Skip to main content

Posts

Showing posts from February, 2008

Atlantic Yards opponents gain procedural edge in court, with arguments delayed until September

The potential timetable for building the Atlantic Yards arena just got pushed back a bit more, with the 2011-12 season now a more likely best-case scenario.

Without explanation, a state appellate court has rejected the request by the Empire State Development Corporation (ESDC) and developer Forest City Ratner (FCR) that the appellate arguments in the case challenging the Atlantic Yards environmental review be heard before this summer. (The decision, dated Feb. 26, was received today by the parties.)

Instead, the five-judge panel of the Appellate Division, First Department, ordered the petitioners, whose case was denied by Judge Joan Madden in a ruling January 11, to file their legal papers by July 7, in anticipation of the court hearing oral arguments in the September Term.

The defendants, as expected, did see the court deny the petitioners' motion for a preliminary injunction to block the demolition of the Carlton Avenue Bridge.

But the court's timetable for the appeal represent…

The city's pension funds finally take on "predatory equity"

When in November, I reported on a conference where participants discussed the practice of "predatory equity"--investment funds making speculative investments in rental housing, intending to raise rents significantly--I was astonished that only the grassroots policy publication City Limits had previously covered the story.

After all, housing advocates had discovered that city pension funds had a stake in such investment funds. Politicians like City Council Member Letitia James weren't making a huge case about it, either, apparently waiting to get New York City Comptroller William C. Thompson and the city pension funds on board.

New policies

Yesterday, the above parties, as well as other elected officials and housing advocates held a press conference in which they announced a new residential real estate investment principle:

* Engaging building management to ensure fair treatment of tenants, especially in instances when ownership changes;

* Creating an “investment opt-o…

The change in the Senate and the stakes for housing

The special election Tuesday to elect a State Senator in the 48th Senatorial district reduced the Republicans margin to 32-30, with several vulnerable Republicans expected to face tough competition in November. Portrayed in the press as a victory for Gov. Eliot Spitzer--and it is--the ramifications for New York City may be felt most sharply in the area of housing.

"The election today may change how we look at the rent laws," Manhattan Borough President Scott Stringer said at a housing panel at the New-York Historic Society on Tuesday, when the results of the election had not yet surfaced.

Since 1971, the legislature, not the City Council, has held the most power over rent regulation, thanks to the Urstadt Law. A Democratic legislature, with a Democratic governor, will be far more receptive to maintaining and strengthening rent protections, and restoring "home rule."

While rent regulations are always an issue for debate, it's pretty hard to argue against, for exam…

AY affordable housing a myth? Better to call it delayed

Like a game of "telephone," in which a message gets mangled as it gets passed from one party to another, the Atlantic Yards affordable housing story grows ever murkier.

The New York Observer's summary yesterday:
Federal funding crunch means Forest City Ratner won't be able to build 3,000 affordable-housing units at Atlantic Yards, fulfilling the prophesies of its opponents. [Brooklyn Paper]

But the Brooklyn Paper article reported only that a federal cash crunch threatens the promised 2250 units of affordable housing, adding some more voices to a story I reported a week ago.

That doesn't mean the promised affordable housing is dead. After all, a Democratic administration in Washington just might allow a state like New York much more capacity to authorize tax-exempt bonds.

The value of delay

And the clogged funding pipeline may make the delay caused by lawsuits that much more palatable, no matter how much Forest City Ratner protests. (Forest City's priority is the a…

Driving Miss Brooklyn, a troubled Brooklyn condo market?

Apparently Forest City Ratner's decision to shift flagship Atlantic Yards tower Miss Brooklyn from condos to office space was based on discernible trends in the industry. (Then again, things can change, given that Miss Brooklyn was supposed to be office space when announced in December 2003.)

In yesterday's New York Sun, real estate columnist Michael Stoler suggested that many in the real estate community see a growing divide between the luxury market in Manhattan and some of the more speculative projects in fringe areas.

The Atlantic Yards project wouldn't exactly be located in a "fringe area," but at least one Brooklyn developer offered some general cautions:
A principal of Troutbrook Company, Marc Freud, said: "The past five years has been the era of ever increasing prices of condominiums in downtown Brooklyn, DUMBO, and many parts of Williamsburg. That era has now ended, with the for-sale condos in the 750- to 1,000-square-foot mark stalled, and pricing dec…

The UNITY plan expands, and will be up for discussion

The UNITY plan for the Metropolitan Transportation Authority's Vanderbilt Yard was unveiled in September, the project web site was re-launched in mid-January, and there's a public meeting Saturday, from 10 a.m. to 2 p.m., to update people and seek further input on UNITY.

The discussion will broaden to more of the Atlantic Yards footprint rather than just the 8.5-acre Vanderbilt Yard.

