Wednesday, July 31, 2013

How "6 Reasons to Be Wary of Public-Private Partnerships" applies to Atlantic Yards

Last April, Laura Barrett, the National Campaign Director for the grassroots network Gamaliel and Transportation Equity Network, wrote 6 Reasons to Be Wary of Public-Private Partnerships for Rooflines, the blog of the National Housing Institute, which also publishes Shelterforce.

The latter was the site for some fierce debate about the Atlantic Yards project, with Shelterforce's writer, John Atlas, defending the deal struck by ACORN, and later writing a book about ACORN with an Atlantic Yards chapter.

So it's interesting to note that public-private partnerships, praised by President Obama, have, according to Barrett, a mixed record, as "political cronyism and financial desperation have contributed to these six troubling trends."

Let's see how much the trends she identified apply to Atlantic Yards:
  • Little or no democratic oversight: Yes, Atlantic Yards is run by a state agency accountable only to the governor, and that agency currently has one employee solely dedicated to Atlantic Yards--and his salary is paid by developer Forest City Ratner.
  • Competition stifled: Yes, there was only one, belated bidder for the key piece of public property, the MTA's Vanderbilt Yard, because Forest City had the inside track. 
  • Public sectors are saddled with the risk: Well, Forest City put money up and obviously assumed some risk, but then attenuated that risk by extending the deadline to acquire the MTA land and to acquire property through eminent domain, and to build the project.
  • The voice of the community is missing: There's no formal process for community input, given that there's no governing entity.
  • Opportunities missed for community benefits: While community benefits were promised, few have been delivered, thanks to the delay in project buildout and Forest City Ratner's failure to hire a promised, and contractually required Independent Compliance Monitor..
  • Absence of strategic planning: This was an ad hoc effort not connected to any planning for the larger area. 
Wrote Barrett:
We desperately need the economic boost and jobs that infrastructure development can bring, but we need to make sure that taxpayers aren't left holding the bag. The Transportation Infrastructure Finance and Innovation Act and any other mechanisms that rely on the private market need to be carefully constructed with community input to make them a boon and not a boondoggle.
Maybe we can start with some clarifying rhetoric and call Atlantic Yards a "private-public development."

Tuesday, July 30, 2013

Brooklyn real estate: a hot market has to be good news for Forest City Ratner (but why 25 years for AY?)

I recently watched the videos from Terra CRG's Brooklyn Real Estate Summit held at the Brooklyn Academy of Music in May, summarized by the 5/10/13 Brooklyn Daily Eagle as Brooklyn Real Estate Summit: Brooklyn is hot, getting hotter, with a quote from a participant: "Demographics is destiny; the borough is changing."

All of this has to be good news for the developers of Atlantic Yards, aiming to market luxury rentals and later condos.

It also could be fuel for critics who, in the pending Supplementary Environmental Impact Statement, argue that the 25-year permit for Forest City Ratner's buildout should be reduced, and that the sites in Phase 2 be bid out to other developers.

Keynote: Deputy Mayor

In the opening keynote (video), Deputy Mayor for Economic Development Robert Steel cited record population, jobs, housing units, and tourists, including a 16% growth in employment in Brooklyn during Bloomberg's three terms, though he acknowledged that certain areas, such as the South Bronx or East New York, face a jobs deficit.

The four-point economic development strategy includes: quality of life, a pro-business environment, investment in the future, and innovation in economic transformation.

Regarding quality of life, he cited increased public safety--murders going from 2200 in 1990 to 419 last year, better parks, and cultural institutions.

Steel noted that young workers can find a good job and lifestyle in "other, newer, more interesting cities" like Austin or Seattle.

"I'm really comfortable selling the idea to people," he said, that "you can live in Brooklyn and work in DUMBO and enjoy Brooklyn Bridge Park and enjoy all of BAM [Brooklyn Academy of Music], and that's a life on your mountain bike with your dog that's not dissimilar to the outdoor life you can get in some of these other places."

Steel noted that residential real estate is hot, but without a "thumb on the scale," there won't be as much commercial office space and retail

"Brooklyn, we believe, will be one of the lasting legacies of this administration," he said, calling the BAM cultural district "kind of our next Lincoln Center." The city's $100 million investment--which surely doesn't include indirect discounts--has "really changed the nature of how people perceive Brooklyn," he said.

Steel praised Two Trees' New Domino plan, saying "the chance to reformulate the skyline is pretty exciting," acknowledging of the SHoP rendering, "I'm sure this will change a bit."

He mentioned Steeplechase Plaza at Coney Island, and the planned Seaside Amphitheater, and said he could talk about Greenpoint Landing, BAM South, and plans for East New York.

Panel: arts and entertainment

In a panel (video), BAM president Karen Brooks Hopkins, said, “This is Downtown Brooklyn’s moment. This is our moment, and and we've waited for it a long time.” With venues ranging in size from 200 to 19,000 seats, she said, "you really don't see anything like this on the planet."

"Within the next five years, you'll also see 10,000 more people residing in this district," she said. "It's an amazing opportunity for real estate industry as well as culture."

She presented a slight challenge to the developers: "We would like all of you to be partners, not adversaries... We challenge you to build great buildings... we want you do something distinctive... also hope you will partner with cultural institutions."

Broker Chris Havens declared, "This is Lincoln Center, with better food within walking distance."

Panelists talked about growth in Gowanus and Williamsburg and Coney Island, all of which are looking up, though Coney could still use hotels, movie theater.

Panel: retail

Geoff Bailey, VP of Retail Sales at TerraCRG, at a panel on retail (video), described a 180-degree turn when visiting the International Council of Shopping Centers conference.

"People want to be here, they want their brands here," Bailey said. "The retail market in Brooklyn has historically been one of the most underserved retail market... what we've seen in the past year has been tremendous... Armani Xchange... everything is happening on Fulton mall, the first SoulCycle in Williamsburg."

Related is building 600,000 square feet behind its Gateway project in East New York.

Christina Warner of L&M Development, described how Williamsburg had changed. After seeing people with Trader Joe's bags, her firm and partner Goldman Sachs made sure to put a high-end grocery in 11 Broadway.

Sabrina Glazer of Equinox said SoulCycle sold out classes (at $34) in an hour. They're looking to expand, perhaps in Brooklyn Heights, Cobble Hill, Boerum Hill, and DUMBO.

At the same time, the firm's high-style, low-cost ($15/month) Blink Fitness has 13 locations, with four in the pipeline, in Prospect Park South, Brooklyn College, and Utica Avenue, and future locations in Bushwick, Sunset Park, Bed-Stuy, and Brownsville.

"I would buy anything that I can on Fulton Street," said Ike Chera, Crown Acquisitions, noting that a street where rents were once $150/sf is now approaching $300/sf.

"City Point we think is going to be a transformative project," said Paul Travis, one of the partners in the joint venture that includes retail and housing, noting that in five years Downtown Brooklyn will have 32,000 residents. "We believe that is the best residential site in the entire borough," he said, citing an 1.8 million square foot buildout. "When City Point opens in 2015, it's a new era for Brooklyn retail world."

A Starbucks rep noted that the chain first opened 20 years ago on Montague Street in Brooklyn Heights and had just opened its 20th store, on Flatbush Avenue and Park Place in Park Slope, and is looking to double its Brooklyn presence in the next four to five years. Starbucks would like to be in Williamsburg, but "it is such a sophisticated market, you gotta do it right."

"Demographics is destiny," Travis said, noting that in some brownstone neighborhoods, "income has doubled in the last ten years."

Panel: hotels

In a panel (video) on hotels, Jason Muss of Muss Development, which built the pioneering Marriott in Downtown Brooklyn, observed, "Everyone thought we were crazy to build a hotel. Now they say you're crazy not to build a hotel."

Marc Freud of Troutbrook Development recently opened a Fairfield Inn and Suites recalled that, more than a decade ago, when his firm closed on the deal to renovate 636 Pacific Street in Prospect Heights--the condo building where Atlantic Yards foe Daniel Goldstein lived--"my car got broken into." (That block improved once renovations emerged.)

The Third Avenue site for Fairfield Inn and Suites was purchased in early 2007 with a "belief that the area might change." Franchiser Marriott was cautious, Freud observed, so his firm had to hire a helicopter to take photos to explain how close the location was to transportation hubs.

Toby Moskovits, founder and CEO of Heritage Equity Partners, is building a 150-room hotel in Williamsburg next to the Wythe Hotel. She cited a “tremendous disconnect" demand and supply for hotel rooms in Williamsburg. "They’re coming for the Williamsburg experience.”

