When will Pacific Park be done? Despite publicly stated 2035 target, developer and state officials deflect questions
This is the sixth and last post concerning the Atlantic Yards/Pacific Park Quality of Life meeting Tuesday 10/9/18, held at 55 Hanson Place and sponsored by Empire State Development (ESD). The first post concerned the Atlantic Yards Community Development Corporation; the second post was about work in the Vanderbilt Yard; the third post concerned contracts for future project monitors; the fourth post concerned plans for the B4 tower at the northeast corner of the arena block; the fifth post was about the other three towers planned soon. I wasn't able to attend but am relying on an audiotape of the meeting.
So when might Pacific Park be finished? Despite a recent document targeting 2035 that was filed by the project developer--as I wrote for The Bridge--residents posing pointed questions at the recent meeting faced obfuscation, misdirection, and denial from representatives of the developer and the state.
The project formerly known as Atlantic Yards was long supposed to have a ten-year buildout, once it got started, but the schedule slipped. As of summer 2014, with the arena built and one of 15 (or 16) towers completed, developer Greenland Forest City Partners (GFCP) issued a tentative timetable and a schematic, both estimating project completion by 2025.
Similarly, GFCP, in a June 2015 filing with the New York State Attorney General aimed at potential buyers of the 550 Vanderbilt condominium, estimated that Pacific Park would be substantially completed by 2025. Only in May 2018 did the developer update its estimate to 2035, as I reported for The Bridge in August.
There had been ample reason for doubt about 2025. The schedule had slipped, with towers announced but not launched. GFCP did not update a timetable for all individual buildings, while insisting that the obligation to build 2,250 affordable units (among 6,430 total) by 2025 would be met.
Four towers have been completed, with no new ones started. But the project recently gained a boost: Greenland USA--now by far the dominant power in GFCP, with 95% ownership going forward--has announced plans to start B4 (18 Sixth Avenue) next year, in the northeast corner of the arena block.
Also, GFCP has sold development rights to three other sites on terra firma--B15, just east of the arena block, and B12 and B13, on the southeast block--to two other developers, The Brodsky Organization and TF Cornerstone, respectively. Both intend to start construction within the next year or two.
However, construction over the Metropolitan Transportation Authority’s Vanderbilt Yard, the site of six future towers, requires more infrastructure, and the Site 5 project, likely involving two towers at one site, needs an approval process that could last a year and hasn't even started. So questions persist about the timetable.
Starting the questions
"When is the full project completion?" asked resident Steve Ettlinger at the meeting, held bimonthly to hear residents’ concerns and offer project updates.
"We’re still figuring out the overall phasing of remaining buildings, but in terms of our obligations, we’re going to meet them," responded Scott Solish, Greenland USA project manager, referring to the 2025 affordable housing deadline.
"I don’t have an outside date," Solish responded. "I think I talked about this in January [at another public meeting]. "In terms of the obligations and commitments… we’re going to meet every single one."
"You went from 2025 to 2035," noted Ettlinger (who audiotaped the meeting for me).
"We didn’t go from 2025 to 2035," Solish countered.
Krashes noted that my article had pointed out that potential condo buyers, once told 2025, are now told 2035.
"It's not a revision of the project plan," Solish said. "It was a change in the Offering Plan; we updated the Offering Plan."
"But you’re giving new owners different information than you gave to the people who bought before, so there is a change there," Krashes responded. "What precipitated that change?"
The state's response
A response came from Tobi Jaiyesimi, Atlantic Yards Project Manager for Empire State Development (ESD), the state authority that oversees and shepherds Atlantic Yards/Pacific Park.
"So the outside completion date for the project is 2035," she said. "The 2025 date, and the penalties that are attached to it, are related to the 2,250 units of affordable housing, and I think we used the understanding that 2025 was the project date, because, again, if we’re having this conversation about affordability and diversity across the project site, it’s understood that you’d want to have those 2250 units dispersed throughout the project site."
Indeed, that's what the developer had proposed. Given that many of the affordable units were supposed to be in mixed-income buildings, and cross-subsidized by market-rate units, Greenland Forest City's 2014 schedule contemplated several buildings with 50% below-market units, including four of the six towers over railyard, which awaits a deck and makes up a plurality of the site.
