Saturday, December 27, 2014

Will the "Atlantic Yards Apartment Project" include an office tower? Maybe, but...

Writing in October 2013, I asked if the pending deal with the Shanghai-based Greenland Group to buy 70% of the remaining Atlantic Yards project (excluding the arena and first tower) included the long-delayed office tower planned for the space occupied by the "temporary" Barclays Center plaza.

I noted that the official press release seemed cagey, since it referred to a "residential and commercial real estate project... including infrastructure, a platform and residential units." After all, the word "commercial" often connotes office space, but also could mean retail space.

Another look suggests the evidence cuts both ways. Last year, a little-noticed Greenland statement suggested that the office tower was excluded. More recently, a joint statement indicates that the office tower is indeed intended.

Differing evidence

Consider the early version of a 10/11/13 Bloomberg News article, which stated:
Greenland signed a memorandum of understanding on Oct. 2 with Forest City Ratner Cos. LLC to develop the Atlantic Yards Apartment Project in Brooklyn, the Chinese company said in an e-mailed statement today. Greenland will take a 70 percent stake in the project, which the company said is the biggest deal of its kind by a Chinese developer in the U.S.
(Emphasis added)

An updated version of that article used different language, calling it a "residential and commercial real estate project."

I also noted that month that, in an interview, Atlantic Yards developer Bruce Ratner claimed that "we have sites for 16 residential buildings right next to the arena." 

Maybe he was being sloppy, but, if not, that hinted at a plan to use the plaza site for housing, which at this point is far more lucrative. 

However, when the deal was finally signed, a 7/1/14 news release did point to an office tower:
The joint venture covers both phase one and phase two of the project – excluding Barclays Center and the first residential tower, B2 BKLYN – including infrastructure, a permanent MTA rail yard, a platform above the rail yard, future residential units and future commercial high-rise development.
What next?

But Atlantic Yards--since renamed Pacific Park Brooklyn--is a "never say never" project, so it bears watching. 

There is demand for office space in Brooklyn, but at a lower price point. 

Should the demand be such that high-priced space at a marquee location "pencils out," we'll finally see a giant office tower over the unplanned, temporary plaza that has become integral to the Barclays Center's identity. (And that will be a bear to build.)

The history

As I've written, the tower was supposed to rise some 620 feet (and later reduced to 511 feet), containing office space for permanent jobs, jobs that would provide tax revenues for the rosy Atlantic Yards economic projections.

It's unlikely the project would have been approved without the tower. But, as Ratner told Crain's in November 2009: “Can you tell me when we are going to need a new office tower?”

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