Monday, July 29, 2013

Forest City CEO: Barclays Center rank in ticket sales "important" measure but, given start-up cost, "not the ultimate outcome" (forecasted revenues at 84%)

Last Wednesday, Forest City Enterprises, parent of Forest City Ratner, held an Investor Day Conference in Washington, DC, and while the discussion leaned toward Washington-related projects, they did discuss the Barclays Center and larger Atlantic Yards project. (Here's a rough transcript from Seeking Alpha, as well.)

CEO David LaRue noted the recent news from Billboard magazine that the Barclays Center was number one in terms of concert/family show revenue (not sports) for the first half of this year. "So, overall, I think that equates to about 183 events that we've had since we've opened, over 50 concerts at Barclays Center," he said. "It's an important measurement, but not the ultimate outcome. As we've said, our goal is to stabilize Barclays Center in 2015, '16 with the New York Islanders moving to the center."

As noted on page 21 of the slide presentation, the Barclays Center has 84% of forecasted contractually obligated revenue in hand, up from 82% in March 2013 and 64% in spring 2012. This raises the question: what would they have done to stabilize income if the Islanders hadn't moved? (Answer: something.)

The Billboard measure, he said, "is important because what we think it's done is established as Barclays Center as a place. And again, as part of our objective of creating distinctive places, I think the acceptance in the marketplace of this center is evidenced by those tickets and revenue numbers. It's our objective, and clearly our responsibility, to translate from revenue down to measurable net operating income. And that's what our New York team has focused on as we move forward to the stabilization of that project."

Start-up costs

Later, LaRue elaborated that "just like any other business, initial start-up costs are much higher than they will stabilize at. Our team is focused on that stabilization and objective of the $70 million [expected revenue]. So, the revenue coming in is great. It's not so great if you have to spend it all. And so we still have not yet made our first anniversary. We opened September last year, on September 28. We are continuing to work with our management team, with the third-party manager of the center, to now focus in on profitability beyond, I think, a venue creation and with the--and do both hand-in-hand for that profitability. So we're still looking at stabilization when the Islanders move in, and again, we're targeting in that 15-16 hockey season when they can move out of that lease in the facility in Nassau.

First tower

LaRue mentioned B2, the first Atlantic Yards tower, built via modular construction: "Modules of steel frames have arrived at the factory. We are starting construction of those steel frames. We'll open that in the second quarter, third quarters, early summer of next year. And again, it will be 363 units of 50% below market, 50% market rate. And, again, we anticipate very strong reception of this product in the market based upon the dynamics that are existing in Brooklyn and the New York market in general in terms of rent--rental rates and levels of demand from renters in the markets."

See p. 23 of the slide presentation.

Two phases

And while state documents have always described the two phases of Atlantic Yards as being west and then east of Sixth Avenue, LaRue explained why Forest City plans to leapfrog to the surface parking lot before building on the railyard. "[O]n both phases, this includes what is Phase 1, land we already own, and then Phase 2, land that will be--er, development rights that'll be created over the MTA [Metropolitan Transportation Authority]." Note that some of that land is not owned by the MTA but is still owned by private owners.

"We ultimately can have--will have rights to 6,400 residential units and 2,250 affordable units," LaRue continued. "This is subject to ongoing--an update of the environmental impact statement and ongoing litigation that we are working our way through from the--with regard to the impact that this has, based upon the development timeline." Indeed, there's a Supplemental Environmental Impact Statement [SEIS] process under way, with a draft SEIS pending, and then a public hearing.

"As we've noted here, this is a significant investment for Forest City where we have approximately $500 million at this time invested in the Atlantic Yards development project," LaRue stated. "But again, in a very strong market and continues to get strong, as evidenced by properties that we own in the market and market studies."

New capital

CFO Bob O'Brien cited Forest City's recent partnership with the Arizona State Retirement Fund. "This is a partnership of which we're very proud of. Arizona really chose to work with Forest City in a development partnership as a reflection of what we've been able to do across the country. Their desire was to invest in some of the key core markets across the U.S., and were finding it difficult to buy into those markets given where cap rates and acquisitions were. They studied our portfolio, they looked at our expertise and, importantly, looked at the pipeline of opportunity that already existed on our balance sheet. Pipeline of opportunity here at The Yards, at Atlantic Yards in Brooklyn and elsewhere."

"As Dave [LaRue] mentioned there, we closed on two transactions, one in Brooklyn and one in San Francisco. They're actively pursuing four more with us currently," O'Brien continued. "So it's not new cash we have to put in. It's activating that development investment we have on our balance sheet, critically important, accelerating the--pushing new development opportunities vertical, bringing them closer and quicker to revenue streams, quicker than we could do with our own equity capital, and a key partner for the future as well."

C Corp vs. REIT

Forest City, O'Brien noted, is often asked why the company is a C corporation rather than a REIT (real estate investment trust), especially "since most of our competitors are organized as REITs. It really boils down to one thing, and that's taxes. We pay almost no federal income tax... Out portfolio has generated tax losses. We can shelter the income. And importantly, as we work to divest of non-core assets in non-core markets, we're able to shelter those gains with over $200-plus million of net operating losses that sit on our balance sheet. So it's something that we consider. We understand that that's different, but the real difference is the tax collection."

" As we monitor that, and plan that out, we want to be prepared," O'Brien  continued. "As Dave [LaRue] and I have said, we'd much rather pay our shareholders than the federal government, so when the time comes and as we reach the time where those net operating losses are gone, and we aren't sheltering our income, that's clearly something that we're going to seriously consider. As we project out, we don't see that happening until beyond 2014 or '15. But that can change, depending upon the acceleration of asset sales and the gains that are embedded in the assets that we do sell."

Also, as noted on page 16 of the slide presentation, Forest City has far more flexibility to retain and invest cash rather than distribute it through dividends.

Brooklyn office market

LaRue pointed to p. 26 of the presentation, which shows a drag in office net operating income, or NOI. Forest City's Pierrepont Plaza in Brooklyn, where "we had the tenant vacate," was "the main driver" of that number.

But, LaRue said, "we are in a strong market. There are strong fundamentals in the marketplace for office... And as we look forward, based upon discussions we have ongoing, we see that 2014 and beyond, we have a great opportunity to reverse that trend, lease that space, and continue to keep our buildings occupied. That again I think is kind of a direct reflection of the strength of Brooklyn in particular... as a place to be."

Demographic drive

Deborah Ratner Salzberg, president of Forest City Washington, pointed to p. 40 of the slide presentation, which noted the region's demographic strengths.

"In DC alone, we've averaged 1,100 new residents annually in the past year--the past several years. Half of these are echo boomers, or people aged 25 to 29. [The slide says 25-34.] Three of the top echo boomers enclaves are in the DC area, in DC, Alexandria and Arlington. The interesting thing is seven of the top eight echo boomer enclaves are in Forest City core markets. You can see them on the map, cities like Boston, San Francisco, Denver, and New York. We have a very low unemployment rate, relatively speaking. We have an unemployment rate of 5%.

Sunday, July 28, 2013

On Aug. 3, my Atlantic Yards tour; on Aug. 4, my Atlantic Yards talk (plus essay: "The Barclays Center Emerges, Overshadowing Atlantic Yards Skepticism")

My Atlantic Yards tour Saturday, August 3, via the Municipal Art Society:
Atlantic Yards: Urban Debate, Arena Debut
10:00 AM - Join Atlantic Yards Report watchdog journalist and guide Norman Oder on a walk around and beyond the controversial Atlantic Yards site, home to the new Barclays Center arena, and 16 planned towers. While visiting Fort Greene and Prospect Heights, we will discuss the context, history, and still uncertain future of the ambitious project (announced in 2003), and the debates about urban design, architecture, public process, and eminent domain. Current issues involve the developer's plans to build the world's tallest modular tower, the mostly favorable reception of the arena, sited adjacent to a transit hub yet still frustrating some neighbors, and the court-ordered environmental review for the project's second phase. $20 / $15 Members.
Note: pre-paid tickets only.

My Atlantic Yards mini-lecture 1:40 pm, Sunday, August 4, part of the Boog City Poetry & Music festival (here's the full program, with an essay on AY, "The Barclays Center Emerges, Overshadowing Atlantic Yards Skepticism"):
Unnameable Books
600 Vanderbilt Ave.
Prospect Heights, Brooklyn
I should be speaking for about ten minutes. That's not a lot of time for the Atlantic Yards saga, but, given the location, I may be talking about the "cappuccino test."

Saturday, July 27, 2013

Jay-Z responds to Belafonte: "my presence is charity"

The blog Madam Noire, drawing on a Rap Radar interview (about 6:46 of Part 2) with Jay-Z, writes, JAY Z RESPONDS TO CRITICISM FROM HARRY BELAFONTE AND SAYS “MY PRESENCE IS CHARITY”.

