Monday, September 15, 2008

FCR to CB 8: evasive and disingenuous on project timing, jobs, bridge opening

Forest City Ratner's announcement in May that Atlantic Yards was moving ahead generated several questions from Brooklyn Community Board 8, which got back a response that is often evasive, vague, and disingenuous.

According to the letter, sent July 18, the developer is unwilling to commit to a start date for Phase 2 nor to commit to opening the arena only when reconstruction of the adjacent Sixth Avenue bridge is complete. The developer offers a highly-qualified pledge for interim open space and, in asserting project’s benefits, likely overestimates the number of permanent jobs in Phase 1 by a factor of two.

The letter, from Senior VP Scott Cantone, was sent to CB8 Chairman Robert Matthews and cc’d to various public and elected officials. CB8 has not yet publicly responded.

(I've added bolding for emphasis in several places.)


The first question involved the timetable:
1. Besides signing an anchor tenant for the B1 building, what other dependencies must be met for the remaining buildings in Phase 1 to be built... What is the timetable for resolving these dependences?

The response:
The completion of buildings in Phase 1... is dependent on factors typical to any large-scale development, such as:
  • completing acquisition of the site
  • finalizing project documentation and agreements with the Empire State Development Corporation
  • securing financing; and
  • finalizing agreements with the City of New York for affordable housing programming.
We are progressing in all these areas, and intend to begin construction on the building on the Arena Block according to the schedule outlined in the press a few weeks ago: The Arena and the first of the residential buildings are expected to be completed simultaneously. The next Arena Block residential building is expected to go into construction 6 months later, and the final residential building is expected to begin 6 months after that.

However, it is hardly typical that the acquisition of a site depends on eminent domain, which in this case has been contested in court. Also, the towers depend on the arena, and right now there’s no financing for the arena. That’s probably why Cantone did not pledge any start date.

What about Phase 2?

As I’ve reported, there’s no start date for Phase 2, and CB8 wanted to know more:
2. The City and State funding agreement don’t specify a deadline for the construction for Phase 2, but most of the public benefits associated with the project are dependent on Phase 2. Is Forest City planning to commit to a start date for Phase 2, and agree to remedies for the community if the start date is not achieved?

The response:
FCR intends to start Phase 2 as soon as possible. However, the tremendous public benefits that come immediately with Phase 1 should not be overlooked.

Having ignored the question, Cantone switched the subject and ignored the question of remedies:
The completion of Phase 1 will bring hundreds of affordable housing units for low- and middle-income families, representing 30% of all residential units constructed on the Arena Block. The Arena itself will be a major civic facility for Brooklyn. Furthermore, Phase 1 will generate over 3000 new, permanent jobs as well as significant new tax revenues for the City and State, and it will include significant public amenities, such as the Urban Room (which includes approximately 10,000 square feet of publicly accessible space) and the new entryway into the subway.

However, the Urban Room and subway issue would serve the arena and the buildings as much as any surrounding community, including that in CB 8. The Arena would not be “for Brooklyn” if it’s rented for $100,000, even if the developer, as per the Community Benefits Agreement, makes it available ten times a year for community groups. (FCR has since said the rental price would be lower.)

And the benefits would hardly come immediately if the developer has a 12+ years to build Phase 1 and there's no anchor tenant for Building 1.

3000 new permanent jobs?

Cantone’s pledge of 3000 new jobs is doubtful, so let’s do some math.

Building 1, with 650,000 square feet of office space, at 250 sf per job (the measure used by the city and state), could accommodate 2600 jobs. However, the New York City Economic Development Corporation (NYCEDC), in an analysis of an earlier configuration, calculated a 7 percent vacancy rate (182), which would mean 2418 jobs. NYCEDC also suggested that only 30 percent of the jobs would be new to New York, rather than moved from Manhattan. That would mean only 725 new office jobs at Atlantic Yards.

According to a memo from the Empire State Development Corporation, there would be 453 arena jobs; however, as the New York Observer reported in 2005, the arena jobs (400 in that article) would be subject to union rules and may be filled with current employees. Let’s estimate 60% new jobs from 453: 272.

According to the ESDC memo, there would be one building services job for every 20 units; at 1500 units (which represents 1.5 million square feet, the minimum over 12 years in City Funding Agreement), that means 75 building services jobs. At 2000 units, that would be 100 jobs.

Parking is 92 jobs at full buildout of 3670 spaces; but there would only be 2346 spaces in Phase 1; that same ratio, 63.9%, yields 59 jobs.

There would be 91,000 gsf of retail space in Phase 1; at 300 gsf per job, according to the ESDC memo, that means 303 jobs.

So my calculation for the total number of jobs for Phase 1 would be 1434 (725 + 272 + 75 + 59 + 303). There could be a few more building service jobs, potentially more new office jobs, and also some spinoff jobs, but for now, Cantone should be asked for details rather than taken on faith.

Worker numbers?

CB 8 asked:
3. Demolition of buildings in the Phase 2 site was claimed to have been necessary to create construction staging and worker parking areas during Phase 1. Now that only the arena and one building are going to be built in the first stage of Phase 1, how has your estimate of the peak number of workers at the site changed? What percentage of those workers are you now projecting will drive to the site?

