Skip to main content

Tenants' second lawsuit calls AY relocation plan inadequate

Thirteen rent-stabilized tenants, who live in two buildings in the proposed Atlantic Yards footprint and have already sued to block the demolition of their buildings, have filed another suit, claiming that the relocation agreements announced by the Empire State Development Corporation (ESDC) are inadequate and violate state law.

Lawyers for tenants have long argued that the relocation agreements offered by developer Forest City Ratner (FCR) left the tenants vulnerable. The agreements provided for just three years of differential rent--the difference between their current rent and that in their temporary apartment--before the tenants were to be relocated to Atlantic Yards at their old rent. However, that wouldn’t leave enough time for the project to be constructed.

The Final Environmental Impact Statement (FEIS) issued by the ESDC in November indicated a better offer:
The sponsors have also agreed to pay the difference, if any, in rent between the tenant's current rent and the rent for the comparable interim unit until such time as the tenant is relocated into a new unit in the proposed development. This agreement would terminate only if the project were abandoned or the tenant breached its obligations.

However, that still would leave the tenants out in the cold if lawsuits stopped the project or the developer chose not to continue.

No offer made

The new lawsuit, filed in state court on behalf of residents of 624 Pacific Street and 473 Dean Street, alleges that those residents never received an offer, even though, “under section 10(g) of the UDC Act... respondent is required to provide petitioners with relocation into a residential project of ESDC or to provide relocation into equivalent housing in the neighborhood.” (UDC refers to the Urban Development Corporation, the ESDC's parent.)

“As far as petitioners are aware, it does not exist in written form,” states the lawsuit of the offer. (I asked for a copy in December, but ESDC didn't provide it.) “ESDC’s offer of ‘relocation assistance’ is not an offer to relocate or to provide housing, which section 10 (g) requires, and it does not meet the clear and explicit statutory requirement to provide comparable housing, not to provide a real estate broker.” Nor would the tenants get the “additional financial assistance” needed to relocate.

“Without sufficient financial assistance, the relocation plan proposed by ESDC--help from a real estate broker--is not a feasible way to provide comparable housing in the neighborhood" and is unlawful, according to the lawsuit.

Attorney George Locker said that tenants in one of the buildings met with FCR executive Jim Stuckey about two-and-a-half years ago. “It was highly conditional, it included gag orders, and it was never was reduced to writing," Locker said of the offer. "They never took it seriously."

New legal ground

As with the previous lawsuit filed on behalf of these tenants, which charged that the ESDC does not have the right to demolish buildings containing rent-stabilized tenants without going through a slower state process, this lawsuit would break new legal ground, acknowledged Locker.

“It's all new law, because nobody ever raises these questions,” he said. “I have not found a single case that has any discussion of relocation requirements.

(A separate case challenging eminent domain has been filed in federal court, and another case challenging the FEIS is expected in state court, both coordinated by Develop Don't Destroy Brooklyn.)

Letter of the law

While one section of the new lawsuit says the ESDC must "provide relocation into equivalent housing into the neighborhoood," another clause quotes the UDC Act directly--which is somewhat more subtle--regarding equivalent apartments "which are or will be provided in the project area or in other areas not generally less desirable."

The UDC Act states:
(g) in the case of all projects, that there is a feasible method for the relocation of families and individuals displaced from the project area into decent, safe and sanitary dwellings, which are or will be provided in the project area or in other areas not generally less desirable in regard to public utilities and public and commercial facilities, at rents or prices within the financial means of such families or individuals, and reasonably accessible to their places of employment. Insofar as is feasible, the corporation shall offer housing accommodations to such families and individuals in residential projects of the corporation.

Comments

Popular posts from this blog

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…

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…

Is Barclays Center dumping the Islanders, or are they renegotiating? Evidence varies (bond doc, cash receipts); NHL attendance biggest variable

The Internet has been abuzz since Bloomberg's Scott Soshnick reported 1/30/17, using an overly conclusory headline, that Brooklyn’s Barclays Center Is Dumping the Islanders.

That would end an unusual arrangement in which the arena agrees to pay the team a fixed sum (minus certain expenses), in exchange for keeping tickets, suite, and sponsorship revenue.

The arena would earn more without the hockey team, according to Bloomberg, which cited “a financial projection shared with potential investors showed the Islanders won’t contribute any revenue after the 2018-19 season--a clear signal that the team won’t play there, the people said."

That "signal," however, is hardly definitive, as are the media leaks about a prospective new arena in Queens, as shown in the screenshot below from Newsday. Both sides are surely pushing for advantage, if not bluffing.

Consider: the arena and the Islanders can't even formally begin their opt-out talks until after this season. The disc…

Skanska says it "expected to assemble a properly designed modular building, not engage in an iterative R&D experiment"

On 12/10/16, I noted that FastCo.Design's Prefab's Moment of Reckoning article dialed back the gush on the 461 Dean modular tower compared to the publication's previous coverage.

Still, I noted that the article relied on developer Forest City Ratner and architect SHoP to put the best possible spin on what was clearly a failure. From the article: At the project's outset, it took the factory (managed by Skanska at the time) two to three weeks to build a module. By the end, under FCRC's management, the builders cut that down to six days. "The project took a little longer than expected and cost a little bit more than expected because we started the project with the wrong contractor," [Forest City's Adam] Greene says.Skanska jabs back
Well, Forest City's estranged partner Skanska later weighed in--not sure whether they weren't asked or just missed a deadline--and their article was updated 12/13/16. Here's Skanska's statement, which shows th…

Not just logistics: bypassing Brooklyn for DNC 2016 also saved on optics (role of Russian oligarch, Shanghai government)

Surely the logistical challenges of holding a national presidential nominating convention in Brooklyn were the main (and stated) reasons for the Democratic National Committee's choice of Philadelphia.

And, as I wrote in NY Slant, the huge security cordon in Philadelphia would have been impossible in Brooklyn.

But consider also the optics. As I wrote in my 1/21/15 op-ed in the Times arguing that the choice of Brooklyn was a bad idea:
The arena also raises ethically sticky questions for the Democrats. While the Barclays Center is owned primarily by Forest City Ratner, 45 percent of it is owned by the Russian billionaire Mikhail D. Prokhorov (who also owns 80 percent of the Brooklyn Nets). Mr. Prokhorov has a necessarily cordial relationship with Russia’s president, Vladimir V. Putin — though he has been critical of Mr. Putin in the past, last year, at the Russian president’s request, he tried to transfer ownership of the Nets to one of his Moscow-based companies. An oligarch-owned a…