Tuesday, June 30, 2015

At Barclays Center, average price for Islanders' tickets rising 70%; despite Yormark spin, they're selling many obstructed seats

There are a couple of very interesting tidbits in the Wall Street Journal article yesterday, Islanders Making Their Move to Brooklyn’s Barclays Center. Yes, tickets are selling well:
Before the Islanders’ full season schedule was announced last week, Brett Yormark, CEO of the NBA’s Brooklyn Nets and of Barclays Center, said more than 8,000 Islanders full-season-ticket plans had been sold: 25% from Long Island, 21% from Manhattan and, somewhat surprisingly, 33% from Brooklyn.
The Islanders have a good team, and can build in a new--or at least expanded market. The average ticket price will be $85--that's $35 (or 70%) more than at the Nassau Coliseum but, according to Yormark, about the league average. Still, it's quite a leap.

The capacity issue

From the article:
Yormark has had to address Barclays Center’s shortcomings. The arena was built to hug a 94-foot-long basketball court, so the 200-foot hockey rink had to be nestled into one end of the arena, prompting the removal of most of four sections of seats at that end.
Additionally, after the Islanders played two preseason games there in each of the last two seasons, several of what Yormark called “horribly obstructed seats” above that end won’t be sold, reducing seating capacity to 15,795, about 2,000 fewer than at Nets games.
That makes Yormark sound like a concerned fellow rather than the relentless marketer he is.

After all, as I reported, arena officials in June 2012 said there'd be only 14,500 seats, of which about 1500 would be obscured, a consequence of an arena built specifically for basketball.

When hockey debuted in September 2013, Joe DeLessio of New York magazine wrote There Are Some Pretty Bad Seats for Hockey at Barclays Center:
Last year, when the Islanders were scheduled to play the Devils in a preseason game at Barclays, the seating chart for the game showed that most seats on the west end of the arena wouldn’t be sold, thus giving the hockey seating bowl a sort of horseshoe shape. (That game was never played because of the NHL lockout.) And when the Islanders announced plans to move into Barclays last year, they said the arena’s hockey capacity was at 14,500 but could possibly be bumped up to 15,000 or "15,000 plus." The official hockey capacity is now 15,813. But no major renovations took place; the arena simply decided to sell the obstructed-view seats. It’s not false advertising — the seats are labeled as “limited view,” and they’re less expensive than they’d otherwise be — but the arena doesn’t exactly broadcast the fact that the west end of the arena is far from ideal for hockey. (A Barclays Center spokesperson didn't immediately respond to a question about the decision to sell these seats or a request for a chart of the 416 seats in the hockey configuration that Yormark said last week wouldn't be offered for sale because of sightline issues.)
So they've gone down to 15,795 from 15,813, a reduction of all of 18 seats. Even if they've added some seats with full views, that still suggests they're selling lots of "not-quite-horribly obstructed" seats.

So those numbers allow the Barclays Center to exceed the one smaller arena in the NHL, MTS Centre in Winnipeg, which seats 15,016.

The numbers

The Journal notes that the Islanders averaged only 15,334 fans last season in Nassau during the regular season. With a bigger market, and more expensive tickets, they don't have to draw as many people to reap higher revenues.

But we don't know the contours of the deal between the team and arena. The Wall Street Journal reported that the arena, rather than getting rent from the hockey team, guaranteed an unspecified annual payment in return for the revenues.

The New York Post reported that the arena’s owners guaranteed the Islanders about $50 million in annual revenue for regular season games--which hasn't been publicly confirmed.

Forest City, naming new modular leader, pushing for "new business partners" and "new business opportunities" (even before B2 is done)

A Crain's New York Business article, originally headlined "Forest City Ratner creates a modular-housing division, names unit leader," has been  updated to Forest City Ratner will keep its modular-housing factory in Brooklyn, names construction exec to run it. Both have the subheading "Susan Hayes will lead FC Modular, which operates out of the Brooklyn Navy Yard."

The lead:
Forest City Ratner Cos. has created a new position to head up the firm’s modular-housing division, the company announced Monday, meaning that it plans to keep its Brooklyn Navy Yard factory running after the completion of a 32-story tower next to Barclays Center in downtown Brooklyn.
The firm tapped Susan Hayes, formerly an executive at a Manhattan construction firm, to lead the subsidiary, known as FC Modular, which currently runs a production facility in the Brooklyn Navy Yard.
“Modular construction is an important part of the future for our industry, and Susan will bring tremendous value as we seek new business partners and source new business opportunities going forward,” MaryAnne Gilmartin, chief executive of Forest City and one of Crain's 50 Most Powerful Women in New York, said in a statement.
Of course they can't make back their investment in the factory, as well as the expected loss on the first tower, B2 (aka 461 Dean Street), without more production. I've speculated that Forest City will seek/get some grant or support from government to build modular affordable housing.

A quote from Hayes, who came from the Manhattan-based construction management firm Cauldwell Wingate Co.:
“While our initial focus is the successful completion of [B2 BKLYN], this modern means of construction offers great promise in the creation of a wide range of high-quality, cost-effective and uniquely sustainable buildings,” Ms. Hayes said in a statement.
It's not clear whether this is a new position in function or name. Surely other personnel have acted as Forest City's point people for modular. 

About the backstory

Gilmartin herself has said the model has to be proven with an open and operating building. Here's Crain's:
The firm was constructing the tower with a U.S. arm of Swedish construction giant Skanska until last fall, when the two had an acrimonious and litigious split prompted by delays and budget overruns on the building, which was originally billed as costing $116 million and was set to open in late 2014.
That's not quite the full story. The issue is not merely delays and budget overruns, but Skanska's claims of design flaws

Monday, June 29, 2015

After complaints about hazardous Atlantic Avenue, Forest City admits traffic agents "not doing their job well enough"

At the Community Update (fka Quality of Life) meeting last Wednesday, executives from developer Greenland Forest City Ratner partners and state and city agencies heard several complaints about unsafe streets, notably the intersection of Atlantic and Sixth avenues, site of major construction.

Two residents north of Atlantic said they were afraid to cross the street, given the poorly marked sidewalks and the poor performance of the Traffic Enforcement Agents (TEAs) paid for by the developer but supervised by the police (though not the local precinct). Such TEAs, residents said, "give preference to large vehicles."

Also, added resident Pauline Blake, "they are nowhere to be found at Sixth and Atlantic ... at 7 in the morning when I drive."

Forest City Ratner executive Ashley Cotton admitted, of the TEAs, "My team completely agrees, they're not doing their job well enough. They've been spoken to many times." She said several had been replaced, and noted that all but one closed sidewalk had been reopened.

The TEAs are separate from the pedestrian monitors, who work for the private firm Sam Schwartz Engineering, hired for specific arena events.

Possible changes

Part of the issue is simply design, since there's no pedestrian refuge in the middle of Atlantic, given that the street has been narrowed for construction, and there is no clear path for pedestrians to stop--and cross.

Keith Bray, Brooklyn Borough Commissioner for the Department of Transportation, said "we are thinking about what Atlantic between Flatbush and Vanderbilt will look like in the future... there will be some changes, from a DOT perspective."

Bray got a significant amount of hostility from a resident, before Forest City acknowledged the problem was ultimately its fault. Forest City's Cotton publicly thanked Bray for his agency's cooperation.

Resident Peter Krashes said the departure of Chris Hrones, a DOT employee assigned to Downtown Brooklyn and Atlantic Yards, means that "part of the frustration" is the lack of a staffer dedicated to the project.

For those approaching Atlantic along Sixth from the south, there's a sign indicating where cars should wait, but no such sign for pedestrians. There's also a missing sign saying "no left turn," noted resident Wayne Bailey, who also heads the 78th Precinct Community Council.  Bray said he'd look into it.

