Elected officials call for Atlantic Yards sale deferred until new analysis and commitments regarding housing; Forest City pushes back, but should be happy all accept scale of project

Foreset City Ratner and its government partner, the Empire State Development Corporation, could not have liked the press conference yesterday, involving a wide range of elected officials, urging that the Atlantic Yards Development Agreement be revised to require the affordable housing to be built on the originally promoted ten-year schedule before the developer is allowed to sell 70% of the remaining project to the Chinese government-owned Greenland Group.

If the politicians' logic was sometimes wobbly--that the arena subsidies were justified because it would bring that housing--they indubitably pointed out that the Development Agreement signed at the end of 2009 was negotiated after an economic downturn, and now the residential market is roaring.

That's a very strong case for revising the agreement, and a sign that the state agency did a lousy job in writing protections for the public. And they made a case that, in the ongoing Supplemental Environmental Impact Statement ordered to examine the impacts of a project that could now go 25 years, that alternatives to Forest City be studied.

Then again, Forest City, even though it fired criticism in response to the press conference, might have reason to smile. All of the elected officials, including long-time project opponents Council Member (and Public Advocate-elect) Letitia James and state Senator Velmanette Montgomery, essentially have accepted the controversial trade-off posited years ago: that Forest City should be allowed to build at the scale and density it chooses, because that will deliver the precious affordable housing.

(Update: Keep in mind that BrooklynSpeaks, organizer of the press conference, has long called for the scale of the project to be reduced, and that the affordable housing eligibility be based on Brooklyn's median income, rather than the higher figure of regional Area Median Income, both requests that were not part of yesterday's ask.)

That's a major victory for the developer and a sign that elected officials are always in a bind when it comes to affordable housing--including, as shown yesterday, feeling hamstrung about talking about other aspects of the project. They also seemed hamstrung about criticizing Mayor-elect Bill de Blasio for his mostly unquestioning commitment to the project.

And while the elected officials did say they wanted to improve accountability of the Atlantic Yards project, supporting legislation to create a dedicated local development corporation to oversee it, they waved off most questions outside of affordable housing.

And even if the Development Agreement is rewritten, there's still enough slack in the system for de Blasio to speed subsidies to make sure the project gets done.

I've long described BrooklynSpeaks as the "mend-it-don't-end-it" coalition, as opposed to Develop Don't Destroy Brooklyn, which aimed to block the project. (The full press release is here, and below.) A broader range of elected officials, understandably, have felt more comfortable with the former group.

Elected officials present were Assemblymembers James F. Brennan, Joan L. Millman, and Walter T. Mosley; State Senator Velmanette Montgomery; City Council members Letitia James and Stephen Levin, and Council member elect Laurie Cumbo. Those supporting the effort, but sending representatives, were U.S. Representatives Yvette Clarke, Hakeem Jeffries and Nydia M. Velázquez;

Assemblymembers Karim Camara and Joseph R. Lentol, and Council Member Brad Lander. (I wasn't there, so I rely on the press conference video.)

Leading off

The event was held at the office of the Fifth Avenue Committee, a nonprofit housing group that's part of BrooklynSpeaks and whose executive director, Michelle de la Uz, was appointed by Public Advocate (and now Mayor-elect) Bill de Blasio to the City Planning Commission.

"Atlantic Yards is at a pivotal moment: whether or not the project is going to deliver the long awaited public benefits, or whether or not those benefits are going to be delayed indefinitely," de la Uz declared, introducing the press conference. "Our state cannot allow FCR to cash out... before the majority of public benefits are delivered."

"There's a tremendous demand for affordable housing," she said, urging "that the project is accountable to the public, and not private, or foreign interests.



Assemblyman Jim Brennan, who once proposed downsizing the project by directing more subsidies to Forest City, read the group's statement:

