Skip to main content

Eminent domain, round two: state and Forest City close-mouthed as condemnation process begins for properties near arena site

Three houses destined for condemnation; photo by AYR
The eminent domain hammer is on its way--again.

Still, Empire State Development (ESD), the state agency overseeing/shepherding Atlantic Yards, and developer Forest City Ratner are close-mouthed and not fully candid about the second--but not quite final--round of eminent domain.

The state recently has begun the condemnation process for three homes and three businesses across Sixth Avenue from the arena, between Dean Street in Atlantic Avenue.

Eminent domain has already been approved; the issue now is compensation and possession, so the first step is asking property owners to accept a visit by an appraiser, a prelude to an offer, which later can be litigated.
August 2004: Two buildings
on left have since been demolished

Why now?

The reason for condemnation, according to ESD, is to facilitate work at the railyard and also construction of the 272-foot B15 tower between Pacific and Dean streets east of Sixth Avenue.

But only the railyard work has a schedule.

 As for when the tower will be built--who knows? There are several already-cleared sites available for construction, on both the arena block and also the southeast block, now used for interim surface parking.

2006 plan
So I'd bet the properties are being taken because 1) Forest City Ratner's new joint venture partner, the Chinese government-owned Greenland Group, finally has the cash to pay the owners and 2) a larger cleared site is needed for staging to assist construction across the street, on the arena block.

After all, that 100-foot-wide piece of land was initially supposed to be used for interim surface parking and staging while four towers were built simultaneously with the arena--a plan that was later abandoned.

In other words, this piece of land was not needed to somehow "cure" blight anomalously located at one rectangle. It was to have a crucial role in construction.

Dicey issue remains

The argument that eminent domain is needed to build housing apparently wouldn't pass muster with the de Blasio administration, which (according to Capital NY's Dana Rubinstein) has ruled out using that tool going forward in its housing plan.

But eminent domain is already approved in this case. Still, however much de Blasio approves of Atlantic Yards--because he values affordable housing above all--it will still be touchy.

Moving school from B5 to B15
I expect de Blasio and Forest City to not only talk up affordable housing at the B15 site, but also the opportunity to build a public school, now planned for the B15 site.

Then again, that school was long said to be in B5, just east of Sixth Avenue over the railyard. But construction there would require an expensive deck, and that's years away, so they're moving it to b15.

In a Times article last month about East New York, Deputy Mayor Alicia Glen said, "“We’re not talking 30- or 40-story buildings in the middle of a neighborhood where everything else is two or three stories."

Slated for taking: lots 4, 87, 86, 85.
Others already acquired by Forest
City. Lots in brown deemed blighted
Now there certainly are large buildings across Atlantic Avenue from the Atlantic Yards site. But a 27-story tower on Dean Street would, in fact, be next to and across from four-story buildings.

New construction work

There's a lot of work coming.  The joint venture plans to build the West Portal to the railyard and install a new green roof on the arena, both of which will require workers, trucks, and lane closures near the arena.

Meanwhile, B2, the tower at Dean and Flatbush avenues, remains under construction. And before it's finished in late 2015, the developers plan to start B3, located at the southeast corner of the arena block. That's a lot of trucks. 

And, remember, for now the plan to build using modular construction--repeatedly claimed to reduce truck traffic, waste, and noise--has been put aside.

Dark building is lot 4 on Pacific Street/Sixth Avenue,
Adjacent is new residential construction
So that likely means more space is needed for staging.

Besides the three homes on Dean Street, the properties include a wholesale fabric business on Pacific Street, and, on Atlantic Avenue, a former museum exhibitions factory (and then potential rave location), and a storage company.

The sequence

Yes, the state got permission in 2006 to condemn the entire site, including "friendly condemnations" of Forest City Ratner-owned buildings, which negated rent-stabilized leases. 

But property owners and renters challenged eminent domain, finally reaching the state Court of Appeals, which rejected the challenge in 2009.

By then, however, cash-strapped Forest City had gotten ESD to revise the eminent domain plan, no longer condemning the entire 22-acre site in one action, thus saving the developer condemnation payments for properties where it had no intention to build. 

(Similarly, Forest City got the MTA to allow payments for the Vanderbilt Yard to be spread over 21 years, thus delaying construction of towers over the railyard.)

That left property owners in limbo, unable to rent to long-term tenants nor to effectuate plans to build on this presumably more-valuable land. (On the Pacific Street site next to Lot 4, a new building is going up.)

Now, however, things are moving quickly, though the property owners are understandably quiet themselves. They have no recourse to stop the process, just to challenge what may or may not be a low-ball condemnation offer. (The recent pattern shows significant variation in judicial awards.)

Public discussion

2010 Daily News photo, Block 1120, Lot 19 at left
At the Atlantic Yards Quality of Life Committee meeting last week, Forest City Ratner External Affairs chief Ashley Cotton made reference to lots 19 and 28 on Block 1120, two buildings which bump back from Atlantic Avenue into a zone dominated by the Vanderbilt Yard. 

(Adjacent lot 35, an empty lot further to the east abutting Carlton Avenue, was already taken by the state for Forest City, though the condemnation judge agreed to a much higher valuation than the state offered.)

"The state has commenced condemnation on the bump properties," Cotton said at the meeting. "Certainly our objective is to take down the bump."

I followed up, asking if it was to facilitate construction of the permanent railyard.

The two properties yesterday
"Well, to facilitate construction on the railyard site," she responded, apparently referencing work on the West Portal.

I said I'd heard that the condemnation process had began for the properties on Pacific and Dean streets, on Block 1118. "What's the project rationale for that?"