Other changes and concerns

Bray also said that bike lane markings and all intersection markings on Dean Street will be refurbished in July.

He said he'd been told that a "no trucks" sign on Carlton Avenue is obscured. "We're going to look to add an additional sign," he said.

St. Marks Avenue resident Pauline Blake said there were "severe problems" from trucks are detouring on St. Marks, aiming to avoid gridlock by going through a residential street. "Are we going to have to live through this summer with these trucks barreling up St. Marks?"

There were several other comments before Bray got to respond to a series of concerns, but his statement regarding St. Marks was "I just heard that."

Forest City: "it is mind-numbingly loud" at 38 Sixth Avenue construction site; also, a complaint about dust

At the Community Update (fka Quality of Life) meeting last Wednesday, Forest City Ratner executive Ashley Cotton noted that construction work had just started at the  38 Sixth Avenue site at the corner of Dean Street and Sixth Avenue, on the southeast end of the arena block.

"The MPT [maintenance and protection of traffic] for that plan is done, so you've seen fences have moved out," Cotton said. "The sound attenuation blankets are going up." 

(Such acoustic blankets have been used at Sixth and Atlantic avenues, but were not mentioned in the most recent Construction Update regarding 38 Sixth Avenue, also known as B3.)

"We know it’s extremely loud... it is mind-numbingly loud," Cotton continued. "It’s because they’ve been hitting cobble [rock]… The field conditions have been very challenging." She said they hoped to get through this phase "very soon."

A question about dust

One resident of Atlantic Terrace, on the northeast corner of Atlantic and Sixth avenues, expressed dismay that the developers, Greenland Forest City Partners, have not consistently put tarpaulins over dirt mounds and wet down the dirt to deter dust. 

"That took a long time to happen.. I want assurances that you’re going to do that," he said, noting that the "dust levels are pretty high," citing a specific incident in which the evidence was very clear on parked cars.

Cotton said they knew about the incident and "addressed it immediately. [Compliance] absolutely has to happen all the time."

WSJ: 550 Vanderbilt gets $200M construction loan; penthouse condo will cost $7 million

The Wall Street Journal, in Pacific Park Condo Gets Construction Loan, reports today that the 550 Vanderbilt condo building got a $200 million construction loan from HSBC Holdings PLC. Such market-rate units cannot depend on tax-exempt financing, as do buildings with "affordable" units.

Two tidbits, first the unit price:
Most of the units will be in the $565,000 to $1.5 million range, but a few of the penthouses will be priced at as much as $7 million.
That's an increase from the initially-indicated price ceiling of $5.5 million, unless they were simply holding such $7 million penthouses in reserve.

And the overall cost:
Mr. [Jeff] Rosen [executive director of the joint venture, Greenland Forest City Partners] declined to put a price tag on the condo. But generally construction loans are equal to 60% to 65% of project value, say real-estate experts. The venture recently received approval from the New York attorney general’s office to start sales and marketing of the condos.
If $200 million is 60% of project value, the total cost is about $333 million. If $200 million is 65% of project value, the total cost is about $308 million.

Sunday, June 28, 2015

Crain's: Forest City's Gilmartin 17th-most powerful women in New York City (but for modular building?)

Crain's New York Business has issued its Most Powerful Women 2015, with Forest City Ratner Chief Executive MaryAnne Gilmartin ranked 17, just one step below her ranking two years ago:
As head of Forest City Ratner Cos. for more than two years, MaryAnne Gilmartin, 51, has already overseen the construction of some of New York City's most recognizable landmarks: a residential building designed by Frank Gehry at 8 Spruce St., the Renzo Piano-crafted New York Times Building and the eye-catching Barclays Center in Brooklyn. So it's only natural that Forest City would lean on her to push through its most challenging project yet--a modular building rising in fits and starts near downtown Brooklyn that, when completed, will be the world's tallest at 38 stories.
Ms. Gilmartin, who leads 650 employees, has also embarked on a number of recent developments including a game-changing tech campus planned for Roosevelt Island.
I don't doubt Gilmartin's ranking, but would credit her more with a role navigating the deal with Greenland Holdings to get the project speeded up, and in convincing the mayor and elected officials to give their blessing to not-so-affordable "affordable housing."

The modular tower is at this point a question mark, since it's still in litigation and, even if/when it gets built (at 32 stories, not 38), it's unclear how many more Forest City and/or partners would build. Only if there's a modular pipeline--as Crain's 2013 ranking suggested--can Forest City make back its investment in research and development.

In 2013, Gilmartin was ranked 16:
MaryAnne Gilmartin, 49, became one of the highest-ranking executives in New York real estate development when she was promoted in April to chief executive of Forest City Ratner.
Among her responsibilities, she oversees the $4.9 billion Atlantic Yards development project, which includes Barclays Center. Lately, Ms. Gilmartin has pushed the company in a new direction, pioneering the use of modular construction in the city. Ms. Gilmartin is hoping to not only use the time- and money-saving technique for the 15 residential buildings slated for the Atlantic Yards, but also to turn the company's growing capabilities in the method into an assembly line for developers across the city.
Success would help the 2,573-employee Forest City Ratner build on the $1.1 billion in revenue it earned in 2012.
Others on the Crain's list linked to Forest City:

Saturday, June 27, 2015

DBP's Reed: land values in Downtown Brooklyn go from $80/sf to $500/sf (so MTA should've driven harder bargain); the perils of BK = "Silicon Valley" prediction

"I think the speed and pace and scale of what's happening in the borough now is why I think everyone's pinching themselves, and find it hard to believe," says Tucker Reed of the Downtown Brooklyn Partnership in the video below, produced by the Brooklyn Eagle, part of its coverage of Make It In Brooklyn: Inaugural innovation summit attracts top business leaders.

"Land values in Downtown Brooklyn alone, over the last 18 months, have gone from $80 a square foot to 500 [dollars]," he continued. "That pace of change is hard to get your mind around." (I'm not sure those numbers are average, as opposed to the outliers.)

Such change is part of why it has become more cost-effective to build Atlantic Yards/Pacific Park using conventional construction, despite developer Bruce Ratner's past claim that it was impossible (though that's what he proposed, and got approved).

And it's also why, as I wrote, the expected prices for condos now exceed Forest City Ratner's optimistic projects from 2009.

It's also why the public should get more of the upside, but, because the Metropolitan Transportation Authority was under the sway of the governor and mayor--themselves doing the bidding of Forest City Ratner--the MTA didn't ask for more.

Looking back at the RPA arguments

As I wrote in May 2014, in June 2009, the Regional Plan Association (RPA) advised the MTA, which was set to give Forest City Ratner more generous terms regarding the Vanderbilt Yard--21 years to pay, with a gentle interest rate-- to seek a better deal.

“While there has been little time to digest the proposal, several considerations are clear,” the RPA's Neysa Pranger testified, suggesting that project was now far different from the one approved in 2006, with “greatly diminished” public benefits.

She also said that “it is likely to be years before the market recovers enough to attract new developers”--a statement I thought worthy of debate and now, with hindsight, see as silly.

However, Pranger and the RPA wisely observed that it “is almost inevitable that it will need to be redesigned and renegotiated over several business cycles before it’s complete."

“Does this new agreement retain enough benefits for the MTA and the city to proceed with a scaled-back plan?” Pranger asked. “Based on the information available, the answer is no."

Rather than open up the site to new bids, she made four recommendations for any revised deal with Forest City Ratner, including granting the MTA more future project revenues, conducting a new cost-benefit analysis and creating a new ESDC subsidiary to oversee the project and review design elements.

Specifically, the RPA said: "The MTA should either receive a larger upfront settlement or an opportunity to realize much greater long-term revenue, possibly by negotiating a share of future revenues from the project that could exceed annual payments for development rights."

