Skip to main content

Looking at Bisnow's Atlantic Yards roundup: a "place-making juggernaut" (?) and some errors/omissions

There's not much new in the THE BARCLAYS CENTER SHAKEUP: JAY Z’S OUT, CHINA’S IN AND ATLANTIC YARDS LIVES ON, from the real estate publication Bisnow, published 9/24/15.

And there's a good deal ignored, such as the actual affordability of the planned subsidized housing, the continuing temporary certificate of occupancy, and the reasons for the arena's new green roof.

But there are a few interesting observations--and mistakes--as well as some clues to how business-friendly publications may frame the project.

The only person quoted is Forest City Ratner CEO MaryAnne Gilmartin--where's new majority owner Greenland?--who calls Barclays Center "a place-making juggernaut," citing 5.5 million visitors. 

That's an interesting term, because, while the number of visitors is undeniable, the "place" is very much in process--not just the under-construction towers, but also unresolved retail, such as at the long-lingering, prime location building at Flatbush Avenue, Dean Street, and Fifth Avenue that once housed Triangle Sports.

The evolution and the rebrand

Writes Billy Gray:
Three years after its debut, the Barclays Center is still drawing crowds and name-brand entertainers. A concentrated building boom has suddenly given Downtown Brooklyn a skyline of note (with a proposal recently unveiled for a tower that would dwarf the Empire State Building) and a bevy of cultural gems. Yet housing at Atlantic Yards (interestingly rebranded as Pacific Park) has lagged, its construction hurdles documented (with no small amount of glee) by local micro-bloggers just as even flashier mixed-use developments in Midtown and Williamsburg have grabbed the spotlight amid murmurs of a coming residential oversupply in DTBK.
Local micro-bloggers? That's a jab, but not accurate.

"Interestingly rebranded"? How about "strategically rebranded," as I've suggested, given the taint associated with Atlantic Yards. Later Gray acknowledges that issue, writing:
At first, there was little explanation of the change. But Gilmartin has since said since Atlantic Yards was “always a working title” and that the rebranding came about to distance the complex from the defunct rail yards it has overtaken that bore the same name. (Perhaps an even bigger development site above old rail yards, these ones on Manhattan’s Far West Side, was another justification.) It was also tempting to read the Pacific Park moniker as an attempt to shed the decades’ worth of baggage accumulated during the project’s still-bumpy road to realization. 
Um, the "defunct rail yards" 1) are still working and 2) formally called the Vanderbilt Yard, never "Atlantic Yards," which was a brand name for a development.

Financial success?

How well is the arena doing? Gray acknowledges the combination of big names but "more sobering financial data," without assessing the future. Nor does he assess how and whether Greenland got a bargain when it bought a 70% stake in the project going forward (excluding the Barclays Center and B-2 modular tower).

Gilmartin cites “significant progress” at the B-2 modular tower, though there's no mention of the history of leaks and mold. As to the future of modular, why not quote Gilmartin as acknowledging it's unclear.

The new "park"

This part is rich:
Gilmartin called an eight-acre park whose master plan was recently revealed “the spine of” the development. “There will no longer be a dearth of green space in the heart of Brooklyn,” she says. The creation of the park will proceed over the next decade. 
First, it's not a park. Second, while the amount of green space is growing, the ratio per resident would actually decline, because of the 14,000 new residents.

Affordable errors

If the affordable apartments "are not completed by 2025—10 years earlier than initially required—Forest City will have to pay a $5M fine," according to the article.

That's wrong on two counts.

First, the $5 million fine would have applied only to delays in the next two buildings, which did launch; rather, the fine for delay will be $2,000 per month per unit.

Second, 2025 is not "10 years earlier than initially required," though that same error has been made multiple times, including by ESD Chair Howard Zemsky. Rather, the project, when approved in 2006 and again in 2009, was supposed to take 10 years. Then the Development Agreement gave a 25-year "outside date," or 2035.

A revised schedule agreed to in 2014--part of negotiations with community groups who claimed a rather imperfect victory--set a completion deadline of 2025. That makes for 10 years earlier than the previously extended outside date, but not "10 years earlier than initially required."

Looking forward and looking back

Writes Gray:
The steroidal growth of Downtown Brooklyn beyond Pacific Park has shed the development’s struggles in an especially harsh light.... The Downtown Brooklyn Partnership estimated earlier this year that a staggering 13,000 affordable and market rate units were in the pipeline, inevitably tacking on the real estate jargon of that influx making downtown a “24/7 neighborhood.” 
Yes, and no. First, Downtown Brooklyn was rezoning in 2004, *after* Atlantic Yards was announced, and the AY site is in Prospect Heights, most of it a good distance from Downtown Brooklyn.