(Note: the video embedded below starts at about 3 minutes in.)



This follows up from a beef that Jay-Z addressed on his latest release, regarding how civil rights veteran Belafonte criticized Jay-Z and Beyonce for doing too little in regard to social responsibility. (I've edited the Madam Noire transcript a bit):
“I’m offended by that because, first of all, this is going to sound arrogant, but my presence is charity. Just who I am, just like Obama's is. Obama provides hope. Whether he does anything, the hope that he provides for a nation and outside of America is enough... Just being who he is. You’re the first black president. If he speaks on any issue or anything, he should be left alone... Of course we want to challenge him to do better, but I felt like Belafonte just went about it wrong. The way he did it, within the media, and then he bigged up, like Bruce Springsteen or somebody. It was like, ‘Whoa, you just sent like the wrong message all the way around... You just bigged up the white guy against me in the white media.’ And I’m not saying that in a racial way. I’m just saying what it is, the facts of what it was, it was just the wrong way to go about it.... 
[9:43] Aside from all that, say I never did anything, my presence is charity! Just this guy who come from Marcy projects, y'know, apartment 5C, 534, who's made it, y'know, to these places, we playing in Yankee Stadium tonight. For the culture of hip-hop, for the African-American culture, and all these different things, my presence is charity. Y'know how many people are inspired by story, like period. Because it's actual, it's realized. It's not hypothetical. It's not saying you could do that, you could be president... Obama is the president... It's realized, it's an actual fact.”
Jay-Z has a point: many, many people (like NPR's Frannie Kelley) found the presence of Jay-Z opening the Barclays Center trumping any controversy: "The Barclays Center is fraught, but watching Jay open it was touching, and that night, I did not feel complicated about him."

And Jay-Z neutralized/deflected a lot of criticism of the arena and Atlantic Yards project.

But "my presence is charity"? Puh-leeze. He's a business, man.

Obama "should be left alone"? Didn't he promise to close Guantanamo?

Flashback, 2003, from the Cleveland Scene: "Ratner said Atlantic Yards 'will be almost exclusively privately financed.' The word to watch is 'almost.'"

When the Atlantic Yards plan was unveiled in December 2003, one of the most prescient analyses came not from the local media but from the Cleveland Scene, an alternative weekly in Cleveland, home of Forest City Enterprises, parent of New York's Forest City Enterprises.

The headline was Ratners take on New York: Where the public trough is a tempting buffet. And however much the language seems loaded, well, look how it turned out.

The Scene reported 12/17/03:
It appears that Cleveland's favorite welfare queens, the Ratners, are up to their old tricks, this time in Brooklyn.
Last week, with rapper Jay-Z and New York City Mayor Mike Bloomberg by his side, family scion Bruce Ratner unveiled plans for a new neighborhood of shops and condos, all centered on a basketball arena that, if he has his way, will someday house the New Jersey Nets.
The arena's designer would be Frank Gehry, the famed architect who created Case Western Reserve's Peter B. Lewis Building, remembered for coming in $23 million over budget and for almost killing pedestrians with the long icicles that fall from its curved metal roof.
Mimicking the Ratners' Cleveland convention-center plan ("Gravy Train," December 3), the Brooklyn development would be right around the corner from MetroTech Center, the seven-million-square-foot commercial development under construction by Forest City Ratner Companies, the Ratners' New York affiliate. The project can get off the ground only if the Nets accept Bruce Ratner's $275 million offer to buy the team.
But in a line that drew instant chuckles from the vultures in the New York press corps, Ratner said the project "will be almost exclusively privately financed." The word to watch is "almost."
"That will be a promise to keep an eye on as the project progresses," wrote the New York Sun. Yet it appears that it's already being broken. Bloomberg will allow Ratner to take taxes generated by the development's first phases and reinvest them back into the project. "We're truly very excited, and we hope he wins and he brings the team to Brooklyn," says mayoral spokeswoman Jennifer Falk.
Actually, that TIF (tax increment financing) plan was dropped for a more complicated, and opaque plan for PILOTs (payments in lieu of taxes) to pay off the plan.

Some semi-skepticism

And were "the vultures in the New York press corps" really chuckling?

Actually, most of the coverage was enthusiastic, though the New York Sun, cited in the above piece, admitted skepticism within a generally approving 12/11/03 editorial headlined Building in Brooklyn:
Some of the best news the city has heard in months came yesterday with the disclosure of plans to build a basketball arena and office and residential towers at the intersection of Atlantic and Flatbush avenues in Brooklyn.

Much of the attention, naturally, will be focused on the basketball arena part of the project. About this we would say that if the Nets can be lured to New York City from New Jersey, it would be a good thing for New York City. A basketball-arena would be used for more than 40 home games, unlike a football stadium, which would be used for fewer than 10. Doubts about how this can work can be allayed by the experience of Washington, D.C. There, the move a few years ago of an NBA team to a new arena in downtown Washington from suburban Landover, Md., helped turn a once-shabby district neighborhood into an area that now bustles with fine restaurants and new condominiums.

But the most important part of this project is the scale of the new construction: 2.1 million square feet of office space, about the amount in the Empire State Building, and 4,500 residential units. The reflexive neighborhood groups were already out complaining yesterday about potential traffic and a "land grab." The general concerns about eminent domain laws and their abuse are well founded. But in this case, most of the site is already publicly owned rail yards of the Long Island Rail Road. And the activists opposing the project have gone beyond "nimby," or not in my backyard, to "banana," or build absolutely nothing anywhere near anyone. What they are really opposed to is the kind of economic growth that this project represents.

Worth noting, as well, is developer Bruce Ratner's assertion yesterday that the $2.5 billion project will be financed "almost exclusively" with private funds. That will be a promise to keep an eye on as the project progresses. The plan sketched by Mr. Ratner and the architect Frank Gehry deserves quick clearance from the city and state when it comes to the logistics and approvals necessary. But in a city where residents face the highest combined state and local tax burden in the nation, any tax relief should be distributed equitably to those who pay the most taxes, not on an ad hoc basis by politicians as targeted subsidies to politically powerful developers.

It seems the intersection of Atlantic and Flatbush avenues has been under construction for one reason or another for the past century. For all the construction work and underground improvements made, however, the fruits of the work have been sometimes difficult to detect above ground. It will be a good thing to see some office and residential towers rising in Brooklyn instead of in New Jersey or some city in the Sunbelt.
The Sun was correct that a basketball arena gets used far more than a football stadium, though the difference between Brooklyn and downtown Washington was that nearly everything around the Brooklyn arena site was already gentrifying.

As for scale, well, there's an argument for significant density, and Atlantic Yards opponents ultimately embraced that, via the UNITY plan. But they didn't support Forest City Ratner choosing the scale, with the willingness of the state to override zoning.

And most of the site was not "already publicly owned rail yards"--actually, less than 40% of the site.

As for the "promise to keep an eye on as the project progresses," well, most have taken their eye off that.

It's devilishly difficult to tote up the combined value of direct subsidies, tax breaks, underpriced land, and zoning overrides, but the benefit is easily in the hundreds of millions. It's closer to $1 billion--and possibly more--than to $500 million.

Friday, July 26, 2013

At Brooklyn Real Estate Summit, statement that "we're very proud of" Barclays Center noise fine provokes titters

At the 5/9/13 Brooklyn Real Estate Summit at the Brooklyn Academy of Music, BAM's Katie Dixon (at 26:46 of this video) said it had sometimes been hard to locate BAM: "Now, we say, we're very near the Barclays Center, everyone knows the location. That's really transformative."

"Well, I like to say it's the only place the Atlantic and the Pacific meet, at Flatbush Avenue," followed up broker Chris Havens, the host of the panel.

Havens, who has an edgy sense of humor, continued archly: "Also, we had a very important milestone. The arena got a $3200 noise violation fine, that you saw on the news. That was for the Rihanna concert. So we're very proud that that happened, and hopefully that will happen again."

The audience tittered.

(Actually, the fine was for Swedish House Mafia, not Rihanna, though there were noise complaints regarding that concert, which was just a few days before the real estate summit. The city has not successfully levied any more fines, nor has the arena operator explained its plan to lower the noise, though efforts to improve have been claimed.)

"I have a close friend who can see [the arena] out of her window, on Bergen Street," Havens added, with a bit of triumphalism. "Her friend said, 'Just give in, Susan, become a Nets fan... You can see the apparel is everywhere. One of the top tech guys in DUMBO said he was in Cologne in the winter, and he saw a Nets hat in a bar in Cologne, Germany."

