Skip to main content

Crain's editor Greg David gets it wrong: chronology, housing, density, and "status quo"

Crain's New York Business editor Greg David, in a column dated 6/26/06 headlined Atlantic Yards is not about sports (subscribers only), repeats some Forest City Ratner talking points, forgets the eminent domain issue that he's previously addressed, and adds some other misreadings.

David writes:
As Bruce Ratner tells the tale, the Atlantic Yards project took off in 2003 following a phone call from the Brooklyn borough president. The New Jersey Nets basketball team was for sale, and Marty Markowitz pleaded with Mr. Ratner to buy it and return a professional sports team to Brooklyn.
Sports and the borough's psyche had been linked decades earlier, and just as the Dodgers' departure in 1958 seemed to start years of decline, so bringing the Nets to Brooklyn would put an exclamation point on its economic revival.
Three years later, sports are merely a footnote to the project.


But sports were always a footnote. The arena was always a small fraction--little more then ten percent--of the project's total square footage. It was billed as the centerpiece of the project to gain political and public support.

David continues:
Atlantic Yards now concerns making choices about the city's future. Mr. Ratner knew nothing about professional basketball when Mr. Markowitz called. What he did understand was Brooklyn, where he had built Metrotech in the 1980s. The office complex saved the borough's downtown and the city 10,000 jobs that had been headed to New Jersey. Mr. Ratner had long believed that a site nearby, where the Long Island Rail Road parked its trains, was suitable for the next major development.

But the railyard site is little more than one-third of the 22-acre project footprint. That's a key error that persists in the press.

Wrong chronology

David continues:
But he couldn't figure out how to get the public money or political support needed to proceed--until the Nets came along. His original concept envisioned a sports arena, 2 million square feet of office space and 4,000 apartments. Sept. 11 sent Mr. Ratner back to the drawing board. Demand for office space weakened, and Atlantic Yards could be seen as a threat to Lower Manhattan, which would split the politicians he needed in his camp.

September 11 (2001) sent Ratner back to the drawing board? The original concept was unveiled in December 2003. The switch from office space to housing was, indeed, a reaction to the threat to Lower Manhattan (and possible opposition from Assembly Speaker Sheldon Silver, who represents the area), as well as the need for higher revenue from housing. David, however, misses the switch from the promise of 10,000 jobs (and the "Jobs, Housing, and Hoops" slogan, now put aside) to many fewer jobs.

The housing switch

David continues:
Escalating apartment prices rescued Mr. Ratner. Adding residential units would produce the revenue needed to pay for the arena and for about $1 billion in infrastructure. One of the top priorities of the Bloomberg administration was more housing, so it would be supportive. Mr. Ratner slashed Atlantic Yards' commercial space and turned it into a residential neighborhood with 6,800 units. Mr. Ratner, always a politically astute developer, added an important twist. The condos would be so lucrative that he would use some of the profits to set aside almost a third of the units as affordable housing--more than any developer had ever done in a similar project. Such a move would be popular not only with the mayor but with advocates for the poor. The developer signed them on as supporters; the most notable was the outspoken group Acorn.

The original promise was 50 percent of all housing in the project. Then, when the housing Memorandum of Understanding with ACORN was signed in May 2005, the switch had been made to 50 percent of the rental housing. (Still, Marty Markowitz was on script for the previous version.) So the one-third figure, however impressive compared to some developments, is less than what was promised.

Also, 30 percent affordable housing was recently negotiated by the City Council for the rezoning of Williamsburg and Greenpoint. There's been no rezoning for the Atlantic Yards project. In essence, the affordable housing is a privately-negotiated zoning bonus. That means Forest City Ratner can build at a density more than twice that of other major developments. So, in this case, affordable housing would be achieved by overbuilding.

Misreading opponents

But his opponents aren't giving up. They claim that Atlantic Yards will destroy Brooklyn's character. Their hope is to preserve the status quo, even as tens of thousands of people come to New York because of its vibrant economy. If the city is to thrive, it will need to build places for them to live by Manhattanizing some sections of Brooklyn and Queens. With residential housing prices so high, developers can subsidize substantial numbers of less expensive units for the endangered middle class. Mr. Ratner has worked out the economics of this game plan for the future. The fate of his project is a test of whether the rest of New York will embrace it.

There's certainly an argument for building at an increased density over the railyard site and even over adjacent streets. But that doesn't mean Ratner, supervised by the Empire State Development Corporation, should have carte blanche to build at the density decided in the boardroom. What happened to zoning and community oversight?

Also, saying that opponents hope to preserve the status quo ignores the community-developed UNITY plan and the bid for the railyards by Extell, a high-rise project at a somewhat lower density than the Ratner plan. It's disappointing that David, who surely knows Brooklyn and development better than Los Angeles-based architect Frank Gehry, sounds in this case like he's echoing Gehry's dismissal of critics.

As for the economics of the plan, why does David trust Ratner's claims, given that the developer has been unwilling to produce his economic projections for the project? Is Ratner's claim of $6 billion in revenue from the project credible? Are the subsidies and public costs deserved? And does David remember that, last December, he wrote, regarding eminent domain: What makes the issue so compelling in New York is that eminent domain is exercised here by undemocratic and politically motivated agencies like the Empire State Development Corp.

Comments

Popular posts from this blog

Barclays Center/Levy Restaurants hit with suit charging discrimination on disability, race; supervisors said to use vicious slurs, pursue retaliation

The Daily News has an article today, Barclays Center hit with $5M suit claiming discrimination against disabled, while the New York Post headlined its article Barclays Center sued over taunting disabled employees.

