Monday, July 30, 2007

Some AY echoes in Williamsburg's New Domino plan (& hype)

The next megaproject plan has arrived, this time at the former Domino Sugar factory site in Williamsburg, and, just as Atlantic Yards has evolved, the focus is on affordable housing.

The press release (not online) issued last week sure sounded good:
Plans for the New Domino Set Goal of 30% of Units for Affordable Housing in Mixed-Income Community on the Brooklyn Waterfront
Former Industrial Site Will Mirror the City’s Economic and Cultural Diversity and Preserve Historic Architecture in Williamsburg


An equally skewed, though likely not inaccurate, press release might have stated:
Plans for the New Domino Include 1540 Million-Dollar Condos on Brooklyn’s Waterfront
Four Tall Towers, Minimal Historic Preservation Needed To Achieve Profits for Much-Criticized Silent Partner; Significant Government Subsidies and Rezoning Sought


So, as with Atlantic Yards, it all depends on how you frame it. The New Domino would contain 2200 residential units, 660 of them affordable, 1540 of them market-rate, in up to 15 buildings constructed over an eight-year span. A billion dollars spent on 2.86 million (corrected) square feet of development. An enormous change for a former industrial site.

Furious gentrification/overdevelopment, driven by a profit-hungry investor? Or inevitable development with a very respectable segment of affordable housing, led by a developer with a strong track record in the latter?

The major opponents include historic preservationists like the Waterfront Preservation Alliance who want to save more of the historic factory buildings (the Adant House and the Processing House, not just the main refinery structure, which is actually three buildings) and neighborhood residents who think the project would be too dense. The response, for which the developer has significant grassroots support, is that only a plan of a certain magnitude would deliver the affordable housing. Sound familiar?

I can’t evaluate whether the New Domino plan is worthwhile or not—more details need to emerge, and some significant local players, among them Community Board 1 and Phil DePaolo's New York Community Council, have yet to weigh in. A public hearing on the Draft Scope, the first step to a Draft Environmental Impact Statement and potential approval of the project next year, will be held from 2 to 5 pm and 6 to 8:45 pm tomorrow at the Department of City Planning (DCP) in Lower Manhattan. (Will the room be big enough?)

But it's clear the plan deserves more scrutiny beyond the hype, especially given some parallels with the AY promotion effort.

The big rezoning

While the Domino developers are apparently not asking for direct subsidies, as with Atlantic Yards, there is a fundamental parallel: will public agencies, in this case DCP and then the City Council—as opposed to the less accountable Empire State Development Corporation, which reviewed/approved AY—approve a rezoning to vastly increase the value of land bought by investors? (Or are they speculators?)

The Domino plan, beginning just north of the Williamsburg Bridge and spanning five blocks, would fill in much of the waterfront density between the Schaefer Landing project to the south and the Palmer's Dock/Northside Piers project to the north. (Graphic from Gentrification and Rezoning, Williamsburg-Greenpoint, by the Bloustein School of Planning and Public Policy at Rutgers University in conjunction with The New York City Community Council.)

The rezoning requested for the most part would not be inconsistent with the density and height limits set in the 2005 rezoning of Greenpoint and Williamsburg, which offered a bonus for affordable housing, but did not include the Domino site.

(Note comment below on the belief that the site should remain zoned for manufacturing.)

Without such a bonus, the change in the zoning map from manufacturing to residential (R8 on the waterfront parcel), would limit building heights to 210 feet (see p. 48 of this PDF). The New Domino would include two 300-foot towers and two 400-foot ones on the waterfront, hence a request for special permits that would mirror the height limits allowed elsewhere on the waterfront.

Building bigger across the street

The developers, however, seek significantly increased development rights for the one-block parcel east of Kent Avenue. They want to transfer 190,000 square feet of development rights--a good-sized tower--from the waterfront site to the upland site, and to allow taller buildings there. The upland site would have a floor area ratio (FAR) of 6.0, significantly higher than the 3.6 FAR allowed via the rezoning for R6 upland districts.

Also, the Draft Scope says the developers seek to "permit the building on the upland parcel to exceed the maximum building height of 110 feet to between 120 and 140 feet for buildings."

