Atlantic Yards/Pacific Park Report

If you want an example of a development that probably pushed Assemblyman Vito Lopez to add all of Bushwick to the "exclusion zone" where affordable housing would be required in exchange for the 421-a tax break , look no farther than 358 Grove , a much-hyped 14-story condo tower. The building also serves as the jumping off point for a Village Voice investigation this week into landlords unscrupulously pushing gentrification in Bushwick. In promoting 358 Grove, the developer generally plays down its location. The image at right, for example, comes from the Halstead web listing , which states "358 Grove is located in one of Brooklyn's fastest growing neighborhoods; just one block from the L train and 15 minutes into Union Square Station." And, when the development hit the blogosphere three months ago, most comments on Curbed were withering, pointing out, for example, that the claimed 15-minute access to Union Square is a fantasy and that Bushwick is hardly close ...

Mayor Mike Bloomberg offered his first public criticism of the "Atlantic Yards carve-out" during a radio interview today, saying developer Bruce Ratner "doesn't need" a special tax break that could be worth $300 million. The criticism came almost as an aside while Bloomberg made the larger argument that Governor Eliot Spitzer should veto the 421-a reform passed by the legislature. Listening in At about 20:45 of the mayhor's weekly appearance on the John Gambling Show , the host raised the question of 421-a, subject of an extensive article in today's Times. Bloomberg responded: Well, I hope the Governor vetoes it… You want people to build affordable housing, but you don’t want it to be so onerous that they won’t, and there are places they’re going to build anyway, so there’s no reason to give them tax breaks... Our City Council… came up with a good balance of building affordable housing and also building the market-rate housing that we need. We consulted...

Council Members David Yassky and Letitia James, in a letter to Governor Eliot Spitzer and Mayor Mike Bloomberg, have asked the state and city to withhold previously pledged direct subsidies for the Atlantic Yards project, citing the "Atlantic Yards carve-out" in the state's revision of the 421-a tax break. They write: The most egregious aspect of the carve-out is the amount it will cost taxpayers. New York City has already approved $205 million for the project, and the State has pledged $100 million. The rewrite of the 421a legislation will cost taxpayers at least an additional $100 million and could reach $170 million in forfeited tax revenue. Because of the size of the 421a tax break for Atlantic Yards, we ask that the money previously set aside for land acquisition aid--$100 million from the City and $100 million from the State—be withheld. This $200 million should not have been allocated in the first place—there is no justification for the government ...

Previous estimates have valued the "Atlantic Yards carve-out" in the state's revision of the 421-a tax break at up to $170 million . Now the New York Times, in a post-mortem on the much-criticized closed-door negotiations, reports the figure could be nearly double that. Today's article, headlined City’s Plans for Housing Flop in Albany , focuses on decisions made by Assemblyman Vito Lopez, the chair of the Brooklyn Democratic Party and of the Assembly Housing Committee, in negotiation with Steven Spinola of the Real Estate Board of New York. The Times reports : But the bill would also provide what the city estimates are an additional $300 million in tax breaks for the vast Atlantic Yards complex being developed by Forest City Ratner Companies, the development partner with The New York Times Company in the Times’ new Midtown headquarters, without getting any additional affordable units in return. Mr. Lopez said it was a concession sought during negotiations with Mr. Sp...

As the fight against eminent domain abuse heats up, maybe it's time to start talking about "the Willets Point effect." The coalition fighting the Atlantic Yards project has gathered savvy from a high-profile battle lasting more than three years. Those challenging Columbia University's West Harlem expansion have a clear David vs. Goliath fight. And the two homeowners on Duffield Street in Downtown Brooklyn have strong suggestions of a link to the Underground Railroad in the face of denial by the city agency that wants their land. (Photos by Jonathan Barkey; here's the full portfolio .) But the 225 businesses operating in the “Iron Triangle” of Willets Point, Queens, employing some 1800 workers, have the manpower and muscle to mount a very public fight against the city’s plans for an upscale development that would include some 5500 housing units, a hotel and convention center, a million square feet of retail and 500,000 square feet of office space. So, as the four...