“In the seven years since the approval of the Atlantic Yards project, an arena has been built, but commitments of affordable housing for Brooklynites remain unmet. During the same time, the market for luxury apartments in Brooklyn has exploded, while the borough’s crisis in affordable housing spirals further out of control. We have watched with concern as the State has resisted taking action to ensure public benefits financed with taxpayer dollars are delivered as promised, even when faced with a court order to compel the review of the impacts from delaying completion from 10 to 25 years. ESDC failed to consider the impacts of the delay and now the people living in the neighborhoods surrounding the Project are being displaced at an alarming rate, which is particularly true for the many families and elderly who are being priced out of their homes due to gentrification. Now, instead of offering accountability to the people of New York, Forest City Ratner Companies has announced plans to sell a majority interest in Atlantic Yards to a foreign developer. Today we call on Governor Cuomo, ESDC, and Forest City Ratner to do the following:
“First, that ESDC defer approval of any sale of Forest City Ratner’s interest in the Atlantic Yards project until after a study of alternatives to expedite construction, consistent with the order from the New York State Supreme Court, has been completed.
“Second, that ESDC make any sale of Forest City Ratner’s interest contingent upon a written commitment to deliver the affordable apartments planned for the Atlantic Yards projects in the timeframe in which they were originally promised.
“Third, that the Governor, ESDC and Forest City Ratner publicly commit to improving the accountability of the Atlantic Yards project to the public, stating their support of legislation to create a dedicated local development corporation to oversee the project until its completion whose board includes outside directors appointed by the elected representatives of the people of Brooklyn.”

Mosley and Millman

"The reason why New Yorkers invested over $700 million in tax subsidies and abatements is we wanted to build a home court advantage for Brooklynites," declared Mosley. "We wanted to build a home court advantage for working class men and women."

Actually, no. Project opponents always said that an arena was not needed to build affordable housing, and it wasn't--except that's the way Forest City packaged it. In fact, the approximately $700 million in subsidies and tax breaks identified by the Independent Budget Office--a good fraction federal, actually--were all directed to the arena, with affordable housing subsidies expected to come later.

"From many accounts, the Barclays Center's been a huge success," Millman declared. There was apparently a little pushback from the audience, since she offered a clarification: "Many, not all."

She cited the Nets, the Islanders, and entertainment at the arena, but said, "Show us the affordable housing."

"Y'know, the promise of affordable housing convinced many elected officials, including myself, to support the project from the get-go," Millman said. "And now that there's a two-year delay in the completion of the very first unit... and even when it's completed, only 10 of the 35 affordable two-bedroom units will be offered to families making an average Brooklyn income.

"I can't imagine what interest Greenland has in low-income, working families in Brooklyn," Millman said, pointing to the investor's understandable stress on the bottom line. "I can't imagine they have any."

Montgomery, James, and more

"Full disclosure, I never was an advocate for this project," said Montgomery. "I never thought this was going to yield for us as much as we wanted to see come out of a project of this magnitude.... an equitable mix of housing. Obviously, the disappointment for me goes very deep."

"We have the agreement, but we note that, at the beginning, we as a community requested that this project be broken up so we could have a number of developers bidding," she said, referring to an alternative known as the UNITY plan. "We were not against development, but we were for equitable development."

"This is a very sad time for us," Montgomery said, going on to salute Brennan for trying to "get ESDC and the city to enforce a commitment to ensure there is equitable development of affordable housing."

"The election was a mandate in support of a progressive agenda," James said, noting de Blasio's commitment to building over 200,000 units of affordable housing. She noted Forest City's plan, in the first building, to devote more studios and one-bedroom units than originally promised.

"Although he's in contract with this particular company, I think he should consider not-for-profit organizations to build the affordable housing," James said, playing to the crowd and getting some claps.
"I know nothing about this company. I don't know if they respect labor laws. I don't know if they respect unions.. I'm not sure whether or not they will hire locally."

Forest City, of course, might respond that non-profit developers often build non-union, and it's not clear they can build high-rise construction.

Levin, noting his challenges with developments elsewhere in his district--he didn't specify, but they likely include New Domino and Greenpoint Landing--said that promises of affordable housing are "like written in disappearing ink... You've got to get these commitments ironclad."

Q&A

Brennan was asked if the Area Median Income (AMI) used for eligibility for the housing could be changed, since it is calculated using wealthier suburban counties, and whether the housing would be build off-site.

Brennan said he'd like lower-income families and individuals to be taken into account in any modification--though I'd say that's unlikely. James noted the housing must be built on-site.


Would there be more project oversight?

"There are many issues, but our main focus is affordable housing," Brennan responding, essentially waving off the issue.

Mosley stepped forward and added that the Community Benefits Agreement (CBA) signed by Forest City Ratner has not led to the promised appointment of  "an Independent Compliance Monitor. which is critical for communication between the developer and the elected officials."

He's right that that's a key thing missing, and it should be a sign of the essential unreliability of the developer. But the government was not a party to the CBA--Brennan later called it a "side issue"--so it's unlikely that can be part of a revised Development Agreement.

