Sunday, August 17, 2014

In the Navy Yard, the modular builder that preceded Ratner faces change

From an 8/12/14 New York Times article headlined A Factory in Brooklyn That Constructs Homes Is Losing Its Own:
Across from the Barclays Center sit hundreds of apartments built at a factory in the Brooklyn Navy Yard.
They are not part of the Atlantic Yards development, where Bruce C. Ratner is assembling a 32-story tower, which will be the tallest factory-made building in the world. Instead, the apartments are inside 32 red-brick, three-story rowhouses and were built by a company called Capsys. Each home uses three modules, one per story. The homes look a century old but opened in 2002, a decade before Mr. Ratner decided to try to build the first of his Atlantic Yards towers through modular construction.
...After 18 years of producing more than 4,000 modules — enough for 2,300 apartments plus hotels and park bathrooms — [Capsys founder] Mr. [Nicholas] Lembo is worried that he might have to close up shop just as modular building is taking off. His lease is up in two years, and he has been scouring the boroughs for a new home for Capsys but has been unable to find one.
In 2010, Capsys was told by the Navy Yard that its lease--currently at $4/square foot--would not be renewed, as the space was needed by the growing Steiner Studios.

The Capsys rent, according to the Times, is about one-third the typical Navy Yard rate, which offers below-market rates. So if Capsys is exploring space in Canarsie some three times its current rent, that would approximate Navy Yard rent.

Capsys also says that it should have been offered the space taken by FC Skanska, the partnership involving Forest City Ratner that's building modules for Atlantic Yards.

It's not clear from the article--and I haven't gotten a response from Capsys--whether the Navy Yard knew Capsys wanted to expand and whether FC Skanska is paying the market rent or the old Capsys rent.

1 comment:

  1. This New York Times article includes the first printed allegation I know of that Forest City Ratner got preferential treatment at the Brooklyn Navy Yard for modular unit construction.

    If Lembo could possibly have outbid Ratner for space not offered to him, does that mean that Ratner pays rent that is about "one-third the going rate within the Navy Yard, where rents are already below market."?

    If it is actually true that Lembo should have been, but was not, offered the space first that would be most meaningful only if Lembo could have outbid Ratner. The only reason not to do whatever was appropriate and called for and offer Lembo the space first is if it would have deprived the Ratner project of the space. There is therefore some indication that Ratner pays rent that is about "one-third the going rate within the Navy Yard, where rents are already below market."?

    I would like to see what Lembo’s rent is and what the rent is for the Ratner project. This should be obtainable through FOIL. In fact, good governance would dictate that all the rents at the Navy Yard with their implicit subsidies should be posted and readily available to the public.

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