The MTA board didn't bother to discuss those suggestions. It should have done so.

More on the Brooklyn boom

From Capital New York, 6/25/15, Get ready Sunset Park, ‘Brooklyn’ is coming:
“Is Brooklyn done?” Brooklyn Chamber of Commerce president Carlo Scissura asked a morning panel of corporate executives who have made money marketing “Brooklyn.” “Or is it just, like, forever? Or is it the beginning?”
Airbnb’s New York manager, Wrede Petersmeyer, suggested that as long as Brooklyn neighborhoods continued to package themselves so well, there was no end in sight.
“I don’t think you can separate our growth in the city from the growth of neighborhoods having brands,” he said. “I think 20 or 30 years ago, you couldn’t imagine the idea that someone living in Paris would want to not go to New York, but go to Williamsburg, spend time in Red Hook, visit a neighborhood that has an identity.”
Reporter Dana Rubinstein rightly called that "boosterism." Some neighborhoods have much more strength than others--and Red Hook, despite its charms, is transportation-challenged.

The conclusion:
...What’s the next great frontier in Brooklyn?
“I have no idea,” said Walentas. “You know, Bushwick is now gentrifying. I don’t know. Jed, do you have any idea?”
His son, Jed, said “Brooklyn is still very early” in its upward trajectory.
[Developer Bruce] Ratner agreed.
“This borough will be known in 10 or 20 years as the equivalent of Silicon Valley,” he said. “I really believe that.”
The perils of prediction

Hold on. Bushwick is gentrifying. It's also huge, full of parts that are very much not gentrifying, or not gentrifying much.

As for Silicon Valley, well, Brooklyn's tech scene is not nearly equivalent, nor does it promise to be that. Remember how MetroTech was once supposed to be Silicon Valley?

From the New York Times, 6/22/97, A Dream Grows in Brooklyn:
''The original concept was developed by George Bugliarello, who wanted to build a research and development facility modeled on Silicon Valley,'' said Mitchell Moss, director of the Urban Research Center at New York University. ''The developer had a better feel for the for the market, but the idea was George's.''
...''We looked at it and determined the area was not appropriate for another Silicon Valley,'' said Mr. [Bruce] Ratner, who was backed by Forest City, his family's development company, which is based in Cleveland. ''We did find that what tenants really wanted was lots of high-tech space for back-office operations. And we also found that 30 to 35 percent of the people who work in downtown Manhattan are from Brooklyn.''

Greenland selling Pacific Park condos at Downtown Los Angeles marketing center; pitching new "cities" for young professionals/early retirees

I missed this 4/29/15 press release, Greenland USA Opens National Sales and Marketing Center in Heart of Downtown Los Angeles: Real Estate Giant to Showcase Residences for Metropolis and Future Properties.

There's one paragraph about Brooklyn:
Pacific Park Brooklyn, Greenland USA’s investment in New York will also be featured in the Sales and Marketing Center. Pacific Park Brooklyn is a $4.9 billion, 22-acre mixed use development that will be a cornerstone of the Brooklyn community, integrating family homes, store fronts for small business owners, schools, shopping, and entertainment. Pacific Park Brooklyn and Metropolis exemplify Greenland USA’s vision for developing properties that integrate seamlessly within a city and catalyze the local economy.
I think that the use of the plural "schools" is not accurate, since only one school is planned. Small business owners? We'll see.

Also note that Metropolis condos start at $600,000, while the ones in Brooklyn are a hair less expensive. Then again, Metropolis is in the center of Los Angeles.

Pursuing "young professionals or early retirees"?

From the Real Deal South Florida, 6/26/15, U.S. CEO of China’s biggest developer peruses SoFla:
"We are building cities for the next generation to come,” Chang said.
In Brooklyn, Greenland USA is a joint venture partner on its property near the Barclays Center, where it plans a project that will span 22 acres of land, with 15 buildings housing more than 6,000 units, one-third of them affordable housing. One year after the joint venture was established, the project has already broken ground on two of the affordable housing buildings, which will total 599 units, she said.
The targeted audience is young professionals or early retirees who want to enjoy urban living, she said.
That's an interesting quote. That "targeted audience" may apply to the condos, or the market-rate housing, but the affordable housing was supposed to be accessible to families, low-, moderate-, and middle-income.

The next two buildings have 35% two- and three-bedroom units (compared to the pledge of 50%, in floor area, so it's unclear whether that's met), but are pitched significantly to middle-income households. They pay more.

The 4/29/15 release, in full below

Greenland USA Opens National Sales and Marketing Center in Heart of Downtown Los Angeles
Real Estate Giant to Showcase Residences for Metropolis and Future Properties

LOS ANGELES--(BUSINESS WIRE)--Greenland USA, a leading developer of residential and commercial properties, opened its first U.S. Sales and Marketing Center in Los Angeles. The Center will showcase Greenland USA’s current and future landmark properties and is today outfitted with a gallery and model residence for Metropolis (www.metropolislosangeles.com), a more than $1 billion mixed-use development set to redefine the Los Angeles streetscape, skyline and lifestyle.

“Greenland USA’s strategic investments in Los Angeles and New York have anchored our presence in the U.S. As we actively seek growth opportunities across the U.S., this Sales and Marketing Center will allow us to showcase the breadth and depth of current and future projects, as well as our expertise, architectural acumen, and the quality of the our developments,” said I-Fei Chang, CEO, Greenland USA.

Metropolis, Greenland USA’s first investment, is a 6.3 acre property being built on one of the last substantial parcels of undeveloped land in downtown Los Angeles. Upon completion, Metropolis will be comprised of three residential towers, a boutique hotel and a curated retail experience. With towers reaching 18- to 56-stories high, Metropolis will provide guests and residents with expansive views of the city, mountains and coastline and will set a new standard for urban living. Sitting conveniently between Los Angeles’ financial district to the north and entertainment district to the south, Metropolis will connect these two districts via a pedestrian-friendly retail thoroughfare. Residential Tower 1 is already 50% pre-sold and is scheduled for completion in 2016. The full property is slated for completion in 2018.

“Downtown Los Angeles is undergoing a revitalization and people from all walks of life are returning to the area to work, play and live,” said Ms. Chang. “As a result, people are eager to make downtown their home and are looking to get in early on the right property that fits their lifestyle and expectations.”

In addition to the spectacular views, Metropolis will feature contemporary finishes and all the modern amenities and conveniences that make urban living so desirable, including 24/7 concierge services, outdoor spaces with swimming pools, spas, cabanas, gardens, walking paths, dog parks, pet-washing stations, a children’s play area, putting green, outdoor kitchen and BBQ areas, indoor fitness centers, club rooms, screening room and residence lounges. Metropolis residences currently range in price from $600,000 to over $2,000,000.

Pacific Park Brooklyn, Greenland USA’s investment in New York will also be featured in the Sales and Marketing Center. Pacific Park Brooklyn is a $4.9 billion, 22-acre mixed use development that will be a cornerstone of the Brooklyn community, integrating family homes, store fronts for small business owners, schools, shopping, and entertainment. Pacific Park Brooklyn and Metropolis exemplify Greenland USA’s vision for developing properties that integrate seamlessly within a city and catalyze the local economy.

About Metropolis

Metropolis is a more than $1 billion, 6.3 acre residential, retail and hospitality property in downtown Los Angeles. Located just two blocks from Staples Center and L.A. Live, Metropolis will span two full city blocks, and connect the financial and entertainment districts, while adding to the L.A. skyline and the vibrancy of the downtown scene. Metropolis will provide guests and residents alike with expansive views of the city, mountains and coastline, and offer a new standard for urban living. Phase I is slated for completion in Fall 2016; Phase II is slated for 2018.

