No clarity on affordable condos: will joint venture build 200 onsite? would diminished Forest City build 400+ offsite?
When, if ever, will the current project developer build at least 200 affordable homeownership units (condos) on the project site, and when, if ever, will original developer Forest City build at least 400 units offiste?
Let's recap. As I wrote in August 2016, several elected officials, not quite getting it right, asked Empire State Development (ESD), the state authority overseeing/shepherding the project, about the stated plan for "200 units of affordable condominiums which are supposed to be located off-site of the Pacific Park project."
Actually, the plan is different. The affordable condos--"in the range of 600 to 1,000 units... on or off site"--were part of a Memorandum of Understanding with ACORN, excerpted above right.
Within that total, the commitment to 200 on-site units was first announced as part of developer Forest City Ratner's public pledge upon project approval in December 2006, a gesture toward requests by Assemblyman Hakeem Jeffries:
As part of the affordable housing program, FCRC has already agreed to build 600 to 1,000 affordable home ownership units on or off site.Note that "work on a program"--the language in the MOU--is not quite the same as "agreed to build." Though "seek to build" is closer.
Today, FCRC [Forest City Ratner Companies] announced that it will seek to build at least 200 of these affordable home-owner units on site (they will be part of the proposed 6,430 units of housing already approved as part of the Atlantic Yards FEIS/GPP).
Documenting the pledge
The pledge was not in the the 2006 General Project Plan or the 2009 Modified General Project Plan approved by ESD, but the project's governing contract, the late 2009 Development Agreement (see p. 22, excerpted at right) references at least 600 for-sale affordable units, with 200 on-site to be built by the project developer, the "AYDC [Atlantic Yards Development Company] and Interim Developer."
|From the Development Agreement; click to enlarge|
That obligation is not ironclad. It's "subject to Governmental Authorities making available to AYDC, Interim Developer or their respective successors... affordable housing subsidies." That's a big contingency.
Another contingency: the goal was to make the units affordable to households with incomes up to 150% of Area Median Income (AMI)--middle-income, as opposed to low- or moderate-income--and to make some units available to moderate-income families with incomes below 100% of AMI.
That leaves a lot of wiggle room regarding the levels of affordability and the configuration and distribution of such units. After all, "some" units for moderate-income households could mean only a handful.
|From Greenland-Forest City agreement; click to enlarge|
That obligation was modified and clarified in 2014, when Forest City sold 70% of the project going forward (excepting the arena operating company and the B2 tower) to Greenland USA.
The obligation to build 200 on-site units remained that of the joint venture Greenland Forest City Partners, but the additional 400 units are Forest City Ratner's responsibility, according to an LLC agreement (excerpted at right) between Greenland and Forest City, as I wrote in May 2015.
The clause at right indicates that, beyond the 200 on-site units, the additional 400 units remain a unilateral Forest City obligation. Note that the document does not say "at least 400," though the Development Agreement left room for a larger number (at least 600, including the 200 on-site) and the original pledge was a total of 600 to 1000 units. In other words, what was once the minimum clearly seems the maximum.
Pledge status, and reasons for concern
What's the status of these pledges? As noted, the state--which takes its cues from the developer--has been silent.
Public officials, including the administration of Mayor Bill de Blasio, may well support on-site for-sale affordable units, but we don't know how wise a deal that is, because the complicated site likely raises costs compared to projects elsewhere.
(That said, note that analyst Moses Gates has said the city should more readily subsidize middle-income homeownership units, rather than middle-income "affordable" rental ones, which have lingered un-leased at Pacific Park.)
The pledge for 200 on-site units is still the responsibility of Greenland Forest City Partners, which will be owned 95% by Greenland USA after a promised restructuring is formalized later this year. So it's worth bringing up at, say, the next meeting of the Atlantic Yards Community Development Corporation, the oversight panel.
Even more murky, but also worth bringing up: does Forest City, which is withdrawing further from the project and hedging its risk, have any intention of building at leaset 400 affordable condos off-site? It's hard to believe that, especially since its capacity, and appetite, for new development, has been diminishing.
In fact, during the February conference call with investment analysts, Forest City executives indicated that they perceived a limited ceiling on any future expenditures related to Pacific Park. That suggests they hardly see this fuzzily-documented obligation as onerous.