Skip to main content

Veconi on Forest City's planned deal with Greenland to sell 70% of Atlantic Yards: scrutiny and oversight needed

Prospect Heights resident and BrooklynSpeaks leader Gib Veconi weighs in on the recent news--broken by the Wall Street Journal and, bizarrely, not followed up by the other dailies--that a Chinese government-owned company, Greenland Group, has signed a memorandum of understanding with Forest City Ratner Companies to buy 70% of the remaining 15-tower plan.

In Atlantic Yards, Pacific Investors: Will the Greenland deal really speed construction? Governor Cuomo better get it in writing., Veconi, writing in Prospect Heights Patch, questions some of the rhetoric:
And Forest City's press release quoted Mayor Michael Bloomberg as saying, "This investment would allow us to move forward with one of the most ambitious affordable housing programs in our City's history," as if any housing at the Atlantic Yards site was dependent upon the closing of the proposed transaction, instead of being an obligation of a deal signed four years ago between Forest City and the State of New York.
It is of course an obligation, but the deal might either move it ahead faster or allow it to proceed as agreed to with a (seemingly typical) renegotiation of terms.

Despite the posturing, Veconi points to previous promises unfulfilled, such as regarding the timing of the project and the promised office jobs (actually in four towers, not the one on-hold tower at the intersection of Flatbush and Atlantic avenues).

Veconi suggests that "one probable result of the Greenland transaction is that Forest City will be taking money out of Atlantic Yards before the project has delivered any of its promised public benefits," though the public will not have gotten a return on its subsidies.

Who's in charge?

He warns of future choppy waters:
Since Greenland would be on the hook to provide most of the future capital, it’s very likely it will also demand representation in decision-making about the schedule for future development as part of the final deal with Forest City. Maybe that’s why in its most recent 10-Q filed with the SEC, Forest City Enterprises disclosed its search for a joint venture partner at Atlantic Yards by stating, "if we are successful, it could result in forming joint ventures whereby we grant joint control or lose control of the asset."
And Greenland Holdings is owned by the government of China. While we may not find any problem with Chinese investment in New York City real estate, the idea that a foreign government could have a say on when affordable housing is made available to Brooklyn residents in danger of displacement is another question entirely. That possibility is particularly galling given the continuous calls for reform of Atlantic Yards oversight made by civic groups, affordable housing organizations and elected officials since the project’s approval in 2006. If it has been difficult for the public, its elected representatives, and the ESDC to get Forest City Ratner to deliver on its commitments, how much more influence can they expect in Beijing?
What next?

His bottom line: not only must ESDC finish the "study of development alternatives required by the court-ordered environmental impact statement," including the option of bidding out sites to other developers.

If does move forward with Greenland, new commitments regarding timing and oversight must be made in writing, with "terms worked out in conjunction with elected officials representing the communities surrounding the Atlantic Yards site."

That could be a major step up. After all, the Chinese government, despite the rhetoric in the initial press release, doesn't give a fig about affordable housing in Brooklyn. It's in this to make money, and has even fewer obligations to the public--or fear of future government pressure--than a local company.

The time for government pressure is before this deal closes, not after.

Here's the full column.

Comments

Popular posts from this blog

Barclays Center/Levy Restaurants hit with suit charging discrimination on disability, race; supervisors said to use vicious slurs, pursue retaliation

The Daily News has an article today, Barclays Center hit with $5M suit claiming discrimination against disabled, while the New York Post headlined its article Barclays Center sued over taunting disabled employees.

While that's part of the lawsuit, more prominent are claims of racial discrimination and retaliation, with black employees claiming repeated abuse by white supervisors, preferential treatment toward Hispanic colleagues, and retaliation in response to complaints.

Two individual supervisors, for example, are charged with  referring to black employees as “black motherfucker,” “dumb black bitch,” “black monkey,” “piece of shit” and “nigger.”

Two have referred to an employee blind in one eye as “cyclops,” and “the one-eyed guy,” and an employee with a nose disorder as “the nose guy.”

There's been no official response yet though arena spokesman Barry Baum told the Daily News they, but take “allegations of this kind very seriously” and have "a zero tolerance policy for…

Behind the "empty railyards": 40 years of ATURA, Baruch's plan, and the city's diffidence

To supporters of Forest City Ratner's Atlantic Yards project, it's a long-awaited plan for long-overlooked land. "The Atlantic Yards area has been available for any developer in America for over 100 years,” declared Borough President Marty Markowitz at a 5/26/05 City Council hearing.

Charles Gargano, chairman of the Empire State Development Corporation, mused on 11/15/05 to WNYC's Brian Lehrer, “Isn’t it interesting that these railyards have sat for decades and decades and decades, and no one has done a thing about them.” Forest City Ratner spokesman Joe DePlasco, in a 12/19/04 New York Times article ("In a War of Words, One Has the Power to Wound") described the railyards as "an empty scar dividing the community."

But why exactly has the Metropolitan Transportation Authority’s Vanderbilt Yard never been developed? Do public officials have some responsibility?

At a hearing yesterday of the Brooklyn Borough Board Atlantic Yards Committee, Kate Suisma…

Barclays Center event June 11 to protest plans to expand Israeli draft; questions about logistics

At right is a photo of a poster spotted in Hasidic Williamsburg right. Clearly there's an event scheduled at the Barclays Center aimed at the Haredi Jewish community (strict Orthodox Jews who reject secular culture), but the lack of English text makes it cryptic.

The website Matzav.com explains, Protest Against Israeli Draft of Bnei Yeshiva Rescheduled for Barclays Center:
A large asifa to protest the drafting of bnei yeshiva in Eretz Yisroel into the Israeli army that had been set to take place this month will instead be held on Sunday, 17 Sivan/June 11, at the Barclays Center in Downtown Brooklyn, NY. So attendees at a big gathering will protest an apparent change of policy that will make it much more difficult for traditional Orthodox Jewish students--both Hasidic (who follow a rebbe) and non-Hasidic (who don't)--to get deferments from the draft. Comments on the Yeshiva World website explain some of the debate.

The logistical questions

What's unclear is how large the ev…

Atlanta's Atlantic Yards moves ahead

First mentioned in April, the Atlantic Yards project in Atlanta is moving ahead--and has the potential to nudge Atlantic Yards in Brooklyn further down in Google searches.

According to a 5/30/17 press release, Hines and Invesco Real Estate Announce T3 West Midtown and Atlantic Yards:
Hines, the international real estate firm, and Invesco Real Estate, a global real estate investment manager, today announced a joint venture on behalf of one of Invesco Real Estate’s institutional clients to develop two progressive office projects in Atlanta totalling 700,000 square feet. T3 West Midtown will be a 200,000-square-foot heavy timber office development and Atlantic Yards will consist of 500,000 square feet of progressive office space in two buildings. Both projects are located on sites within Atlantic Station in the flourishing Midtown submarket.
Hines will work with Hartshorne Plunkard Architecture (HPA) as the design architect for both T3 West Midtown and Atlantic Yards. DLR Group will be t…

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…