About Greenland USA

Greenland USA is a leading developer of residential and commercial properties that both transform communities and exemplify modern living. Greenland USA is investing nearly $5 billion into New York’s Pacific Park Brooklyn, a 20 acre mixed-use property, and more than $1 billion in Los Angeles’ Metropolis. Greenland USA’s strategic acquisitions exemplify its vision for developing transformative and modern properties that are amenity-rich, will catalyze the local economies and foster the growth of the surrounding communities. Greenland USA is a subsidiary of Greenland Group, which is ranked 268th among the Fortune 500 global enterprises.

Friday, June 26, 2015

A footnote re Ratner's pursuit of passive income: initially, he aimed to leave real estate

From Capital New York, this morning,
Pacific Park developer Bruce Ratner got into real estate because he wanted to make $120,000 a year in passive income.
“Obviously, it didn’t work out that way,” Ratner said Thursday morning.
He made "more."
From the Real Deal, May 2011:
But in 1982, at 38 years old and with a young family to support, Ratner was making $52,000 and decided he wanted a more secure financial future. He gave himself eight years to earn enough money to produce $125,000 a year in “passive income” (not such a modest goal; in today’s dollars that’s about $500,000), figuring he could then focus on whatever he wanted.
In other words, it wasn't merely that he made more money. It's that Ratner--once a reformer--found his place in the world of New York real estate and political influence.

Plumlee, Nets' "PR Slave," traded after two years; four new guys get "Welcome to the neighborhood"

“The NBA is entertainment, too, not sports,” former referee Tim Donaghy recently told New York magazine. And a business.

Consider the prominence at p.r. events over the past two years of Nets backup center Mason Plumlee, who was on the trading block.
(That tweet might not have had the same language were Plumlee not a white guy.)

Indeed, Plumlee was on the block, and last night he was traded as part of a package deal to Portland.

From the press release:
The Brooklyn Nets selected forward Chris McCullough with the 29th pick of the first round in the 2015 NBA Draft tonight.
McCullough (6’9”, 200) joins the Nets after playing one season at Syracuse. The Bronx, N.Y. native averaged 9.3 points, 6.9 rebounds, 2.1 blocks and 1.7 steals in 28.1 minutes per game through 16 games in his lone season with the Orange.
Following the selection of McCullough, the Nets acquired the draft rights to forward Rondae Hollis-Jefferson and guard Steve Blake from the Portland Trail Blazers in exchange for center Mason Plumlee and the draft rights to guard/forward Pat Connaughton, Nets GM Billy King announced tonight.
Here's NetsDaily coverage.

The news, for the tabloids, was very much secondary to the higher-stakes pick by the New York Knicks, as indicated in the New York Post cover below:

Thursday, June 25, 2015

Barclays Center green roof, originally due by July, should (still) be finished in September

I'll have more coverage from the Community Update meeting in subsequent posts.

The Barclays Center green roof is still delayed--but still on the delayed timetable acknowledged in February. 

As I reported in February, developer Forest City Ratner (the public-facing part of Greenland Forest City Partners) admitted indirectly that the green roof--an exoskeleton aimed to beautify the view and also tamp down escaping noise--was several months behind schedule.

The Atlantic Avenue cranes "will be gone this summer, that's our expectation," Forest City's Ashley Cotton said in February, and she repeated the prediction last night at the periodic Atlantic Yards/Pacific Park Community Update (formerly Quality of Life) meeting.
The Atlantic Avenue crane, according to the original timetable (below), was supposed to installed in August 2014 and removed by October 2014. Instead, it was installed in October, and will have lasted more than nine months, not three months, as originally predicted. 

At a meeting last November, a state official overseeing Atlantic Yards, Sam Filler, told Ken Adams, CEO of Empire State Development, the agency overseeing/shepherding the project, that the traffic-clogging crane would be gone by May. That didn't happen.

Going green by September

Cotton again said the installation of sedum--the vegetative roof materials, as with the top of the subway entrance on the arena plaza-- will be done in September. 

"Only have 50,000 trays of a total of 135,000 trays of sedum left to deliver!" Pacific Park Brooklyn tweeted two days ago, and Cotton also cited that statistic.

That's two months behind the original timeline, when the installation was supposed to be done by the end of July, as the graphic above shows.

From the east, a larger percentage of the sedum has been placed. Photo via AY Webcam.

Wednesday, June 24, 2015

Open space (not "park") designs released, depict project as complete, portrayed as gift to Brooklyn

Well, we should have guessed.

In advance of tonight's Community Update meeting, which includes an "open space presentation," developer Greenland Forest City Partners placed an "exclusive" with a friendly newspaper, the New York Daily News.

This morning the Daily News--remember, the sponsor of the arena plaza--published EXCLUSIVE: Forest City Ratner unveils design of 8-acre park at Brooklyn’s Pacific Park mega-development.

Why now? Not because the "8-acre park"--which is not a park"--will arrive soon.

The first pieces should come next year, but the full open space won't be finished until 2025.

Surely it has something to do with marketing those new condos, as well as reinforcing the misconception that the open space is a park.

Open space is privately managed, likely by a nonprofit, and has shorter hours than parks. It can also impose greater restrictions on freedom of expression and other activities.

As shown in the graphic above right (and reproduced below), the largest pieces of open space are set far back from the street and will be built only after the Vanderbilt Yard is decked over, in the latter part of the 11-year buildout.

Commented Prospect Heights writer Andrew Blum on Twitter, "To my eye, the expansiveness in the renderings (if it exists at all) isn't coming until the decking is built."

Indeed, what's missing is a set of incremental renderings, showing what the open space would look like every few years.

From the article

It begins:
Pacific Park, the namesake park of real estate giant Forest City Ratner's enormous Prospect Heights mega-development, might finally cross from drawing board to reality.
After seemingly endless delays, the company and its partner Greenland have finally unveiled a masterplan and renderings of the 8-acre park at the heart of their new residential and commercial megaproject, which is slated to comprise 16 towers featuring condos and 2,250 units of affordable housing over 22 acres.
Actually, it's a new master plan, since it's designed by "landscape architect Thomas Balsley, best known for spaces such as Gantry Plaza State Park in Long Island City and Hunter's Point South Waterfront Park"--both quite nice, but separate from nearby towers by--not the original landscape architect, Laurie Olin.

There's no explanation for the timing.

A real amenity?

The article states:
“The park will make this pocket of the borough more livable for residents of many different Brooklyn neighborhoods," said MaryAnne Gilmartin, the president and CEO of Forest City, which plans to present the plans at a local community meeting on Wednesday. "There will no longer be a dearth of green space in the heart of Brooklyn. Instead, there will be sprawling lawns, shaded benches and valued neighborhood amenities across eight acres of public open space that will reknit these communities together."
(Emphasis added)

Well, this is a net gain of open space, sure. However, it surely will serve the residents of Atlantic Yards/Pacific Park far more than anyone else.

Remember, the city sets a goal of 2.5 acres for every 1,000 people and, recognizing that's unattainable in many places, notes an average of 1.5 acres for every 1,000 people.

Given that the 6,430 Atlantic Yards/Pacific Park apartments should hold some 14,000 people, that means either 35 acres or--more realistically--21 acres.

So they're not even close. Moreover, as Brooklyn Views blogger Jonathan Cohn wrote in 2005, those ratios were "relative to the city's existing pattern of streets and blocks, where the streets provide additional open space that is not counted in the ratio. If we didn't have streets, the requirement for open space would be much greater." In fact, perhaps 3 acres of the open space comes from the street.

Note the "gateway portal" (10) on Atlantic Avenue in four places, as well as the "railroad heritage/retail ribbon" (27) along Atlantic starting at Sixth Avenue and then at Carlton Avenue.

