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80 Flatbush follow-up: the history of the deals, plus discussion of parking and FAC

As we're waiting to learn more about a potential compromise regarding the 80 Flatbush project, I wanted to add some backstory plus a few things discussed at last month's hearing but left out of my article for The Bridge.

I wrote in a 4/1/18 article that developer Alloy began acquiring property in 2015, so it was well-positioned, perhaps uniquely so, to respond to the Educational Construction Fund’s (ECF) plan for the space. Indeed, after its purchases, Alloy contacted the Department of Education and School Construction Authority regarding the air rights over the Khalil Gibran school, with the Downtown Brooklyn Partnership making the introduction. Meanwhile, ECF had been independently looking at the site for potential redevelopment.

"Well-positioned, perhaps uniquely so," was generous--it's hard to believe that anyone else would've wanted to proceed, because another developer would have had to buy out Alloy, or build around their property. After all, the Downtown Brooklyn Partnership was already on board. 

So that suggests that Alloy's voluntary investment of nearly $80 million was premised on a plan to achieve a significant upzoning, adding new buildable floor area to both deliver the public benefits (schools, affordable housing) as well as the anticipated profit. The challenge in evaluating the proposed project, as I wrote, includes understanding the terms of the deal between Alloy and ECF (which is currently not public).

The history

To be specific, Alloy closed on two transactions (see bottom) on 4/6/15. Its third transaction--a purchase, after two long-term leases--closed 7/28/17, but a memorandum of contract was signed 9/22/16, as one file below indicates. That was (updated) after the city's July 2016 Request for Expressions of Interest (RFEI); the sale didn't close until after Alloy was selected, which the company announced 4/3/17. 

(The address of the Limited Liabilities Companies, or LLCs, is 20 Jay Street, Suite 1003, which is Alloy's address, and the documents were signed by Alloy CEO Jared Della Valle.)

Here's the statement I got from a company spokesman earlier in the year:
Alloy closed on the first parcels on the block in April 2015 and then began assembling the balance of the block. In addition to pursuing the adjacent privately held parcels, we reached out to DOE/SCA to see if they would be interested in selling the excess air rights over the Khalil Gibran School. The initial introduction was made by the Downtown Brooklyn Partnership who put us in touch with SCA, and SCA invited ECF to join them at the first meeting we had. ECF had been independently looking at the KG site for potential redevelopment as a way to get a new facility for KG and build more school seats. ECF issued an RFEI in 2016 that Alloy responded to and was ultimately selected as the winning respondent. Many local elected officials, including Council Member Levin, were updated throughout that process. 
The numbers on parking

The two-tower project, with some 900 apartments planned, has gained support from transit advocacy groups because of the developer’s decision, already approved by City Council, to ditch otherwise required on-site parking, given the proximity to transit. 

“In real terms, does that have an financial impact on this development?” asked 33rd District Council Member Steve Levin at a hearing last month.

“It’s lost revenue, it’s also lost expense,” Alloy's Della Valle responded neutrally. “Parking in that neighborhood has proven to be valuable to people… It also limits who our audience might be on residential side.”

Perhaps, but a March 2012 policy brief from New York University’s Furman Center noted the significant cost-savings in not building parking, “with underground garages costing up to $50,000 per spot.”

The impact on FAC

This project would further the mission of the nonprofit Fifth Avenue Committee (FAC) by fostering a city “that is more diverse, more inclusive and more equitable than what we have now,” stated FAC Board co-chair Erica Gilles at the hearing. (FAC Executive Director Michelle de la Uz, a member of the City Planning Commission, recused herself from the commission’s vote.)

FAC Treasurer Juan Barahona, also said this project could help steady the organization’s finances.(That could mean fees for managing the lottery and other aspects of the affordable housing.) “Fortunately, FAC has a diverse revenue base, but my fear is that nearly half of our revenue, that comes from philanthropic, corporate, and government support, is too unreliable,” he said.