Thursday, October 29, 2015

Now we know what the Downtown Brooklyn Partnership seeks: permanent incentives for office space

Remember that cryptic New York Daily News piece in August:
Downtown Brooklyn developers have been so preoccupied with building supertall residential towers that they’ve been neglecting the office market.
...“As the Downtown Brooklyn renaissance continues on all fronts, there’s a critical need for office space to meet growing demand,” said Tucker Reed, president of the DBP [Downtown Brooklyn Partnership]. “It’s essential that we focus on all the elements – commercial, residential, retail and cultural – needed to make Downtown Brooklyn a thriving central business district.”
Missing from such coverage was any hint of the agenda of the DBP, which is steered significantly by Forest City Ratner, whose CEO, MaryAnne Gilmartin, co-chairs the board. Now we know. (And Forest City, according to Gilmartin, is now considering office space at the Site 5 and B1 sites.)

Incentives sought

In the Commercial Observer, Now That Brooklyn is Hot, Let’s Make it Hotter, Alan Washington, the DBP's director of real estate and planning, wrote 9/27/15
But lost in the discussion about the need for additional commercial office space within Downtown Brooklyn, the Brooklyn Tech Triangle, and the borough as a whole, are a few essential ingredients that are key to helping the area reach its full potential as a healthy central business district that drives the most populous borough’s economy: incentive programs. 
The city wisely recognized that in order to spur economic diversity that fosters and celebrates the best of mixed-use development in a real estate market where highest and best use is almost certainly residential, incentive programs are necessary not only to attract but also to retain commercial business in the areas of the city in need of economic stimulus. To the city’s credit, several incentive programs were created, including the Industrial and Commercial Abatement Program (ICAP), the Commercial Expansion Program (CEP), the Relocation and Employment Assistance Program (REAP) and a variety of energy programs, including the Energy Cost Savings Program (ECSP).
(Emphasis added)

Those programs, in June, were extended for two years each, which Washington says is not a long-term solution, because of the time it takes to relocate a major tenant and because the uncertainty of such programs could kill future conversion projects, which take time to reach fruition.

What's the alternative?

Could there be an alternative: why not amend the rezoning or otherwise tweak policies to make housing in the downtown district less so the "highest and best use"?

After all, Downtown Brooklyn was rezoned in 2004--giving windfalls to property owners--to allow for new towers featuring office space. That didn't work, because they could make more money building housing.
Downtown Brooklyn Plan Summary, 2003-04

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