The designs

From the article:
The long, meandering park, which will follow the footprint of the new towers... is slated to feature a public plaza, separate toddler and children play areas, sloping lawns, a bocce ball court, a basketball court, a dog run, a public promenade, glowing lanterns and a water garden with floating foliage.
The first phase of the park, which will comprise a swath of land between new residential projects on Carlton and Vanderbilt Aves. and Dean St. and Atlantic Ave., is slated to open next summer to coincide with the opening of two towers abutting the park — they are 550 Vanderbilt, a 278 -unit condo development, and 535 Carlton, a 298-unit affordable housing complex.
The new park will have separate toddler and children play areas, sloping lawns, a bocce ball court, a basketball court, a dog run and a water garden.
That sounds like open space for those buildings. But they have a response:
But the park is much more than just a backyard for the residents of new luxury towers, Balsley said.
“Everyone agreed that we wanted this to look just like a normal accessible park that you would see elsewhere in the city,” he told the News. “We wanted this to be a great space that could be shared by the whole neighborhood as well as the residents of these buildings.”
A neighborhood critic

Blum, who writes about architecture and design (and no opponent of Atlantic Yards), tweeted, "What a sad site plan. Something like Teardrop [in Lower Manhattan] is the best of what can be hoped for (and this isn't it)"

I asked him to elaborate, and he responded, "To my eye, the expansiveness in the renderings (if it exists at all) isn't coming until the decking is built."

That doesn't arrive until 2019, at best, according to the most recent tentative schedule.

" I walk by everyday *wanting* this space to be good," Blum added. "But those renderings are a) over the top and b) 10 years away."

Will court ruling pry open details of claims of sexual misconduct against Stuckey while at Forest City?

Capital New York (paywall only) points to a brief but potentially important decision yesterday by an appellate court in the lawsuit by Stephanie Bonadio against New York University and its former Dean Jim Stuckey regarding the potential sharing of information regarding Stuckey's conduct while at developer Forest City Ratner.

Bonadio sued NYU and Stuckey in 2012 for sexual harassment, with other counts against NYU for retaliation (she claims her job was eliminated after accusations against Stuckey) and against Stuckey for assault and battery.

As stated in the decision issued yesterday, the Appellate Division, First Department, reversed a lower court order that denied Bonadio's "motion to compel discovery of information related to claims of sexual misconduct made against defendant Stuckey when he was employed by Forest City Ratner (FCR), except insofar as such information was provided to or otherwise known by defendant New York University."

In other words, information about such claims--the New York Post reported that Stuckey, the former Atlantic Yards point man, was pushed out in 2007 "after a series of complaints had been made against him by female employees"--can be shared with Bonadio.

Whether they will become public is another question. Certain documents in this case are already under seal. From the decision:
Plaintiff claims that she was subjected to unlawful conduct in the form of unwanted touching by defendant Stuckey; Stuckey denies that his intent was to harass plaintiff or that his conduct was unwanted. He claims that he took plaintiff's hand and placed it on his upper leg, innocently and with her consent, in an effort to console her. As Stuckey's intent is at issue and "no particular intent can be inferred from the nature of the act [he] committed," plaintiff is entitled to disclosure of evidence that bears on his intent, e.g. "other similar acts" (see Matter of Brandon, 55 NY2d 206, 211-212 [1982]). Thus, she is entitled to information related to claims of sexual misconduct made against Stuckey while he was employed at FCR (see e.g. Pecile v Titan Capital Group, LLC, 119 AD3d 446 [1st Dept 2014]).
Settlement agreements while at Forest City

As I reported in January, a lawyer for Stuckey, in a letter to the court, indicated there were two settlement agreements involving Forest City Ratner:
That is because the prior motion related to a settlement agreement that the Court ordered non-party Forest City Ratner to produce under seal. The Court ultimately determined that the agreement should remain confidential and free from discovery pursuant to the express language of the confidentiality clause in that agreement. Motions No. 5 and 6 relate to the same settlement agreement, as well as another related settlement agreement with an identical confidentiality clause, and therefore deserve the same sealing treatment.
In other words, Forest City Ratner signed a settlement agreement, presumably with Stuckey and/or his former colleagues/subordinates. And then it signed a "related settlement agreement," again presumably with Stuckey and/or his former colleagues/subordinates.

Real estate boom lifts Atlantic Yards/Pacific Park condos: prices 18% over 2009 projections for 2015 (which were aggressive)

It's stunning, a testament to the roaring New York/Brooklyn/Prospect Heights real estate market, as well as the unpredictability of project timing, the entrance of a deep-pocketed partner, and the opportunity to reach a new segment of buyers.

In 2009, Forest City Ratner's projections for future condominium revenues were seen by many (including this writer) as significantly overstated. Now, they seem conservative.

(Update: a reader points out that we should look at the 2006, when the project was first approved, with the unrealistic ten-year buildout.)

For example, in 2009, the developer projected that the B11 tower would open in 2019 and sell for $1,369 per square foot, among the most expensive towers in the project.

Now, the building, known as 550 Vanderbilt, is projected to open next year, and the eight announced sales are pending at $1,436/sf, according to StreetEasy.

That's more than a 4.9% increase. It's a 4.9% increase three years early. As of 2015, the developer was only expecting $1,217/sf for the first condo building. The jump to $1,436 represents an 18% increase.

Should those numbers be reached, and also be reflected in the market-rate rentals, Forest City may well make up the impairment it announced, $148.4 million after taxes, upon selling 70% of the project (excepting the Barclays Center and B2) to Greenland Holdings last year.

After all, the subsidized affordable rental apartments also will rent for higher prices than projected.

Forest City also originally gains a 5% development fee, which if maintained by the developer--rather than split with Greenland--would mean some $200 million.

Greenland not only offers deep pockets but--surely not projected a decade ago--access to some deep-pocketed potential condo purchasers. Hence the marketing materials in Chinese.

The 550 Vanderbilt units

Streeteasy's page for 550 Vanderbilt cites:
  • Apt. 202, 1-BR, 1-BA, 637 sf, $800,000 ($1255/sf))
  • Apt. 327, 1-BR, 1-BA, 672 sf, $870,000 ($1294/sf))
  • Apt. 621, a studio, 461 sf, $625,000 ($1355/sf))
  • Apt. 331, a studio, 414 sf, $565,000 ($1364/sf))
  • Apt. 328, 2-BR, 2-BA, 1,177 sf, $1,615,000 ($1,372/sf)
  • Apt. 730, 3-BR, 2-BA, 1,358 sf, $1,960,000 ($1,443/sf)
  • Apt. 1119, 3-BR, 3.5 BA, 1,919 square feet, $2,890,000 ($1505/sf)
  • Apt. 1317, 2-BR, 2-BA, 1,004 sf, $1,655,000 ($1,648/sf)
Looking for context

Some thought those numbers high--one Brownstoner commenter pointed to a resale in DUMBO at under $1200/sf.

But they're not out of line for the most expensive luxury condos in the area. At One Prospect Park, there's a listing for $1823/sf. Units recently sold for $1104/sf, $1270/sf, $1173/sf, and $1459/sf.

The latter unit, listed at 9/15/10 for $1,950,000 and then re-listed 1/17/12 for $1,775,000, finally sold more than 18 months later, on 4/18/12, at that new ask. It was re-listed two years later, on 4/8/14, at $2,849,000, it sold at that ask less than four months later. That's an astounding price increase of 60.5%.

At Newswalk, 535 Dean Street, there's a unit on sale for $1090/sf, and another for $1002/sf. (This latter was priced at $799,000 in 2009, and is now listed at $2,099,000, an increase of 162.7%.) Sales at Newswalk's Phase 3 average $1004/sf.

Active sales at 388 Bridge Street in Downtown Brooklyn, the borough's tallest tower, average
$1,494/sf, while previous sales averaged $1,335/sf, according to StreetEasy.

