Wednesday, January 12, 2011

The new Downtown Brooklyn skyline, the rezoning gone awry, and yet more proof KPMG's report to the ESDC was bogus

I'm coming a little late to the 1/9/11 cover story in the New York Times's Real Estate section, headlined Suddenly, a Brooklyn Skyline, but it's worth another look, for its slant and its omissions.

Notably, the nearby public housing is ignored and the main justification for the rezoning that led to the towers--an expected need for office space--is downplayed.

And--no surprise--there's no mention of the discrepancy between the sales figures revealed in the article and the ones consultant KPMG ginned up for an 8/31/09 report to the Empire State Development Corporation on the housing market in Brooklyn--a report used to justify the unrealistic ten-year Atlantic Yards buildout.

Leading with Oro

The article starts at the new 40-story Oro condo tower:
In addition to Oro, which started selling in 2007, at least half a dozen high-rises have recently opened or broken ground downtown, a sprawling area broadly defined by Cadman Plaza on the west, Atlantic Avenue to the south, Flatbush Avenue and Fort Greene to the east and the Brooklyn-Queens Expressway to the north. They are drawing Manhattanites lured by low rents as well as locals who want modern amenities and a change from brownstones and low-rises.

Yet the swift pace of development — abetted by a 2004 rezoning — has worked in tandem with the recent recession to produce growing pains. Many of the new buildings, hobbled by slow sales in 2008 and 2009, had to reduce prices drastically. And some new residents bemoan the lack of a supermarket, among other services.
Note the very Manhattan perspective, in which "low rents" start at $2,132 for a studio at the Avalon Fort Greene. Other buildings cited include The Brooklyner, DKLB BKLN (aka 80 DeKalb, by Forest City Ratner), and Toren.

A two-bedroom apartment at the Toren is a good deal for Skip Mooney, given "a real estate climate that included low interest rates and a 25-year tax abatement." In other words, subsidized housing for the well-off.

Sales figures vs. KPMG

According to the Times, Oro was more than 50 percent sold before the building was finished but, "[b]y September 2009, the building was only 28 percent sold." That led to price drops. Now its about 70 percent sold.

Funny, but KPMG claimed on 8/31/09 that the Ora was 75 percent sold. Not even close.

The rezoning

The Times reports:
With so many new residents in place, planners and officials hope a more well-rounded neighborhood will soon coalesce. The goal of the 2004 rezoning that made much of the new construction possible was to create a mixed-use environment with thriving office and retail components in addition to residences, said Joe Chan, the president of the Downtown Brooklyn Partnership, a not-for-profit development corporation.

The area, Mr. Chan said, has not had as much commercial development as he would have liked. But, he added, “having thousands of talented, highly educated people living in Downtown Brooklyn makes a compelling case for more companies to move to the area.”
Not as much commercial development? There's been very little, but the rezoning was, in significant part, to take advantage of the city's third-largest central business district, according to the Department of City Planning, and provide an alternative to New Jersey for companies priced out of Manhattan.

The zoning justification

DCP stated:
Downtown Brooklyn is a key part of New York City's strategy for growth by providing an affordable option for businesses and a competitive alternative to New Jersey.

The area offers an alternative and competitive office district with a focus on back-office functions for firms seeking to disperse operations from central locations. It offers Class A space without Class A rents, boasts a vibrant and varied urban environment, has the benefit of close proximity and easy access to Manhattan and is connected by a wide variety of transportation options. Downtown Brooklyn is poised to retain and grow the citys at-risk back-office jobs, preserve its tax base and generate new revenues.

DCP had three goals:
  • Expand commercial development with high density, flexible zoning that will encourage attractive new buildings on underutilized sites.
  • Expand academic and commercial uses by facilitating public/private development and promoting mixed-use opportunities.
  • Expand residential development with higher density zoning, providing opportunities for integrating new housing and retail with academic and cultural communities and leveraging low-cost financing for affordable housing.
Jobs vs. housing

The city expected jobs:
Economic Development
The public investment provided for in this plan would act as a catalyst to generate an estimated 4.5 million square feet of new commercial office space, creating 18,500 office jobs and 8,000 construction jobs. It would add some 1,000 new housing units and result in the addition of new, vibrant public spaces and cultural resources.
That's not what happened.

Oro has 303 units, the Brooklyner 490, Toren 240, 80 DeKalb (aka DKLB BLKN) 365, Avalon Fort Greene 650. That's 2048 units alone, with many more coming--567 in two upcoming buildings. And there's more, including the 510-unit Brooklyn Gold.

There's an argument for residential development, but that's not how the rezoning was sold. And that's why a lot of people, including ACORN, were caught off guard and didn't advocate for mandatory affordable housing as part of the trade-off for developers gaining additional zoning rights.

The Times acknowledged some concerns:
Robert Perris, the district manager of Community Board 2, which represents the area, said the benefits of residences along Flatbush Avenue were clear. But, he added, so are the benefits of a strong commercial district — and strengthening the commercial district was one of the chief goals of the rezoning. When residential buildings are erected in commercial zones, he said, their lots are lost for commercial purposes.

“There are only so many development sites,” Mr. Perris said. “If these sites get developed for residential, they’re gone forever.”
The supermarket

People in the Times article complain about the lack of a supermarket, but, as one Times commenter pointed out, a supermarket just down Myrtle Avenue which significantly served the adjacent housing projects--which go unmentioned in the article--was demolished for development.

The gateway to AY

According to DCP, "The proposed zoning would develop [Flatbush] avenue as a gateway to Brooklyn connecting the Fort Greene community with downtown."

That's been happening and, indeed, the end of the line, as of now, is the Williamsburgh Savings Bank, aka One Hanson. Should the flagship tower, Building 1, be built on the Atlantic Yards site, it would continue the march toward Prospect Heights and the rest of the towers of the project, however anomalous, might be that much less anomalous.

1 comment:

  1. Interesting I subbed at a high school at 49 Flatbush Avenue Extension yesterday, the first time I was there in five years. All the high rises were there, and absolutely no place within many blocks, to get coffee, a sandwich. or any other kind of food.

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