Skip to main content


Showing posts from 2018

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 …

On "ill-informed" elected officials, including the mayor's dissing deputy

When a deposition from deputy Mayor Alicia Glen regarding housing policy surfaced recently in Politico, with her calling Council Members “often extremely confused and ill-informed and not that smart” regarding housing policy, she was forced to apologize.
in fairness, "ill-informed" (to take the least pejorative) could apply (at various times) to any number of elected officials, including Glen's boss, BDB.
Here's example re #AtlanticYards@pacificparkbk — Norman Oder (@AYReport) February 6, 2018 Sure, it *can* be complicated. But also Council & Mayor can be in lockstep for political reasons, *both* failing to be informed. Consider chorus of praise for "100% affordable" #535Carlton@pacificparkbk
Then reality: empty units — Norman Oder (@AYReport) February 6, 2018 By the way, Glen herself has participated in that praise, unwisely calling Atlantic Yards affordable ho…

McKissack CEO on working with Greenland: "It’s an awakening, how we do business here."

There's a rather curious passage in the Commercial Observer's 2/14/18 article, Why Construction Firm McKissack Added Natural Disaster Relief to Its Repertoire, which notes the work of major minority- and woman-owned McKissack & McKissack on the Vanderbilt Yard for the Atlantic Yards/Pacific Park project for Forest City Ratner (now Forest City New York): The biggest change has been working more closely with Greenland since Forest City reduced its ownership in the project to just 5 percent in January. Greenland has more foreign executives, which require more translation.
“They are being cautious because they are not from here and they are not used to our regulations,” [Cheryl] McKissack Daniel said. “They probably run their crews 24/7 [in China]. You can’t do that here. It’s an awakening, how we do business here. But we don’t have a problem with them.” Well, I'm not sure that Greenland runs its crews 24/7 or how much McKissack Daniel was speaking rhetorically.

However, t…

At de Blasio's State of the City, affordable housing rhetoric but not details

So, I finally checked out Mayor Bill de Blasio's 2/13/18 State of the City address and, as the New York Times's William Neuman wrote, "The speech was long on oratory and vision, but it had less to offer in the way of details, new ideas or measurable goals."

According to a video of the event, a preview video (about 31 minutes in) shown to attendees  at the Kings Theatre touched on "creating affordable housing for New Yorkers." The illustration was not ground-up construction but a rent freeze for seniors. Okay.

"So, let me take you to the task at hand, becoming the Fairest Big City in America," de Blasio said, according to the transcript. "The video you saw gave you the flavor of some of the steps we've taken so far what they mean to the people of this city and when you came in this evening, you were handed this booklet, which conveniently is titled, 'The Fairest Big City in America.'"

So what did he talk about? His mandate, he…

That elusive 2025 completion date

So when exactly will Atlantic Yards/Pacific Park be finished? Previous predictions have proven treacherous (remember that ten-year timeline posited upon project approval in 2006?), and the some recent prominent ones, relying on secondhand or stale information, unwisely posit 2025 as the expected completion date.

Consider Curbed's 2/9/18 A guide to the major megaprojects transforming New York City, which includes:
After well over a decade of planning, the megaproject formerly known as Atlantic Yards has made some progress. Now called Pacific Park, the development has seen the opening of the Barclays Center, the modular rental at 461 Dean Street, an all-affordable building at 535 Carlton Avenue, and the COOKFOX-designed condo at 550 Vanderbilt. More residential buildings are the works—the whole thing is due to have 15 by its anticipated completion date of 2025—and the recent acquisition of much of the development by Greenland USA may add some much-needed energy to the project. Or Fo…

Newsday: Coliseum operator and Nassau County executive want to end penalty for not supplying hockey long-term

The Islanders' deal is not quite done.

Newsday's Robert Brodsky and Jim Baumbach had a scoop yesterday, in Laura Curran moves to end Islanders penalty clause. The new Nassau County executive, bowing to a request from Nassau Coliseum operator Brooklyn Sports & Entertainment, says she supports killing the annual $1 million (and ultimately growing) penalty for not playing six required games per year at the Coliseum through 2027.

BS&E argues that the planned 60 games over the next three seasons at Nassau, during the construction of the new Belmont arena, make up for the promise. And they're playing hardball, saying that the latter plan is contingent on the the deal revision.