Downtown Brooklyn, according to StreetEasy, averages $1,340/sf. Prospect Heights averages $1013/sf, including townhouses. The difference in price may be one reason why Corcoran--violating its own stated boundaries!--classifies 550 Vanderbilt as being located in Downtown Brooklyn.

The predictions in 2009

In 2009, Empire State Development, the state agency overseeing and shepherding the project, commissioned a report from KPMG that said it was not unrealistic to expect the project to be built in ten years, given the continuing demand for affordable housing as well as the expected increase in demand for market-rate units.

KPMG cited Brooklyn demographics:
If the above given projections turn out to be evenly reasonably accurate, the Brooklyn residential marketplace will demand more luxury apartments and condominiums over the next ten years.
KPMG noted the predictions were generally in the range of $1,200 to $1,400 per square foot--and I discovered the actual numbers, which were not fully redacted, including the $1,369/sf prediction for 2019.

But KPMG's statistics about condo sales, as I pointed out, were exaggerated and incorrect.

Note that the project, in fact, was not built out in the next ten years, as developer Forest City Ratner spent several years researching modular construction, aiming for cost savings. But it looks to be built out in eleven years after joint venture partner Greenland entered the picture in 2014. That means a 16-year buildout after 2009.

What's changed

With Greenland in the driver's seat, they're building conventionally--though in 2011, developer Bruce Ratner told the Wall Street Journal that "existing incentives" don't work for high-rise, union-built affordable housing.

What's changed? First, it's quite possible that Greenland, in its desire to make a splash, is accepting a lower profit margin. More importantly, the market is booming even beyond KPMG's assessment. KPMG stated:
Given the timing of the Subject Property’’s entry into the market place, with what was described earlier in this report about the vacancy and absorption rates, the market data supports that the high-end/luxury nature of these properties, coupled with the number of building amenities that will be provided, such as proximity to transportation, the fact that the buildings will be brand new, the amount of retail surrounding the property, etc, will create a higher demand for the Subject Property and allow the units to be absorbed more quickly than other comparable properties, as well as, obtain a premium on asking sales price.
What might that premium be? As noted in the graphic above right, condos in 2009 were averaging $450/sf as a minimum and $970/sf as a maximum, with the anomalous $1225/sf likely attributable to One Prospect Park.

Even that number wasn't trustworthy; the KPMG report claimed that building was 75% sold; however, the Times quoted the developers as saying half the units have been sold and that StreetEasy.com documented only 25% the units as sales.

Looking back at the critique

As I wrote in 2009, the Kahr report commissioned by the Council of Brooklyn Neighborhoods--a group set up to respond to the environmental review--was skeptical of even the $850/sf (in 2006 dollars) assumed for condos in a 2006 KPMG report.

Given recent price drops in Manhattan, "the Brooklyn properties should be in the $600 PSF range," Joshua Kahr wrote.
From 2006 predictions

Kahr was both right and wrong.

He was absolutely correct in casting huge doubts on the official timetable, saying it "would be extremely difficult to finance the project within the next 36 months and to build the project over the next ten years."

That should have been enough to give state overseers pause.

But Kahr also said "it is much more likely that the development will take at least 20 years to complete." That was a not unreasonable conclusion, given that Forest City Ratner restructured payments to the MTA to last more than 20 more years. But it also didn't allow for market changes.

Also, hindsight suggests that Kahr should have provided much more of a range of projected condo prices, depending on the level of economic recovery.

While it may have been reasonable to project a recovery, few were projecting the furious rise in real estate dollars, even in the past few years, as noted in the sales at One Prospect Park.

Nor was anyone projecting how Forest City (with Greenland) would raise $349 million via the EB-5 program--essentially selling visas--to lower costs and help pay for the project. (This was on top of $228 million raised during the arena construction phase.)

Or that a deep pocketed developer from China would join the project, and have access to wealthy Chinese buyers.

Atlantic Yards, as I've said before, is a "never say never"project.

Tuesday, June 23, 2015

From the latest Construction Update: Saturday work at B3 site (Dean Street/Sixth Avenue)

Unlike in the past two two-week periods, the latest Atlantic Yards/Pacific Park Construction Update--dated June 22 and covering the next two weeks--was not released on the Friday before the official Monday date, but rather was released after hours yesterday, delivered at 5:17 pm.

The most notable element disclosed, as far as I can tell, is coming Saturday work at the B3 tower, 38 Sixth Avenue, that just launched at the northwest corner of Dean Street and Sixth Avenue.

The document states:
*Saturday work to address field conditions within the site will commence during this reporting period. This work includes excavation work including drilling large cobbles.
A "cobble" is defined as a rock that is smaller than a boulder but larger than a pebble. If so, that suggests significant noise.

The document marks "new work" with asterisks and red type, and I have excerpted it below.

B2 Modular Residential tower -- 461 Dean Street:
*Work related to the erection of modules for floors 13 and 14 shall continue during this reporting period. [previously the work related to floors 11, 12, 13]
B3 - 38 Sixth Avenue 
*Excavation and foundation activities have commenced & continue during this reporting period.
Work includes drilling of soldier piles for the SOE system, excavation of soil to a depth of 20’ and the installation of lagging to the same elevation. Soil that has been classified as clean, or contaminated will be removed from the site as part of the excavation activities and brought to appropriate disposal locations. Protocols for the trucks entering and exiting the site have been put in place. These protocols provide instruction on roadway routing to and from the project site, queuing of trucks while on site and vehicle idling restrictions.
*The removal of the stationary bollards and retractable bollards will continue to take place during this reporting period.
*Saturday work to address field conditions within the site will commence during this reporting period. This work includes excavation work including drilling large cobbles.
[definition:smaller than a boulder but larger than a pebble.]
LIRR Yard Activities – Atlantic Avenue 
*MPT on 6th Avenue between Atlantic Avenue and Pacific Street has been restored to two-way traffic.
 One northbound traffic lane and one southbound traffic lane are now open.
Pedestrian crossing at Atlantic and 6th Avenues now takes place at the east, south and north sides of the intersection;
 The sidewalk on the west side of the 6th Avenue Bridge (between Pacific and Atlantic) will remain closed to pedestrians for approximately one week to allow for installation of the roadway plates in this location.
 B11 – 550 Vanderbilt Avenue: 
*On site preparation for the superstructure phase of construction will commence including the arrival of equipment. 

Monday, June 22, 2015

The Atlantic Yards CDC, conflict-of-interest, and the not-so-affordable "model" building

Remember how the Atlantic Yards Community Development Corporation (AY CDC) was set up "to improve oversight and monitoring of the project," with the appointed board "responsible for monitoring the delivery of public commitments related to the project by making recommendations to the ESD [Empire State Development] Board of Directors"?

And remember how I (and others) raised the issue of a blatant conflict-of-interest, given that two appointees, Bertha Lewis and Sharon Daughtry, are connected to groups that signed the Atlantic Yards Community Benefits Agreement (CBA) with developer Forest City Ratner, and have been funded by Forest City?

Well, we have an answer, and its not pretty. A document released after the AY CDC meeting last month answered--sort of--the question about conflict of interest:
a. Conflict of Interest
All Board members are required to comply with Section 74 of the Public Officers Law which governs conflicts of interests. Board members have been instructed to recuse themselves from any votes which may create a conflict of interest for them based on their outside activities, employment or business interests.
(Emphasis added)

That's hardly convincing. The work of the board goes well beyond voting, as it encompasses what topics are given attention, or not. Lewis, former head of ACORN and now leader of The Black Institute, is one of the few people on the board with expertise in housing issues.

Last week, she hailed a "100% affordable" building with most units way too expensive for her longtime constituency, as I wrote. She called "Pacific Park buildings... a model for how to build housing and communities that reflect the diversity, in every way, of our City."