However, elected officials like Mosley can use the bully pulpit--as de Blasio has chosen not to do--to point out the absence of the compliance monitor

What about de Blasio?

Politicker reporter Kamelia Kilawan asked if anyone thought de Blasio should have been more proactive regarding the project.

"No," said Brennan, to some nervous laughter from the crowd. " Other questions?"

As she wrote, Atlantic Yards Critics Were Rather Quiet on de Blasio Today. That's understandable; he's the big dog in New York now, and they don't want to cross him. But de Blasio essentially signed on to the project a long time ago.

The article stated:

After the press conference, Assemblyman Walter Mosley elaborated on the topic, arguing the “election is over” and the time for governing has arrived.
“All of us came in from different places. Some of us opposed the project. Some of us supported it. Some of us supported it with reservations,” he told Politicker. “I know he’s going to do what’s necessary to make sure Brooklyn and places like Brooklyn exists for all New Yorkers, and not just the very few that can afford to live here.”

Pushback from Forest City

Crain's New York Business offered Forest City blasted for slow-moving project:

Forest City fired back at Brooklyn Speaks, accusing them of causing some of the affordable housing delays through legal means....
"We are very focused on accelerating the housing," a Forest City spokesman said. "While groups like Brooklyn Speaks were suing to delay this project, we were working aggressively to start the housing, which we did last year, and to identify financial partners to move the other buildings forward."
But a Brooklyn Speaks representative said its lawsuit, filed in 2009, aimed to force Forest City to build the affordable housing sooner.

Gib Veconi of BrooklynSpeaks posted a comment:

Forest City likes to say that BrooklynSpeaks sued to delay the project, but the opposite is true.
BrooklynSpeaks sued Forest City and ESDC because the two agreed in 2009 to delay Atlantic Yards' completion from 10 to 25 years. In 2011, a New York State Supreme Court ruled ESDC approved the schedule change illegally, and ordered ESDC to revisit the project plan, including studying alternatives to get Atlantic Yards completed faster. More than two years later, ESDC and FCRC have yet to comply with the court order.

