Tuesday, June 21, 2016

664 Pacific delayed by dispute with neighbor; developer (in affidavit) says buildout is 4 years; middle school pushed back to 2020 (or later)

Update:  School advocate Gib Veconi reminds me that the B15 school (aka P.S./I.S. 653) was listed on the School Construction Authority's January 2016 capital plan with an August 2019 estimated completion, which was the time frame cited at the April 2 M.S. OneBrooklyn design charrette. I'd note that, as of February 2016, the developer was saying the buildout would take four years.

From Pacific Park Brooklyn web site
"Read about the new public school we’re building," tweeted the developers of Pacific Park Brooklyn, touting the middle school planned for the base of the upcoming 664 Pacific tower, just east of Sixth Avenue between Dean and Pacific streets.

What they don't say: the school seems delayed for a year or more after its projected September 2018 August 2019 opening date.

Construction on the 27-story 664 Pacific (aka B15, with market-rate rental apartments) has been stalled by a dispute with neighbors.

Moreover, a court file reveals that a representative of developer Greenland Forest City Partners (GFCP) in February 2016 said excavation and construction at the site would take four years. That's not the two-year buildout originally promised or the slightly extended buildout.

Placard on 664 Pacific construction fence identifies
anticipated completion as "4th quarter of 2018"
That means the previously stated September 2018 (and more recently August 2019) opening for the middle school—as well as the "Fourth Quarter 2018" anticipated completion as stated on the placard posted at the site (left)— is untenable.

Also, if the dispute over access to the adjacent property is not resolved by September, when the next hearing in the case is scheduled, further delay could jeopardize the school's opening even by September 2020.

The stalled construction process won’t resume until GFCP and the owners of the adjacent 497 Dean Street resolve a heated dispute over access to that property and the impact of a planned 36-foot deep excavation trench.

Would honest timetable have led to different site?

The timetable revelation raises a question, sure to be discussed by legislators and school advocates: did the New York City School Construction Authority (SCA) know that construction might take this long when it predicted that September 2018 opening date?


Affidavit 2/22/16 from Forest City's Sonya Covington:
12 months for excavation + 36 months for construction
It seems unlikely. After all, they then had to change the opening date to 2019.

Nor does it seem the SCA was informed of the current delay. When I asked about an updates schedule, SCA spokeswoman Toya Holness responded, "We haven't made changes to any schedules."

If school officials and advocates had known the school would take four years to build, surely there would have been a more candid discussion about whether B15--a tight, 100-foot-wide site--was the right building for the school. (After all, the developer fully controls the southeast block of the site.)

Querying the developer

Without mentioning the affidavit, I queried GFCP about the current schedule. I was told they would not to comment beyond representative Ashley Cotton's statement about delays at a public meeting last week. I was advised to contact the SCA.

I then learned that SCA didn't have an updated timetable.

Earlier this afternoon, I asked GFCP to comment on the conclusion, based on Covington's statement, that 664 Pacific would take four years. When I hear back, I'll add their response.

(I also queried the Chair of the Community Board 8 Education Committee, Sharon Wedderburn, who told me all they knew was the unspecified delay indicated at the meeting last week. I queried David Goldsmith, Chair of Community Education Council 13, who said he'd been told the school would open in September 2019, which I assume comes from the SCA document at top.)

Looking at B15 site from Dean Street. 497 Dean is on right.
Safety vs. greed?

The owners of 497 Dean say the dispute regards safety, as they seek more assurances that construction plans for the 27-story building, including the excavation pit, do not jeopardize their four-story, eight-unit, 26-foot wide apartment building.

GFCP, which says it has been sufficiently transparent about its plans, hints that the dispute concerns greed, as the owners of 497 Dean seek a monthly fee during construction, and also have suggested that GFCP buy their building.

It’s hard to assess which party is right. But surely the combination of ambitious plans for a very large building, and the project's extremely tight fit on a residential block raise the stakes.

And it seems that 497 Dean, a stolid 1930 building historically offering affordable, rent-stabilized housing, is now an exhibit in Prospect Heights’ white-hot real estate market.
Image via Marvel Architects. 497 Dean is flush to tower.

Indeed, Sugar Hill Capital Partners (a private equity firm specializing in New York City real estate) bought the building in 2013 for $1.66 million, little more than two years after it sold for $970,000.

In June 2015, the firm put the building up for sale for $3.4 million, even though only three of the eight units are currently market rate. (Today, the building is off-market.)

As I wrote, the asking price--$425,000 per unit--could only be justified if the new owner aims to buy or nudge out the rent-regulated residents, raise rents (or go condo) and make a profit.

A public acknowledgment

Forest City's Cotton, representing GFCP, hinted at site-related troubles when speaking at the 6/14/16 Atlantic Yards/Pacific Park Community Update meeting.