BS&E has some leverage here: the Islanders need a place to play, and if they can't play some games at Nassau, they'd likely face three more dreary season at the only alternative, the Barclays Center. That said, BS&E would rather get more events set at Nassau and allow alternatives b…

From the latest Construction Alert: National Grid work expected at the intersection of Vanderbilt and Atlantic

The latest Atlantic Yards/Pacific Park Construction Update (bottom), covering the two weeks beginning yesterday, Feb. 12, was circulated at 11:27 am yesterday (late) by Empire State Development (ESD) after preparation by Greenland Forest City Partners.

There's not much new compared to the previous update, but National Grid is anticipated to start project-related infrastructure relocation work near the intersection of Vanderbilt and Atlantic avenues.

Also, previously noted SOE (support of excavation) installationin the northeastern portion of Block 1120 (just west of the Carlton Avenue Bridge) will continue, with the activity of "excavation" added and clarified.

Sidewalk on Dean coming

Outside the B12 site, west of 550 Vanderbilt along Dean Street, the document states, as it did in the previous update, "The 16 foot fence has been removed. Work related to grading the site will continue. Sidewalk replacement will occur when permits are received."

Weekend work


NREI: caution on Brookfield bid for Forest City

From National Real Estate Investor today, Would Forest City Agree to a Brookfield Deal?, suggests caution on the the reported interest of Brookfield Asset Management in buying Forest City Realty Trust: the reported offer price is just too low, say investment analysts.
In other words, this may be a negotiation to get the bid--reportedly at a discount over 16%--closer to the net asset value.
Also, analyst Sheila McGrath said that tax considerations hamper sales after conversion to a real estate investment trust (REIT) within five years. The company converted to a REIT two years ago. “I think that these additional frictional costs would impede the value of what other buyers might pay at this juncture," she said. "The board may be in a better position to maximize shareholder value when these restrictions burn off in three years."
Does that mean status quo for three years?

A glimpse of that 550 Vanderbilt open space

As I reported 1/24/18, Ashley Cotton of L&L MAG, which represents Forest City (and says she speaks for the joint venture Greenland Forest City Partners), said that open space planned outside 550 Vanderbilt is finished, but not yet open because of safety issues regarding final work on the building. 
“I was told February, today,” she said of the new goal. (Previously, the goal was the end of 2017.)
Well, as the photo--taken through a window Thursday 2/8/18 in the Dean Street wall outside the space--shows, the open space is done. February has several weeks left, though.

At conference call, Forest City won't comment on disposition pace, says future spending on Pacific Park modest; railyard due end of year

The news from yesterday's Forest City Realty Trust conference call with investment analysts, according to the Real Deal, was that discussions about a potential sale or strategic dispositions will remain “robust” but not necessarily “timely,” according to CEO David LaRue.

He had been asked by previous guidance that included the word "timely" had been dropped. The company's initial statement about a potential disposition came in September, and reports of two possible deals have been floated already.

So perhaps the lack of "timely" was a signal that reported (but not confirmed) talks with Brookfield and/or Equity Residential were hardly resolved. The board, LaRue said, "is running a robust and thorough process that is ongoing."

And in New York

LaRue was similarly tactful regarding Forest City's operations in New York, given its announcement that it was reducing from 30% to 5% ownership of future Pacific Park development.

"Again, we still have…

Forest City: affordable 535 Carlton just 66% leased; 38 Sixth 28%; 461 Dean 92%

According to an investor presentation (download) posted yesterday by Forest City Realty Trust, the three rental buildings in Pacific Park are getting somewhat more full.

As of 2/1/18, as noted in the screenshot at right, "100% affordable" 38 Sixth was 23% leased, "100% affordable" 535 Carlton was 66% leased, and 50% affordable/50% market 461 Dean was 92% leased.

Those numbers compare to 0%, 51%, and 92% as of 10/26/17, as noted in a previous presentation. 535 Carlton had its official grand opening in June, but couldn't find enough takers for upper middle-income units in the lottery, and has had to offer a free month of rent. Half the building is in that "band." So it's still not going that fast.

Forest City's annual results

Yesterday, Forest City Realty Trust had good news regarding its 2017 Fourth-Quarter and Yearend Results, in a press release stating that 2017 fourth and annual earnings were up significantly compared to 2016 versions:
The pr…

Real Deal: Forest City more likely to be sold in full, not in pieces; Ratner's "empire" fadeout?

From the Real Deal's analysis, When a suitor calls: The calculus behind Brookfield’s Forest City play, regarding the reported, but hardly confirmed pursuit of Forest City Realty Trust by Brookfield Asset Management:

Brookfield's reported offer, less than $24/share, is below the estimate net asset value, but could changeForest City's complex enough to require a sophisticated investorOne analyst thinks the company will be sold in full, rather than in pieces
Note that Forest City yesterday, in its quarterly earnings release, continued its no-comment mode.

