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

In press release re Forest City selling most of its Pacific Park stake to Greenland, more rhetoric than insight (timetable?)

There's not a lot new--but there is some rhetoric and misdirection--in the press release issued yesterday (bottom) by Greenland USA--the stateside arm of Shanghai-based Greenland Holding, owned significantly by the government of Shanghai--and Forest City Realty Trust.

After all, the New York Post already had the story that Greenland would buy 25% of Forest City's 30%, thus increasing its stake from 70% to 95%. And that the B4 tower on the northeast corner of the arena block would be the first to move forward. And--unmentioned in the press release--that the new firm L&L MAG would consult on the project. (Also yesterday: the Real Deal reported that construction chief Bob Sanna would run Forest City New York, at least for now.)

The press release, "Forest City and Greenland Reach Agreement to Restructure Pacific Park Brooklyn Partnership," subtitled "Next Round of Development Moving Forward," crucially omits a detail: what is Greenland paying? And is Forest City taking a loss? Based on past performance, I'd bet yes.

And why isn't Forest City selling the whole thing? Maybe because then the joint venture wouldn't be called Greenland Forest City Partners any more. But rest assured, this is Greenland's project.
Timing and configuration questions

Though a new building should launch in 2019 and the 2025 affordable housing deadline was reaffirmed, that leaves some questions:
  • in which buildings will the 2025 affordable timeline be met?
  • how will the affordability compare to that long promised? (it's been skewed toward middle-income units)
  • what will be the program at B4 (once planned as condos plus market-rate and affordable rentals, later promoted as an office tower)
  • when might the whole project be finished?
Update: the Real Deal reports that B4 will stay residential, but with no details regarding the program. Could that building include more affordable units, so as to meet that 2025 deadline?

Note that the affordable deadline does not mean that the full project would be built by then. Gilmartin told Crain's New York Business:
“Pacific Park has been part of my everyday life—I live a half-mile from the project and I care a lot about it,” Gilmartin said. “The contract will keep us working on it and aligned so it gets built as expeditiously as possible.”
Gilmartin told Politico:
Gilmartin said nearly 800 low- and moderate-income apartments have been built and assured the deadline for the subsidies will be met.
"We have the capital, we have the partner, we've got the deal," she said. "The deal's been made; the buildings are being built. A lot of the painful, heavy lifting is behind us and that project is in execution mode."
But the building's aren't yet being built. Perhaps we'll learn hear those questions asked and answered at the Wednesday meeting of the Atlantic Yards Community Development Corporation.

Puffy rhetoric from the press release

"We saw in Pacific Park Brooklyn the opportunity to implement our vision of creating a better, more accessible lifestyle and drive continued innovation in the United States. Now, through the jobs and the community benefit we have created, and the great relationships we've established with the city and state, we are delivering on that vision," said Zhang Yuliang, president and chairman of Greenland Group.

Actually, they're not delivering on that vision, not by delaying new building or by building not-so-affordable below-market housing.

"This is a win-win for both companies as well as for our community partners and stakeholders," said David J. LaRue, President and Chief Executive Officer of Forest City Realty Trust, essentially saying, "It's good that we're limiting our exposure."

As to whether the joint venture is "solidly committed to the vision for Pacific Park and the public benefits it has and will continue to deliver, including significant affordable housing," that's not really for LaRue to say, because he has no control over it.

Hu Gang, president and CEO, Greenland USA said that "this restructuring allows Greenland to meet all of the goals it set forth when we entered the New York market and deliver a world class project that will make all of Brooklyn proud." But the goals surely were to earn profits, establish Greenland's worldwide reputation, and to do development in a less volatile place than China.

The government's all in

The key quote, perhaps, comes from Howard Zemsky, president and CEO, Empire State Development Corporation, who said, "We look forward to working closely with Greenland Forest City Partners on the successful development of Pacific Park Brooklyn. More than 750 units [of affordable housing] have already been built and the Joint Venture remains committed to its 2014 agreement with the State to deliver 2,250 units of affordable housing by 2025."

That doesn't look like the state will do anything to try to slow the deal or get new commitments out of Greenland. The key thing to watch is the affordability of the future units--will they be skewed to middle-income households?