"I just want to announce that obviously, we put up this fence, and we started work, and the site demolition has been complete since May, but clearly not more work has happened, so I want to explain what’s going on," she said.

A construction fence at the border of 497 Dean
"We have been unable to gain access to an adjacent property, which is necessary to install proper protections for their building," she said. "This access is needed to ensure that the property next door is protected."

"We tried working with the real estate investment fund that owns this property to come up with a site access plan, but were unsuccessful, so now we’re working through the court system to come up with a way to expedite access," Cotton continued. "But because of that delay, we’ve obviously not implemented the MPT [maintenance and protection of traffic] on Sixth Avenue."

(While I audiotaped the meeting, held at 55 Hanson Place, I initially missed this because I was out of the room. I rushed out to get the names and titles of two Tishman Construction speakers who were not listed on the meeting agenda. Curiously enough, as I exited the room, I was trailed by public relations representatives for both GFCP and Empire State Development, or ESD, the state authority overseeing/shepherding the project.)

The problems were actually hinted in May, in a letter to ESD from concerned project neighbors:
If the State tracked relevant 311 complaints, then it would have known that construction workers had trespassed into the backyard of a neighbor of the Project, and that this had catalyzed litigation between a property owner and Greenland Forest City Partners that appears to have delayed B15.
I have since been told there was a 311 complaint, not a criminal accusation, alleging trespassing.

Slipping timetable

The delay reinforces the observation that projected construction dates are provisional. Several other buildings in the Atlantic Yards/Pacific Park project are delayed, as well.

The August 2014 tentative project schedule produced by the developer (below), well before eminent domain was complete, ambitiously predicted a February 2018 opening for 664 Pacific.



In early 2015, ESD lawyer Charles Webb said in legal papers regarding site condemnation that the "school could open for the 2018 school year only if ESD gains control of the site by February 2015."

That seemingly was already off the table by late January, as Webb announced in court that a business at Sixth Avenue and Pacific Street had agreed to leave by March 31. Moreover, final site control was gained only in May 2015, when the state evicted the final condemnee, a former homeowner on Dean Street.

A January 2015 affidavit from Forest City Ratner Construction Chief Bob Sanna (bottom) in that case said construction could begin in May 2016 and take approximately 26 months, thus opening for the 2018 school year, but only if they got site control by February 2015.

However, this seeming delay was never addressed publicly (and I didn't make a big issue of it). Indeed, it seems to have been incorporated in the new timetable.

Sanna also noted that the developer would have to investigate the soil, soil vapor and groundwater beneath the site, as those conditions "often affect the design of the foundations of the buildings."

If this subsequent process led to the new buildout estimate of 12 months of excavation plus 36 months for construction, well, shouldn't the developer have estimated a range for the potential construction timetable?

A delayed mitigation

The bottom line is that the school, which is required to partly mitigate a Significant Adverse Impact triggered by new residents in Atlantic Yards/Pacific Park, was supposed to be built as soon as possible.

If the building does not open until September 2020, it's possible that six buildings (four on the southeast block two on the arena block) will already be open, plus B15 itself. If the building does not open until September 2021, even more buildings may be open by then. (Note that the timetables in the above map were tentative, and already some buildings are delayed.)

The SCA, local input, and City Council

Despite the fact that the state did not control the site until May 2015, in June 2015, SCA representative Kenrick Ou said at a public hearing that the site would go into construction in 2016 and open in September 2018.

Neighbors at the time were split, as many--under the banner of M.S. OneBrooklyn, with backing from local elected officials--advocated for a STEM-focused middle-school at the site. A smaller fraction warned about the location of the school, across the street from the arena and a fire station, and very near a police station.

Looking at B15 site from Sixth Avenue
In September 2015, as the school plan was approved by the City Council, GFCP said the building would "break ground in 2016 and open in 2018.”

The SCA's Ou told the City Council that "SCA has considered all comments received on the proposed site plan and affirms the site plan," thus dismissing concerns raised by local Community Boards. (Both CB 8 and CB 6 raised questions about the site, while CB 2 thought the school should move.)

The current delays make the few critical Council Members look prescient. Council Member Inez Barron, who ultimately abstained, had asked if the timeline was reasonable.

Ou said that the original developer, Forest City, had brought in a partner--Greenland Group--that brings resources and a new commitment to the schedule, but acknowledged that, in mixed use developments, the city cannot assure a timeline.

Council Member Maria del Carmen Arroyo asked, "Does this site lend itself to enable the authority to build the school should the rest of the project stall?"

No, said Ou. Arroyo voted no, saying that the SCA did not control the site.

Only later, in 2016, did the SCA adjust the timetable.

The legal dispute

According to a 2/26/16 affidavit in the current legal case by Forest City’s Sonya Covington, the project manager for the petitioner, AY Phase II Development Company LLC (an affiliate of GFCP), the developer must erect a construction fence, restricting access to a portion of 497 Dean's rear yard during the demolition of a structure located at 664 Pacific.