The last two towers, once slated for completion in 2025, were to contain some 1,100 units, half of them affordable. (As of now, 782 affordable units have been built; 1,468 apartments remain to be built.)
"So, again, there wasn’t a revised project completion date, that would require a change in the General Project Plan"--a state document--"which again has not come up and we would all be aware of that," Jaiyesimi continued. "But the understanding is that, by 2025 we will have 2,250 units of affordable housing, and the General Project Plan anticipates an outside completion date of 2035, but"—she went off on a jokey tangent—"I’m not sure how old I’ll be in 2035, but I won’t be here."
What about the GPP?
Neither Jaiyesimi nor a colleague correctly cited the document.
The Modified General Project Plan issued when the project was first approved, in 2006, anticipated a ten-year buildout, with completion by 2016. Then the project faced delays, with various terms renegotiated.
The 2009 Modified General Project Plan, issued when the project faced revisions, stuck to a ten-year schedule: "The Project documentation to be negotiated between ESDC and the Project Sponsor will require the Project Sponsors to use commercially reasonable efforts to achieve this schedule and to complete the entire Project by 2019."
A footnote pointed to an accompanying Technical Memorandum (Parts 1, 2), which noted that the "anticipated date of the full build-out of the project... has been extended from 2016 to 2019." In Part 3, that memorandum acknowledged the potential for future delays and assessed "a hypothetical delay of approximately five years," thus analyzing the impacts of a 2024 build year. There was no mention of 2035.
Rather, it was the Development Agreement--that future documentation cited in the Modified GPP--that set 2035 as an "outside date." The agreement required full completion 25 years after the project's "Effective Date," which was May 12, 2010. (The latter was defined as when the state delivered certain properties taken via eminent domain to the developer.)
The belated disclosure sparked significant outrage, fueling a lawsuit, and finally a court-ordered Supplemental Environmental Impact Statement to assess the impacts of a 25-year buildout. That prompted the threat of a lawsuit, organized by the coalition BrooklynSpeaks, which was averted by the settlement announced in June 2014 promising the new 2025 affordable housing deadline.
Back to the meeting
Nobody at the meeting pointed to misstatements regarding the General Project Plan, but the discussion continued. "Speaking as someone who’s lived in the vicinity of the project since before it’s announced, and heard all the different dates, and the changes," Krashes said, "I’ve witnessed my neighbors investing money in homes or investing money into businesses because of the time frames that the developer lays out, or the state lays out... and I’ve seen people’s lives affected deeply by these calculations."
The 550 Vanderbilt buyers, he said, were told "this project is going to be done by 2025." (Actually, while they were told 2025 was anticipated, they were warned that "construction in general... is subject to unanticipated delays," so there was always a loophole.)
"So they have every expectation that by 2025 they’re going to have open space looking out their windows… and they’re going to have a complete project and not be exposed to construction for a long time." Krashes, who lives on Dean Street across from the project site, said it "is super exhausting... to be exposed to construction for a long period." He reiterated his question: "why the change?"
"There wasn’t a change," Jaiyesimi responded.
"You changed what was explained to people buying into 550 Vanderbilt," Krashes said.
"Because the offering plan is a disclosure document," interjected resident Gib Veconi, a leader of the BrooklynSpeaks coalition.
"So what new information came into the picture?" asked Krashes.
"But there isn’t any new information," Jaiyesimi said.
Changing assumptions
Her colleague, Senior VP for Community Relations Marion Phillips III, intervened. "The reality is when we entered into an agreement in 2014 to complete the affordable units by 2025," he said, "the assumption has always been that Greenland Forest City is in this to make money, and that they would complete the entire project by that time frame."
However, at some point Forest City Realty Trust--the junior partner in the joint venture--concluded that it could not make money by completing the project by 2025. In November 2016, it announced a unilateral pause in the project, citing rising construction costs, a glut of market-rate units in and around Downtown Brooklyn, and the loss of an expected project-wide tax break known as 421-a.
(Tellingly, it was not a joint announcement by GFCP and, in retrospect, signaled tensions between the joint venture partner. Greenland, then a 70% owner of the project going forward, later bought out all but 5% of Forest City's share.)