Double the neighbors

The New Domino would join, and ultimately dwarf, some big neighbors. The tallest Schaefer Landing building is 25 stories, part of a 345-unit project, according to the Rutgers report. The first Northside Piers building (right) is 29 stories, part of a project including more than 1000 units. The Edge will include one 30-story and one 40-story building, among others, for a total approaching 900 units.

Other than the upland site, the New Domino would not be inconsistent in scale, just much larger overall, nearly double the size of the other three projects. So it would add density previously not considered when the neighborhood was rezoned.

So a New York Post article last week missed the point, inaccurately stating that the project “was made possible by a massive rezoning of Greenpoint/Williamsburg by the city in 2005.”

$600K in lobbying

In this case, the 11.2-acre site, sold in 2004 by the American Sugar Refining shortly before the complex closed, cost the investors just $56 million. Historic preservation/conversion, site planning, and construction would cost much, much more. But the biggest variable may be getting the rules changed.

Perhaps that’s why the developer of the New Domino, Refinery LLC, [updated] spent nearly $600,000 in 2005 and 2006 lobbying (search on "Refinery") the Department of City Planning (DCP) before going public, as it did in recent weeks, with its plans, even though the Community Board 1 in June 2006 was rebuffed when it asked the developer for details, as the Brooklyn Rail reported. While that's not atypical developer behavior, it's reason enough for some skepticism.

After all, if condos average 1100 square feet each and sell for $900 a square foot--not unreasonable over the eight-year life of the project--the 1540 market-rate condos would each be worth about $1 million. That might mean a very nice return, depending how much the investors put in.

High density

And 2200 units over 11 acres would be quite dense, about 200 units/acre--if not Atlantic Yards "extreme density" (now 6430 units over 22 acres, or 292 units/acre, but actually more dense because of the arena)--it would be more dense than Battery Park City or Peter Cooper Village/Stuyvesant Town. (The Extell plan proposed for the MTA's Vanderbilt Yard would have been more dense than the New Domino.)

The Post reported:
"The density is outrageous, it is just adding to the gentrification of the area and there is no way the infrastructure is going to be able to accommodate all these new people," said Stephanie Eisenberg, who lives across the street in a building where a 50-by-100-foot "SAVE DOMINO" sign hangs.


It's worth a look at night. (Eisenberg's not just a resident, but the building's developer, as the Brooklyn Rail noted.)

Interestingly, the project has already been scaled down a bit, apparently. The Draft Scope, a prelude to the environmental review issued at the beginning of July by the Department of City Planning indicates 2400 residential units, not 2200.

AY parallels

So to get there, there are some interesting parallels with Atlantic Yards plan. The Domino plan would cover about half the Atlantic Yards footprint with about one-third the square footage; the $1 billion-plus cost would be about one-fourth the AY tab, but there's no arena or rail platform to build.

The New Domino would offer, like AY:
--significant density
--a starchitect (in this case Rafael Viñoly)
--an emphasis on affordable housing (30 percent), requiring significant (but unstated) public subsidies
--plans for “park space,” in the developer’s words, that’s actually “public open space,” according to DCP (4 acres)
--a questionable solution for transit (shuttles to the distant subway, plus a water taxi)
--endorsement by grassroots neighborhood advocates (El Puente, Churches United)
--a fast-track plan in the summer (hearing July 31)
--a considerable amount of parking (1450 spaces)
--a partner-developer with a not so beloved track record (The Katan Group)

Significant differences

There are some significant differences, besides the city review and no request for direct subsidy. AY would include no historic preservation, despite calls to save the Ward Bakery. Perhaps most notably, Refinery LLC is run by managing partner CPC Resources (CPCR), the for-profit subsidiary of Community Preservation Corporation (CPC), which has a 30-year history of financing affordable housing throughout New York.

CPCR "intervenes directly to save vital community properties, and invests to catalyze development in up and coming neighborhoods" and partners with local developers, among others, which may be a reason for the for-profit status. (A major accomplishment: rehabbing the Parkchester complex in the Bronx.)

Williamsburg sure doesn't need a catalyst, and the refinery building was on the path to landmarking. So in this case CPCR's main goal may be simply to maximize the affordable housing on the site. A worthy goal, but the tradeoffs should be calculated as well.

Unlike with Atlantic Yards, where the affordable housing group ACORN signed on formally after 18 months and brought no equity to the table—though it sure brought grassroots fervor—the New Domino comes with a community-oriented group out front. CPC seems to have a pretty good reputation. And they’ve replied cordially, if not quite completely, to the questions I posed.