She didn't comment on how the configuration--skewing to middle-income subsidized units--differs from the housing plan for Atlantic Yards she signed as head of New York ACORN. Nor how the configuration differs significantly from Mayor Bill de Blasio's overall plan for subsidized housing.

It's not surprising that a developer-prepared press release would include such cheerleading quotes--or even a completely misleading one from the head of ESD, the state authority that's supposed to shepherd and oversee the project.

But it's dismaying to think that such a comment comes close to oversight.

What's the boundary?

When I first asked about the conflict back in February, ESD attorney Robin Stout told me, "Purely as a hypothetical, if one of the elected officials decided to appoint someone from Forest City Ratner or [new partner] Greenland to the board, I'm not sure that that would constitute a conflict."

Stout pointed me to the Public Officers Law (excerpt), which includes boards of any public authority corporation, encompassing AY CDC:
No officer or employee of a state agency, member of the legislature or legislative employee should have any interest, financial or otherwise, direct or indirect, or engage in any business or transaction or professional activity or incur any obligation of any nature, which is in substantial conflict with the proper discharge of his duties in the public interest.
... An officer or employee of a state agency, member of the legislature or legislative employee should not by his conduct give reasonable basis for the impression that any person can improperly influence him or unduly enjoy his favor in the performance of his official duties.
This passage--Section 74 of the Public Officers Law, as noted above--continues to raise a red flag.

Remember, as the December 15 groundbreaking for the 535 Carlton tower loomed last year, the AY CDC did not exist, though it was supposed to meet by then. At the last moment, the ESD stated the CDC had been established, but would not meet until January 30. (Actually didn't meet until February.)

"The January meeting allows local elected officials sufficient time to identify their appointments to the AY CDC," the state said, "as well as sufficient time for appointees to complete their ethics and background checks." 

What exactly were they checking?

Sunday, June 21, 2015

BP Adams: at (accidental) arena plaza tonight, a vigil "to stand with Charleston and members of the A.M.E. community"

The Barclays Center Plaza--the Daily News Plaza--is the site tonight for a vigil in support of the victims of the massacre in Charleston, which Borough President Eric Adams rightly calls "an act of terror."

Arena operators are sacrificing 30 minutes of oculus advertising for a message of solidarity. Will they go so far as to call for South Carolina to take down the Confederate flat? I'd be surprised.

Note that, should Atlantic Yards/Pacific Park be built as approved, there would be no plaza but rather an enclosed Urban Room, a tougher (though not impossible) place for public gatherings. That Urban Room was part of the giant B1 tower, some 620 feet (later 511 feet) tall and over 1 million square feet.

As I wrote in 2012, The plaza view of the arena was never planned. But not building a tower at the intersection makes Atlantic Yards more modest (though it never would have been approved).

Why wouldn't it have been approved? Because the office tower was supposed to deliver crucial tax revenue. Might it still come? Yes. If Greenland Forest City gets pressured not to build B1, would it accept the loss of 1 million square feet? No, it would want some compensation, such as a shift of development rights.

A message from Adams:
Brooklyn mourns all the victims of the terrible Charleston shooting. What happened at the Emanuel A.M.E. Church was an act of terror, and I am committed to doing what it takes to keep all our churches protected. Yesterday, I held an emergency meeting with close to one hundred local clergy leaders and NYPD officials, including members of their Intelligence Division and Counter-Terrorism Bureau, to discuss safety at houses of worship in Brooklyn. In the coming weeks, steps will be taken that will make all of us more secure.
This Sunday, June 21st, I ask all New Yorkers to stand with Charleston and members of the A.M.E. community for an interfaith candlelight vigil at Daily News Plaza outside of Barclays Center. The faith community, along with local leaders and concerned residents, will gather beginning at 8:00 PM for the vigil, which is scheduled to start at 8:30 PM. The oculus display at Barclays Center will show a message of solidarity during the proceedings. A copy of the flyer is below as well as posted here. You can also RSVP on our Facebook event and share it with friends.

Let us stand united as the ultimate family, One Brooklyn, this Father's Day evening to mourn those we have lost and recommit to all those we have and cherish.
A press alert:
Tomorrow at 8:30 PM, Brooklyn Borough President Eric L. Adams and civil rights attorney Norman Siegel will hold an interfaith candlelight vigil in memory of the victims of Wednesday's terror attack at Emanuel A.M.E. Church that claimed nine lives. Faith leaders, along with local elected officials and concerned residents, will gather in Daily News Plaza outside Barclays Center, where the exterior oculus display will show a message of solidarity during the proceedings with those mourning this mass shooting. Borough President Adams and others Borough President Adams and others will express the borough’s grief and outrage over this blatant act of terrorism.

***PLEASE NOTE: Vigil attendees will begin gathering at approximately 8:00 PM. The message of solidarity on the exterior oculus display at Barclays Center is scheduled to be shown from 8:30 PM to 9:00 PM.***

Saturday, June 20, 2015

Community update meeting Wednesday, June 24 focuses on green space (plus emerging strategy to promote "park")

Greenland Forest City Partners and Empire State Development Corporation (ESD) will host the next Community Update (formerly known as Quality of Life) meeting on Wednesday, June 24, from 6 to 8 pm.

The location is the first floor conference room of the Shirley Chisholm State Office Building, 55 Hanson Place.

The agenda is diverse, but ESD highlighted the fact that there will be "an overview of open space plan for the project and a construction update."

1. NYPD Community Update – Captain DiGiacomo (78th Precinct)
2. Department of Transportation (DOT) – Commissioner Keith Bray
3. Empire State Development (ESD) – Samuel Filler
4. Atlantic Yards Community Development Corp. (AYCDC) – Tobi Jaiyesimi
5. Forest City Ratner Companies (FCRC) – Ashley Cotton
a. Open Space Presentation
b. Construction Update
i. Barclays Center Green Roof
ii. West Portal/LIRR
iii. 550 Vanderbilt Avenue (B11)
iv. 535 Carlton Avenue (B14)
v. 38 Sixth Avenue (B3)
vi. 461 Dean (B2)
c. Arena Operations
6. Q & A
The open space promotion

Remember, there will be eight acres of open space delivered by 2025, which 1) is publicly accessible private space, not a park; 2) is hardly not coming soon; and 3) will mainly serve the 14,000+ people in Atlantic Yards/Pacific Park.

However, as seen in the screenshots below on Twitter, the developers are likening it to truly public space like Grand Army Plaza (14 acres), Fort Greene Park (30 acres), and Prospect Park (585 acres).

Dean Street between Carlton and Vanderbilt closed to traffic Tuesday through Friday for utility work

As noted on Atlantic Yards Watch, Brooklyn Community Board 8 has received the following notice from Con Edison:
Con Edison will be installing new electric service on Dean Street between Carlton Avenue and Vanderbilt Avenue in Brooklyn. Con Edison will have a Full Roadway Closure for this street segment for us to complete this work. We will be starting this work on Tuesday, 6/23/15 instead of Monday, 06/22/2015 and will continue until Friday, 06/26/2015. The hours of the Full Roadway Closure will be 9:00 AM to 4:00 PM each day. Con Edison will be posting signs as per NYCDOT requirements and will adhere to all stipulations imposed by the NYCDOT. 
The Con Edison contact person will be Ronald Robins at (917) 709-6280 throughout the duration of the intended work in association with the Full Roadway Closure.
Please call if you have any questions.
Also, as noted in the photo at right, there are warnings up for drivers. Two towers are under construction on the block directly to the north (behind the massive green wall), and two more are scheduled in the coming years.

Friday, June 19, 2015

City, state, electeds help Forest City spin "100% affordable" building geared mainly to $100K+ households as a "model"

Not modular. Perspective skewed.
It's "Orwellian, almost."