Thursday, July 25, 2013

City Council votes ten-year renewal for Madison Square Garden

Capping a surprisingly effective lobbying effort by the Municipal Art Society, the Regional Plan Association, and Times architecture critic Michael Kimmelman, the New York City Council voted yesterday 47-1 to renew Madison Square Garden's operating permit for only ten years in order to effectuate a revamp of Penn Station below..

The Garden, which is just finishing a renovation costing nearly $1 billion (begun after a plan to move to Moynihan Station dissolved, and with the expectation of a renewal in perpetuity), "barely acknowledged" the deadline, the Times reported.

A move in ten years is not guaranteed. The Garden won't have to move until and unless the city, likely with much help from the state and feds, comes up with a plan to fix Penn Station. The Garden surely will lobby the next administration for changes.

And surely the Garden would make a case for significant subsidies, tax breaks, or revenue generating ideas (naming rights, anyone?) if it had to move.

But the vote sets up a scenario in which, at least for a period of time, the Barclays Center in Brooklyn would be the most stable and modern arena in the city.

"Brooklyn's not for sale," then (Atlantic Yards protesters) and now (Carpenters Union)

It's notable how the chant "Brooklyn's not for sale" can be appropriated for multiple purposes.

It was used frequently during the Atlantic Yards battle, including at the March 2010 protest over the arena groundbreaking.



The unions come around?

By contrast, most unions preferred the phrase "Build It Now" and rallied vigorously for the project, as in June 2008.

Now, as it turns out, the Carpenters Union is protesting the compensation (and representation) of conversion workers at the Barclays Center with a persistent inflatable rat (and video).

And they're fighting the general trend toward nonunion work in Brooklyn, as at the 5/9/13 Brooklyn Real Estate Summit at the Brooklyn Academy of Music. The phrase? "Brooklyn's not for sale."



Inside, broker Chris Havens, hosting one panel (at 7:20), offered a joke: "Local's 79's outside. And I like to say, If you're not getting picketed, you're not doing a big enough job."

Wednesday, July 24, 2013

Billboard numbers show Barclays ahead of MSG in concert/family show revenue, but the Garden earns more per event

While the Barclays Center ranked first in the United State for concert tickets sold, according to Pollstar, far outdistancing Madison Square Garden (MSG), the numbers were closer regarding overall ticket revenues for concert and family shows (not sports).

MSG apparently pulled in far more revenue per show, which suggests that, once the Garden's renovations are done, it will be more competitive.

As the New York Times reported:
Overall, Barclays ranked No. 2 worldwide in ticket sales with $46.9 million, second to the O2 Arena in London, with $119 million, Billboard reported. Madison Square Garden was fourth with $39 million.
Meadowlands Matters reported:
Three of the top four U.S.-grossing arenas are in this region — No. 2 overall Barclays Center in Brooklyn ($46.9M), No. 4 Madison Square Garden in Manhattan ($39.5M), and No. 8 Prudential Center, which in the United States also trailed the sixth-ranked Staples Center in Los Angeles ($36.2M).
The Newark arena sold out 11 of 41 events, while Barclays Center sold out 20 of 90 and the Garden sold out 22 out of 33.
If MSG reaped $39.5 million from 33 shows and Barclays $46.9 million from 90 shows, that suggests that the Garden charges far higher prices and/or Barclays deliberately positioned itself to charge less and perhaps bring in smaller shows.

Barclays Center releases August event calendar: the big event is the MTV Video Music Awards

The Barclays Center has released its August event, which includes six mights of concerts, and five days associated with the MTV Video Music Awards.

Note that surely the Justin Bieber and Beyonce concerts will sell out, but the expected attendance--surely limited by the set--is expected 14,500 and 13,500.


Here's the July calendar.

Tuesday, July 23, 2013

From the latest Construction Alert: Dean Street between Flatbush and Sixth closed two days next week for crane

The latest bi-weekly Atlantic Yards Construction Alert, (below) dated July 22, was distributed yesterday by Empire State Development after preparation by Forest City Ratner, but in this case--unlike the practice in most weeks (bottom)--the state agency didn't even bother to reformat it with new letterhead.

Notably, Dean Street will be closed between Flatbush and Sixth Avenues on July 29-30, next Monday-Tuesday.

There's continued at the modular tower, B-2, including:
  • installing reinforcement steel for foundation walls
  • pouring the concrete Foundation Walls. 
  • reinforcement and pouring concrete for the Dean Street transfer foundation
  • construction of and tie in the foundations grade beams at the Arena Exit northwest corner. 
New work at B2 includes:
  • Interconnect the Con Edison Vaults, electric and plumbing
  • Con Edison may work within Dean St to install the Tower 2 temporary electrical service. We do not have a specific date...
  • Crawler crane will be delivered to the site on July 29th and be constructed on July 29th thru July 31st. This will require Dean Street, between Flatbush Avenue and 6th Avenue, to be closed while the crane is being erected through July 30th. DOT permits are approved pending DOB approvals (cranes & derricks) which is still outstanding
  •  Install Sidewalk Bridge at the Dean Street entrance. This is scheduled for July 22nd thru July 24th
  • Erect Structural Steel starting July 31st. There will be approx. 4 to 5 steel trucks per day. A separate logistics plan has been submitted for this work
LIRR Yard Activities Block 1120 & 1121
  • Work will commence on Pacific street level within the MPT to prepare the piles to accept the new barrier and fence installation. This work will consist of cutting off piles to proper heights and welding steel supports.



Monday, July 22, 2013

Bruce Ratner reflects on career: "I am a big public interest person. But I need to make money."

From BloombergBusinessWeek
That's the Atlantic Yards developer, Bruce Ratner, on the back page of BloombergBusinessWeek. Maybe it's the format, which understandably focuses on the positive, but not there's nothing critical, other than some potentially self-sabotaging statements.

Bruce Ratner: How Did I Get Here contains a quote that to many will be unexceptional: "I came from Cleveland. Back in the 1980s, Brooklyn wasn't such a great place, so I would joke, 'Coming from Cleveland, anything looked good.'"

As I commented, in the past, rather than comparing 1980s Brooklyn to Cleveland, Ratner has instead gushed regularly about the borough where his business is located. Consider his interview last year with Charlie Rose.

"So why Brooklyn?" Ratner asked rhetorically. "Brooklyn, I think growing up for me, I grew up in the 50s, you had the Brooklyn Dodgers, everybody great that I knew of, whether it be Jackie Gleason, or Walt Whitman, who I read about in college and high school, everybody seemed to come from Brooklyn."

"I got to travel all over the city, I fell in love with Brooklyn: the transportation, the parks, the museums, just everything, the brownstones," Ratner added. "And so, very early on, I said, in 1984-85, this is a place I want to develop, because I believe in this place, I believe this place will come back. So that's really what it was."

Ratner as victim?

It states that he "Went through eight years of litigation before getting approval for the Barclays Center."

There are other ways to put that, including:
  • "Harnessed the nation's most powerful eminent domain laws to acquire property for the arena project."
  • "Leveraged political connections, p.r. spending, lobbying, campaign contributions to get an inside track and a discount price on public land."
In his own words

Also consider Ratner's own words: "I am a big public interest person. But I need to make money."

Or: "The only way you can really not go to war was to go to grad school, so I applied to law school. I had no interest in the law."

You can draw a (jagged) line from that mindset to the New York Times's description last year of Ratner's "reputation for promising anything to get a deal, only to renegotiate relentlessly for more favorable terms."

And that's part of the Culture of Cheating I've described regarding Ratner's Atlantic Yards project.

Sunday, July 21, 2013

On NPR: "Jay-Z and Beyonce were kind of used as pawns to help the developers..."

OK, Jay-Z may be "bulletproof" in the music market, as some experts say, but some remember lingering taint from the role the hip-hip entrepreneur and cultural force played in the building of a certain Brooklyn arena.

From NPR, 7/19/13, Getting Real On Race After Zimmerman Verdict...
MICHEL MARTIN, HOST:  I'm Michel Martin and this is TELL ME MORE from NPR News. Now it's time for our weekly visit to the barbershop, where the guys talk about what's in the news and what's on their minds. Sitting in the chairs for a shape-up this week - our writer and culture critic Jimi Izrael, with us from Cleveland. Fernando Vila is the director of programming for Fusion. That's a joint venture between ABC and Univision. He's with us from Miami. Sportswriter and professor of journalism Kevin Blackistone is here in D.C. And also here in Washington this week - Mario Loyola. He's normally with us from Austin, where he is with the National Review magazine and the Texas Public Policy Foundation.