The press release

Brooklyn’s Elected Officials Demand New Commitment for Atlantic Yards’ Affordable Housing in Advance of Sale of Forest City Ratner’s Interest in Project Electeds find the delay unconscionable and call on ESDC to negotiate new agreements guaranteeing an expedited construction schedule
BROOKLYN, November 15, 2013: Today, a coalition of Brooklyn elected officials, who represent the communities surrounding the Atlantic Yards project, and prominent civic groups, gathered at the Fifth Avenue Committee to call on Forest City Ratner Companies (FCRC), Governor Andrew Cuomo and the New York State Empire State Development Corporation (ESDC) to accelerate the delivery of the 2,250 units of affordable housing promised at the site and acknowledge in the newly required environmental impact statement, the socioeconomic damage to the community from the delay. The coalition also presented demands that must be met before FCRC is allowed to sell a majority interest in the Project.
The group issued the following statement:
“In the seven years since the approval of the Atlantic Yards project, an arena has been built, but commitments of affordable housing for Brooklynites remain unmet. During the same time, the market for luxury apartments in Brooklyn has exploded, while the borough’s crisis in affordable housing spirals further out of control. We have watched with concern as the State has resisted taking action to ensure public benefits financed with taxpayer dollars are delivered as promised, even when faced with a court order to compel the review of the impacts from delaying completion from 10 to 25 years. ESDC failed to consider the impacts of the delay and now the people living in the neighborhoods surrounding the Project are being displaced at an alarming rate, which is particularly true for the many families and elderly who are being priced out of their homes due to gentrification. Now, instead of offering accountability to the people of New York, Forest City Ratner Companies has announced plans to sell a majority interest in Atlantic Yards to a foreign developer. Today we call on Governor Cuomo, ESDC, and Forest City Ratner to do the following:
“First, that ESDC defer approval of any sale of Forest City Ratner’s interest in the Atlantic Yards project until after a study of alternatives to expedite construction, consistent with the order from the New York State Supreme Court, has been completed.
“Second, that ESDC make any sale of Forest City Ratner’s interest contingent upon a written commitment to deliver the affordable apartments planned for the Atlantic Yards projects in the timeframe in which they were originally promised.
“Third, that the Governor, ESDC and Forest City Ratner publicly commit to improving the accountability of the Atlantic Yards project to the public, stating their support of legislation to create a dedicated local development corporation to oversee the project until its completion whose board includes outside directors appointed by the elected representatives of the people of Brooklyn.”
Elected officials joining this call were Assembly members James F. Brennan, Karim Camara, Joseph R. Lentol, Joan L. Millman and Walter T. Mosley; State Senator Velmanette Montgomery; City Council members Letitia James, Brad Lander and Stephen Levin, and Council member elect Laurie Cumbo; and U.S. Representatives Yvette Clarke, Hakeem Jeffries and Nydia M. Velázquez.
At the time Atlantic Yards was approved in 2006, Forest City Ratner Companies (FCRC) committed to completing its arena and 16 towers with 2,250 affordable apartments by 2016. However, in 2009, FCRC renegotiated the timetable for the project so that it could delay completion until 2035. A State court ruled that ESDC illegally approved the 2009 change, but construction of affordable housing at Atlantic Yards has continued to languish, with the first units not expected to be occupied before 2015.
“Now is the time to review the current construction schedule and get a written commitment from FCRC that the residential buildings and affordable housing units will be constructed in less than 10-years. Following the 25-year build out schedule is too long for our community to wait for the affordable housing units to be delivered.” Said Assembly member Jim Brennan, Chair of the Assembly Committee on Corporations, Authorities, and Commissions.
"The Atlantic Yards project is a public-private partnership made possible by the investment of hundreds of millions of precious taxpayer dollars. Yet, the public has still not experienced the benefit of thousands of affordable housing units that were promised a decade ago. The decision by the developer to sell a majority stake in the project to a foreign investor raises troubling questions that must be answered before approval to move forward is granted,” said Representative Hakeem Jeffries.
“25 years is too long for the communities in need to wait for promised affordable housing. Our neighbors need housing now and the State must assert its oversight responsibility to ensure developers keep their commitments to the public,” said Representative Nydia Velázquez.
“ESDC’s obligation to ensure the public’s funds are used appropriately includes its careful review before approval of the proposed sale an equity interest to a group of Chinese investors. Even throughout the financial crisis, financing for affordable housing was available, and the market is now healthy,” said Assembly member Joan Millman. “What Atlantic Yards needs is not more remote investors. It needs a careful assessment of reasonable alternatives so we can deliver on the benefits that were promised to our communities.”
“Forest City and others have indicated the Greenland investment will deliver the affordable housing much more quickly, but we expect those commitments to be made in writing as part of the project agreements,” noted State Senator Velmanette Montgomery. “And if the development team doesn't meet its deadlines, the State must require it to compensate the public for any and all delays in the development of the affordable housing. The affordable housing must come now.”
"Affordable housing is as urgent a need in Brooklyn today–if not more urgent–as when Forest City Ratner Companies first promised 2,250 affordable units nearly a decade ago,” said City Council member Brad Lander. “But it’s hard to live on a promise. Our communities need to see real deadlines and commitments, with real consequences for failure or further delay.”
“When the development of Atlantic Yards was proposed, the families and children of Brooklyn were promised several thousand units of affordable housing,” said Representative Yvette Clarke. “Today, as the cost of renting an apartment has continued to increase, Forest City Ratner has both a legal–and, more importantly, a moral–duty to uphold that promise. Today, the people in our community need actions, not words.”
“A commitment is a commitment and Forest City should be held to their agreement to develop affordable housing at Atlantic Yards,” said Council member Stephen Levin. “The community depends on these units being built and will not accept any further delays.”
“The broken promises at Atlantic Yards show what happens when elected representatives are left out of the process,” said Assemblyman Walter Mosley, whose 57th Assembly District includes nearly all of the Atlantic Yards footprint. “The ‘home court advantage’ Brooklyn gained with the new arena has not proved beneficial for the working families who are being squeezed out of our borough and city. We stand here today ready to work with the State to make sure a new plan at Atlantic Yards will be a win for everyone.”
“Without a fair development plan, affordable housing will come too late to help low-income residents, thousands of whom will likely have already been displaced from the communities that were supposed to benefit from Atlantic Yards.,” added City Council member and Public Advocate-elect Letitia James. “The time for promises has ended—there will be no new deal without a project agreement with the community that includes a firm timeline.”
This week, the coalition of elected officials sent a letter to MaryAnne Gilmartin, FCRC’s Chief Executive Officer requesting a meeting with FCRC to discuss their concerns about the construction schedule and other issues, including concerns about governance and the development of future open space areas.