"The GPP [General Project Plan] has always said 2035. So there is no new change," said Phillips. "There has not been any public change, any document change. The state entered into an agreement to separate the conclusion date and the affordable housing deadline. We accelerated that time frame so we could have the affordable units online. That’s the only thing that occurred. There has not been a change in the outside date of 2035. And so, Gib I believe answered it perfectly... There has not been any change in any of our documents."
"From the state’s perspective, and the project’s perspective," Phillips said, "the outside date is 2035, and the affordable units must be completed by 2025, or there are liquidated damages on the affordable units."
A missed opportunity for disclosure
Krashes then read a question that I'd posed publicly before the meeting: why, if Forest City had in November 2016 revised its financial outlook for the project to 2035, did the joint venture not change its estimate in its filings to the Attorney General regarding the condo until May 2018?
Jaiyesimi ignored the question.
Krashes, a bit later, suggested a lack of candor from the developer and project sponsor: "You lay plans in your life, and you discover later that it was anticipatable, and it makes you angry."
Veconi, who has experience in the securities industry--and has clashed with Krashes over neighborhood responses to the project--then interjected, "This is a new role for me here in this meeting, explicating some of these issues."
"Do you work for the state?" one resident interrupted tartly.
"I do not work for the state. I’m also certainly not counsel for Greenland Forest City Partners," Veconi said. "To Norman’s question, about why Forest City made a statement [regarding their financial timeline] and why the Offering Plan for 550 [Vanderbilt] was updated later, if I was an attorney for someone who had purchased in 550, I would say that the Offering Plan, when it said 2025, was wrong, and if I had bought one of those units, I would be upset about it, because I would have read 2025 when the reality always was 2035. That is the real outside build date."
That's dubious. While the outside date was indeed 2035, as of the June 2015 Offering Plan, a 2025 timeline was plausible: Greenland Forest City had produced its tower-by-tower timeline in the previous year, and had neither updated nor renounced it.
As of September 2015, when the developer announced plans for B12 (aka 615 Dean Street), that tower was slightly delayed: it was supposed to have started in July 2015. But as of December 2015, when the developer announced plans for B15 (aka 664 Pacific Street), it had until July 2016 to start. Neither did.
Then again, those who bought condos somewhat later--after the November 2016 announcement by Forest City--might more plausibly claim they were misled, though the underlying documents always left wiggle room and likely legal protection.
"So everything isn’t about changes in the construction schedule," Veconi said. "Sometimes people just make mistakes in legal documents. I’m not saying that’s what happened here."
A "mistake" seems a generous interpretation, given the role of legal experts in crafting such documents. After all, the failure to update the Offering Plan candidly and promptly surely served the developers' business interests: to get units sold under the most favorable conditions.
"Can I ask the state to weigh on what you just said?" Krashes said.
"It’s not our Offering Plan," Phillips said. "We only have the GPP [General Project Plan]. Any legal documents between developer and the potential owner of the unit is between them."
How will it get done?
A little later, Veconi returned to the issue. "The difference between [2025 and 2035], as Marion [Phillips] pointed out, is 2035 is the outside build date for everything in the project, 2025 is the affordable housing," he said. "Since affordable housing generally requires, economically, some kind of cross-subsidy from market-rate [housing], it’s very, very difficult to see how all of the affordable units could ever be built without the market-rate to cross-subsidize."
"It doesn’t mean they have to be, someone may come up with a way of doing it," Veconi said. "But it would be hard to imagine in today’s environment how that would be possible. All that being said, like everybody else in this room, I’m very curious as how to how, in my mind, all the market-rate [units] would have to be built by 2025 to guarantee the affordable housing gets done. And I am very curious and am absolutely interested in hearing more from the developers and their partners about how that could happen."
That central question hasn't been answered. Given the need to build a platform for six towers over the railyard, and the business reasons not to flood the market with units, construction of the full project by 2025 seems unlikely, from both logistical and economic perspectives. Even a former project executive, speaking casually, earlier this year estimated the project would take some ten more years.
As I've speculated, to avoid the fines imposed by failing to deliver the affordable units, the developer might claim delays. Or the affordable units might arrive ahead of the market-rate units, perhaps thanks to higher income limits--and less affordability--than long promised. Also, given that all buildings getting 421-a benefits must contain affordable housing, Pacific Park ultimately might contain more below-market units than promised.