Is Forest City New York moving ahead?

Forest City spokesman Jeff Linton told the Real Deal that New York City remained a core market:
“We have moderated our overall development level, but remain committed to development opportunities that allow flexibility to activate entitlement when market conditions are right,” Linton said in a statement. “Our current development ratio of approximately 6 percent of total assets still repres…

Forbes says the Nets are worth $2.3B. OK. But they're not making a profit, really.

Thanks to worldwide marketing/popularity and new revenue sources like corporate logos on uniforms, Forbes reported yesterday that NBA Team Values 2018: Every Club Now Worth At Least $1 Billion.

And yes, the Brooklyn Nets really are worth $2.3 billion, because they found a buyer:
Mikhail Prokhorov is on the verge of selling 49% of the Nets to Taiwanese billionaire Joseph Tsai. The Alibaba co-founder has an option to assume majority control by the end of 2021. The deal values the Nets at $2.3 billion and does not include operating rights to the Barclays Center where the Nets play their home games. That's an enormous leap in value, and a testament to Jay-Z's line that pro teams are like "paintings for billionaires."

After all, when Forest City Enterprises/Forest City Ratner sold its 20% of the team to Prokhorov in early 2016, as well as its majority share of the arena, "the transaction values the team at approximately $875 million and the arena at $825 million, inc…

From Gotham Gazette: The real value of New York Islanders’ Belmont deal? Cuomo administration won’t say.

I have a essay in Gotham Gazette: The real value of New York Islanders’ Belmont deal? Cuomo administration won’t say.

It includes the state stonewalling on the rival bid and the new arena's economic projections, as well as the seeming failure to confront two big issues: the cost of the Long Island Rail Road upgrades, as well as the impact of the new arena on the county-owned Nassau Coliseum.

Early Atlantic Yards investor Londell McMillan won't go to Nets games. "It breaks my heart to have been a part of the project."

A briefly prominent Atlantic Yards investor, who was presented early on as representing "inclusion" in ownership, is not happy with Atlantic Yards, not at all.

In a Crain's Q&A, Prince's former manager Londell McMillan explains Jay-Z's beef with him, the Brooklyn-born lawyer, who famously extracted Prince from an onerous recording contract, not only defends himself in a dispute with Jay-Z regarding Prince's estate, he answers a few bonus questions from Aaron Elstein: You’ve had so much success, but what’s your biggest setback?
Atlantic Yards and Barclays Center. I am an investor in that project, and what was promised was not delivered. It was presented as a public-private partnership to create not just a sports facility but housing—affordable housing—jobs and economic opportunities to benefit the community. Today the Nets are owned by a Russian industrialist, the property sold to a Chinese conglomerate, and the public officials who advanced the project ar…

Maybe Pacific Park will have more than 4,500 rentals and fewer than 1,930 condos. Consider past documents.

I wrote recently about how changes in the 421-a law have upended plans for condos beyond the already-constructed 550 Vanderbilt, with 278 units. How would Greenland Forest City Partners get to the planned 1,930 condos? (There are also 4,500 rentals planned, half of them below-market.)

Well, maybe they won't, even if the 421-a law changes again to encompass condos. In other words, the developer (previously just Forest City Ratner)  may not have ever aimed for that total

A look at 2006 and 2009 documents cast doubt that the condo total was ever a goal within the overall total of 6,430 residential units. Moreover, a second look at two documents prepared by the developer in 2014--a map and a chart--suggests plans for the full 1,930 units had yet to gel.

2006 numbers

From the December 2006 Modified General Project Plan states:
At full build-out, the Project would include approximately 5,325 to 6,430 residential units, depending on the amount of commercial office space provided; most of …

At 535 Carlton, 11 affordable units get their rents halved. That saves the developer far more.

So, the "100% affordable"--but skewed to middle-income households--535 Carlton tower has gotten a little more affordable. But it's no act of generosity, but rather furthers a huge tax break for Greenland Forest City Partners, as previously reported.

Recently posted public documents reveal that the moderate-income "band," which originally included only 15 of the building's 297 apartments, now has eleven more units, and the most expensive "band has eleven fewer units. This approximates a 50% rent cut.

535 Carlton has eight more two-bedroom units renting for $1,591 a month (total now 12) and three more three-bedroom units renting for $1,832 (total: 4). Combined with 90 low-income units, this means the building now has 116 units renting at 100% of Area Median Income (AMI) and below. (In 2016, 100% of AMI for a four-person household was $90,600; it rose to $95,400 in 2017.)