On the other hand, the New Domino appears to be a major stretch for CPC/CPCR, which is sponsored by 80 prominent banks and insurance companies. Consider that this $1 billion-plus project would create 2200 apartments, while CPC in its history “has provided more than $6 billion in financing to renovate and build more than 140,000 apartments and homes.”

The New Domino would cost more than $400,000 per apartment (though the cost of the project also includes retail and community facilities). The other projects average out to about $43,000 per unit.

As for CPCR, it has constructed more than 1100 units in 30 development projects. How many market-rate units? Susan M. Pollock, CPCR Senior VP responded that CPCR “has completed new construction market rate housing developments in south Park Slope and in Harlem, and is in construction on two projects in Prospect Heights.”

The Park Slope project is two buildings on 16th Street between Fifth and Sixth Avenues with eight apartments each. CPCR calls it “a unique Infill Housing Model--an efficient, cost effective prototype for affordable housing throughout the City.”

That may be so, but it's on a different scale from the New Domino.

Site boundaries

The project would be on two sites. The main site, the waterfront site, is bounded by the East River on the west, Kent Avenue on the east, South 5th Street on the south and Grand Street on the north.

An upland site, east of Kent Avenue in a former parking lot, is bounded by Kent Avenue on the west, Wythe Avenue on the east, South 4th Street on the south and South 3rd Street on the north.

It is now an industrial and warehouse area, with just the barest sign of gentrification--a dance studio along with grittier neighbors on Kent Avenue, which is the closest thing to a truck route in the neighborhood.



Affordable housing

The 30% affordable goal is admirable--it aims to produce housing for a lower-income range than that at Atlantic Yards and many other projects--but it also should be seen in context. Under the emerging revision of the 421-a tax break, 20% affordable housing would be required. And the developer gets a density bonus for providing affordable housing, as well.

CPC’s Michael Lappin said, “We intend to provide more affordable housing than is required by the Greenpoint-Williamsburg Rezoning regulations, and we will build it throughout the complex on both the upland and waterfront parcels.” So that counts for greater responsiveness to community needs.

Pollock explained, “We estimate that approximately 100 units would be for families who are making as little as $21,000 per year [30% of Area Median Income, or AMI]; approximately 100 units would be for seniors making 50 percent of AMI; approximately 100 units would be available to middle-income homeowners [$90,000 according to the New York Sun], and the balance would be set aside for households earning about $42,000 per year [60% of AMI].”

That would mean 500+ units, at least 75% of the affordable housing, for those at 60% of AMI or less; of the Atlantic Yards affordable housing, by contrast, 40% would be for households at 60% of AMI or less. (Then again, Atlantic Yards would be 35% affordable housing if you take 2250 rentals out of 6430 units. If you add the promised 200 affordable for-sale units, promised but not memorialized in any document, nor with any AMI attached, the percentage would go up to 38%.)

But with affordable housing, the devil is in the details. Where’s the money coming from? “CPCR's intention is to finance the affordable units using widely available subsidies and incentives,” Pollock stated.

CPC has also said it would build the affordable housing first--another contrast to Atlantic Yards, where the bulk would come later in the project, and could face significant delays.

But the fundamental question, one city regulators have been loath to examine, is this: how much subsidy would be provided for each affordable unit, and how does that compare to other projects? What's the bang for the buck?

Last best hope?

El Puente’s Luis Garden Acosta said, according to the Sun, that while some were unhappy with the project’s density, CPC "really has demonstrated a keen sensitivity that I haven't found often in people who are only interested in market development."

"It is the last, best hope for affordable housing in our community," he said.

So that sensitivity may be to creating affordable housing that is truly affordable. But what’s the tradeoff for the "last, best hope"?

One tradeoff might be indirect residential displacement--people who currently live in unregulated apartments nearby who get forced out by rising rents. It's a decent bet that the environmental review will draw the same conclusions as did the review for Atlantic Yards, that the gentrification process is ongoing so it's wrong to blame gentrification on this project.

(Note the significant rent burden on the nearby South Side, which has a large Latino population and many old tenements but has been punctuated by new luxury construction. Graphic from Gentrification and Rezoning.)

Job creation

The development would create about 550 permanent jobs in the retail and commercial sectors, and in building operations, according to the developer's press release.