The topic of Mayor Mike Bloomberg's address yesterday morning at a breakfast presented by Crain's New York Business was education , but he answered questions about a range of issues, from his presidential ambitions to congestion pricing. On the latter topic, Bloomberg improbably--and not too convincingly--deflected criticism that took off from the disturbing announcement from New York City Transit that certain subway lines, notably the numbered ones, are at or over capacity and can't add trains. The event, held at the Sheraton New York was in Midtown, was broadcast yesterday on the Brian Lehrer Show, and the issue came up at about 17:09 . Crain's editor Greg David posed the question: The Transit Authority said this week there’s no room on the numbered subway lines for any new riders that would head to subways if congestion pricing went into effect. Doesn’t that lend support to the opponents’ view that we’re just not ready for congestion pricing? Bloomberg responded: ...

So this is what the New York Daily News, City Council Speaker Christine Quinn, and some others are so shocked by. The New York Observer yesterday published the map of the proposed expansion of the 421-a exclusion zone--where developers would have to construct 20% affordable housing (for households with incomes up to 60% of area median income, or AMI) in exchange for tax breaks. The map comes via the Pratt Center for Community Development. The maroon area, in Manhattan, was added in the 1980s to require affordable housing (achievable via a certificate program in low-income neighborhoods, typically in the Bronx) as a tradeoff for new construction The rust color indicates the areas--notably Brownstone Brooklyn, Greenpoint/Williamsburg, the Queens waterfront, Lower Manhattan, and parts of Harlem--added last December by the City Council (which eliminated the certificate program). And the zones in yellow were added by the State Legislature. Missing from the map, of course, is the outline o...

Today's New York Times reports, in an article headlined Some Subways Found Packed Past Capacity , that crowding on the subways, "especially the heavily used numbered lines," leaves little or no room to accommodate riders, according to the president of New York City Transit, Howard H. Roberts. (Graphic from the Times--note that the 2/3/4/5 trains would serve the Atlantic Yards project.) Contrast that with the sunny predictions of the Empire State Development Corporation in its Atlantic Yards environmental review, predictions that were criticized again and again by transportation analysts Brian Ketcham and Carolyn Konheim. From the Atlantic Yards Final Environmental Impact Statement (Response 13-2): The DEIS includes a detailed subway line haul analysis based on 2005 NYCT passenger counts that show that all subway routes serving the project site would continue to operate below capacity in the peak direction in the AM and PM peak hours at their maximum load points in bot...

Bruce Ratner doesn't talk much to the press--and when he does, he's protected --so it's worth another look at excerpts from his 6/26/05 New York Times Magazine interview conducted by Deborah Solomon, headlined Stadium, Anyone? . Note that then-Public Editor Byron Calame criticized the Times for failing to disclose the parent company's business relationship with Ratner, but the Times never printed a note or a letter about the issue. Also note that the headline refers to a stadium, not an arena. They're not interchangeable. Arena revenue Q: How do you explain the sudden vogue for stadiums and arenas? So many teams want a new home -- the Mets in Queens, the Yankees in the Bronx, the Jets with their doomed project in Manhattan. And you're building a new arena for the Nets in Brooklyn. A: It has to do with the economics of sports. The high salaries of athletes drive the whole thing, because it creates a need for revenue. In the case of the Nets, we need an arena tha...

There's no map (yet) of the exclusionary zones added to the 421-a reform legislation passed by the State Legislature last Thursday (but not yet signed by Governor Eliot Spitzer), but City Limits has a good article, headlined REDRAWING THE 421-A FORMULA FOR TAX BREAKS AND HOUSING , summarizing the law's multiple factors. Along with the expansion of the zones where developers would be required to build affordable housing in exchange for a tax break, the bill features the notorious "Atlantic Yards carve-out" and, crucially for the real estate industry, an extension of the current law for six months--which should spark a frenzy of building, especially in Manhattan north of 96th Street and south of 14th Street, boundaries of the current exclusionary zone. City Limits points out that some "healthy real estate markets," including Riverdale in the Bronx and downtown Flushing and Forest Hills in Queens are oddly left out of the zones and explains that city officials...