For now, though, the developers' disclosure to buyers--that “the remaining buildings, and the balance of the public park, [are] projected to be completed in phases by 2035"--is the best available estimate.
So when might Pacific Park be finished? Despite a recent document targeting 2035 that was filed by the project developer--as I wrote for The Bridge--residents posing pointed questions at the recent meeting faced obfuscation, misdirection, and denial from representatives of the developer and the state.
The project formerly known as Atlantic Yards was long supposed to have a ten-year buildout, once it got started, but the schedule slipped. As of summer 2014, with the arena built and one of 15 (or 16) towers completed, developer Greenland Forest City Partners (GFCP) issued a tentative timetable and a schematic, both estimating project completion by 2025.
Similarly, GFCP, in a June 2015 filing with the New York State Attorney General aimed at potential buyers of the 550 Vanderbilt condominium, estimated that Pacific Park would be substantially completed by 2025. Only in May 2018 did the developer update its estimate to 2035, as I reported for The Bridge in August.
There had been ample reason for doubt about 2025. The schedule had slipped, with towers announced but not launched. GFCP did not update a timetable for all individual buildings, while insisting that the obligation to build 2,250 affordable units (among 6,430 total) by 2025 would be met.
 |
| B4 rendering by Perkins Eastman |
Four towers have been completed, with no new ones started. But the project recently gained a boost: Greenland USA--now by far the dominant power in GFCP, with 95% ownership going forward--has announced plans to start B4 (18 Sixth Avenue) next year, in the northeast corner of the arena block.
Also, GFCP has sold development rights to three other sites on terra firma--B15, just east of the arena block, and B12 and B13, on the southeast block--to two other developers, The Brodsky Organization and TF Cornerstone, respectively. Both intend to start construction within the next year or two.
However, construction over the Metropolitan Transportation Authority’s Vanderbilt Yard, the site of six future towers, requires more infrastructure, and the Site 5 project, likely involving two towers at one site, needs an approval process that could last a year and hasn't even started. So questions persist about the timetable.
Starting the questions
"When is the full project completion?" asked resident Steve Ettlinger at the meeting, held bimonthly to hear residents’ concerns and offer project updates.
"We’re still figuring out the overall phasing of remaining buildings, but in terms of our obligations, we’re going to meet them," responded Scott Solish, Greenland USA project manager, referring to the 2025 affordable housing deadline.
"The project has technically an outside date of 2035," said resident Peter Krashes later, noting that the schedule announced in 2014 hasn't been met. "What’s the outside date for the last building right now?"
"I don’t have an outside date," Solish responded. "I think I talked about this in January [at another public meeting]. "In terms of the obligations and commitments… we’re going to meet every single one."
"You went from 2025 to 2035," noted Ettlinger (who audiotaped the meeting for me).
"We didn’t go from 2025 to 2035," Solish countered.
Krashes noted that my article had pointed out that potential condo buyers, once told 2025, are now told 2035.
"It's not a revision of the project plan," Solish said. "It was a change in the Offering Plan; we updated the Offering Plan."
"But you’re giving new owners different information than you gave to the people who bought before, so there is a change there," Krashes responded. "What precipitated that change?"
The state's response
A response came from Tobi Jaiyesimi, Atlantic Yards Project Manager for Empire State Development (ESD), the state authority that oversees and shepherds Atlantic Yards/Pacific Park.
"So the outside completion date for the project is 2035," she said. "The 2025 date, and the penalties that are attached to it, are related to the 2,250 units of affordable housing, and I think we used the understanding that 2025 was the project date, because, again, if we’re having this conversation about affordability and diversity across the project site, it’s understood that you’d want to have those 2250 units dispersed throughout the project site."
Indeed, that's what the developer had proposed. Given that many of the affordable units were supposed to be in mixed-income buildings, and cross-subsidized by market-rate units, Greenland Forest City's 2014 schedule contemplated several buildings with 50% below-market units, including four of the six towers over railyard, which awaits a deck and makes up a plurality of the site.
 |
| The outdated schedule, from August 2014 |
"So, again, there wasn’t a revised project completion date, that would require a change in the General Project Plan"--a state document--"which again has not come up and we would all be aware of that," Jaiyesimi continued. "But the understanding is that, by 2025 we will have 2,250 units of affordable housing, and the General Project Plan anticipates an outside completion date of 2035, but"—she went off on a jokey tangent—"I’m not sure how old I’ll be in 2035, but I won’t be here."
