"The fact it’s being marketed is not impacting the construction schedule?" asked Veconi.
No, said Forest City Ratner's Ashley Cotton.
Veconi asked about a forecast for completing the building.
"We do not have a revised forecast," Cotton responded.
The giant B4 building on the northeast flank of the arena, once planned to contain both mixed rental and condo apartments, was once expected to break ground in March 2017.
"Our intent to move forward with the state"--which oversees the project--"and request a change to that building," Cotton said of B4.
"What's the status of the request to change the project plan?" asked Veconi.
"Obviously it's slower than we first thought," said Cotton. Forest City had previously predicted that the new public process would begin this spring.
"The state is not in receipt of a formal request and a formal change to the project plan?" asked Veconi.
"Correct," said Marion Phillips III of Empire State Development, the state authority that oversee/shepherds the project.
"Public agencies have been briefed on our interest," Cotton stated, but was not able to offer a forecast on timing. One significant roadblock, if likely a temporary one, is a lawsuit from P.C. Richard that has stalled condemnation, as the retailer contends it was promised space in the replacement building.
Asked if the joint venture had a tenant for either office building, Cotton said no.
"Is that necessary?" Veconi followed up. (It is highly unusual, but not unprecedented, to build office buildings on spec.)
"We have a year long public approval process," Cotton said. That could mean they'd be looking for a tenant as the approval process continues.
Veconi brought up the issue he's raised several times before--the significant challenge to the developer in meeting an obligation to deliver a required minimum ratio of affordable housing without the affordable units once planned for B4. (The issue has also been raised by Barika Williams of the Atlantic Yards Community Development Corporation.)
As part of a new timetable Veconi helped negotiate in 2014 as part of the BrooklynSpeaks coalition, the developer agreed that 35 percent of the completed units at the site would be affordable housing units until 1,050 affordable housing units are built. The tentative scenario below shows why B4 units are key.
"Well, it's something that I think would be at least a schematic-level consideration, at this point to figure out where those units would be redeployed," Veconi said with a touch of exasperation, "and how the phasing schedule would work. I know your firm spent some time in 2014 to work out that original phasing plan. I can’t believe it isn’t being contemplated at this point."
"I think I'll be ready to show you all the plans when we've taken that next step," Cotton said.
The 421-a impact?
As I wrote, none of the three sites for sale--the B12 and B13 condo sites, as well as B4--are actually supposed to be market-rate rentals. However, all the buildings were supposed to take advantage of 421-a benefits, thanks to a 2007 legislative deal that allowed the site to be looked at as a whole, even if some buildings were all market-rate.
According to a 6/14/16 profile of union leader Gary LaBarbera in The Real Deal, Forest City CEO MaryAnne Gilmartin said that future affordable buildings would be unlikely to rise without the 421-a tax break. The program, she said, “is essential for the further construction of the affordable components.
At the same time, the developer is obligated to build the affordable units by 2025. If 421-a is not renewed, will the developer be able to claim a lack of subsidy and avoid being in default?
At the meeting, resident Robert Puca asked about the status of the lawsuits between Forest City and Skanska, its former partner on the ill-fated modular factory.
Cotton said she didn't know. (As far as I know, they're still percolating.)
He asked about the status of the P.C. Richard lawsuit. (I reported that the discovery process could last until the end of March 2017.)
The next court appearance "is several months out," said Phillips, but "they can't talk about it with me present."