Skip to main content

A blighted gas station? Or an increasingly valuable piece of property?

The number of gas stations in the five boroughs is "steadily disappearing," as developers find the sites much more lucrative for housing and retail, the New York Times reported in a July 4 article headlined Shops and Condos Crowding Out Gas Stations.

The phenomenon raises questions about why exactly a gas station (right) at Dean Street and Flatbush Avenue in the Atlantic Yards footprint should be considered underutilized and thus blighted, according to the Empire State Development Corporation (ESDC). The ESDC's Atlantic Yards blight study also makes the dubious claim that mild sidewalk cracks and graffiti on a now-demolished adjoining building also constitute evidence of blight. (See Tracy Collins' map for location of gas station.)

Developer Forest City Ratner owns the property, paying $5.42 million for it, according to a document unearthed by Assemblyman Jim Brennan's lawsuit. (Property Shark says $5.2 million and that the transaction occurred on 3/1/06.)

The designation of blight might justify the invocation of eminent domain to terminate the lease of longstanding gas station operator John Tsao and speed construction of the project, which at this spot would rise a tower some four times the height of the eight-story apartment building behind the station.

Then again, it's not at all clear that eminent domain would be necessary; according to a 1/1/06 article in the Brooklyn Paper, Tsao once got a buyout offer from the developer, even though he has no rights over the property he rents. I recently contacted Tsao, who would not comment for this article.

Something is likely afoot. Adjacent empty properties have been steadily demolished in recent months; the gas station property would stand to be next on the list, further isolating the two extant apartment buildings on Pacific Street behind the station, both of which have tenants in lawsuits challenging in the project.

Stations disappearing


The disappearance of gas stations is part of a trend. From September 2003 to February of this year, the city lost about 9 percent of its gas stations, according to the Times; Brooklyn was a close second to Manhattan in the rate of change, going from 529 gas stations to 468, an 11.5 percent dip. Some of the losses may be the result of consolidations, but others are the result of development.

As the Times reports:
These sites are attractive because they are frequently situated on busy corners and are large, typically covering 12,000 to 30,000 square feet. Zoning often allows for expansion, too.

(Photo of now-demolished buildings on Flatbush Avenue by Adrian Kinloch.)

A former BP Amoco station at 236-250 Atlantic Avenue at Adams Street (the exit from the Brooklyn Bridge) in Brooklyn might have brought $1 million to $2 million as a gas station but instead sold for $13 million, according to the broker quoted in the Times. (Property Shark says $9.75 million.) The $13 million figure works out to about $456 per square foot. By contrast, Forest City Ratner paid $5.42 million for the Flatbush Avenue lot covering 18,574 square feet. That's $292 per square foot.

Forest City may face additional costs at the site. On the other hand, the developer gains a zoning override--essentially,, a private rezoning--from the Empire State Development Corporation (ESDC) that vastly increases allowable development rights.

Indeed, while the Blight Study conducted for the ESDC concludes that the lot can accommodate up to 74,296 square feet of development, Building 2, planned for the site (and a larger footprint beyond), would rise 322 feet and involve more than 380,000 square feet.

Underutilization

As the article suggests, designations of blight are hardly needed to overcome the "underutilization" of a gas station; the free market seems to be taking care of that issue.

Then again, there's also a need for such low-rise structures. At the 5/3/07 court hearing in the challenge to the Atlantic Yards environmental review, plaintiffs' attorney Jeff Baker called the state’s criterion of underutilization “a fairly unique concept,” noting it lacked any analysis of how the property is being used.
(At right, looking along Flatbush Avenue toward Grand Army Plaza)

The gas station lot, he said, is considered “dramatically underutilized,” but now is occupied by “a highly successful gas station.” There’s nothing in the law, he said, “that says all buildings must be built to the maximum size possible.” The ESDC’s method, he argued, “is, per se, arbitrary and capricious.”

ESDC blight report

In its Blight Study, the ESDC offered this assessment of Block 1127, Lot 1:

(All emphases added)
Unsanitary and Unsafe Conditions
The structures located on lot 1 itself appear to be in fair condition. However, the façade on the building east of lot 1 (lot 56), which faces the gas station and parking area, is in poor condition. As shown in Photograph B, the façade has been plastered over and is painted with graffiti. The plaster has crumbled in areas, exposing the underlying brick. In addition, as shown in Photographs C and D, portions of the lot’s asphalt surface are pot holed (Photograph C shows a drainage grate near the lot’s entrance that has sunk below grade) and areas of the sidewalk surrounding the lot are cracked and uneven.

Underutilization

As indicated above, lot 1 is in an R7A zoning district, with a C2-4 overlay and an FAR of 4.0. Although the 18,574 sf lot can accommodate up to 74,296 zsf of built space under current zoning, it hosts a one-story 1,913 gsf building, utilizing less than 3 percent of the lot’s development potential.

Environmental Concerns
The Phase I ESA identified known subsurface contamination on lot 1. The site is undergoing remediation within the jurisdiction of the New York State Department of Environmental Conservation Spills Program....


The DDDB response

Develop Don't Destroy Brooklyn's (DDDB) blight response counters that the ESDC overstated indications of deterioration and attributed a blighting influence to a separate property:
John Tsao has operated this first-class gas station and car repair shop for 31 years. His is a clean, attractive business, open 24/7, with a small convenience store out front. Prospect Heights residents with cars depend on John Tsao for the smooth functioning of their automotive lives. Should the FCR plan be realized, Prospect Heights will not have a single gas station or auto repair shop left...

The main Lot 1 blight complaint raised in FCR’s report deals with the lot next door – the demolished 461 Dean Street, a.k.a. Lot 56 (Blight Study Photograph 1127-B-1): “the façade has been plastered over and is painted with graffiti. The plaster has crumbled in areas, exposing the underlying brick.” Why does the Blight Study even mention this? FCR demolished 461 Dean St., Spring 2006: the alleged ‘blight’ vanished. Graffiti mentioned here and elsewhere in the Blight Study is of such a small amount as not to be noticeably different than any other neighborhood, particularly in the surrounding 1/2-mile radius. Again, most of the heavy graffiti in the study area is on MTA owned property and has been negligently left alone.

FCR
[sic; actually it's the ESDC] mentions that “portions of the lot’s asphalt surface are pot holed.” (Blight Study p. C-70 & 73) These so-called potholes are in fact asphalt patches applied to holes drilled by Roux Associates in the course of making soil sample borings for AKRF when FCR was purchasing the property. It is not evident as asserted in Photo 1127-1-D that the entry drainage grate has sunk below grade. Likewise, the concrete sidewalk has cracks so very modest and so easily fixed, they do not merit “blight characteristic” status.

New York City, again, has been lax about enforcing NYC sidewalk maintenance laws. This scrupulously well-maintained Mobil station, is needed by motorists on heavily trafficked Flatbush Avenue and residents whose cars are out of tune and out of gas.

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…