Skip to main content

Despite announced two-year timetable to replace Carlton Avenue Bridge, contract gives FCR three years (and maybe more)

The Carlton Avenue Bridge, closed on 1/23/08 and currently half-demolished, was supposed to to be closed two years for reconstruction.

However, the contract for bridge work--which I obtained via a Freedom of Information Law request--gives developer Forest City Ratner three years before penalties kick in, and even longer in case of unavoidable delays. (Excerpt below.)

That three-year window has never been made public, as far as I know, and I got only a cursory explanation of why it was allowed.

“We negotiated an agreement with FCR which met our mutual needs," New York City Department of Transportation (DOT) spokesman Seth Solomonow told me. "The project end-date does not preclude the possibility of earlier completion.”

That's true, but it doesn't explain why no one announced that 36 months might be an end-date.

Moreover, as I describe below, "unavoidable delays" could extend the deadline to 60 months, or five years, to finish the job, without penalty--and loose contract language could stretch that deadline even more.

(Photo by Jonathan Barkey. Click on all graphics to enlarge.)

Reaction: "completely unacceptable"

I informed Terry Urban, co-chair of the Council of Brooklyn Neighborhoods, a plaintiff in the lawsuit challenging the AY environmental review, of the deadline and asked for comment. "It is completely unacceptable that the DOT gave Forest City Ratner three years, plus possible extensions, to re-open the Carlton Avenue Bridge, while representing to the electeds and the community that the work would only take two years," she said.

"But it is shocking that the ESDC [Empire State Development Corporation] represented to the appellate court that the work would be completed in two years, although as the lead agency on the project, it was unquestionably aware that the DOT contract gave FCR three years," she added. "Now work on the bridge has completely halted, without explanation or a restart date, and it is clear that there is no government authority with the will or desire to protect the community from Forest City Ratner."

Two-year estimate

The two-year estimate was in the Final Environmental Impact Statement (p. 17-23 of the Construction Impacts chapter, above) produced by the ESDC. And was cited in an ESDC Memorandum of Law (p. 13, PDF) filed 1/25/08 in the case challenging the Atlantic Yards environmental review.

The DOT says the work is "scheduled for completion January 2010."

No timetable

No timetable, however, was provided in the community notice (right) the ESDC issued last year regarding the closure and reconstruction of the bridge.

Maybe they were on to something.

Asked to comment, City Council Member Letitia James, who lives north of the bridge in Clinton Hill, contended, "The reconstruction of the Carlton Avenue Bridge is related to the now doomed Atlantic Yards project. The reconstruction of the bridge was not necessary. The bridge provided me and others safe passage to Prospect Heights and Park Slope. Governor [David] Paterson should return the bridge to a state of good repair and reopen it immediately to the community."

I noted that the bridge reconstruction is a city, not a state project; James pointed out that the state has overall responsibility for Atlantic Yards. The ESDC, of course, says reconstruction was necessary to enable a new railyard in the project. Then again, if there's no project, there's no need for a new railyard.

Contract questions

In a legal document filed 1/25/08, Forest City Ratner attorney Jeffrey Braun stated:
The Carlton Avenue bridge is being closed and dismantled in accordance with a contract between FCRC and the City of New York. FCRC is contractually obligated to the City to rebuild the bridge...

After I filed a FOIL request, the DOT provided the Carlton Avenue Bridge Construction Agreement. (First page at right.) It allows for up to 36 months for completion, with extensions possible for "unavoidable delay."

It was signed 12/17/07, a year and nine days after the ESDC approved the project. Similarly, the State Funding Agreement for the project, signed in September 2007, provides far more lenient deadlines than in project documents approved nine months earlier.

Penalties

What are the penalties if the bridge isn't rebuilt? The document states:
Subject to Unavoidable Delay, in the event that Developer fails to Substantially Complete Developer Work by the Date of Substantial Completion, Developer shall pay DOT liquidated damages of ten thousand dollars ($10,000) per day until the Bridge is Substantially Complete...

However, those damages might not kick in after three years.

"Unavoidable delay" and a five-year limit

That's because damages could be precluded by an "unavoidable delay," defined as:
[A]ny circumstances beyond the reasonable control of the Developer, including... the pendency of litigation challenging the approvals for, or seeking to enjoin the development of, the Atlantic Yards project (provided that Developer establishes to DOT that such litigation prevents Developer from proceeding with the Developer Work)...
Nothwithst
anding the foregoing, Developer shall be responsible for Substantially Completing the Bridge no later than sixty (60) months from the date of this Agreement, regardless of any such unavoidable delay, unless the unavoidable delay directly and specifically precludes the Developer from Substantially Completing the Bridge. Developer shall make best efforts to take all necessary and reasonable steps, including legal action, to overcome any unavoidable delay in the Atlantic Yards Project required to Substantially Complete the Bridge.
(Emphasis added)

In other words, if "unavoidable delays" extend past the three-year deadline, the developer would have only a two-year grace period for such delays--unless the "unavoidable delays" are really, really unavoidable.

That strikes me as giving the developer a lot of leeway.

Unanswered questions

When I posed questions to the ESDC, I was told to ask DOT. The DOT's response, as noted above, was brief.

I asked both ESDC and DOT why the more generous deadline wasn't announced, and whether the there's any current estimate on when the bridge would be reconstructed. No answers were provided.

Target date, "probabilistic date"

Another unanswered question I posed: why aren't such projects announced as, for example, "expected two years, with up to three years contractually possible"?

After all, when pressed by Paterson about Ground Zero, Port Authority of NY/NJ Chairman Christopher Ward, according to the Times, presented two dates for each project: a target date and a “probabilistic” date, based on computer analysis of all the many random things that might go wrong.

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…