Skip to main content

Daily News: longtime homeowner offered only $1.5 million after losing Dean Street house; state claims "fair market" appraisal, developer silent

Here's the craziest part of the in-depth Daily News article, No Place Like Home: Atlantic Yards project has Jerry Campbell fighting for his place in Brooklyn, about a longtime property owner who has been trying to get fair compensation for the four-story house long in his family:
An ESD [Empire State Development] spokesman says the $1.5 million the agency offered Campbell “represents fair market value” based on a 2014 appraisal. The tower that will be built on the site of Campbell’s home will include a middle school, and the spokesman says the project will also bring badly needed housing and jobs to Brooklyn.
The fact that developer Greenland Forest City Partners is building a 27-story market-rate rental tower--with a school--on a plot that includes Campbell's former property suggests that the property is worth far more than $1.5 million. The article states:
Campbell says the offer is the same he received a decade earlier when the Brooklyn real estate market was just beginning to heat up. He thinks the home is worth twice as much and he’s angry that some displaced homeowners, including [longtime Developer Destroy Brooklyn spokesman Daniel] Goldstein, received more than market value while he’s been offered a fraction of his home’s worth.
One key difference is that Forest City Ratner needed Goldstein (who didn't collect that sum, given legal fees, taxes, moving costs, etc.) out on a tight schedule so they could effect the sale of the Brooklyn Nets to Mikhail Prokhorov. Others got a premium for timing.

Fair compensation?

The state changed the locks and removed family posessions
But it's ridiculous to think that $1.5 million could leave Campbell whole, to buy a replacement house in the neighborhood where his grandfather set down deep roots.

As I wrote last May, after the state unceremoniously changed the locks on the house and removed Campbell's possessions, a letter from ESD attorneys Berger & Webb in the court file set out a conundrum.

"Whenever feasible, replacement housing alternatives will be provided in the project neighborhood," the lawyers wrote. "However, to the extent market forces fail to provide affordable alternatives in the Project neighborhood, ESD will provide listings of alternatives in other similar or better areas."

As I wrote, it was odd that "market forces" were blamed for failing to provide a condemnee with comparable property. First, the market is being bypassed via eminent domain and the state's override of zoning, which allow Greenland Forest City to build a tower far larger than Campbell or any other property owner could do on their own.

Secondly, shouldn't "market forces"--assuming the house is valued comparably with others in the neighborhood--yield a payment sufficient to purchase a similar house?

I suspect a judge will value Campbell's home at well more than $1.5 million, though the time and cost of litigation will have an impact. Most of the "comparable properties" Campbell was offered for a potential swap were not in Prospect Heights but neighborhoods farther from the core, with lower real-estate prices, like Bedford-Stuyvesant and Crown Heights.

The only townhouse for sale currently in Prospect Heights, according to StreetEasy, is $2.4 million, but "Priced significantly under market due to SRO status." In other words, the new owner has to pay to get the tenants out. (Here's a list, by date, of more recent sales.)

The developer is (strategically) silent

Notably, "Ashley Cotton, the Forest City Ratner executive who serves as a spokeswoman for Greenland Forest City Partners... declined to comment on Campbell’s case due to the pending litigation."

Perhaps she declined to comment because, as described in Michael O'Keeffe's article, life on Dean Street "became unbearable" from arena construction, including noise and rats, forcing Campbell's wife and son to move.

Or, perhaps, she learned the lesson from a particularly callous quote she gave to the New York Times in February 2015, “We know our neighbors, we’re sympathetic to whatever experience they’re having, but this is really another enormous milestone on the path of Pacific Park.”

As Campbell told me last year, "Do note, in all the years we have lived here we have never met the lady."

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…

At 550 Vanderbilt, big chunk of apartments pitched to Chinese buyers as "international units"

One key to sales at the 550 Vanderbilt condo is the connection to China, thanks to Shanghai-based developer Greenland Holdings.

It's the parent of Greenland USA, which as part of Greenland Forest City Partners owns 70% of Pacific Park (except 461 Dean and the arena).

And sales in China may help explain how the developer was able to claim early momentum.
"Since 550 Vanderbilt launched pre-sales in June [2015], more than 80 residences have gone into contract, representing over 30% of the building’s 278 total residences," the developer said in a 9/25/15 press release announcing the opening of a sales gallery in Brooklyn. "The strong response from the marketplace indicates the high level of demand for well-designed new luxury homes in Brooklyn..."

Maybe. Or maybe it just meant a decent initial pipeline to Chinese buyers.

As lawyer Jay Neveloff, who represents Forest City, told the Real Deal in 2015, a project involving a Chinese firm "creates a huge market for…

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…