His conclusion:
Ironically, though, the anger lavished on the project seems to have distracted people from the more seismic changes redefining the broader borough. It’s not always easy being the frontrunner, and Pacific Park’s freighted history has, to an extent, lingered through its problematic present. Its ultimate success may hinge on how those affordable units allay a housing crisis in the increasingly chic borough and for that burden Pacific Park has itself to blame.
To some degree, that's true, but it's also true that Atlantic Yards was more bold, aggressive, and neighborhood-invading than the other projects--and it came via a process that was wired from the start.

Hence, the resistance. Were such a project suggested now, after such development, there'd a different reaction, with both sides likely more able and willing to negotiate. Remember, the "anger lavished on the project" was in proportion to the implacable arrogance of those proposing it.

As for the ultimate success of AY/PP, those affordable units--many not so affordable--will be a drop in the bucket, as we have long known.

Comments

Popular posts from this blog

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…

Is Barclays Center dumping the Islanders, or are they renegotiating? Evidence varies (bond doc, cash receipts); NHL attendance biggest variable

The Internet has been abuzz since Bloomberg's Scott Soshnick reported 1/30/17, using an overly conclusory headline, that Brooklyn’s Barclays Center Is Dumping the Islanders.

That would end an unusual arrangement in which the arena agrees to pay the team a fixed sum (minus certain expenses), in exchange for keeping tickets, suite, and sponsorship revenue.

The arena would earn more without the hockey team, according to Bloomberg, which cited “a financial projection shared with potential investors showed the Islanders won’t contribute any revenue after the 2018-19 season--a clear signal that the team won’t play there, the people said."

That "signal," however, is hardly definitive, as are the media leaks about a prospective new arena in Queens, as shown in the screenshot below from Newsday. Both sides are surely pushing for advantage, if not bluffing.

Consider: the arena and the Islanders can't even formally begin their opt-out talks until after this season. The disc…

Skanska says it "expected to assemble a properly designed modular building, not engage in an iterative R&D experiment"

On 12/10/16, I noted that FastCo.Design's Prefab's Moment of Reckoning article dialed back the gush on the 461 Dean modular tower compared to the publication's previous coverage.

Still, I noted that the article relied on developer Forest City Ratner and architect SHoP to put the best possible spin on what was clearly a failure. From the article: At the project's outset, it took the factory (managed by Skanska at the time) two to three weeks to build a module. By the end, under FCRC's management, the builders cut that down to six days. "The project took a little longer than expected and cost a little bit more than expected because we started the project with the wrong contractor," [Forest City's Adam] Greene says.Skanska jabs back
Well, Forest City's estranged partner Skanska later weighed in--not sure whether they weren't asked or just missed a deadline--and their article was updated 12/13/16. Here's Skanska's statement, which shows th…

Not just logistics: bypassing Brooklyn for DNC 2016 also saved on optics (role of Russian oligarch, Shanghai government)

Surely the logistical challenges of holding a national presidential nominating convention in Brooklyn were the main (and stated) reasons for the Democratic National Committee's choice of Philadelphia.

And, as I wrote in NY Slant, the huge security cordon in Philadelphia would have been impossible in Brooklyn.

But consider also the optics. As I wrote in my 1/21/15 op-ed in the Times arguing that the choice of Brooklyn was a bad idea:
The arena also raises ethically sticky questions for the Democrats. While the Barclays Center is owned primarily by Forest City Ratner, 45 percent of it is owned by the Russian billionaire Mikhail D. Prokhorov (who also owns 80 percent of the Brooklyn Nets). Mr. Prokhorov has a necessarily cordial relationship with Russia’s president, Vladimir V. Putin — though he has been critical of Mr. Putin in the past, last year, at the Russian president’s request, he tried to transfer ownership of the Nets to one of his Moscow-based companies. An oligarch-owned a…

Former ESDC CEO Lago returns to NYC to head City Planning Commission

Carl Weisbrod, Mayor Bill de Blasio's City Planning Commission Chairman and Director of the Department of City Planning, is resigning,

And he's being replaced by Marisa Lago, currently a federal official, but who Atlantic Yards-ologists remember as the short-term Empire State Development Corporation CEO who, in an impolitic but candid 2009 statement, acknowledged that the project would take "decades."

Still, Lago not long after that played the good soldier at a May 2009 Senate oversight hearing, justifying changes in the project but claiming the public benefits remained the same.

By returning to City Planning, Lago will join former ESDC General Counsel Anita Laremont, who after retiring from the state (and taking a pension) got the job with the city.

Back at planning

Lago, a lawyer, in 1983 began work as an aide to City Planning Chairman Herb Sturz, and later served as the General Counsel to the president of the NYC Economic Development Corporation, Weisbrod himself.