MARTIN: ...But before we go, we do want to talk about Jay-Z's album "Magna Carta Holy Grail." There's new criticism - now people might remember that the singer and civil rights activist Harry Belafonte once said that Jay-Z and Beyonce need to take more social responsibility. Well, Jay-Z's talking back on this album. I just want to play a short clip.
(SOUNDBITE OF SONG, NICKELS AND DIMES")
[I'm just trying to find common ground
'fore Mr. Belafonte come and chop a nigga down
Mr. Day O, major fail

Respect these youngins boy, it's my time now
Hublot homie,
two door homie
You don't know all the shit I do for the homies]
MARTIN: Oh, I had missed that lyric until you all pointed it out to me. Ouch, Kevin what are you saying? Is he overstepping? Is he giving his props to the elders? What's up?
BLACKISTONE: Yeah, he's overstepping. I mean, come on you can't go after Harry Belafonte even though he went after you. Look, you are doing your thing, but we also know you don't have the history and the narrative of Harry Belafonte. You know, you didn't learn at the knee of Paul Robeson. You know, you didn't write the check to get MLK out of the Birmingham jail. I mean, you didn't do all of those sorts of things. You didn't march on South Africa.
You know, you did "Big Pimpin," which a lot of people would say is a misogynistic album, OK. I mean, it may be funky, but at the end - you know, you can look at the lyrics for yourself. And, you know - and most recently, with the whole Barclays Center up in Brooklyn, there's a whole documentary out called "Battle of Brooklyn," which shows how Jay-Z and Beyonce were kind of used as pawns to help the developers just steam roll over people in the Atlantic Yards neighborhood so that they could build that sparkling new arena there. So, you know, lay off of Harry Belafonte.
It's actually Battle for Brooklyn, but Blackistone gets the picture in a way many don't.

Saturday, July 20, 2013

Details for MTV Video Music Awards emerge: three days of street closings near arena Aug. 23-25; no public meeting scheduled yet

The Mayor's Office of Media and Entertainment yesterday circulated an unsigned "Dear Resident" letter from MTV regarding the channel's popular Video Music Awards program, which will broadcast Aug. 25 from the Barclays Center and require three days of street closings nearby, though only street will be closed the first day.

Residents will get passes to park in the surface parking lot associated with the neighborhood, and sidewalks will be open to residents of the impacted streets--Sixth Avenue between Atlantic Avenue and Dean Street; Dean Street between Flatbush and Vanderbilt Avenue, and Pacific Street between Sixth and Carlton Avenues--but there are no other announced benefits or compensation for the inconvenience.

Residents, however, were informed about how to purchase tickets for the event. MTV's plans previously alarmed locals, given the failure of anyone from MTV or the mayoral agency to attend a recent public meeting on qualify of life issues related to the arena. A public meeting likely will be held closer to the time of the event.

From the letter

The letter forwarded by Jake Goldman, Director of External Affairs for the Mayor's Office of Media and Entertainment, states:
As you know, Barclays Center is hosting our MTV 2013 Video Music Awards on Sunday, August 25th . We have been working in conjunction with the Mayor’s Office of Film, Theatre, and Broadcasting on efforts to make our event safe and efficient. Additionally, guidance from the Mayor’s Community Affairs Unit, Police and Fire Departments, Department of Transportation, and members of the neighborhood community have been immensely helpful, ensuring a positive experience throughout our time in Brooklyn. We want to thank the community for the valuable input they have provided, allowing us to address concerns as they arise.

In our aim to keep all residents informed, we are sharing some details in writing to assist the community. The production load‐in will begin inside Barclays on August 6th . The anticipated dates of neighborhood impact are August 23rd – August 25th. Our Red Carpet rehearsals with crew (no celebrities) will be on August 24th from 6:30pm – 9:00pm. On August 25th , the Red Carpet is live on television from 8:00pm – 9:00pm with the live broadcast of the VMAs immediately following from 9:00pm – 11:00pm. For any parking that is disrupted during this time, free alternate parking has been arranged nearby. On the day of our event, sidewalks will remain open to residents of impacted streets.
What to expect: crowd control
On the day of the VMAs, you can expect to see ample activity mostly along 6th Avenue and Dean Street. There will be outdoor lights, music, cameras, and many cars arriving to drop‐off / pickup guests. To maintain safety for the general public, crowd control will exist around the perimeter of the affected streets.
Getting in touch

Those who need parking passes must contact VMAinfo@viacom.com, which, along with the phone number 1‐855‐VIACOM‐9 is a contact info for questions.

The letter closes:
Thank you for hosting MTV in your community. We have done our best to minimize the impact in your neighborhood and are hopeful that this information answers many of your questions. However, if you have any further queries or concerns regarding MTV’s presence in Brooklyn, please refer to the contact information below and you will receive a response within 24 hours.
Continuing to keep the community informed, we plan to share details again closer to our event date, August 25th.
Exactly what that means is unclear, though, as noted, residents have requested a public meeting, and likely one is in process.

Atlantic Yards down the memory hole: subway naming rights in the Times, cheery news in the Brooklyn Paper

From a New York Times article today headlined M.T.A. Considers Selling Rights to Name Subway Stations:
The authority experimented with station naming rights in 2009, when the confluence of stops at Atlantic Avenue, Pacific Street and Flatbush Avenue in Downtown Brooklyn was renamed “Atlantic Avenue-Barclays Center” as part of a 20-year, $4 million sponsorship deal.
An initial version of the article credited Barclays for buying the sponsorship, but after I pointed out on Twitter that it was Forest City Ratner, it was fixed, with a link to previous Times coverage that identified Forest City as the buyer..

Unanswered was why Forest City spent the monty, but, as I wrote in my analysis of the MTA negotiations, it was understandable that, without a Gehry arena and the attendant delays, the developer was under pressure to adjust the deal.

The Brooklyn Paper down the memory hole

There's a cheery article on the Brooklyn Paper website headlined Greenmarket sprouts at the Barclays Center. There's also a big ad in the current issue for the Nets. But there's been no coverage of the lawsuit filed against the Atlantic Yards modular plan. Wonder why.




Friday, July 19, 2013

After press conference unveiling expensive new Nets, owner Prokhorov lauded (but what about all the public support?)

It's front-page news in the New York Times, the unveiling of the Brooklyn Nets' expensive new players, For Nets’ Prokhorov, $183 Million Is No Object:
It should be clear now that Mr. Prokhorov, a 48-year-old Russian billionaire, renowned playboy and aspiring politician, did not come on a peace mission. He came to conquer the N.B.A. by setting a standard for unbridled spending and general audacity.
That truth was unmistakable Thursday at Barclays Center in Brooklyn, where the Nets introduced two pricey new stars, Paul Pierce and Kevin Garnett, to join the three pricey stars the team already had.
The Nets’ payroll next season will surge to a league-high $101 million, triggering a league-record luxury tax bill of about $82 million. In three years, Mr. Prokhorov has morphed from the N.B.A.’s international man of mystery into a Russian George Steinbrenner — only taller, richer and with a cool accent.
...Fourteen of the N.B.A.’s 30 owners are billionaires, according to Forbes. But few spend on their teams as eagerly as Mr. Prokhorov does, or with as much overt glee. There seems to be no limit to his largess, at least when it comes to assembling elite talent. Last summer, Mr. Prokhorov committed to $330 million in player contracts, including rich deals for Deron Williams, Joe Johnson and Brook Lopez, who were at the time the Nets’ biggest stars.
The Times article explains that the estimated $82 million penalty will be shared with lower-spending teams and the league at large. The Nets have sold all but 800 tickets below their self-imposed cap of 12,500-13,000. (Note how that cap is fluid.)

Painless spending

More importantly, Prokhorov's a billionaire. His spending is painless--not just as a strict business proposition but as part of shaping his media halo. As the Times notes, Forbes estimates that the move to Brooklyn increased the value of the team by 48 percent, to $530 million and Prokhorov claims "his investment had increased 'minimum, fivefold' since his purchase of the team and a share of its arena."

Arena employees gave out water to those watching
the press conference at the oculus outside
Is that merely investment genius? No. Prokhorov and his partner Bruce Ratner gain from the team's move to the nation's media capital, and a brand new arena primed for luxury suites and sponsorships.

All that makes it ever more curious that the city and state would provide subsidies, tax breaks, free or low-priced land, and triple tax-exempt financing to enable the Barclays Center and the larger Atlantic Yards project.

And it points out media myopia--a willingness to laud Prokhorov but not to examine uncounted savings on the arena that I estimate at more than $100 million--greater than the penalty the Nets are paying.

In the tabloids

Daily News columnist Filip Bondy wrote Nets owner Mikhail Prokhorov’s win-at-all-costs mentality is reminiscent of late George Steinbrenner, calling him "a fan’s dream owner, an easy newspaper column, and something of a nightmare for James Dolan and every other league executive."

Yeah, an easy newspaper column for those who don't want to think too much.


