Skip to main content

What Forest City Ratner told Sheldon Silver (but not the public): affordable condos depend on "appropriate subsidy"

As I've written, the affordable rental units planned for Atlantic Yards are not guaranteed but rather dependent on available public subsidies.

The same goes for the affordable condos promised by developer Forest City Ratner upon project approval in 2006.

Though the developer did not mention such caveats in its public announcement, it did offer such caveats in a letter to Assembly Speaker Sheldon Silver that I recently obtained via a Freedom of Information Law (FOIL) request. Beyond that, the pledge has never been memorialized in project documents, despite a 2009 update to the Modified General Project Plan.

This is part of a pattern; as I wrote in June, the Empire State Development Corporation, while the Atlantic Yards project approached approval in December 2006, never revealed how project funding depended on scarce housing bonds, and Forest City Ratner's 2005 bid to the Metropolitan Transportation Authority ignored the need for such bonds to build the residential buildings.

Announcement in 2006

Upon approval by the Public Authorities Control Board (PACB) on 12/20/06, Forest City Ratner told the public:
As part of the affordable housing program, FCRC has already agreed to build 600 to 1,000 affordable home ownership units on or off site. Today, FCRC announced that it will seek to build at least 200 of these affordable home-owner units on site (they will be part of the proposed 6,430 units of housing already approved as part of the Atlantic Yards FEIS/GPP). FCRC will also seek to build the remaining affordable home-owner units as close to Atlantic Yards as possible. (The Community Benefits Agreement already calls for half of the proposed 4,500 rental units to be affordable and low-income, all of them on site.)

(Emphases added)

The letter to Silver

Developer Bruce Ratner was even more careful in his correspondence with Silver, the key vote among the three members of the PACB.

Ratner wrote:
As you know, FCRC has already agreed with ACORN to provide 2,250 affordable, rent stabilized units and an additional 600-1000 units of Affordable Home Ownership units, on or off site. FCRC will further commit to seek to build the affordable home ownership units as close to the Atlantic Yards site as possible, including but not limited to the following neighborhoods: Prospect Heights, Fort Greene, Bedford Stuyvesant, Crown Heights, Clinton Hill, Park Slope. Moreover, FCRC will seek to build 200 of these affordable home ownership units directly on the Atlantic Yards project site provided we receive the appropriate subsidy required to fund these units, and assuming the density levels approved in the ESDC GPP are maintained. These 200 units are part of the 6,430 units of housing approved as part of the Atlantic Yards FEIS/GPP. We will further seek to make the affordable home ownership units affordable to families with income up to 150% of AMI and to make homeownership opportunities available to families with incomes below 100% of AMI.

(Emphases added)

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…

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…

Former ESDC CEO Lago returns to NYC to head City Planning Commission

Carl Weisbrod, Mayor Bill de Blasio's City Planning Commission Chairman and Director of the Department of City Planning, is resigning,

And he's being replaced by Marisa Lago, currently a federal official, but who Atlantic Yards-ologists remember as the short-term Empire State Development Corporation CEO who, in an impolitic but candid 2009 statement, acknowledged that the project would take "decades."

Still, Lago not long after that played the good soldier at a May 2009 Senate oversight hearing, justifying changes in the project but claiming the public benefits remained the same.

By returning to City Planning, Lago will join former ESDC General Counsel Anita Laremont, who after retiring from the state (and taking a pension) got the job with the city.

Back at planning

Lago, a lawyer, in 1983 began work as an aide to City Planning Chairman Herb Sturz, and later served as the General Counsel to the president of the NYC Economic Development Corporation, Weisbrod himself.