Tuesday, May 12, 2015

Greenland agreement shows Forest City solely responsible for 400 affordable off-site condos; timing, configuration, affordability, funding still murky

The promise to build 600 to 1000 for-sale affordable units at or near the Atlantic Yards/Pacific Park site has always been murky.

Now there are some more details, thanks to a recently unveiled LLC agreement between original developer Forest City Ratner and new joint venture partner/overseer Greenland Holdings.

First, the total looks to be 600 rather than 1000. That's unsurprising. Second, beyond the 200 units already pledged to be on-site, which would be the responsibility of Greenland Forest City Partners, the other 400 units would be solely Forest City's responsibility.

But the timing, affordability, funding, and location of those units remains murky.

In other words, as Forest City Ratner CEO MaryAnne Gilmartin said in another context last September, "every building will be a conversation with the city around exactly how we put that building together."

My guess: if Forest City can successfully finish the B2 rental tower via modular construction, it will aim to build those for-sale affordable units off-site using modular construction, as well. And it will seek a subsidy or grant from the city or state to further such "innovation."

The history: a murky plan in the CBA

The promise was always murky.

The 2005 Affordable Housing Memorandum of Understanding, which Forest City signed with ACORN and was incorporated into the Atlantic Yards Community Benefits Agreement (CBA), described the signatories' plan:
to "work on a program to develop affordable for-sale units, which are intended to be in the range of 600 to 1,000 units, over the course of ten (10) years and can be on or off site. It is currently contemplated that a majority of the affordable for-sale units will be sold to families in the upper affordable income tiers."


That was cited rather murkily elsewhere in the CBA, which stated that "ACORN and Project Developer will develop together the term and mechanism for long-term affordability restrictions on for sale affordable units consistent with any applicable governmental programs."

From CBA
That left some wiggle room.

A promise to build on-site

Upon approval of Atlantic Yards by the Public Authorities Control Board (PACB) on 12/20/06, Forest City Ratner told the public :
As part of the affordable housing program, FCRC has already agreed to build 600 to 1,000 affordable home ownership units on or off site. Today, FCRC announced that it will seek to build at least 200 of these affordable home-owner units on site... and seek to build the remaining affordable home-owner units as close to Atlantic Yards as possible.
(Emphasis added)

That was a win for local Assemblymember Hakeem Jeffries, who had sought on-site for-sale units. Still, that statement contained hedging language ("seek to build," etc.).

In correspondence with Assembly Speaker Sheldon Silver, Forest City stated (via a letter obtained via FOIL) the goals somewhat more explicitly:
As you know, FCRC has already agreed with ACORN to provide 2,250 affordable, rent stabilized units and an additional 600-1000 units of Affordable Home Ownership units, on or off site. FCRC will further commit to seek to build the affordable home ownership units as close to the Atlantic Yards site as possible, including but not limited to the following neighborhoods: Prospect Heights, Fort Greene, Bedford Stuyvesant, Crown Heights, Clinton Hill, Park Slope. Moreover, FCRC will seek to build 200 of these affordable home ownership units directly on the Atlantic Yards project site provided we receive the appropriate subsidy required to fund these units, and assuming the density levels approved in the ESDC GPP are maintained.”
More firm plans?

As I wrote in March 2008, a major question raised about the affordable for-sale units was why they were absent from the 2006 General Project Plan approved by the Empire State Development Corporation. 

The State Funding Agreement unveiled in 2008 did, in fact, mention the pledge. But as I wrote, the document didn't seem to have teeth, since it asserted neither deadlines nor penalties.

Nor was there mention of the pledge the state's 2009 Modified General Project Plan. However, according to the Atlantic Yards Development Agreement, signed later in 2009, the developer "shall build or shall cause the construction of at least 600 affordable homeownership housing units on the Project Site or as close to the Project Site as reasonably practicable, including but not limited to the following neighborhoods: Prospect Heights, Fort Greene, Bedford Stuyvesant, Crown Heights, Clinton Hill, Park Slope."

That, of course, had some caveats, since it was "subject to Governmental Authorities making available... affordable housing subsidies."

The goal was to make the units affordable to families with incomes up to 150% of Area Median Income (AMI)--middle-income, as opposed to low- or moderate-income--and to make some units available to moderate-income families with incomes below 100% of AMI.

That left a lot of wiggle room regarding the levels of affordability and the configuration and distribution of such units.

(Note that, with 2015 AMI for a four-person household at $86,300, so 150% of that would mean an annual income of $129,450. That's well above the income levels of those clamoring for affordable housing. Then again, households with that income level still struggle to buy in the Brooklyn market.)

If the developers ultimate offer some units for households earning up to 150% of AMI and some below 100% of AMI, they'll have reasonably met the pledge. That doesn't mean all have to fit the pledge.

Note that the affordable rentals were initially supposed to go up to 160% of AMI (in one of three scenarios, with another maxing at 140% of AMI), but now go up to 165% of AMI. So there's always wiggle room.

The new requirement, and the prospect of lobbying

According to the new document, any cost to build the 400 offsite "Additional Affordable Units" will remain a unilateral Forest City obligation.

Still, the 200 onsite units will remain a joint obligation. Both will depend on subsidies. That should be one of many reasons that Forest City and Greenland will keep lobbying the city and state.




No comments:

Post a Comment