New York Post columnist Mike Vaccaro, in Piece-ful dream closer to reality, wrote:
For the first time, it feels real. For the first time, this doesn’t seem like a fantasy-league trade or the rantings of a late-night talk-show caller. For the first time, they are inside Barclays Center, flesh and blood, words and thoughts and opinions, bookend Hall of Famers.
Bookend Nets.
“What’s up, Brooklyn?” Kevin Garnett asks.
“At this point, right now,” Paul Pierce says, “we’re all about winning a championship, and Brooklyn, we feel, gives us the best opportunity.”
...Here they are at Barclays Center, from where the Nets will launch a pointed assault on the Knicks, on the Eastern Conference, on the rest of the NBA.
...But, really, that’s going to be the fun part, watching them either figure it all out or fail spectacularly trying... Or maybe this really is just the start of something special. Here they are. It’s time to find out. Suddenly November can’t get here fast enough. And not only because it’ll be cooler then.
At the press conference

The press conference was excerpted on NBA.com. In one video, 15-year Celtic Pierce stated, "Obviously, I would have loved to end my career in Boston but y'know, that day and age is probably over with."

It sure is. Now, "at this point in our careers, we're championship-driven... Brooklyn, we feel, gives us the best opportunity."

The crowd outside watching at the oculus was, given the very hot weather, understandably modest. But there was a Nets store.


Dean Street between Flatbush and Sixth Avenues closed on Saturday, maybe Sunday, for work at B2 site

A message from AtlanticYards.com echoes one placed on cars parked on and around Dean Street:
Community Notice
DEAN ST. BETWEEN FLATBUSH & 6TH AVES. WILL BE CLOSED
Saturday, July 20th (& Sunday, July 21st if necessary)
to install Con Edison vaults at the B2
construction site at the corner
of Flatbush Ave. and Dean St.
This work is expected to start at 7:00 am and conclude by 9:00 pm. The street closure will start at 3:00 am.
Access to Barclays Center loading dock is being coordinated via 6th Avenue.

Thursday, July 18, 2013

After demise of Kemistry, operators plan a club for teenagers with arcade games and "latest electronics"

The (revised?) team behind the controversial lounge/nightclub Kemistry proposed for 260 Flatbush Avenue near Park Place, which was yesterday denied a liquor license by the State Liquor Authority, now plans to organize a social club for teenagers, with arcade games and electronic devices.

Given the reported high rent at the space, whatever goes in there must be calculated to reap significant revenues. Perhaps the denial of the license, as well as the departure of partner Leonard Bartletto from the liquor license process, caused a re-think regarding whether a liquor license would be viable.

A message from Kemistry: new plans

Below is the unsigned message I was sent early this morning from an account previously used by project manager Damali L'Elie to send me a message about Kemistry:
Kemistry restaurant lounge is sadden by the decision of the community. We had all intention in complying with the matters at hand. Kemistry restaurant Lounge hired a sound professional, who did a whole acoustic test to make sure we didn't violate any noise codes due to sound which would put caps the max level sound go turn up to. Which was very costly. Kemistry Restaurant Lounge also are working with Precision Security Agency who are known to be the most professional and train security company in NYC who also submitted a full in detailed security plan for the lounge. Kemistry Restaurant Lounge also agreed to close at decent hours that would be beneficial to both. Sun: 10am-12pm. Mon: 4pm-12am Tues: 4pm-2am. Weds: 4pm-3am. Thurs: 4pm-3am. Fri: 4pm-3:30am. Sat: 12pm-3:30am. With these times we are open our doors later than most restaurants in the area also closing our doors before most.
We still plan on being good tenants as we move forward these next years to come and in giving it great thought we will revised our plans into a social club for teenagers. Fully equip with the latest electronics , Arcades and Social Media devices. Sounds and lasers from the future. We will operate 7 days a week and cater to a 13-19 year old crowd. We would like to sit down with the board to discuss reasonable hours of operation and come to an agreement on operations. therefore hopefully in time when we revisit the SLA the community will not denied us and see us as responsible neighbors
Note that the decision yesterday was by the SLA, not the community.

Any role for review?

No SLA approval is needed for a social club for teenagers, but rather if/when the establishment seeks a liquor license for adults.

I'm not sure whether any presentation to Community Board 6 is required. CB 6 District Manager Craig

Hammerman, responding to my query, wrote:
The only element that I can think of which might involve a public review component is the way the zoning applies to the lot itself. There is a small, triangular piece of the footprint on the Prospect Place side which is exclusively zoned as Residential. I suppose there's a chance that what they are proposing may require a special permit or variance, but that's a determination that would have to be made by the Department of Buildings.

It's unclear whether Bartletto, who was arrested in March on charges of selling pot, would be involved.

SLA Chairman: problem of leaking bass from music venues "slips between the cracks" when it comes to regulation

Residents living near the Barclays Center are not the only ones to complain about leaking noise from musical, though the scale--an arena, as opposed to a nightclub--is unusual.

Yesterday, at State Liquor Authority (SLA) hearing that included a thumbs-down for Kemistry, the agency heard many other issues, including complaints about a loud bar on Eldridge Street on the Lower East Side.

"Is it problems with the bass?" asked SLA Chairman Dennis Rosen sympathetically. "I think that's one of the things that slips between the cracks on these [noise] codes." Of course, that's the main responsibility of the city Department of Environmental Protection.

A bit later Rosen brought up the issue: "Let's say I'm on the second floor [above the club], and my apartment vibrates from the bass. That would be awful."

Well, the residents near the arena aren't right above the Barclays Center "club"--not, at least, until the first tower is built--but they still feel vibrations from bass-heavy shows. And there's been but one fine, a mere $3200.

Wednesday, July 17, 2013

Kemistry kaput: SLA denies liquor license to controversial lounge/club aimed for Flatbush but backing into residential Prospect Place

Update July 18: Those behind Kemistry now plan a social club for teenagers.

Kemistry, a lounge/nightclub planned for Flatbush Avenue but with a glass back wall at Prospect Place, was emphatically denied a liquor license today by the State Liquor Authority, which cited widespread opposition from the community regarding late hours and planned bottle service.

Compounding that opposition, neighbors' skepticism about Kemistry was fueled by late-emerging news (via DNAinfo) that one of the two partners in the business, Leonard Bartletto, had been arrested on selling marijuana in March, but had not informed fellow partner James Brown or the SLA.

Though Brown said today that he was willing to buy Bartletto's share and make some partial concessions regarding the scope of bottle service, SLA officials were unmoved, but instead cited the widespread community opposition.

In this case the burden was on Kemistry, planned to host 225 people on two levels. If an applicant for a liquor license is within 500 feet of three or more licensed premises, the SLA must affirmatively determine that granting the license would be in the “public interest.”

After the hearing, Brown’s lawyer said it was unclear what would happen next. However, the SLA expressed skepticism toward even a re-submitted application.

The arena as magnet

While the emergence of the Barclays Center, a huge crowd magnet less than three blocks away, has always been a backdrop to plans for Kemistry, both Brown and SLA officials made that explicit.

Brown said that Kemistry's late hours--planned until 2 am, 3 am, and 4 am (Fri/Sat)--were aimed to take advantage of crowds leaving the arena, while bottle service was needed to reap revenues commensurate with the high monthly rent.

But SLA Chairman Dennis Rosen was worried. “I'm particularly concerned that the problems we tried to avoid” with the arena--limiting hours for a venue that had already agreed to no bottle service--”might rear their head if we grant this application.”

It's not the first controversy created when entrepreneurs have tried to capitalize on the new crowds on Flatbush. Previously, a venue planned for Flatbush and Sixth Avenue, a music venue and sports bar initially called Prime 6, was modified after community consultation into the restaurant and bar Woodland.

Much opposition

Besides individual testimony about a dozen neighbors, including lawyer Peter Adelman, representing Prospect Place Neighbors, representatives of Community Board 6, Council Member Steve Levin, Assemblymember Joan Millman, and state Senator Velmanette Montgomery spoke in opposition at the meeting, held at SLA office in Harlem.

CB 6 District Manager Craig Hammerman, citing the unwillingness of the applicants to compromise on issues raised by neighbors, said they had decided to "cease discussion and roll the dice."

Had the community board known of Bartletto’s tangle with the law, Hammerman said, it might not have been so willing to negotiate. Now that the character and fitness of the applicants has been called into question, he said, "we don't see how the public interest would be served by granting of any license."

Jim Vogel, representing Montgomery, suggested, "if it's a new partnership, it should be a new application."

Adelman said “we put an enormous amount of time attempting to accommodate this applicant” but “its a square peg in a round hole.”

“People simply don't trust the applicants,” he said, “and this was the case before the criminal misconduct came to light.”