What about the GPP?
 |
| 2006 Modified General Project Plan |
The Modified General Project Plan issued when the project was first approved, in 2006, anticipated a ten-year buildout, with completion by 2016. Then the project faced delays, with various terms renegotiated.
The 2009 Modified General Project Plan, issued when the project faced revisions, stuck to a ten-year schedule: "The Project documentation to be negotiated between ESDC and the Project Sponsor will require the Project Sponsors to use commercially reasonable efforts to achieve this schedule and to complete the entire Project by 2019."
A footnote pointed to an accompanying Technical Memorandum (Parts 1, 2), which noted that the "anticipated date of the full build-out of the project... has been extended from 2016 to 2019." In Part 3, that memorandum acknowledged the potential for future delays and assessed "a hypothetical delay of approximately five years," thus analyzing the impacts of a 2024 build year. There was no mention of 2035.
Rather, it was the Development Agreement--that future documentation cited in the Modified GPP--that set 2035 as an "outside date." The agreement required full completion 25 years after the project's "Effective Date," which was May 12, 2010. (The latter was defined as when the state delivered certain properties taken via eminent domain to the developer.)
The belated disclosure sparked significant outrage, fueling a lawsuit, and finally a court-ordered Supplemental Environmental Impact Statement to assess the impacts of a 25-year buildout. That prompted the threat of a lawsuit, organized by the coalition BrooklynSpeaks, which was averted by the settlement announced in June 2014 promising the new 2025 affordable housing deadline.
Back to the meeting
Nobody at the meeting pointed to misstatements regarding the General Project Plan, but the discussion continued. "Speaking as someone who’s lived in the vicinity of the project since before it’s announced, and heard all the different dates, and the changes," Krashes said, "I’ve witnessed my neighbors investing money in homes or investing money into businesses because of the time frames that the developer lays out, or the state lays out... and I’ve seen people’s lives affected deeply by these calculations."
The 550 Vanderbilt buyers, he said, were told "this project is going to be done by 2025." (Actually, while they were told 2025 was anticipated, they were warned that "construction in general... is subject to unanticipated delays," so there was always a loophole.)
"So they have every expectation that by 2025 they’re going to have open space looking out their windows… and they’re going to have a complete project and not be exposed to construction for a long time." Krashes, who lives on Dean Street across from the project site, said it "is super exhausting... to be exposed to construction for a long period." He reiterated his question: "why the change?"
"There wasn’t a change," Jaiyesimi responded.
"You changed what was explained to people buying into 550 Vanderbilt," Krashes said.
"Because the offering plan is a disclosure document," interjected resident Gib Veconi, a leader of the BrooklynSpeaks coalition.
"So what new information came into the picture?" asked Krashes.
"But there isn’t any new information," Jaiyesimi said.
Changing assumptions
Her colleague, Senior VP for Community Relations Marion Phillips III, intervened. "The reality is when we entered into an agreement in 2014 to complete the affordable units by 2025," he said, "the assumption has always been that Greenland Forest City is in this to make money, and that they would complete the entire project by that time frame."
However, at some point Forest City Realty Trust--the junior partner in the joint venture--concluded that it could not make money by completing the project by 2025. In November 2016, it announced a unilateral pause in the project, citing rising construction costs, a glut of market-rate units in and around Downtown Brooklyn, and the loss of an expected project-wide tax break known as 421-a.
(Tellingly, it was not a joint announcement by GFCP and, in retrospect, signaled tensions between the joint venture partner. Greenland, then a 70% owner of the project going forward, later bought out all but 5% of Forest City's share.)
"The GPP [General Project Plan] has always said 2035. So there is no new change," said Phillips. "There has not been any public change, any document change. The state entered into an agreement to separate the conclusion date and the affordable housing deadline. We accelerated that time frame so we could have the affordable units online. That’s the only thing that occurred. There has not been a change in the outside date of 2035. And so, Gib I believe answered it perfectly... There has not been any change in any of our documents."