While that's part of the lawsuit, more prominent are claims of racial discrimination and retaliation, with black employees claiming repeated abuse by white supervisors, preferential treatment toward Hispanic colleagues, and retaliation in response to complaints.

Two individual supervisors, for example, are charged with  referring to black employees as “black motherfucker,” “dumb black bitch,” “black monkey,” “piece of shit” and “nigger.”

Two have referred to an employee blind in one eye as “cyclops,” and “the one-eyed guy,” and an employee with a nose disorder as “the nose guy.”

There's been no official response yet though arena spokesman Barry Baum told the Daily News they, but take “allegations of this kind very seriously” and have "a zero tolerance policy for…

Behind the "empty railyards": 40 years of ATURA, Baruch's plan, and the city's diffidence

To supporters of Forest City Ratner's Atlantic Yards project, it's a long-awaited plan for long-overlooked land. "The Atlantic Yards area has been available for any developer in America for over 100 years,” declared Borough President Marty Markowitz at a 5/26/05 City Council hearing.

Charles Gargano, chairman of the Empire State Development Corporation, mused on 11/15/05 to WNYC's Brian Lehrer, “Isn’t it interesting that these railyards have sat for decades and decades and decades, and no one has done a thing about them.” Forest City Ratner spokesman Joe DePlasco, in a 12/19/04 New York Times article ("In a War of Words, One Has the Power to Wound") described the railyards as "an empty scar dividing the community."

But why exactly has the Metropolitan Transportation Authority’s Vanderbilt Yard never been developed? Do public officials have some responsibility?

At a hearing yesterday of the Brooklyn Borough Board Atlantic Yards Committee, Kate Suisma…

Forest City acknowledges unspecified delays in Pacific Park, cites $300 million "impairment" in project value; what about affordable housing pledge?

Updated Monday Nov. 7 am: Note follow-up coverage of stock price drop and investor conference call and pending questions.

Pacific Park Brooklyn is seriously delayed, Forest City Realty Trust said yesterday in a news release, which further acknowledged that the project has caused a $300 million impairment, or write-down of the asset, as the expected revenues no longer exceed the carrying cost.

The Cleveland-based developer, parent of Brooklyn-based Forest City Ratner, which is a 30% investor in Pacific Park along with 70% partner/overseer Greenland USA, blamed the "significant impairment" on an oversupply of market-rate apartments, the uncertain fate of the 421-a tax break, and a continued increase in construction costs.

While the delay essentially confirms the obvious, given that two major buildings have not launched despite plans to do so, it raises significant questions about the future of the project, including:
if market-rate construction is delayed, will the affordable h…

Revising official figures, new report reveals Nets averaged just 11,622 home fans last season, Islanders drew 11,200 (and have option to leave in 2018)

The Brooklyn Nets drew an average of only 11,622 fans per home game in their most recent (and lousy) season, more than 23% below the announced official attendance figure, and little more than 65% of the Barclays Center's capacity.

The New York Islanders also drew some 19.4% below announced attendance, or 11,200 fans per home game.

The surprising numbers were disclosed in a consultant's report attached to the Preliminary Official Statement for the refinancing of some $462 million in tax-exempt bonds for the Barclays Center (plus another $20 million in taxable bonds). The refinancing should lower costs to Mikhail Prokhorov, owner of the arena operating company, by and average of $3.4 million a year through 2044 in paying off arena construction.

According to official figures, the Brooklyn Nets attendance averaged 17,187 in the debut season, 2012-13, 17,251 in 2013-14, 17,037 in 2014-15, and 15,125 in the most recent season, 2015-16. For hoops, the arena holds 17,732.

But official…

So, Forest City has some property subject to the future Gowanus rezoning

Writing yesterday, MAP: Who Owns All the Property Along the Gowanus Canal, DNAinfo's Leslie Albrecht lays out the positioning of various real estate players along the Gowanus Canal, a Superfund site:
As the city considers whether to rezone Gowanus and, perhaps, morph the gritty low-rise industrial area into a hot new neighborhood of residential towers (albeit at a fraction of the height of Manhattan's supertall buildings), DNAinfo reviewed property records along the canal to find out who stands to benefit most from the changes.
Investors have poured at least $440 million into buying land on the polluted waterway and more than a third of the properties have changed hands in the past decade, according to an examination of records for the nearly 130 properties along the 1.8-mile canal. While the single largest landowner is developer Property Markets Group, other landowners include Kushner Companies, Alloy Development, Two Trees, and Forest City New York.

Forest City's plans unc…

At 550 Vanderbilt, big chunk of apartments pitched to Chinese buyers as "international units"

One key to sales at the 550 Vanderbilt condo is the connection to China, thanks to Shanghai-based developer Greenland Holdings.

It's the parent of Greenland USA, which as part of Greenland Forest City Partners owns 70% of Pacific Park (except 461 Dean and the arena).

And sales in China may help explain how the developer was able to claim early momentum.
"Since 550 Vanderbilt launched pre-sales in June [2015], more than 80 residences have gone into contract, representing over 30% of the building’s 278 total residences," the developer said in a 9/25/15 press release announcing the opening of a sales gallery in Brooklyn. "The strong response from the marketplace indicates the high level of demand for well-designed new luxury homes in Brooklyn..."

Maybe. Or maybe it just meant a decent initial pipeline to Chinese buyers.

As lawyer Jay Neveloff, who represents Forest City, told the Real Deal in 2015, a project involving a Chinese firm "creates a huge market for…