Here's the original distribution. The number of studios (3) and one-bedroom apar…

The Barclays Center, boxing, and pervasive weed

& Thomas Hauser in The Sweet Science says @barclayscenter has a pot problem: "At times--and Saturday night was one of them--the smell of weed is so strong that non-smokers are in danger of getting a contact high"
(I've heard reports from concerts, too. Hoops/hockey, not so much) — Norman Oder (@AYReport) January 22, 2018

Real Deal: "unsophisticated" EB-5 investors sue New York City Regional Center

A 1/10/18 Real Deal article A cautionary tale? EB-5 investors sue over Battery Maritime woes describes lawsuits on behalf of 150 Chinese nationals who put some $77 million in EB-5 funds into the Battery Maritime Building in Lower Manhattan, a project that defaulted.

The investors got green cards for themselves and their families, but they didn't get their money back. The defendant, the New York City Regional Center (NYCRC)--the most prolific regional center, the middleman for the first $228 million in Atlantic Yards EB-5 funds--allegedly misled the investors about progress.

I can't judge that at this point, but here's the key point about EB-5. According to the Real Deal, the suit describes the investors as “unsophisticated Chinese nationals, most of whom neither speak nor read English.”

However, the NYCRC, in its defense, states, "“Plaintiffs claim they were ‘unsophisticated’ when in fact they expressly represented and were required by law to be sophisticated investors…

670 Pacific Street is sold to Catsimatidis

John Catsimatidis, a prolific developer, supermarket owner, and sometime political candidate, has bought 670 Pacific Street, the 8-story, 86-unit rental building situated between the Newswalk condos and the unbuilt B15 site, aka 664 Pacific.

The Real Deal reports that Catsimatidis’ Red Apple Group paid $69.2 million to Read Property Group, a little more than he wanted, but he had proceeds from another sale he wanted to deploy.

“This reinforces our love for Brooklyn and our trust in the borough," he said.

OK, but does he know that a 27-story building is coming next door, and there likely will be work developing over the railyard for years?

Barclays Center releases February 2018 event calendar: "private events" listed, but with no detail

Ah, maybe I was a little too optimistic. Two weeks ago, I wrote that the Barclays Center will return to a small but important practice of transparency, announcing non-ticketed events on the monthly calendar circulated to community residents.

That longstanding practice of alerting residents of events--including graduations and other gatherings--that may be disruptive was abandoned after May 2016, with an arena representative rather dubiously claiming that it was for security reasons.

Well, the practice is back, as noted in the Community Notice circulated yesterday (below), but there was no information about the nature of the private events held on Feb. 1 and the one schedule for Feb. 27. On Feb. 28, there is an indication of "Disney Training," which is presumably staff training and not a huge event. but no actual information to help people prepare.

By contrast, the May 2016 event calendar (above right) indicated the nature of the event, such as a graduation, as well as the e…

Glassdoor: inside Forest City, in New York and Cleveland, rumbles of concern

A recent article in the New Yorker on the inside-the-workplace site Glassdoor prompted me to look at reviews of both Forest City New York (aka Forest City Ratner) and its parent Forest City Realty Trust, at least its headquarters in Cleveland.

The reviews are hardly definitive, notes the New Yorker's Lizzie Widdicombe: "Any one review on Glassdoor, like any single restaurant review on Yelp or product review on Amazon, may be misleading, useless, or unhinged." Indeed, those who choose to post reviews generally cluster at the very positive or very negative scale.

So we should take these anonymous reviews with some significant grains of salt. But they might indicate some trends. I'd say they indicate rumbles of concern in a company, and office, that has been going through reassessment, even upheaval.

That upheaval, if we believe a Bloomberg report yesterday, means Forest City Realty Trust may be sold to Brookfield Asset Management, a firm large and sprawling enough (acc…

Newsday: beware of taxpayer support for Islanders deal

Newsday published an editorial last night, Don’t let Islanders deal become slippery slope for taxpayers, arguing that it was wrong for New York State to pay $6 million to renovate the Nassau Coliseum for the New York Islanders's return. (I made that point earlier.)

And Newsday raises some questions that I and other have raised regarding the new Belmont arena:
There are still many unknowns. Will there be tax breaks? Who will pay for traffic mitigation, Long Island Rail Road modifications, and other infrastructure? The slope from privately funded to publicly funded is a slippery one, and taxpayers should be assured they’re on firm footing. Thing is, these questions, and such scrutiny, should have forced far more transparency than we've gotten.