"From the state’s perspective, and the project’s perspective," Phillips said, "the outside date is 2035, and the affordable units must be completed by 2025, or there are liquidated damages on the affordable units."
A missed opportunity for disclosure
Krashes then read a question that I'd posed publicly before the meeting: why, if Forest City had in November 2016 revised its financial outlook for the project to 2035, did the joint venture not change its estimate in its filings to the Attorney General regarding the condo until May 2018?
Jaiyesimi ignored the question.
Krashes, a bit later, suggested a lack of candor from the developer and project sponsor: "You lay plans in your life, and you discover later that it was anticipatable, and it makes you angry."
Veconi, who has experience in the securities industry--and has clashed with Krashes over neighborhood responses to the project--then interjected, "This is a new role for me here in this meeting, explicating some of these issues."
"Do you work for the state?" one resident interrupted tartly.
"I do not work for the state. I’m also certainly not counsel for Greenland Forest City Partners," Veconi said. "To Norman’s question, about why Forest City made a statement [regarding their financial timeline] and why the Offering Plan for 550 [Vanderbilt] was updated later, if I was an attorney for someone who had purchased in 550, I would say that the Offering Plan, when it said 2025, was wrong, and if I had bought one of those units, I would be upset about it, because I would have read 2025 when the reality always was 2035. That is the real outside build date."
That's dubious. While the outside date was indeed 2035, as of the June 2015 Offering Plan, a 2025 timeline was plausible: Greenland Forest City had produced its tower-by-tower timeline in the previous year, and had neither updated nor renounced it.
As of September 2015, when the developer announced plans for B12 (aka 615 Dean Street), that tower was slightly delayed: it was supposed to have started in July 2015. But as of December 2015, when the developer announced plans for B15 (aka 664 Pacific Street), it had until July 2016 to start. Neither did.
Then again, those who bought condos somewhat later--after the November 2016 announcement by Forest City--might more plausibly claim they were misled, though the underlying documents always left wiggle room and likely legal protection.
"So everything isn’t about changes in the construction schedule," Veconi said. "Sometimes people just make mistakes in legal documents. I’m not saying that’s what happened here."
A "mistake" seems a generous interpretation, given the role of legal experts in crafting such documents. After all, the failure to update the Offering Plan candidly and promptly surely served the developers' business interests: to get units sold under the most favorable conditions.
"Can I ask the state to weigh on what you just said?" Krashes said.
"It’s not our Offering Plan," Phillips said. "We only have the GPP [General Project Plan]. Any legal documents between developer and the potential owner of the unit is between them."
How will it get done?
A little later, Veconi returned to the issue. "The difference between [2025 and 2035], as Marion [Phillips] pointed out, is 2035 is the outside build date for everything in the project, 2025 is the affordable housing," he said. "Since affordable housing generally requires, economically, some kind of cross-subsidy from market-rate [housing], it’s very, very difficult to see how all of the affordable units could ever be built without the market-rate to cross-subsidize."
"It doesn’t mean they have to be, someone may come up with a way of doing it," Veconi said. "But it would be hard to imagine in today’s environment how that would be possible. All that being said, like everybody else in this room, I’m very curious as how to how, in my mind, all the market-rate [units] would have to be built by 2025 to guarantee the affordable housing gets done. And I am very curious and am absolutely interested in hearing more from the developers and their partners about how that could happen."
That central question hasn't been answered. Given the need to build a platform for six towers over the railyard, and the business reasons not to flood the market with units, construction of the full project by 2025 seems unlikely, from both logistical and economic perspectives. Even a former project executive, speaking casually, earlier this year estimated the project would take some ten more years.
As I've speculated, to avoid the fines imposed by failing to deliver the affordable units, the developer might claim delays. Or the affordable units might arrive ahead of the market-rate units, perhaps thanks to higher income limits--and less affordability--than long promised. Also, given that all buildings getting 421-a benefits must contain affordable housing, Pacific Park ultimately might contain more below-market units than promised.
For now, though, the developers' disclosure to buyers--that “the remaining buildings, and the balance of the public park, [are] projected to be completed in phases by 2035"--is the best available estimate.
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