From the weekend edition (June 23/24) of the Wall Street Journal, in an op-ed headlined The 'Blight' Excuse (subscribers only), Carla Main observes that, two years after the controversial Kelo v. New London decision, which affirmed the use of eminent domain for economic development, states and courts have responded by curbing that option--but another remains: Armed with a blight exception, private property in nearly all of the loophole states may still be condemned and ultimately used for economic development... But what is blight? A half-century of experience has demonstrated only that it is in the eye of the beholder , or perhaps more to the point, in the eye of the power holder . Now New York's blight law may not be as bad as, for example, that in New Jersey , where courts have begun to reform it. But it's still arbitrary. The question, as Supreme Court Justice Joan A. Madden must face in the pending challenge to the Atlantic Yards environmental review, is whethe...

Will Gov. Eliot Spitzer veto the 421-a reform passed by the legislature, one that includes some worthy reforms as well as a handout to developer Forest City Ratner? According to NY1: The governor tells us he needs time to review the legislation before he decides if he will sign it. A veto shouldn't kill the measure for good. If there's to be a summer session to deal with outstanding legislation, there's no reason the legislature couldn't revisit 421-a. In an article Friday headlined 421-a extension will spur construction , Crain's New York Business reported that the six-month extension contained in the 421-a reform will lead to a surge in condominium and apartment construction, as developers will rush to build market-rate projects before a lucrative tax break expires. Here's the key paragraph: The bill approved by the legislature has the support of the Real Estate Board of New York, the powerful lobbying group that represents developers. Insiders say it is unlik...

So how could Assemblyman Hakeem Jeffries support (and sponsor) legislation to reform 421-a, then vote against it? Below, the press release from his office, and then a further explanation. Press release issued Friday Assemblyman Jeffries today voted “No” on A.9293, legislation introduced by Vito Lopez that would treat the controversial Atlantic Yards project more favorably than other developments as it relates to the 421-a tax abatement program. “The Atlantic Yards project has feasted on government funds for far too long. Enough is enough. There is absolutely no justification for treating Atlantic Yards better than any other development project in New York, when Forest City Ratner has already received $300 million in government subsidies.” Joining Assemblyman Jeffries in voting against the bill is Assemblywoman Joan Millman, who represents the neighboring assembly district. The legislation passed 105-6 on the floor of the Assembly. It will now be sent to the Senate for consideration. As...

When you're a public relations professional, you often go where the work is, but consider the mental whiplash that Forest City Ratner spokesman Loren Riegelhaupt must experience--especially this week. He used to work for the investor relations company Sloane & Company , which worked with Madison Square Garden owner Cablevision. So less than three years ago Riegelhaupt worked on the "grassroots" coalition New York Association for Better Choices, which opposed the construction of the West Side Stadium. (One critic said Cablevision had "hijacked" the opposition.) Indeed, an 8/20/04 Associated Press article, headlined Mayor: Stadium could be used for protesters stated: Loren Riegelhaupt of the New York Association for Better Choices, which opposes the stadium, criticized the mayor's comments: "Whether it is the most expensive football stadium ever or the most expensive protest area ever, the West Side Stadium is a colossal waste of $600 million in ta...

In a column today headlined Atlantic Yards gets a deal so sweet it's sick , Daily News columnist Juan Gonzalez bores in on the special carve-out in the 421-a legislation. The deal could be worth [ updated/corrected ] $100-$170 million in tax-exemptions for the condos. (Still, I'd like someone in government to break down the math, since I don't think the bill will, as Gonzalez writes, allow Forest City Ratner to charge an extra $350 a month for affordable units; I think that might apply only to a subset. Doesn't legislation come with official analysis?) The issue, Gonzalez suggests, is a test for Governor Eliot Spitzer. ACORN speaks Gonzalez put Forest City Ratner on the spot. They wouldn't comment. He asked their partner in housing, ACORN, which had lobbied for an expansion of 421-a, didn't know of the special provision. NY ACORN's Bertha Lewis called it "bad public policy," which is remarkable because it 1) involves ACORN's first public critic...

The Times, on the City Room blog, reports that the 421-reform bill with the Atlantic Yards carve-out has passed the Assembly. To the Times, Brad Lander of the Pratt Center for Community Development estimates that the tax break, which could exempt four buildings with condos from including onsite affordable housing. would cost taxpayers $100 million. (The other 12 Atlantic Yards towers would have mixed-income housing.) That's just an estimate, however, and a closer accounting would be worthwhile. Developer Forest City Ratner saves by not having to provide another 380-plus units of very affordable housing. (The 1930 condos would have to be matched by 20 percent affordable housing.) Moreover, the state law--though not the carve-out--requires affordable housing at 60 percent of Area Median Income, or AMI, while less than half of the Atlantic Yards affordable housing would meet that qualification.) There's another benefit for the developer. Condo owners won't have to share their...