Neighbors cited an initial commitment, since withdrawn, to brick up the back wall of the building, where an emergency exit leads to Prospect Place. (The building was formerly a Big Daddy appliance store on Flatbush, but the back was apartments.)

“We have no certainty as to what this is,” commented Rob Underwood. “It feels like a nightclub to us.”

Playing defense

Kemistry lawyer Jerome Sussman said Bartletto had lied to him about his past, and that Brown, having known Bartletto for a dozen years, never knew anything untoward. “We have agreed to give him a $20,000 payout to walk away, only if we get the license,” Sussman said.

He noted that there were no deliveries planned on Prospect Place nor any usage of the back door, except in an emergency. He suggested that soundproof curtains would suffice.

“The hours seem to be a moving target,” Rosen said.

Sussman provided a new set of hours, including lunch service. Brown suggested that the shifting professed hours meant they were trying “to accommodate the community board’s request,” a claim that provoked incredulity from the audience.

Why bottle service?

Rosen, noting a history of problems with nightclubs serving liquor by the bottle, asked why it played a central part in Kemistry’s business model.

“The later evening hours we expect to bring in the people leaving the Barclays Center after any event that may be there,” Sussman said.

He added that Kemistry would serve wine and champagne in bottles throughout the evening, but instead of cutting off hard liquor bottle service one half hour before closing--which prompts worries that people would gulp remaining alcohol--”he is willing to limit that to an hour, hour and a half prior to closing time.”

Rosen suggested bottle service was incongruent with a neighborhood having a high proportion of residences.

“There's not a house on the street that doesn’t have iron gates,” Sussman commented, as if suggesting that detracted from a residential district.

“How is it not a quiet residential street?” asked Rosen, eventually getting the Nassau County-residing lawyer to admit, “I found it to be a fairly quiet street.”

Rosen brought up the Barclays Center, warning that the problems SLA aimed to avoid with that license would instead “be created by Kemistry.”

Brown said he’d compromise on hours but needed bottle service to be competitive.

Where else is there bottle service?

Brown cited the nearby lounge Sugarcane, prompting “no’s” from the crowd.

He mentioned Social Butterfly on Atlantic Avenue, prompting Rosen to point out that’s a different street..

Brown said there was no dancing planned, given that seating would maximize the use of the floor.

One neighbor, Ted Kim, pointed out that the license application proposed getting a catering license to have dancing and DJs.

While the license application mentioned jazz being played at Kemistry, Brown during his statement mentioned that there would also be r&b, which had not previously come up.

The verdict

Commissioner Jeanique Greene observed, “If the community is apprehensive, it sets a tone, it sets a relationship... it seems to have went awry, especially when the community is not getting a clear picture of what you intend.”

“I have to take into consideration the concerns of the community,” she said, noting that the location wasn’t “strictly Flatbush” and “this isn't Lower Manhattan where we have a location every storefront.”

“I just can't see the type of location you have could coexist” with the neighborhood, she said, adding, “I can't even recommend that you go back and speak to residents” and resubmit.

Brown noted that he co-owns another establishment, Atomic Wings, that got a beer and wine license through Community Board 6.

“It's a totally different animal,” countered Greene. Having bottle service, she added, “that just doesn't read as a restaurant.”

Rosen had the final word. “I don't think there's been a demonstration, and this is a 500-foot case, that it will serve the public interest, and the burden is on the applicant.” He repeated his concerns about problems SLA tried to avoid with the Barclays Center.

Not quite as promised: oculus, set to broadcast Nets press conference, was supposed to be programmed for games, events, maybe feed of Prospect Park

Get ready for a crowd on the arena plaza, given the hype around new Brooklyn basketballers Kevin Garnett, Paul Pierce, Jason Terry, and Andrei Kirilenko. The BrooklynNets announced yesterday:
The Brooklyn Nets will hold a press conference on Thursday, July 18 at 12 p.m. to introduce the team's newly acquired players.
We are welcoming fans to come to The Daily News Plaza outside Barclays Center and watch the press conference on the oculus. The press conference will also be televised live on the YES Network and streamed live on brooklynnets.com.
That finally, and rather partially, fulfills a promise to use that digital display screen for more than advertising.

However, the press conference is a form of advertising, rather than a more civically virtuous activities suggested nearly years ago.

The promise: a programmed display screen

The 9/28/10 press release announced designs for the arena plaza:
The Barclays Center Oculus, which will extend over a 5,660 square foot section of the plaza closest to the arena, is 117 feet by 56 feet and 36 feet from the top of the plaza paving. The Oculus will also contain a state-of-the-art display screen that can be programmed for games, events and other activities on the plaza.
"Forest City Ratner is very interested in working with the community to find out what the right kind of programming is," architect Gregg Pasquarelli of SHoP said 9/29/10. "We just looked at examples around the city... whether it's something as simple as cafe seating… Wouldn't it be great to have to have a live digital feed of Prospect Park on the inside of the oculus?"

Neither have arrived, other than very limited cafe seating associated with Starbucks.

Also possible, Pasquarelli suggested, were fashion shows "or maybe a movie night, which we think would be fantastic… bring chairs, blankets,... you could actually project the film on the inside of the oculus." 

He was a little over-optimistic, wasn't he?

Promises, promises

Just as the arena was described as a place for graduations and civic events (of which there have been a few) but instead is predominantly a commercial exercise, so too is the oculus.

Also note several other promises not quite fulfilled: the delayed buildout was supposed to mean arena block amenities at unbuilt tower sites; the scoreboard can barely be seen from the plaza; and roof signage is actually visible from the street.

I wrote in April how the promised greenmarkets and holiday fairs at the Barclays Center plaza had not materialized. Then again, a greenmarket debuts today and will run Wednesdays through November 27.

And in other news... JKidd

The press conference also serves to crowd out any negative buzz from new coach (and ex-Knick) Jason Kidd's plea of guilty yesterday to drunk driving. The Times reported:
As part of his plea deal, Kidd has agreed to speak at high schools on Long Island. He will share his story of what happened in the drunken-driving incident, discuss the dangers of driving impaired and discourage teenagers from text messaging while they drive.
“He looks forward to these next few months,” Burke said of Kidd. “He want to connect with the kids who just got their license. He wants to put a touch on kids who look up to him and, hopefully, they will listen intently.”
But why exactly should they look up to him? He's a great player, and flawed person, with more than drunken driving in his background.

Nets GM Billy King released an oblique statement:
Jason has taken responsibility for his actions, and fully realizes that he needs to grow from this experience. We are confident he will make these strides on a personal level and have a positive effect on others as well.
We've heard that before.

Didn't an oblique November 2005 New York Times column quote a Brooklyn minister as saying that Kidd "began a transformation of his values, his relationships and his work"? And, like King's statement, didn't that column fail to mention why exactly a transformation might be needed, or at least seen to be happening?

Barclays ranks first in U.S. for 2013 concert ticket sales, third in world; MSG lags, but also has many more sporting events (as of now)

Via Pollstar 
It's clear that a lot of people, myself included, didn't recognize exactly how many musical acts would glom onto a (mostly) well-run new indoor venue accessible via public transit.

But the data suggest that not only is the Barclays Center far outdistancing less accessible arenas like the Nassau Coliseum and the Prudential Center, it's well ahead of Madison Square Garden, though that designation deserves an asterisk.

As the L Magazine pointed out yesterday, the 2013 mid-year report from concert-ticket tracker Pollstar shows the Barclays Center third in the world in ticket sales--nearly 660,000 in six months, and first in the United States, behind venues in London and Manchester,

MSG & hockey

While the L tweaked "poor Madison Square Garden hanging out down there in the number 29 spot," it should be noted that MSG currently houses two professional teams, not one, which means that 45 or so hockey games fill dates in Manhattan, nudging out concerts.

MSG typically hosts the New York Liberty, but due to renovations that WNBA team is temporarily playing at Newark's Prudential Center. MSG also hosts St. John's basketball.

Also, as the Times reported last September, MSG's typical costs are high and profit margins low, and it's tough to get two consecutive nights there, which means bookers have welcomed Barclays:
[Jim Glancy of Bowery Presents] said it will take time for the positions of the arenas to become defined. Barclays will enjoy a honeymoon period, as bands and their promoters give it a try, and the Garden’s renovations will not be completed until late next year. “The true test is years away,” Mr. Glancy said.
So it'll be interesting in 2015 (or earlier), when the Islanders come to Brooklyn, to see how much hockey will limit concert bookings. And it certainly hints at why arena developer Bruce Ratner, who's put together a group to revamp the Coliseum, is willing to offer that venue several Islanders games.