Interestingly, the developer has not promised a specific number of construction-related jobs, even though there surely would be many. Perhaps that’s because they haven’t promised union jobs.

While I couldn't find anything on CPCR's record, Katan has a track record of using non-union labor. (Forest City Ratner uses union labor.)

The Katan Group

With CPCR in the lead, there's been little mention of co-investor Isaac Katan and The Katan Group, which has built several projects on Fourth Avenue and in the South Slope, and not endeared itself to the neighborhood. Last year, the Brooklyn Downtown Star reported:
Harris was speaking only about the property on 184 15th Street, a site where the notorious and well-reviled developer Isaac Katan is proposing to construct a 12-story luxury condominium tower.

That building was rebuffed, but a ten-story building under construction at 162 16th Street just west of Fifth Avenue (right), based on development rights from several lots before the neighborhood was downzoned, stands out like, well, a Williamsburg "finger building."

(More vitriol here. DCP, in the rezoning, stated, As market demand for housing within the desirable Park Slope neighborhood extends farther south, however, several out-of-scale nine to fourteen-story tower developments have been proposed that would be inconsistent with the neighborhood’s low-rise, rowhouse character.)

Whether or not the criticism of Katan is deserved, it’s interesting, at least, that CPCR has allied with Katan. I asked what percentage of the money Katan put up. Pollock responded with a non-answer: “The Katan Group is an equity partner in Refinery LLC. CPCR has sole decision making responsibility.”

Still, it raises an issue: a for-profit subsidiary of a nonprofit, like CPCR, may have lower profit goals than an investor trying to maximize return. So there may be pressure to build more units and build taller to deliver the (unannounced) return the investor needs, even if the decisions are being made by CPCR.

“Community Preservation Corporation doesn’t care about this community,” Eisenberg told the Brooklyn Rail. “I believe they are using their non-profit status to further their for-profit venture.” That's unclear, but the CPC/Katan deal deserves more scrutiny.

Preservation issues

The 11-story main Domino refinery (1883) will be preserved (and likely landmarked), requiring extensive structural changes to transform it into retail, housing, and community/cultural facilities, the developer has balked at keeping two other buildings preservationists value, the Adant House (right; photo by Bob Guskind/Gowanus Lounge) and has made no promises yet regarding the famous Domino Sugar sign.

That portends a battle before the Landmarks Preservation Commission, with affordable housing advocates opposing any measure that would reduce affordable housing. It's an understandable impulse, but surely the area's infrastructure capacity--how many people can fit on the increasingly-crowded L train?--should be considered as well.

The Waterfront Preservation Alliance commented:
In both cases, these very historic structures could be incorporated into the design without compromising bulk, density or housing units (affordable or otherwise), and with only minimal impact on the proposed public open space. The plan as proposed now would leave the refinery as a relic of the past, completely unintegrated into the new development.

Perhaps, but including the historic structures surely would cost more. Pollock told NY 1: "We think most of it is impossible to be used adaptively for any economically feasible benefit." Will a closer look at the costs emerge?

Open space promise

From the press release:
A five-block waterfront esplanade will open the river to all, with welcoming streetscapes and a connection to Grand Ferry Park. Attractive view corridors and public connections to the waterfront will be created at all five currently blocked-off streets leading from the community to the waterfront. Mr. Lappin said, “The New Domino is expected to become Williamsburg’s central public gathering place with views of Manhattan and New York Harbor.”

After visiting the site for a press conference, Dennis Holt pointed out in the Brooklyn Eagle:
One thing that became clear is that the Domino site is the most prominent part of the Williamsburg waterfront. Looking north and south from the site, the waterfront fades out of sight, clear proof if ever needed that the East River is anything but straight.

However, because the site is on the south side of Williamsburg, the "central public gathering place" claim is arguable, given the recent opening of the 7.5-acre East River State Park, nearly twice as large and closer to the neighborhood's population and retail/nightlife center (though increasing density likely will expand street life).

Also, the main segment of open space would be directly behind the refinery rather than extending to the street, as with the state park. Then again, if the historic building incorporates community facilities, it might be the gateway to open space rather than a barrier. (Regarding AY, BrooklynSpeaks points out the open space would feel private.)

(Note comment below on how the open space is appropriately sited.)