Indeed, when the graphic at right was unveiled, it raised some questions. Why was the triangular plot of land west of Fifth Avenue included and planned for park space, given that it's not part of the yard.

Urban planner Tom Angotti of Hunter College, one of the designers of UNITY, responded, "As a practical matter, Forest City Ratner owns most of the land and much of it is vacant. Its location is important, and leaving it out of the plan would lead to questions about what to do with it."

That, of course, would require the developer to both abandon its project and, if so, to give up piece…

So, why didn't Forest City Ratner announce the cut planned for Miss Brooklyn?

It seems that the flagship Atlantic Yards tower Miss Brooklyn has been cut in bulk, from 908,144 square feet to either 528,000 square feet or, perhaps, with the addition of a hotel of 164,652 square feet, to 692,652 square feet. (It was originally announced at 1.1 million square feet.)

A reduction in some bulk was inevitable, given that the building, once projected to be 620 feet tall, was cut, as the project was approved, to be a sliver below the 512-foot Williamsburgh Savings Bank building.

So why did Forest City Ratner tell investors but not the public? FCR is smart at public relations, so its leaders had to be waiting. And what might they have been waiting for? I can only speculate:

Perhaps the building would be even shorter than the anticipated 511 feet, and would no longer block the bank's iconic clock.

Perhaps the developer was simply waiting until construction could begin, with the lawsuits cleared. A reduction in bulk might be seen as magnanimous.

Given that a less bulky build…

Democracy Now? Ratner Plays Hardball When It Counts

I threaded together some reporting and commentary I've done for the blog into a piece for this week's Brooklyn Downtown Star, headlined Democracy Now? Ratner Plays Hardball When It Counts.

It covers the Atlantic Yards gag order, Michael Ratner's political contributions, Forest City Ratner's contribution to the Democratic Assembly Campaign Committee's Housekeeping account, and the New York Times's editorial standoffishness.

FCR official: no such thing as too much sharing of information

From today's New York Observer article, Blame It on Eminent Domain! Ratner Pays D'Amato, on Forest City Ratner lobbying, which breaks the news that the firm had hired former Sen. Al D'Amato to lobby [corrected] against anti-eminent domain legislation in Washington:
In a statement, Forest City said it strives for transparency with its lobbying reports, suggesting an explanation for the high numbers. “When it comes to lobbying reports, we definitely err on the side of disclosure, including even law firms that do work for us,” Forest City spokesman Loren Riegelhaupt said in a statement. “When it comes to sharing information with the public and governmental bodies, there’s no such thing as too much, as far as we are concerned.

OK, then, how big would Miss Brooklyn be? And why no comment on the slush fund story?

AY scaleback? Well, at least Miss Brooklyn, apparently

As I wrote yesterday, the evidence from the transcript of Forest City Enterprises' "Investor Day" last October suggested that "the size of the project may have been reduced" and "the flagship Miss Brooklyn tower has apparently been trimmed." But I didn't put them in the headline or lead sections because the evidence was murky.

But the potential scaleback was apparently the news of the day, as Brownstoner declared in a headline, Atlantic Yards Scope Trimmed; Funding Still Fuzzy and commenters piled on, suggesting that the affordable housing would be cut, even though a company executive said in the transcript that "we are committed to creating [the 2250 units] over the life of the project."

Miss Brooklyn cut

And if Miss Brooklyn no longer would contain condos, as Forest City Ratner officials seem to have confirmed, part of a reduction in total bulk as well as a tradeoff for office space. The loss of some 435,000 square feet of condo space sug…

Yassky come lately on AY costs, which still need a thorough accounting

Term-limited Brooklyn City Council member David Yassky, running for the citywide position of Comptroller, has decided to target subsidies for Atlantic Yards, part of a tougher line he's shown lately regarding the project.

Among the tactics he recommends in an article in this week's Gotham Gazette is ending corporate tax loopholes:
Of course, the single biggest example of corporate welfare is the proposed Atlantic Yards development. The Bloomberg administration has agreed to give the project's developer at least $100 million in direct subsidies, plus another $400 million to $500 million in tax breaks. In the current financial climate, this handout is impossible to justify.

While some significant increases in subsidies--including a doubling of the city's contribution and the "Atlantic Yards carve-out" for 421-a benefits--have surfaced in the past year, there was a longer list worthy of concern before that.

And Yassky did not raise the issue of AY subsidies in his …

LeBron James to the Brooklyn Nets? A marketing bonanza, both ways

In an article Monday headlined Jay-Z, James relationship should worry Cavs, Adrian Wojnarowski, the NBA columnist for Yahoo! Sports, suggests that the hip-hop star, a part owner of the New Jersey Nets, may be manuevering to lure the superstar LeBron James from the Cleveland Cavaliers once he can opt out of his contract in the summer of 2010.

That would be the right before the fall when the Nets, as announced, intend to move to Brooklyn, thought construction schedules suggest an arena opening in early 2011 is a best-case scenario.