Because the structure to be demolished abuts the property line of 497 Dean, the required construction fence can only be installed on 497 Dean’s property (As far as I can tell, based on my visit last Saturday, that may have already been accomplished.)

B3, across the street, is already at 16 stories
The construction code also requires that developer perform a pre-construction survey of 497 Dean, prepare a monitoring plan and install monitors at 497 Dean, and provide lateral support for 497 Dean’s property during excavation and foundation work at 664 Pacific.

The code also requires that GFCP provide other protections—roof and overhead protections, and various types of waterproofing—to the neighbor during construction, but such protections cannot be designed until the pre-construction survey is completed.

Moreover, because B15 will be built with its eastern wall at the border of the site, Covington stated, construction of that wall’s exterior requires entry to and access on and from 497 Dean. For example, laborers will have to stand on scaffolding erected over 497 to perform work on the facade.

According to Covington, the two parties negotiated draft agreement over three months last year, but 497 Dean Street Residences LLC sought new counsel, and reopened issues. By late January, the parties were close, she said.

Other than discussion of the specific configuration of some proposed protection plans, the only issue left was a voluntary license “fee.” The developer was willing to pay for the time protection that would interfere with 497 Dean’s use of its property. Respondent sought a fee—in other papers identified at $5,000 per month—for the entire duration of the B15 project.

According to Covington, the talks stalled when 497 Dean sought more information, which could only be acquired after a pre-construction survey. So GFCP has asked the courts to provide access to 497 Dean for some 48 months.

“Developer currently estimates that construction will take approximately 36 months to complete after completion of excavation,” she wrote, thus confirming that previously unpublicized timetable.

“Thus, for protection and construction activities, Developer seeks entry to 497 Dean Street immediately upon the issuance of an Order, and for a period of 48 months (12 months for excavation, and 38 months for construction) thereafter (and for such longer time as may be required to complete the B15 project because of events outside Developer’s control.)”

The dispute escalates

497 Dean, in response, said it has never refused access, but only set reasonable conditions to ensure that the developer "can perform the invasive and potentially dangerous excavation work safely and without causing harm to the 497 Dean Residences.”

The owners say the requested license to enter their property should be denied, but if it’s granted, the court should grant an award of engineering and attorney fees, as well as a licensee fee to be paid by Developer

497 Dean says GFCP has failed to dig test pits on its own property near 497 Dean to gain crucial information about the type, deputy, and condition of 497 Dean’s foundation. It says that initial submissions by GFCP were marked preliminary, without sign-off from either an engineer or the DOB.

“The Petition shows that during negotiations Developer has been withholding from 497 Dean Residences critical details about the length and invasiveness of the construction,” wrote 497 Dean’s lawyer, Steven Cramer. “497 Dean has learned for the first time from reading the Petition that the entire construction process will take at least four years, the Developer will require access to its site through 497 Dean, and that Developer will have scaffolding resting on or extending over the roof of 497 Dean.”

“This is not an abstract engineering challenge for the individuals who live in 497 Dean,” he added. “The building in which they sleep every night will be inches away from a 36-foot deep hole in the ground, and then under the construction of a tower that will dwarf their homes.

Volleying back

In response, GFCP attorney Alexander Ferrini countered that the developer had provided more than sufficient information to support its request for access. He also said that it wasn’t true that the timetable was revealed only in the legal petition; rather, it was in a 2/8/16 email. (That timetable had not publicly announced to stakeholders, however.)

Cramer responded that the planned method to shore up 497 Dean—the installation of 16 tie-backs that would extend under and across the property—would remain in place permanently and constitute a permanent trespass. The developer, he said, should use other options.

Next hearing September 14, 2016
He blamed GFCP for going to court, saying that not until this litigation were details of the developer’s plans finally revealed.

In response, an engineer for GFCP said that tie-backs are routinely used and the safest method, and that leaving them underground, “abandoned in place” does not make them permanent.

He also said that test pits are “better performed” after a pre-construction survey. (That’s doesn’t mean they couldn’t have been dug earlier, however.)

On 5/31/16, in the most recent document in the file, attorney Cramer alerted the judge to “a long and improper” reply filed one day before a schedule oral argument. In fact, that oral argument was postponed, and is now scheduled for 9/14/16, as indicated in the screenshot above right.

Cramer sought permission to submit a response affidavit, or to have rival engineers both appear at a hearing.

The legal papers

Below are three in the many legal papers in the case AY Phase II Development Company LLC vs. 497 Dean Street Residences LLC, the initial petition and Sonya Covington's affidavit, then 497 Dean's reply.






Below is Bob Sanna's 2015 affidavit:

1 comment:

  1. Anonymous7:38 AM

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    ReplyDelete