Skip to main content

FCR's Morgan Stanley Building, Brooklyn Heights, issues of scale, and questions of government help

In a profile of Steve Spinola, president of the powerful Real Estate Board of New York (REBNY), the New York Observer leads with an anecdote involving Brooklyn and, yes, Forest City Ratner:
Developer Bruce Ratner came to Steven Spinola for help in 1985. Mr. Ratner needed to get tenants for his planned MetroTech Center in Brooklyn, and Mr. Spinola was Ed Koch's economic development chief. Part of his job was to keep tenants in New York, and Morgan Stanley was thinking about moving its back offices to New Jersey.

"They were trying to convince Morgan Stanley to go to MetroTech... They asked me to go to a meeting with Morgan Stanley to discuss and to tell them that the city was ready to encourage them to do whatever."

...After Mr. Spinola's meeting with Morgan Stanley, the prospects for a deal looked dim. "We went down in the elevator. I turned to Bruce Ratner and I said, 'There's no way you get them to MetroTech.' I said, 'But I have a site on Pierrepont Street that's currently a garage. And one of my guys came to me two months earlier and said, "The city's about to give a new lease for this garage. We oughta have a cancellation clause in case we ever need it."'"

..."So I called up City Hall, I asked for it, they gave it to me. So I said to Ratner, 'Can you spend the weekend coming up with a design for a building on that site? I'll sole-source it to you if we can get Morgan Stanley to be the principal tenant.' And we made that deal."

The groundbreaking took place outdoors on the job site in 1986, Mr. Spinola remembered. Residents of Brooklyn Heights were protesting outside. They didn't want something so decidedly un-Heightsy—a bank back office, of all things—in their neighborhood.
(Photo by MK Metz/McBrooklyn)

In the 1980s, the city faced a real need to transform Downtown Brooklyn, so sole-source deals might have been somewhat more defensible. But they're still questionable as a policy.

Questions of scale

As for the building, it's on the Brooklyn Heights side of Cadman Plaza West, though within the zoning for Downtown Brooklyn (before and revised).

Today, it certainly isn't seen as encroaching much on Brooklyn Heights. In the Atlantic Yards context, buildings at the edge of Atlantic Avenue wouldn't encroach much on Prospect Heights.

The building at the corner of Atlantic and Flatbush, B1, would not border any low-rise buildings, but would be across the street, an abrupt transition from Fifth Avenue.

The first building planned, at the corner of Dean and Flatbush, would be near some low-scale buildings across Dean Street, but would not be nearly as abrupt a transition as the building at the corner of Dean and Sixth avenue.

Neighborhood resurgence?

The Brooklyn Paper, in an 11/29/09 article headlined The story of Brooklyn Heights? Stability, found a cautionary tale while over-praising the building:

The neighborhood’s resurgence began with One Pierrepont Plaza. That project, Forest City Ratner’s first in the borough, kicked off not only the development of Downtown Brooklyn, but also provided a cautionary tale for the neighborhood. For years, the borough president’s office had promised that the parking lot on which the development was built would become a hotel, not the home for Morgan Stanley that it would eventually become.

From that battle, the Brooklyn Heights Association learned that it was important to dictate some of the terms of neighborhood debate with government officials, not simply react to what was imposed on them.
Actually, the neighborhood's resurgence began 20 years earlier when Brooklyn Heights became the city's first landmark district.

FCR's investment?

In 7/29/09 testimony before the Empire State Development Corporation, Kathryn Wylde of the Partnership for New York City said:

Bruce Ratner and Forest City Enterprises have played a singular role in the renaissance of Brooklyn. The Morgan Stanley building on Pierrepont Street, followed by Metrotech, were seminal projects that began our transformation from a dumping grounds into New York City’s most desirable place to live, and increasingly, the place where New Yorkers also want to work, play and visit. We should all applaud the fact that, during the worst economic and credit crisis since the Great Depression, Forest City Ratner continues to invest their significant resources into creating new buildings and jobs in Brooklyn.
If FCR is investing "their significant resources," more details would be welcome. As a smart developer, they are (and should be) doing their best to use others' "significant resources."

That was the story of the Morgan Stanley building, when government help was more justified. It's also the story of Atlantic Yards.

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.