Skip to main content

DBP's Reed: land values in Downtown Brooklyn go from $80/sf to $500/sf (so MTA should've driven harder bargain); the perils of BK = "Silicon Valley" prediction

"I think the speed and pace and scale of what's happening in the borough now is why I think everyone's pinching themselves, and find it hard to believe," says Tucker Reed of the Downtown Brooklyn Partnership in the video below, produced by the Brooklyn Eagle, part of its coverage of Make It In Brooklyn: Inaugural innovation summit attracts top business leaders.

"Land values in Downtown Brooklyn alone, over the last 18 months, have gone from $80 a square foot to 500 [dollars]," he continued. "That pace of change is hard to get your mind around." (I'm not sure those numbers are average, as opposed to the outliers.)



Such change is part of why it has become more cost-effective to build Atlantic Yards/Pacific Park using conventional construction, despite developer Bruce Ratner's past claim that it was impossible (though that's what he proposed, and got approved).

And it's also why, as I wrote, the expected prices for condos now exceed Forest City Ratner's optimistic projects from 2009.

It's also why the public should get more of the upside, but, because the Metropolitan Transportation Authority was under the sway of the governor and mayor--themselves doing the bidding of Forest City Ratner--the MTA didn't ask for more.

Looking back at the RPA arguments

As I wrote in May 2014, in June 2009, the Regional Plan Association (RPA) advised the MTA, which was set to give Forest City Ratner more generous terms regarding the Vanderbilt Yard--21 years to pay, with a gentle interest rate-- to seek a better deal.

“While there has been little time to digest the proposal, several considerations are clear,” the RPA's Neysa Pranger testified, suggesting that project was now far different from the one approved in 2006, with “greatly diminished” public benefits.

She also said that “it is likely to be years before the market recovers enough to attract new developers”--a statement I thought worthy of debate and now, with hindsight, see as silly.

However, Pranger and the RPA wisely observed that it “is almost inevitable that it will need to be redesigned and renegotiated over several business cycles before it’s complete."

“Does this new agreement retain enough benefits for the MTA and the city to proceed with a scaled-back plan?” Pranger asked. “Based on the information available, the answer is no."

Rather than open up the site to new bids, she made four recommendations for any revised deal with Forest City Ratner, including granting the MTA more future project revenues, conducting a new cost-benefit analysis and creating a new ESDC subsidiary to oversee the project and review design elements.

Specifically, the RPA said: "The MTA should either receive a larger upfront settlement or an opportunity to realize much greater long-term revenue, possibly by negotiating a share of future revenues from the project that could exceed annual payments for development rights."

The MTA board didn't bother to discuss those suggestions. It should have done so.

More on the Brooklyn boom

From Capital New York, 6/25/15, Get ready Sunset Park, ‘Brooklyn’ is coming:
“Is Brooklyn done?” Brooklyn Chamber of Commerce president Carlo Scissura asked a morning panel of corporate executives who have made money marketing “Brooklyn.” “Or is it just, like, forever? Or is it the beginning?”
Airbnb’s New York manager, Wrede Petersmeyer, suggested that as long as Brooklyn neighborhoods continued to package themselves so well, there was no end in sight.
“I don’t think you can separate our growth in the city from the growth of neighborhoods having brands,” he said. “I think 20 or 30 years ago, you couldn’t imagine the idea that someone living in Paris would want to not go to New York, but go to Williamsburg, spend time in Red Hook, visit a neighborhood that has an identity.”
Reporter Dana Rubinstein rightly called that "boosterism." Some neighborhoods have much more strength than others--and Red Hook, despite its charms, is transportation-challenged.

The conclusion:
...What’s the next great frontier in Brooklyn?
“I have no idea,” said Walentas. “You know, Bushwick is now gentrifying. I don’t know. Jed, do you have any idea?”
His son, Jed, said “Brooklyn is still very early” in its upward trajectory.
[Developer Bruce] Ratner agreed.
“This borough will be known in 10 or 20 years as the equivalent of Silicon Valley,” he said. “I really believe that.”
The perils of prediction

Hold on. Bushwick is gentrifying. It's also huge, full of parts that are very much not gentrifying, or not gentrifying much.