Via Pollstar
Barclays bookings

The L credited Barclays Center bookers:
Handled by AEG Live, the company behind shabby upstart festivals like Coachella, its pulled in more than a few heavy hitters since opening in September. Jay-Z's eight-night run of sold-out shows have ushered in the likes of Paul McCartney, The Rolling Stones, Green Day and The Postal Service in recent months. Superstar idiot Justin Bieber, Depeche Mode, Fall Out Boy, Beyonce, Vampire Weekend(!), Yeah Yeah Yeahs and the glittery debauchery of the MTV Video Music Awards are on the docket in the near future.
Some but not all of the acts that filled the arena--notably Barbra Streisand and the Stones--are not about to return annually, though Jay-Z surely can sell out, as can Beyonce.

Note that, in 2012, Barclays was 32nd on the list, with some 356,000 tickets sold, despite having been open barely more than three months. (Over the year, MSG, which was undergoing renovations, had about 454,000.)

The arena does not have to be filled daily to be near the top of the Pollstar list. While the Barclays Center is said to be able to house 19,000 people for concerts, stage arrangements typically put sections of the arena off limits.

So 15,000 is a very good crowd. To get to the half-year total of nearly 660,000 tickets, that means 44 shows--fewer than 8/month--that sell 15,000 tickets. Or, rather, more shows, including some that don't sell out.

The August lineup

While the Barclays Center in August offers some very high-profile events, including a return visit by Justin Bieber, three shows by Beyonce, and the MTV Video Music Awards, only seven of 31 days are booked as of now.


The Downtown Brooklyn Neighborhood Alliance's ninth Community Tickets Giveaway, to be held next Monday, will only distribute tickets to Bieber and Beyonce.

Tuesday, July 16, 2013

Despite official statements, idling continues on pad outside Barclays Center, and beyond

Less than a week ago, as I reported, trucks were idling on the Barclays Center "pad" adjacent to the loading dock, despite official statements, by a state official, that idling is neither allowed nor tolerated.

That problem continues. A report posted yesterday on Atlantic Yards Watch details buses idling or generators running not just on the pad, but across the street in the satellite uplink parking lot, and even in the neighborhood. The report links to several videos.

Initial photos, such as the first photo below, do not indicate any visible connecting cables to the arena, meaning that idling vehicles were running under their own power. Later photos suggested some cabling from the arena to support any internal electronics.




Kemistry lounge (or bottle-service club) faces liquor license hearing tomorrow; neighbors slam increased hours, commitment to bottle service, disingenuous behavior

Via Park Slope Stoop
Remember Kemistry, the self-described "restaurant, bar and lounge" (or, as neighbors contend, bottle service nightclub) planned for Flatbush Avenue near Prospect Place, with a back emergency exit on a residential street?

The establishment, with a capacity for 225 people, faces a hearing before the State Liquor Authority (SLA) Wednesday, July 17, with an array of neighbors, Community Board 6, and local elected officials opposing it.

The objections focus on Kemistry's plans to stay open late every night (and until 4 am on Saturday and Sunday), its commitment to bottle service, and a pattern of apparent disingenuous behavior.

(My query to Kemistry went unanswered.)

The hearing, which includes many other applications, begins at 10 am at the SLA office at 317 Lenox Avenue near 126th Street in Harlem, near the 125th Street stop on the 2 or 3 trains. It also should be webcast.

Also see coverage in DNAInfo, which quotes neighbors' attorney Peter Adelman: "Having another bar, I’m not saying that’s a bad thing, but having this one is very bad." Note that Kemistry, while surely seeking to capitalize in part on late-night post-event crowds, likely aims to rely on a much broader clientele.

Neighbors' case

Kemistry, as noted in the CB 6 letter, came to agreement on a host of issues raised by critics, but not all. The organization Prospect Place Neighbors (PPN), via Adelman, details in a submission to the SLA three areas of conflict, part of an effort "to shoehorn an outsized club into this radically ill-suited location":
  • Kemistry entirely retreated from its initial promise to the community, CB6 and elected officials that it would “brick up” the inappropriate glass fa├žade that would face onto residential Prospect Place. At a March 26, 2012 public review session held by Community Board 6, Kemistry outright promised to “brick up” the Prospect Place exterior of the proposed nightclub/lounge, if that were necessary to allay community concerns. After later suggesting that its landlord might not permit the promised renovations (which was untrue), Kemistry finally abandoned all pretense of accommodating this intensely important community concern, recently suggesting it try to conceal its inappropriate glass frontage with “opaque, soundproof curtains.” 
  • Kemistry refused to scale back on its proposed hours of operation in recognition of its sensitive, semi-residential location. Remarkably, it has instead proposed progressively longer hours, recently (and brazenly) proposing to stay open on school nights as late as 4:00 a.m., and no earlier than 2:00 a.m. 
  • Kemistry has doggedly continued to insist upon providing hard-liquor bottle service, despite widespread opposition to this roundly disfavored practice. And as if to make a mockery of concerned community members, elected officials and this Authority, after months of adamantly refusing to negotiate its intention to provide hard liquor bottle service, in its recently-filed application, Kemistry now claims “not to understand what Bottle Service means.” 
Note that, while there's no statutory definition of "bottle service," it's a fairly well-known concept, offered by, among other outlets, branches of Jay-Z's 40/40 Club.

During the process, Kemistry's proposed hours have expanded. The proposal emerged in March 2012, when a CB 6 committee considered the application, which at that point proposed no Sunday hours, and Mon-Wed hours until 11 pm, (rather than 2 pm as of now), Thursday until 1 am (rather than 3 am now), and Friday until 2 (rather than 3:30 am now), and Saturday until 3:30 (rather than 4 am now).

Prospect Place Neighbors also suggests that a study it commissioned of "the nightclub/lounge’s anticipated effects on traffic, parking and noise suggests substantial adverse impacts" and that the public benefits would be trivial, and "pale in comparison" to those impacts.

The public interest?

If an applicant for a liquor license is within 500 feet of three or more licensed premises--as is the case with Kemistry--the SLA must affirmatively determine that granting the license would be in the “public interest.”

The memo from an SLA administrative law judge after the 500-foot hearing last November described Kemistry as "a restaurant/lounge serving Cajun cuisine," with "live music provided by a four-piece jazz band."

Some fuzziness emerged: "There will be no dancing, except the Applicant reserves the right to obtain a catering license for private events that may include dancing. Bottled liquor will be served to large parties"--an undefined term--"if requested in lieu of individual drinks."

Kemistry declared that its license would be in the public interest:
"We will provide a unique Cajun menu with a 3 to 4 piece jazz band performing for the listening entertainment of the diners, which are not available in this area.”
PPN responds that such offerings are hardly exceptional:
Little need be said about the “3 to 4 piece jazz band” performing for Kemistry’s diners. Both Sugarcane and Woodland have jazz brunches on weekends, so that experience is neither unique nor unavailable to the immediate local community. (As a corollary, if Kemistry intends to feature live music at times other than during the Sunday jazz brunch it mentions, it should disclose the duration and frequency with which it plans to have live music.)
Also, PPN points out that Kemistry's self-described “unique Cajun menu” contains apparently two Cajun dishes, while Two Boots restaurant, not far away in Park Slope, offers a full Cajun menu.

PPN points to disingenuousness on the part of the applicant, noting:
  • Kemistry to CB6 provided a menu including cocktails, but redacted that cocktail list in the menu it submitted to SLA
  • Kemistry won't employ a chef, which belies any professed focus on food
  • Kemistry appears to devote about 6% of its floor plan to food preparation and storage, far less than nearby restaurants and bar/restaurants.
The issue of bottle service

The PPN submission cites a letter from Assemblywoman Joan Millman, who noted:
Kemistry Lounge wishes to be the second establishment in Brooklyn too offer bottle service. Bottle service drastically increases patrons’ incentive to drink and promotes dangerous levels of drunkenness.
PPN adds:
Kemistry has not only failed to advance any kind of security plan, but its application indicates that it doesn’t intend to engage any security personnel at all. It is a recipe for disaster.
Impact on streets

A PPN consultant observed "that the local street network forces a majority of the new traffic onto Prospect Place and then onto other narrow, residential streets in the neighborhood," with Prospect Place both being the first place arriving patrons from the north would turn back north for parking, as well as the most likely route for taxis and car-services.

Thus, traffic on the residential street could double during late night weekday and weekend periods

In a stipulation, Kemistry agreed to notify in writing any car service it engages that they may not idle, wait, drop off or pick up passengers on Prospect Place, Sixth Avenue, or St. Marks Avenue, adn that any other car service or taxi should be instructed similarly.

I think that, based on the experience of car service companies serving patrons at the Barclays Center, that would be very hard to guarantee--even if Kemistry committed to such instructions, there's no way to enforce it.