Skip to main content

Where does Atlantic Yards/Pacific Park stand? Buildings behind schedule; affordable housing unsteady; low-income units lag most

The most important part of the map below, revised Aug. 13, 2014 by developer Greenland Forest City Partners, is the note at the bottom right: "Building start and finish dates are subject to change."

That's a watchword for Atlantic Yards/Pacific Park. I've annotated the map below, pointing out how much remains unresolved. Notably:
  • all the buildings are behind schedule
  • the affordable housing is not being delivered steadily
  • there's a bigger gap in the delivery of low-income affordable housing, as 255 units are under construction, with the remaining 645 units not re-starting until perhaps 2020 
The bottom line: a project that was once promised as transformative or to "encourage systemic changes" is hardly that, and the much-saluted new timetable negotiated in 2014--the completion of affordable units by 2025--could have used specific safeguards.

Timetable delays

None of the buildings has met the tentative schedule suggested in that 2014 map: the two towers on the southeast block, 550 Vanderbilt (B11) and 535 Carlton (B14) were supposed to be open by this past July or August. The affordable building, 535 Carlton, should open this fall, while the 550 Vanderbilt condo should open in January.

The revised schedule for 461 Dean (B2) was 2016. While that vague date should be met, with move-ins beginning in November, the building will have taken some four years, twice as long as originally promoted.

Neither the B12 nor B13 condo buildings on the southeast block, supposed to start in July 2015 and July 2016 respectively, have gotten off the ground. Those building sites are for sale, or seeking new investors, as is the B4 site at the northeast corner of the arena block. The sale of the latter is presumably complicated by the developer's stated plan to shift the program from condos and rentals to office space, which requires state approval.

And of course, Greenland Forest City seeks to shift the approved bulk at the B1 site over the arena and temporary plaza to Site 5 across Flatbush Avenue, already approved for a large building. That's on hold for now, as a legal case percolates.

Affordable housing: the details

But the most important message of this annotated map, I believe, regards affordable housing and, especially, the low-income housing component within that affordable housing.
Click to enlarge; note that L-I = Low-Income
As noted on the graphic, the project is slated to include 6,430 apartments, including 1,930 condos (200 below-market) and 4,500 rentals, of which 2,250 are "affordable."

But "affordable" merely means below-market, or income-linked. (And not permanently--more like 30-35 years.) More crucially for those who so fervently rallied for the project, there are 900 low-income units. Some 255 low-income units are under construction, in three towers.

But the numbers can be fuzzy. As the Commercial Observer reported, quoting the developer, "1,800 units are currently underway, 782 of which are affordable." Actually, the only way to reach 1,800 is to include the B12 and B15 towers, which have not gone vertical. It looks like B15 may not be done until 2020.

Rather, there are some 1,246 units under construction, a majority of them below-market, if not necessarily that affordable. Also, at least going by the schedule above, the next four towers--including B12 and B15--will be 100% market-rate.

Among the overall affordable units, the low-income units are supposed to represent 40% of the total, according to the Affordable Housing Memorandum of Understanding (MOU) original developer Forest City Ratner signed with ACORN. (As shown in the graphic at right, the low-income units would be 20% of buildings that were 50% market-rate units.)

That ratio has been met in the mixed market-rate/affordable 461 Dean modular tower, aka B2 (though, as I explain below, the lowest-income units lag behind promises). Then again, were far fewer family-sized units than promised.

However, in the two "100% Affordable" buildings under construction, 535 Carlton (B14) and 38 Sixth (B3), the low-income units represent only 30% of the total (though there are more family-sized units).

That means, as I've calculated in the graphic above, there are about 58 "missing" low-income units. So, to maintain the pledged ratio of low-, moderate-, and middle-income units, some future towers should contain fewer middle-income units and more low-income units. Keep watch.

Affordable for whom?

The term "affordable" means "below-market" or "income-linked," not the colloquial understanding of "housing for the neediest." A good chunk of "affordable housing" does little to reach that cohort. More than half the units in the three buildings under construction could go to households earning six figures.

That includes potentially 57 of the 181 affordable units at 461 Dean, 184 of the 297 affordable units at 535 Carlton, and (estimated) 189 of the 306 affordable units at 38 Sixth. (Given income ranges, some may go to households earning less.)

So the 2014 negotiation between government agencies, the developer, and BrooklynSpeaks, which got a 2025 deadline for affordable housing--16 years after project was re-approved--instead of an outside date of 2035 (which replaced a longstanding promise of ten years) should be seen in a new light.

It did not guarantee a certain timetable for the low-income affordable  housing, just "affordable housing": the developers agreed that 35 percent of completed units would be affordable (aka "below-market") until 1,050 affordable housing units were built.

"This new deal ensures that the delivery of affordable units does not lag behind the creation of market rate units," a gubernatorial press release said. But it didn't distinguish between affordable middle-income units and affordable low-income ones. 

I (and others) wrongly assumed at first that the distribution of affordable units would match the configuration long pledged. Rather, the current buildings are 1) skewed to middle-income units, 2) contain fewer low-income units than long promised, and 3) contain fewer of the lowest-income units (among low-income units) than promised.

Getting to 1,050

After 1,050 units, then the percentage of affordable apartments could drop, for a time, to 25 percent of total units, until it was raised with a final buildout of four huge 50/50 (affordable/market-rate) towers. See the large graphics above and below.

A complication has emerged: if the B4 tower at the northeast corner of the arena block switches from residential space to office space, the developers won't meet that 35% threshold.

Those 276 affordable units are key to that percentage, as shown in the document below. And there's no announced plan yet to move those units (though surely something is being hatched).

The low-income mismatch

Even the low-income units are out of reach for many Brooklynites.

Because income is calculated based on regional AMI (Area Median Income), at 60% of AMI, a low-income household of three people earns up to $48,960, and a household of four people earns up to $54,360.

Those figures approximate 100% of the median income for Brooklyn--the Census Bureau reports median income at $46,958 (for households of 2.74 people).

Most of the low-income units being produced are up to 60% of AMI (currently Band 2, the second "band" from top in the chart at right), which is thus close to Brooklyn median income. A much smaller fraction of the low-income units are at 40% of AMI (Band 1).

According to the MOU--which was incorporated into the Community Benefits Agreement--the ratio of Band 2 to Band 1 was to be 3-to-1. Of the affordable units, 30% were to go to Band 2 and 10% to Band 1. (Again note that the graphic above right is based on in buildings that are 50% affordable/50% market.)

Instead, according to the developer's own press kit, 34% of the affordable units in 461 Dean will go to Band 2, with only 6% to Band 1 low-income households; that ratio is 5.7 to 1. The figure for 535 Carlton (and 38 Sixth) is 25% and 5%; that ratio is 5 to 1.

That means there are fewer Band 1 affordable units. Moreover, Band 2 was originally supposed to cap at 50% of AMI, not 60%, as shown in the graphic above right. The change is permissible; under city rules, low-income units can now serve households earning up to 80% of AMI.

Still, while developers may be following the letter of the promise, they're not following its spirit, as regards the affordable bands. When it comes to the percentage of low-income units, and the fraction of lowest-income units, they're not following the letter, either.

The configurations (screenshots from developer)


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…