As for Silicon Valley, well, Brooklyn's tech scene is not nearly equivalent, nor does it promise to be that. Remember how MetroTech was once supposed to be Silicon Valley?

From the New York Times, 6/22/97, A Dream Grows in Brooklyn:
''The original concept was developed by George Bugliarello, who wanted to build a research and development facility modeled on Silicon Valley,'' said Mitchell Moss, director of the Urban Research Center at New York University. ''The developer had a better feel for the for the market, but the idea was George's.''
...''We looked at it and determined the area was not appropriate for another Silicon Valley,'' said Mr. [Bruce] Ratner, who was backed by Forest City, his family's development company, which is based in Cleveland. ''We did find that what tenants really wanted was lots of high-tech space for back-office operations. And we also found that 30 to 35 percent of the people who work in downtown Manhattan are from Brooklyn.''

Comments

Popular posts from this blog

Barclays Center/Levy Restaurants hit with suit charging discrimination on disability, race; supervisors said to use vicious slurs, pursue retaliation

The Daily News has an article today, Barclays Center hit with $5M suit claiming discrimination against disabled, while the New York Post headlined its article Barclays Center sued over taunting disabled employees.

While that's part of the lawsuit, more prominent are claims of racial discrimination and retaliation, with black employees claiming repeated abuse by white supervisors, preferential treatment toward Hispanic colleagues, and retaliation in response to complaints.

Two individual supervisors, for example, are charged with  referring to black employees as “black motherfucker,” “dumb black bitch,” “black monkey,” “piece of shit” and “nigger.”

Two have referred to an employee blind in one eye as “cyclops,” and “the one-eyed guy,” and an employee with a nose disorder as “the nose guy.”

There's been no official response yet though arena spokesman Barry Baum told the Daily News they, but take “allegations of this kind very seriously” and have "a zero tolerance policy for…

Behind the "empty railyards": 40 years of ATURA, Baruch's plan, and the city's diffidence

To supporters of Forest City Ratner's Atlantic Yards project, it's a long-awaited plan for long-overlooked land. "The Atlantic Yards area has been available for any developer in America for over 100 years,” declared Borough President Marty Markowitz at a 5/26/05 City Council hearing.

Charles Gargano, chairman of the Empire State Development Corporation, mused on 11/15/05 to WNYC's Brian Lehrer, “Isn’t it interesting that these railyards have sat for decades and decades and decades, and no one has done a thing about them.” Forest City Ratner spokesman Joe DePlasco, in a 12/19/04 New York Times article ("In a War of Words, One Has the Power to Wound") described the railyards as "an empty scar dividing the community."

But why exactly has the Metropolitan Transportation Authority’s Vanderbilt Yard never been developed? Do public officials have some responsibility?

At a hearing yesterday of the Brooklyn Borough Board Atlantic Yards Committee, Kate Suisma…

No, security guards can't ban photos. Questions remain about visibility of ID/sticker system.

The bi-monthly Atlantic Yards/Pacific Park Community Update meeting June 14, held at 55 Hanson Place, addressed multiple issues, including delays in the project, a new detente with project neighbors,concerns about traffic congestion, upcoming sewer work and demolitions, and an explanation of how high winds caused debris to fly off the under-construction 38 Sixth Avenue building. I'll have more coverage.
Security issues came up several times at the meeting.
Wayne Bailey, a resident who regularly takes photos and videos (that I often use) of construction/operations issues that impact residents, asked representatives of Tishman Construction if the security guard at the sites they're building works for them.
After Tishman Senior VP Eric Reid said yes, Bailey asked why a guard told him not to shoot video of the site, even though he was on a public street.