"That's eventually the site of"--Cotton turned quizzical--"B13?"

"B15," I clarified, referencing the tower planned for that site. I asked if it was the next building: "Why now?"

"Um, why now?" Cotton responded, not as enthusiastic as when, say, talking up the green roof. "I can't answer that question... We're here to talk about MPT [maintenance and protection of traffic, to accommodate railyard and roof construction]."

Querying ESD

I followed up with written questions for ESD.

Asked why the condemnations were happening now, the response was, "They are taking place now to let the project move forward, both for the LIRR Yard construction and a future residential development on Block 1128."

That doesn't quite answer the question about the timing.

I pointed out that one block--home to Modell's and P.C. Richard, southwest of the arena, known as Site 5-- was also subject to eminent domain.

(It's planned as the site of a 250-foot building, reduced from the originally planned 400 feet. Forest City Ratner already controls the Modell's property, but not the P.C. Richard site.)

The response: "Site 5 is not part of the current process, but it is expected to be part of a future condemnation."

What's next?

There's no way to fight condemnation; eminent domain has already been approved.

The question is compensation and timing of their departure. An offer is sometimes sweetened in order to get people to leave faster (see the example of Daniel Goldstein, 2010).

In this case, the state and Forest City may have another edge: the construction slated to occur around the site may prove annoying enough to push owners to settle and leave.



Comments

  1. Anonymous10:28 AM

    https://statejobsny.com/public/vacancyDetailsView.cfm?id=142

    The clarity of how Empire State Development does business with Atlantic Yards can be showcased by their ongoing employment issues with their ever changing staff. Here's another new posting. Every 2 years we go through a change of staffing at this agency where there is no consistency, and as the political environment changes so does the staffing.

    ReplyDelete

Post a Comment

Popular posts from this blog

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

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

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

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

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

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

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

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

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

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

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

Forest City acknowledges unspecified delays in Pacific Park, cites $300 million "impairment" in project value; what about affordable housing pledge?

Updated Monday Nov. 7 am: Note follow-up coverage of stock price drop and investor conference call and pending questions.

Pacific Park Brooklyn is seriously delayed, Forest City Realty Trust said yesterday in a news release, which further acknowledged that the project has caused a $300 million impairment, or write-down of the asset, as the expected revenues no longer exceed the carrying cost.

The Cleveland-based developer, parent of Brooklyn-based Forest City Ratner, which is a 30% investor in Pacific Park along with 70% partner/overseer Greenland USA, blamed the "significant impairment" on an oversupply of market-rate apartments, the uncertain fate of the 421-a tax break, and a continued increase in construction costs.

While the delay essentially confirms the obvious, given that two major buildings have not launched despite plans to do so, it raises significant questions about the future of the project, including:
if market-rate construction is delayed, will the affordable h…

Revising official figures, new report reveals Nets averaged just 11,622 home fans last season, Islanders drew 11,200 (and have option to leave in 2018)

The Brooklyn Nets drew an average of only 11,622 fans per home game in their most recent (and lousy) season, more than 23% below the announced official attendance figure, and little more than 65% of the Barclays Center's capacity.

The New York Islanders also drew some 19.4% below announced attendance, or 11,200 fans per home game.

The surprising numbers were disclosed in a consultant's report attached to the Preliminary Official Statement for the refinancing of some $462 million in tax-exempt bonds for the Barclays Center (plus another $20 million in taxable bonds). The refinancing should lower costs to Mikhail Prokhorov, owner of the arena operating company, by and average of $3.4 million a year through 2044 in paying off arena construction.

According to official figures, the Brooklyn Nets attendance averaged 17,187 in the debut season, 2012-13, 17,251 in 2013-14, 17,037 in 2014-15, and 15,125 in the most recent season, 2015-16. For hoops, the arena holds 17,732.

But official…

So, Forest City has some property subject to the future Gowanus rezoning

Writing yesterday, MAP: Who Owns All the Property Along the Gowanus Canal, DNAinfo's Leslie Albrecht lays out the positioning of various real estate players along the Gowanus Canal, a Superfund site:
As the city considers whether to rezone Gowanus and, perhaps, morph the gritty low-rise industrial area into a hot new neighborhood of residential towers (albeit at a fraction of the height of Manhattan's supertall buildings), DNAinfo reviewed property records along the canal to find out who stands to benefit most from the changes.
Investors have poured at least $440 million into buying land on the polluted waterway and more than a third of the properties have changed hands in the past decade, according to an examination of records for the nearly 130 properties along the 1.8-mile canal. While the single largest landowner is developer Property Markets Group, other landowners include Kushner Companies, Alloy Development, Two Trees, and Forest City New York.

Forest City's plans unc…

At 550 Vanderbilt, big chunk of apartments pitched to Chinese buyers as "international units"

One key to sales at the 550 Vanderbilt condo is the connection to China, thanks to Shanghai-based developer Greenland Holdings.

It's the parent of Greenland USA, which as part of Greenland Forest City Partners owns 70% of Pacific Park (except 461 Dean and the arena).

And sales in China may help explain how the developer was able to claim early momentum.
"Since 550 Vanderbilt launched pre-sales in June [2015], more than 80 residences have gone into contract, representing over 30% of the building’s 278 total residences," the developer said in a 9/25/15 press release announcing the opening of a sales gallery in Brooklyn. "The strong response from the marketplace indicates the high level of demand for well-designed new luxury homes in Brooklyn..."

Maybe. Or maybe it just meant a decent initial pipeline to Chinese buyers.

As lawyer Jay Neveloff, who represents Forest City, told the Real Deal in 2015, a project involving a Chinese firm "creates a huge market for…