(Note that CB8 only includes in its boundaries Phase 2.)

The response:
As mentioned above, the scope of Phase 1 has not changed from what was approved as part of ESDC’s General Project Plan. However, the schedule has been delayed approximately two years as a result of litigation. The number of construction workers on the site will remain generally the same as was disclosed in the Final Environmental Impact Statement (FEIS) for both Phase 1 and Phase 2.

Well, the scope may not have been changed, but the developer has said nothing about Site 5, the site now occupied by Modell’s and P.C. Richard. So “generally the same” may contain some leeway.

Staging needs

CB 8 asked:
4. Since the construction of B1 and the cluster buildings in Phase 1 will be delayed, how has your assessment of the amount of space required for staging changed? Are you considering the use of the areas of the Phase 1 site adjoining the arena and the first residential building for staging and worker parking instead of using some or all of the Phase 2 site? If the unbuilt areas of Phase 1 won’t be used for staging, how will the space be used?

Cantone replied:
The staging areas identified in the FEIS remain the same. The construction of both the Arena and the LIRRR railyard, which will be undertaken as part of Phase 1, requires the use of Block 1129 for staging. At the time the Arena opens, we anticipate a portion of the Phase 2 site will continue to be used for development, construction staging or other project uses to support the development of the platform over the LIRR new yard, the construction of the residential buildings, and the open space that is part of Phase 2.

He didn't mention that a significant portion of the Phase 2 site would be used for interim surface parking.

Buildings as buffer

CB 8 asked:
5. The Atlantic Yards FEIS refers to the buildings around the arena as a buffer for locating the arena in a residential neighborhood. With only one residential building slated to be complete at the time of the arena opening, that buffer will not be in place at that time. In addition, due to the changes in the construction timetable, the impact of the arena on the residential and commercial areas around the project, (including the arena’s radical swings from dormancy to intense activity), will no longer be compensated for by the residential high density of the ring buildings. The one residential building proposed to be complete at the time of the arena opening is roughly the same number of residential units as the number of units displaced b the project as a whole. Please detail how you plan to prevent the arena from affecting the residential and commercial areas around the project adversely during the extended buildout of the project.

Cantone responded:
In the event that any of the development sites that surround the Arena (Buildings 1-4) are not in construction by the time that the Arena open, FCRC will create temporary public open spaces between the Arena and the surrounding streets; however, we anticipate that construction of Phase 1 will be complete or underway at the time of the Arena opening.

The pledge for temporary open space seems iffy, given the broad scope of “in construction.” Even if there were temporary open space, it wouldn’t arrive until the arena opens, at least three years down the line.

Displacement issues

Cantone also took issue with the claim that the building would contain roughly the same number of residential units as the number displace:
This is factually incorrect. The proposed residential building will offer approximately 300 residential units.

He’s correct. Chapter 4 of the FEIS, Socioeconomic, states
The proposed project would directly displace 171 residential units housing an estimated 410 residents.

It also states:
[I]t was estimated that the study area contains approximately 2,929 households that are potentially at risk of indirect residential displacement.

However, the study doubts that the total is at risk from the project, citing ongoing gentrification, because new housing units could relieve market pressure, and because most of the at-risk households would be more than a half-mile away. I wrote in July 2006 that one of the reasons--that the housing would be similar--was bogus.

New open space?

CB 8 asked:
6. What is the open space plan for Phase 1 across the new timetable you have recently released. Will there be any open space added to the project in Phase 1 to compensate for the loss of the arena roof as open space?

Cantone repeated the answers about the Urban Room and temporary open space, adding:
As noted above, in the event that a development site on the Arena Block is not in construction or needed for other project purposes by the time the Arena is completed, FCRC will create temporary open spaces that will persist until such site is needed for development or construction activities.

Actually, Cantone first said that open space would be created if a development site is “in construction” but here he's added a broad qualifier: “needed for other project purposes.” That gives the developer a lot of leeway.

Bridges open?

Question 7 confirmed plans for indoor parking. The final question from CB 8 concerned bridges:
8. Will the Carlton Avenue and 6th Avenue bridges be complete and open when the arena is opened?

Cantone responded:
Both the Carlton Avenue and the 6th Avenue bridges are anticipated to be open when the Arena opens.

An ESDC spokesman told me last November, “Forest City Ratner tells us that while the arena might be able to open without the bridge in operation, the goal is to have the bridge open in coordination with the arena's opening."

Note that “anticipated” is a weasel word. The Carlton Avenue bridge is undergoing reconstruction and surely would be finished before the Sixth Avenue bridge is addressed. At the current timetable, the Sixth Avenue bridge should be open by early 2011, providing a good chunk of time before the basketball season begins in October--but there can always be snags.

Who's in charge?

Local public officials and community boards surely would not want the Sixth Ave bridge closed during an arena event, since the traffic problems could be ruinous. But Forest City Ratner certainly wouldn't want to miss an arena opening at the beginning of the basketball season: there are suites to sell and a naming rights contract to fulfill.

In that case, there might be significant tension between the interests of the developer and the interests of the public.

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