"I will address it with principals for that security firm," Reid said.
Forest City Ratner executive Ashley Cotton, the …

Atlantic Yards/Pacific Park graphic: what's built/what might be coming + FAQ (post-dated pinned post)

This graphic, posted in January 2018, is post-dated to stay at the top of the blog. It will be updated as announced configurations change and buildings launch. Note the unbuilt B1 and the proposed shift in bulk to the unbuilt Site 5.

The August 2014 tentative configurations proposed by developer Greenland Forest City Partners will change. The project is already well behind that tentative timetable.

How many people are expected?

Atlantic Yards/Pacific Park has a projected 6,430 apartments housing 2.1 persons per unit (as per Chapter 4 of the 2006 Final Environmental Impact Statement), which would mean 13,503 new residents, with 1,890 among them in low-income affordable rentals, and 2,835 in moderate- and middle-income affordable rentals.

That leaves 8,778 people in market-rate rentals and condos, though let's call it 8,358 after subtracting 420 who may live in 200 promised below-market condos. So that's 5,145 in below-market units, though many of them won't be so cheap.

As …

The passing of David Sheets, Dean Street renter, former Freddy's bartender, eminent domain plaintiff, and singular personality

David Sheets, longtime Dean Street renter, Freddy's bartender, eminent domain plaintiff, and singular personality, died 1/17/18 in HCA Greenview Hospital in Bowling Green, KY. He was 56.

There are obituary notices in the Bowling Green Daily News and the Wichita Eagle, which state:
He was born in Wichita, KS where he attended public Schools and Wichita State University. He lived for many years in Brooklyn, NY, and was employed as a legal assistant. David's hobby was cartography and had an avid interest in Mass Transit Systems of the world. David was predeceased by his father, Kenneth E. Sheets. He is survived by his mother, Wilma Smith, step-brother, Billy Ray Smith and his wife, Jane all of Bowling Green; step-sister, Ellen Smith Alexander and her husband, Jerry of Bella Vista, AR; several cousins and step-nieces and step-nephews also survive. Memorial Services will be on Monday, January 22, 2018 at 1:00 pm with visitation from 10:00 am to 1:00 pm Monday at Johnson-Vaughn-Phe…

Some skepticism on Belmont hockey deal: lease value seems far below Aqueduct racino; unclear (but large?) cost for LIRR service

As I wrote for The Bridge 12/20/1, The Islanders Say Bye to Brooklyn, But Where Next?, the press conference announcing a new arena at Belmont Park for the New York Islanders was "long on pomp... but short on specifics."

Notably, a lease valued at $40 million "upfront to lease up to 43 acres over 49 years... seems like a good deal on rent for the state-controlled property." Also, the Long Island Rail Road will expand service to Belmont.

That indicates public support for an arena widely described as "privately financed," but how much? We don't know yet, but some more details--or at least questions--have emerged.

An Aqueduct comparable?

Well, we don't know what the other bid was, and there aren't exactly parcels that large offering direct comparables.

But consider: Genting New York LLC in September 2010 was granted a franchise to operate a video lottery terminal under a 30 year lease on 67 acres at Aqueduct Park (as noted by Gov. Andrew Cuomo).

As…

Barclays Center event June 11 to protest plans to expand Israeli draft; questions about logistics

At right is a photo of a poster spotted in Hasidic Williamsburg right. Clearly there's an event scheduled at the Barclays Center aimed at the Haredi Jewish community (strict Orthodox Jews who reject secular culture), but the lack of English text makes it cryptic.

The website Matzav.com explains, Protest Against Israeli Draft of Bnei Yeshiva Rescheduled for Barclays Center:
A large asifa to protest the drafting of bnei yeshiva in Eretz Yisroel into the Israeli army that had been set to take place this month will instead be held on Sunday, 17 Sivan/June 11, at the Barclays Center in Downtown Brooklyn, NY. So attendees at a big gathering will protest an apparent change of policy that will make it much more difficult for traditional Orthodox Jewish students--both Hasidic (who follow a rebbe) and non-Hasidic (who don't)--to get deferments from the draft. Comments on the Yeshiva World website explain some of the debate.

The logistical questions

What's unclear is how large the ev…