City and state officials--who work for the public, remember--have, in service of developer Greenland Forest City Partners, contributed to a deceptive, misleading portrayal of the affordable housing in Atlantic Yards/Pacific Park.

They would hardly mention that subsidized units are skewed toward households earning six-figure incomes, as I described in a long article last year for BKLYNR.

Yesterday came a press release (also, at bottom) for the 23-story 38 Sixth Avenue, aka B3, located at the southeast corner of the arena block, Work Begins on 38 Sixth Avenue at Pacific Park Brooklyn:
CLEVELAND and BROOKLYN, N.Y., June 18, 2015 -- Forest City Enterprises, Inc. (NYSE: FCEA and FCEB), a member of Greenland Forest City Partners, the joint venture developing the Pacific Park Brooklyn project, today announced that the joint venture has closed on financing for the construction of 38 Sixth Avenue, a 303-unit, 100-percent affordable apartment building at Pacific Park Brooklyn, and that work has begun on the building.
Designed by SHoP Architects, 38 Sixth Avenue (formerly known as B3) is the third building that Greenland Forest City Partners has broken ground on since December 2014 at Pacific Park Brooklyn, including 535 Carlton, a 100-percent affordable apartment building, and 550 Vanderbilt, a market-rate condominium building.
Keep your eye on the ball. The project was originally supposed to be 50/50 affordable/market rentals, then approximately 35% subsidized after 1930 condos were added to the 4500 rentals. 

Every "100% affordable" rental will ultimately be matched by a "100% market" rental. And another "100% market" condo is about to be launched, without the same political fanfare.

As for "a model," a term used in the press release, note that in Mayor Bill de Blasio's ambitious plan to build or preserve 200,000 affordable units, only 11% --not 65%, as in these two "100% affordable" towers--are supposed to go to middle-income households.

From the state, a lie

The press release continues:
“We’re very excited that Greenland Forest City Partners is moving aggressively to fulfill their commitment to a fast-tracked timeline for the delivery of affordable housing,” said ESD [Empire State Development] President, CEO, and Commissioner Howard Zemsky. “They’re on track to complete construction 10 years earlier than originally predicted and when construction commences at 38 Sixth Avenue, they’ll have made good on their commitment to start construction on two 100-percent affordable buildings by June 30. In addition to delivering much-needed affordable housing, 38 Sixth Avenue will also deliver jobs and economic activity.”
(Emphases added in bold throughout)

That's not true. 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 originally predicted."

I asked Empire State Development yesterday if they would issue a correction or clarification. No response.

And by the way, "economic activity" is one of those vague terms, like "affordable housing," that needs to be unpacked with more specifics. After all, gambling and drug dealing deliver economic activity.

From the city, "incredibly proud"

From the press release:
“The people of this city need affordable housing built in real time. And make no mistake: affordable housing at Pacific Park is on the move. We committed last summer to get two new 100-percent affordable buildings in the ground by this June, and today, we are making good on that promise. Our administration is incredibly proud to have negotiated two buildings that each have double the affordable housing and reach more low-income families as the first buildings to rise at this site, all without increasing costs to the public. We are grateful to all our partners in the community, at Greenland Forest City and at the State who have worked to get these shovels in the ground,” said NYC Deputy Mayor for Housing and Economic Development Alicia Glen.
As noted, the building "have double the affordable housing" only because the configuration of the project has shifted. 

And while the buildings reach "more low-income families"--again, only because the subsidized housing is being distributed in fewer buildings--that obscures a deeper problem: the affordable housing is far less affordable than originally promised. 

(Remember, "affordable" merely means "income-linked," with tenants paying 30% of their income.)

As I've written, fully half the units in this "100% affordable" rental tower will be geared to middle-income households earning up to 165% of Area Median Income, or AMI. The configuration differs significantly from the arrangement in the Affordable Housing Memorandum of Understanding that Forest City Ratner signed with ACORN in 2005, and which was incorporated into the Community Benefits Agreement.

Note that 40% of the overall affordable units are supposed to be low-income, but only 30% in this all-affordable buildings would be low-income.

While only 20% of the affordable units were supposed to go to the best-off cohort, earning 140% to160% of AMI, instead 50% would go to the best-off cohort, earning as much as 165% of AMI. And 15% would go to another middle-income cohort, earning up to 145% of AMI.

Note YIMBY's statement that "Forest City’s press release says more than a third of the units 'will be sized for families,' hopefully indicating three bedrooms (or larger)." Actually, that simply means two-bedrooms or more.

Who's eligible, what it will cost

Below is my calculation of the rents for each unit. The number of units per band is an estimate, since, as footnoted, some units may have more people, and they will pay a higher rent. But it's clear that the building is skewed to Band 5--middle-income households.

Based on the new AMI, here are the income maximums for residents in the building.

More elected officials offer praise

It is apparently enough for many elected officials to praise "affordable housing" without looking at the details. (Note that state Senator Velmanette Montgomery, a longtime project opponent, is not quoted.) From the press release:
"It is imperative that we maximize every opportunity to construct affordable housing for Brooklynites that make up the foundation of our communities,” said Brooklyn Borough President Eric Adams. “I thank Greenland Forest City Partners for their commitment to advancing toward affordable housing at Pacific Park." 
Assemblyman Walter Mosley, Assembly District 57, said, “As the state assembly representative of the neighborhoods directly surrounding the Pacific Park Project, it pleases me to see the partnership between Forest City Ratner Companies and Greenland USA is producing the amount of affordable housing promised to the community, especially at such a crucial time where such housing is at a premium. We are facing a housing crisis, the likes of which we have not seen since post-World War II, and it is critical that projects like Pacific Park continue to create and maintain affordable housing in an effort to ensure hard working families can continue to live in this great city and state." 
“The influx of new residential buildings in communities across New York City too often excludes the thousands of families who cannot afford market-rate housing units. The highly-anticipated construction of 38 Sixth Avenue will help alleviate the overwhelming need for affordable housing in Brooklyn while preserving the cultural and economic diversity of its surrounding community,” said Council Member Laurie A. Cumbo.
Cumbo's quote is particularly rich.

Where the financing came from

From the press release:
For construction financing of 38 Sixth Avenue, the New York City Housing Development Corporation is providing an $83 million first mortgage loan for the building through the issuance of tax-exempt government debt obligations funded by Citi Community Capital. Greenland Forest City Partners is also receiving a $10 million subordinate loan from HDC and a $2 million subordinate loan from Citibank.
....“HDC is committed to financing high impact projects that will create the quality affordable housing needed to foster strong, economically diverse neighborhoods,” said HDC President Gary Rodney. “38 Sixth Avenue, the latest addition to the Pacific Park Brooklyn development, leverages an innovative financing structure to achieve affordability that will add to the fabric and diversity of this vital Brooklyn hub. Thanks to a collaborative partnership with Citi Community Capital, Empire State Development, and HPD, HDC was able to provide the financing for this mixed income housing development, delivering on the goals of the Mayor’s housing plan.”
The final validation, from Bertha Lewis

The press release states:
Bertha Lewis, Founder and President of The Black Institute, said, “Pacific Park Brooklyn is turning into an affordable housing engine. When we announced this project nearly 12 years ago, some expressed doubt that the housing would come to fruition. Today, with affordable housing an even greater crisis in New York, Pacific Park buildings are not only becoming a reality, they are becoming a model for how to build housing and communities that reflect the diversity, in every way, of our City. I applaud the joint venture for its commitment to the promise of Pacific Park and their desire to move quickly.”
Actually, some expressed doubt that the affordable housing would be truly affordable, and questioned how much it would serve the constituency of ACORN, the low-income organization Lewis then led. As the statistics show, most of the housing will be out of reach.

No, not a model.