The reform of the 421-a tax break about to be passed by the state legislature would require developers in the Geographic Exclusion Area to include 20 percent affordable housing onsite in exchange for the tax break. Affordable housing is defined as being geared to households earning up to 60 percent of Area Median Income, or AMI. The special clause for developer Forest City Ratner benefits the Atlantic Yards project in two ways ( updated ): 1) the obligation to provide 20 percent affordable units in the same building will be lifted and instead can be met in the aggregate 2) the obligation to provide 20 percent of the units at 60 percent of AMI will be changed so that the developer must provide 20 percent of the units at an average AMI of 70 percent, so as not to disturb the current plans for Atlantic Yards. Here's the current bill (A 4408), which has both errors that will be changed and clauses that are being updated: 13. A multi-phase project that includes at least 2,500 dwellin...

The state's revision of the 421-a tax break, as I perhaps overemphasized yesterday , significantly adds to the exclusion area where developers won't be able to get a tax break for building market-rate housing without including affordable housing. That's a significant advance, but it comes with a cost. The final version of the bill apparently came down to two men in a room, Brooklyn Assemblyman Vito Lopez (and surrogates) and Real Estate Board of New York (REBNY) executive Steven Spinola (ditto), each deputized by the two men who control their respective legislative bodies, Assembly Speaker Sheldon Silver and Senate Majority Leader Joseph Bruno. And in those backroom negotiations emerged a nice plum for Forest City Ratner's Atlantic Yards project. (The lack of an obligation to build affordable housing in AY condo buildings adds to the developer's bottom line in multiple ways.) Kept in the dark Assemblyman Hakeem Jeffries, a sponsor of the bill (A 4408), wasn't e...

It's the six-month anniversary (plus a day) of the Atlantic Yards approval by the Public Authorities Control Board, but we still don't know much about the "additional community initiatives and enhanced housing program" announced at the time by developer Forest City Ratner (FCR). We do know that, when FCR pledged to "invest $3 million to improve existing parks in and around the project," the developer was overstating the case by calling it an "additional" initiative. After I queried the Empire State Development Corporation (ESDC), the agency confrimed that the sum includes the $1.25 million-plus announced in November to add a comfort station to the Dean Street playground, a partial mitigation for increased noise. However, a mitigation neither constitutes an enhancement nor an initiative, especially since it surfaced more than a month earlier. (The developer initially offered much less .) Few details My January questions to the ESDC hadn't...

[ Updated 10:40 pm ] As details emerge today about the contours of the state’s planned reform of the 421-a tax exemption, a bonus for developer Forest City Ratner's Atlantic Yards project appears hidden in the verbiage. That bonus appears unclear according to the current version of the legislation (A 4408). But a bigger gift is coming. Instead of requiring the condo buildings--perhaps four of the 16 towers--at Atlantic Yards to include 20 percent affordable units, as the tax break reform would require, the developer would be allowed to spread the affordability over the project as a whole—as long as the project met some requirements that would apply only to... Atlantic Yards. Brad Lander of the Pratt Center for Community Development, who’s reviewed the legislation and has followed the discussion swirling around the bill, thinks that's wrong. "There shouldn't be special side deals for particular developers. Buildings that include 20 percent affordable housing should ge...

It was front-page news last December 20 when the New York City Council passed a reform of the 421-a subsidy law, which offers "corporate welfare" (in State Sen. Liz Krueger's words ) to developers in thriving neighborhoods thanks to a 1971 law that long outlasted its usefulness. So it should be front-page news again, given that the state will further tighten the subsidy. The city's reform increased the Geographic Exclusion Area (GEA) where developers would be required to build 20% affordable housing in exchange for the subsidy, extending it to Brownstone Brooklyn, among other places. ( Update 5:50 pm : More details are emerging about this bill, so it may not be as much of a reform as initially assumed.) (Graphic of 12/21/06 Times front page from New York Magazine's Daily Intelligencer .) But that wasn’t the end of the story--and now even fewer luxury condos will get that free ride, which lasts ten to 25 years. The New York State Legislature had to approve ...