The full press release, below

Forest City and Greenland Reach Agreement to Restructure Pacific Park Brooklyn Partnership

Next Round of Development Moving Forward

CLEVELAND and BROOKLYN, Jan. 15, 2018 /PRNewswire/ -- Greenland USA and Forest City Realty Trust, Inc. (NYSE: FCEA) today announced that they have reached an agreement on the restructuring of Greenland Forest City Partners, the joint venture that is developing Pacific Park Brooklyn, a new 22-acre mixed-use development adjacent to the Barclays Center. The restructuring takes Greenland USA's ownership interest in the venture from 70 percent to 95 percent going forward, and Forest City's interest from 30 percent to 5 percent. Greenland Forest City Partners also announced that design work will begin early this year on B4, the next building at Pacific Park, which is expected to break ground in 2019.

"We saw in Pacific Park Brooklyn the opportunity to implement our vision of creating a better, more accessible lifestyle and drive continued innovation in the United States. Now, through the jobs and the community benefit we have created, and the great relationships we've established with the city and state, we are delivering on that vision," said Zhang Yuliang, president and chairman of Greenland Group. "We are excited to continue working with Forest City and are proud of the tremendous progress we've made together in bringing affordable housing and residential space to the market quickly. In 2018, we remain dedicated to delivering these contributions to New York's vibrant and diverse communities. Pacific Park Brooklyn brings opportunities to the whole community, and I look forward to its progress and success."

"This is a win-win for both companies as well as for our community partners and stakeholders," said David J. LaRue, President and Chief Executive Officer of Forest City Realty Trust. "Forest City continues to execute on our strategy of maintaining an overall lower level of development activity, while remaining fully engaged and accountable for current responsibilities. Most important, the restructuring will keep the remaining entitled development on track, with the joint venture solidly committed to the vision for Pacific Park and the public benefits it has and will continue to deliver, including significant affordable housing. As a company, we continue to believe strongly in the New York market. It is our largest core market and we've had a significant presence and portfolio here for more than 30 years."

Hu Gang, president and CEO, Greenland USA added, "We are incredibly proud of the transformative projects we have built with our partners at Forest City. Pacific Park is a true landmark development in the heart of Brooklyn, New York, and this restructuring allows Greenland to meet all of the goals it set forth when we entered the New York market and deliver a world class project that will make all of Brooklyn proud."

Howard Zemsky, president and CEO, Empire State Development Corporation said, "We look forward to working closely with Greenland Forest City Partners on the successful development of Pacific Park Brooklyn. More than 750 units have already been built and the Joint Venture remains committed to its 2014 agreement with the State to deliver 2,250 units of affordable housing by 2025."

Greenland USA will take primary responsibility for the remaining development work at Pacific Park. The restructuring will not impact the three projects that Greenland Forest City has completed to date: 38 Sixth Avenue, 535 Carlton and 550 Vanderbilt. The transaction is expected to close in mid-2018. Pacific Park Brooklyn is the redevelopment of 22 acres in downtown Brooklyn that has already delivered four residential buildings with nearly 800 units of affordable housing, a state of the art sports and entertainment arena – Barclays Center – a new subway entrance to the Atlantic Terminal Transit Hub and ongoing transportation infrastructure improvements. Design for the fifth building, designated B4, will move forward at the corner of Atlantic Avenue and 6th Avenue. Design work will begin early this year with groundbreaking planned for 2019.

When complete, Pacific Park is expected to deliver 6,430 units of housing, including 2,250 units of affordable housing, as well as office space, neighborhood retail, community facilities and 8 acres of publicly accessible open space. Pacific Park also includes major infrastructure improvements including a new storage and maintenance facility the LIRR, new rail access to and from the Atlantic Terminal station, and significant improvements to the infrastructure network in the surrounding area. For more information about Pacific Park Brooklyn, please visit www.pacificparkbrooklyn.com

About Greenland USA
Greenland USA is a leading developer of residential and commercial properties that transforms communities. Greenland USA leverages its extensive international track record, commitment to design innovation, quality and efficiency and its local market expertise to develop landmark across the country. It is currently developing the $1B+ property Metropolis in Los Angeles, the $6B+ property Pacific Park Brooklyn in New York and the 42-acre Oyster Point project in South San Francisco, CA. Established in 2013, Greenland USA is a subsidiary of the Greenland Group, which is publicly traded on the Shanghai Stock Exchange (SSE), and ranked 277th among the Fortune Global 500 in 2017. More information can be found at www.greenlandusa.com

About Forest City
Forest City Realty Trust, Inc. is a NYSE-listed national real estate company with $8.1 billion in consolidated assets. The Company is principally engaged in the ownership, development, management and acquisition of commercial and residential real estate throughout the United States. For more information, visit www.forestcity.net.

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