Wojnarowski noted that James wants to become "sport’s first billionaire athlete," hence the appeal of a larger platform. Says noted sports marketer Sonny Vaccaro, "Jay-Z is the one person that I can put in a parallel universe with LeBron from where they started and where they are now."

He suggests James will be on a "marketing roll" after he leads the United States basketball team to victory this year in the Olympics.

No tampering

Two…

Forest City to investors: more AY office space, slowed railyard, less upfront cash than city & state

Last October 9, Forest City Enterprises (FCE) held an Investor Day meeting at the New York Times Tower, built by subsidiary Forest City Ratner (FCR) in tandem with the New York Times Company. The developer shared several important pieces of news about the Atlantic Yards project that have not been aired publicly.

Among the highlights, thanks to the transcript (for sale):
The developer has apparently signed funding agreements with the city and state, despite reports that it has not done so
It would take 4½-5 years to build a new railyard, not 3½ years, as promised in the Atlantic Yards environmental review
The size of the project may have been reduced
The flagship Miss Brooklyn tower has apparently been trimmed, and would have more office space
The number of planned arena suites has been reduced from 170 to 130
Additional arena sponsorships were supposed to be announced in January, but that didn’t come to pass
The developer has invested $250 million in the $4 billion project, its largest single…

"Bulldozed": on the Kelo eminent domain case and beyond

Despite the title, Carla T. Main’s recent book Bulldozed: “Kelo,” Eminent Domain, and the American Lust for Land tells the story of eminent domain by focusing on a particularly heavy-handed (but little-known) case in Freeport, TX (population approx. 13,000), a Gulf Coast city some 50 miles south of Houston. Freeport officials wanted to take waterfront property from the salt-of-the-earth Gore family operating a longtime shrimp business to create a low-risk deal for a wealthy developer to build a private marina. The Gores fought back, fiercely, with more resources than the typical eminent domain plaintiff, and the story includes numerous twists and turns.

The case is striking enough that even the liberal/populist Texas Observer, which, in its review says Main "relentlessly hawks her mantra" against eminent domain and criticizes her for black-and-white portrayals of the antagonists, considers the Gores are sympathetic characters, albeit unusual among those faced with eminent dom…

HDC head curiously unconcerned about AY funding availability

From yesterday's New York Post, an article headlined ATLANTIC YARD$TICK FOR POOR HOUSING, in its entirety:
A federal-funding shortfall that could hamper affordable housing projects in the city likely won't affect the Atlantic Yards project, a top official said yesterday.

"Given the scale of the project . . . we're not concerned that the money won't be there," said Marc Jahr, president of the city's Housing Development Corporation.

That's curious.

Less than two weeks ago, Jahr wrote in City Hall News, as I reported Friday:
It is only February, but over $960 million in private activity bonds are required for affordable housing deals in HDC’s 2008 pipeline alone, while New York State overall has a pipeline of more than $6 billion. Unfortunately, however, New York State’s yearly allocation of cap is only around $1.6 billion.

And, as I reported, he earlier this month told the Bond Buyer, "It's a pity to have good affordable housing projects in a city t…

The "spirit of the Times," or why there's no editorial criticism of Ratner

Maybe you were wondering why the New York Times editorial board, despite being capable of skepticism about development puffery, has produced confused and lame editorials supporting Atlantic Yards and remained (I speculate) in the gridlock of silence, failing to take a stand pro or con when a questionable process finally reached the Public Authorities Control Board at the end of 2006.

Well, the parent New York Times Company partnered with Atlantic Yards developer Forest City Ratner on the new Times Tower headquarters on Eighth Avenue, and the Times even agreed to guarantee a loan, as Editor and Publisher reported last year.

While that doesn't mean the business relationship influences coverage--though I've long argued that obligates the Times to do a better job--the editorial page is not so insulated. The Times itself has acknowledged publicly that its publisher influences the editorials.

And even clearer explanation of the connection between boss and doctrine came from Editorial B…

AY affordable housing jeopardized not by lawsuits but by funding "crisis"

Forest City Ratner has heavily promoted the 2250 units of subsidized housing in the Atlantic Yards project, and that's been cited as a public use by two courts. However, there's no money available for it right now, more than a half year after a city official cited a "crisis" in the provision of affordable housing bonds.

In arguing for an expedited schedule to hear the appeal in the state lawsuit challenging the AY environmental review, the developer says resolution of the case would dampen uncertainty regarding arena financing and even would help build the project’s affordable housing, according to lawyer Jeffrey Braun.

Yes, the developer must start on the arena block as a whole to build the housing towers that would ring the arena. However, delay may be a silver lining for the housing component of Atlantic Yards. The city and state don’t have nearly enough capacity to allocate bonds for affordable housing projects, an issue highlighted last November by the Independen…