The press release also states:
The conceptual design by Rafael Viñoly Architects PC restores visual and physical access to the waterfront along each of the upland streets leading to the River – access which had been closed off to the public for more than a century – and offers a spectacular addition to the Brooklyn skyline.

The access had been closed off because Brooklyn had a sugar industry for more than a century—a reasonable tradeoff.

DCP unaware?

A 7/1/04 New York Times article headlined Developers Known for Residential Work Buy Domino Sugar Plant on Brooklyn Waterfront, pointed toward the property’s likely fate but found DCP not yet on board:
In August, city officials said they were committed to finding an industrial reuse for the site. ''We're not contemplating a rezoning for this site,'' Regina Myer, the Brooklyn director for the Planning Department, said yesterday. ''We're focusing all of our efforts on the rezoning to the north.''

Things sure have changed.

Goals and objectives

According to the Draft Scope, the project goals are not about profits--or tradeoffs:
PROJECT GOALS AND OBJECTIVES
Consistent with the abovementioned recently adopted zoning changes in the area of the Williamsburg waterfront and in keeping with the mission of CPC Resources, the proposed project seeks to meet the following objectives:
• Creation of a substantial amount of affordable housing with a high quality design;
• Redevelopment of a former waterfront industrial site into an economically integrated mix of residential, retail/commercial, and community facility uses consistent with the redevelopment of nearby waterfront sites to the north and south and complementary to the existing neighborhood;
• Creation of physical and visual access to the waterfront, including a substantial amount of public open space and a linkage to the existing Grand Ferry Park to the north of the project site; and
• Reuse of the three buildings comprising the structure known as the Refinery building.


The developers also request that one nearby block and portions of two blocks (designated by light dotted line) be rezoned from heavy industrial use to light industrial and commercial uses, more compatible with adjoining residential districts.

The Draft Scope states:
For example, M1-2 districts require that industrial activity be enclosed, which is appropriate for industrial areas in proximity to residential uses. New industrial uses permitted under the proposed M1-2 zoning would be compatible with the nearby residences and noxious uses would be prevented from located on these blocks.


Two of the current lots are waste transfer stations; it's understandable that a developer selling million-dollar condos might not want to have more noxious neighbors. But it's a sign of the tension between historical manufacturing/industrial uses and the seemingly inexhaustible (but ultimately fickle?) market for high-end housing.

In the Eagle, Holt writes:
The fact that the developers expect to spend more than one billion dollars to get all this done is an indication that this isn’t going to be a haphazard piece of work.


That's an echo of Mayor Mike Bloomberg's 1/23/04 statement that Atlantic Yards developer Bruce Ratner had to raise $2.5 billion.

The developers in Williamsburg might spend more than a billion bucks, but how much would they put up themselves? How much would come from the public coffers, and would that be a good deal, given the tradeoffs? More details surely will emerge.

2 comments:

  1. This piece is impressively detailed and a great synthesis of the available information. My fear with Domino is that it implies that the 2004 rezoning, which promised to save manufacturing by leaving the domino site and others as M-1 is not worth the paper that it's written on and if this developer driven zoning change goes through then we're back to the situation where land sells at inflated prices under the assumption that a variance or site specific rezoning is available for any parcel.

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  2. The waterside public space is exactly where the public would want to be. In terms of it being inviting to the public, the encouraged public spaces fronting along the waterways of the city are being connected with each other as they are built and the public understands and delights in the convention that ever- augmented segments of the waterfront are publicly accessible. The public space needs to be on the waterfront side of the project in order to achieve the goal of continuously connected publicly accessible waterfront. The waterfront space associated with this project should get high marks for accessibility and it’s potentially very inviting nature. (Yes: The Atlantic Yards public space design is exceptionably poor.)

    Projects that front waterfront and large parks, like for instance the Trump and nearby development on the upper west side of Manhattan can deal with density in an ameliorated and much less oppressive way. Waterfront density, if done well, can also be thought of sharing the amenity of the city’s waterfront more broadly.

    Lastly, there is a critical difference in comparing the density of this (less dense) plan with the density of the Atlantic Yards plan. This plan is at the “ask” stage. The remarkable thing about the density of the Atlantic Yards project is not so much the absurdly inappropriate density that Ratner “asked” for, it is the absurdly inappropriate density with which some of those in government seem willing to actually proceed.

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