Times reports:
Forest City agreed to sell a 70 percent stake in Atlantic Yards (excluding Barclays Center and B2) for about $200 million to Greenland. As a result, Forest City had to reduce the value of its $527.4 million investment in the project by about 45 percent.
It's a little more complicated than that, if you read the fine print. Forest City has not had to reduce the value of its investment by 45 percent, since that $242.4 million "impairment" is actually $148.4 million net of tax.

The joint venture

The Times reports:
The joint venture will be overseen by a board with five members, three appointed by Greenland and two by Forest City. Ms. Gilmartin said, though, that the two companies had equal say over key issues: architects, contractors, unit mix, scheduling and community relations.
That obscures the fact that Greenland's ultimately in control, as shown in the decision to build these three towers conventionally. Yes, a five-person board of directors would be established, with Greenland appointing the Chairman, CEO, and CFO, and Forest City Enterprises appointing Vice Chairman and President.

Decisions of particular importance, including starting a new building, require a majority vote, including a vote from one appointee from both, which "in effect requires that both Greenland and FCRC agree to such decisions," according to a memo from Rachel Shatz of Empire State Development, the state agency overseeing/shepherding the development.

However, the agreement does provide for a possible buy-out in the event of a deadlock among the members of the Board of Managers and it also provides for a dilution of a member's interest if it fails to meet certain obligations. "Accordingly, it cannot be assumed that the 30%-70% divisions of interests described above is a permanent arrangement," Shatz wrote.


Not only is the EB-5 deal unmentioned in the Times, so too is the planned green roof for the arena, which Greenland will help build, aiming to improve the esthetics for apartment dwellers and also block bass escaping from the arena during certain shows.

Modular snag: Forest City admits B2 tower will be one year late, now expected to finish in fourth quarter of 2015

The construction pace of B2, the world's tallest modular tower, has been well below that needed to open by the target date of December 2014, as I've steadily reported.

Late yesterday developer Forest City Enterprises made it official, acknowledging in a brief report to the Securities and Exchange Commission that the building will open in December 2015, one year late.

That coincides with a New York Times report today that the new partner, the Greenland Group, aims to start three towers using conventional construction. (Here's my analysis of that article.)

From SEC report
That's a significant delay. Rather than saving time for Forest City Ratner and getting a building done in some 18 months, modular construction, at least in its first iteration, means a longer buildout than conventional construction: three years, rather than two.

It also shows that Forest City Ratner, ever capable of generating publicity for its innovative modular plan, hasn't yet made it work. Think about all the publications who were invited in to report about the inevitable future, including, most recently, Forbes (my critique). Other coverage came from Fast CompanyGizmodoBrownstoner, and Gothamist.