With 25% affordability (at least) in next four buildings, still a heavy lift needed to meet May 2025 deadline of 2,250 total units
At the 3/5/19 Atlantic Yards/Pacific Park Quality of Life meeting, Tobi Jaiyesimi, who serves as executive director of the Atlantic Yards Community Development Corporation (AY CDC) as well as project director for parent Empire State Development (ESD), reminded attendees of a deadline little more than six years away.
The “overall objective for our team,” she said, “is ensuring that we get this project completed, that we keep the developer to its commitments of developing 2,250 units of affordable housing by [May] 2025. The project's outside completion date is 2035.” In other words, buildings without affordable units—or with affordable units exceeding the project minimum—could take much longer, as main developer Greenland Forest City Partners (GFCP) began to disclose last year.
Of the required below-market (or income-linked) rental units, 782 have been built, leaving 1,468 to go. That will be a heavy lift, as the numbers suggest and I explain below.
The “overall objective for our team,” she said, “is ensuring that we get this project completed, that we keep the developer to its commitments of developing 2,250 units of affordable housing by [May] 2025. The project's outside completion date is 2035.” In other words, buildings without affordable units—or with affordable units exceeding the project minimum—could take much longer, as main developer Greenland Forest City Partners (GFCP) began to disclose last year.
Of the required below-market (or income-linked) rental units, 782 have been built, leaving 1,468 to go. That will be a heavy lift, as the numbers suggest and I explain below.
Next four buildings
The next building to start, B15 (aka 662 Pacific Street), to be developed by The Brodsky Organization, will not only have a 600-seat middle school, but “we anticipate that building will have at least 25% affordable housing, and that can also be said for the next three residential buildings,” Jaiyesimi said. That affordability is tied to new city subsidy requirements.
Those are B4 (18 Sixth Avenue), to be developed by GFCP and likely to start in the next few months, and B12 (615 Dean Street) and B13 (595 Dean Street), to be developed by TF Cornerstone. Jaiyesimi said B12 and B13 “won't come online this year, possibly 2020.”
“In terms of keeping the developer to a schedule or to a timeline for project development, the deadline is 2025, and ESD is committed to that,” she said. “Again, there are very strong liquidated damages” that apply if the deadline isn’t met.
All 2,250 affordable units must have either a Temporary Certificate of Occupancy or a Certificate of Occupancy by May 2025, "subject to extensions set forth in the Development Agreement and the General Project Plan." If not, the developer would pay $2,000/month per delayed unit.
“To date, the developer hasn't made any request for changes to that deadline,” she said. “Were that the case, it would require a force majeure” or similar unavoidable delay. (Note that the developer did get a force majeure extension in the deadline for the new Vanderbilt Yard, so we shouldn't dismiss the possibility.)
Doing the math
Right now, she said, of the units built, the 782 affordable units represent about a 60% affordable rate and “we hope to continue that standard of keeping affordable housing on par with other market-rate development at the site.” (The project requirement is 35% total. Note that the 60% affordability is achieved by skewing toward middle-income “affordable” housing.)
What’s the unit count? “I don’t have that in front of me,” Jaiyesimi said.
Scott Solish, GFCP project manager, clarified that B4 would have about 800 units, B15 about 300, and B12 and B13 would have about 700 total, but are still in the planning stages. (Others have reported 800 total units at those two sites.)
So that’s a total of either 1,800 or 1,900 apartments in the next four buildings, all being built on terra firma.
(The other development sites are six sites that require a costly, yet-to-be-built deck over the railyard and Site 5, currently home to P.C. Richard and Modell's, which almost surely will require a public process, lasting at least a year, to transfer the bulk from the unbuilt B1 tower--once planned for what's now the arena plaza--across Flatbush Avenue.)
With 25% affordability in these next four buildings, that would mean a total of 450 or 475 affordable units, depending on the total number of units. With 30% affordability, that would be 540 or 570 units.
Still a heavy lift
Given the total of 1,468 more affordable units required, that would leave—from worst-case to best-case scenario—1,108 to 898 units left to be built by 2025, after the construction of these four towers.
That’s a heavy lift, at least if they’re going to be built as a percentage—25% to 30%—of larger buildings containing market-rate units.
Put another way, 1,468 is 25% of 5,872 total units, leaving 4,404 market-rate units to be built by 2025, or 30% of 4,893 units, leaving 3,425 market-rate units.
That’s a lot of product to build in six years, much less to lease up.
The next building to start, B15 (aka 662 Pacific Street), to be developed by The Brodsky Organization, will not only have a 600-seat middle school, but “we anticipate that building will have at least 25% affordable housing, and that can also be said for the next three residential buildings,” Jaiyesimi said. That affordability is tied to new city subsidy requirements.
Those are B4 (18 Sixth Avenue), to be developed by GFCP and likely to start in the next few months, and B12 (615 Dean Street) and B13 (595 Dean Street), to be developed by TF Cornerstone. Jaiyesimi said B12 and B13 “won't come online this year, possibly 2020.”
“In terms of keeping the developer to a schedule or to a timeline for project development, the deadline is 2025, and ESD is committed to that,” she said. “Again, there are very strong liquidated damages” that apply if the deadline isn’t met.
All 2,250 affordable units must have either a Temporary Certificate of Occupancy or a Certificate of Occupancy by May 2025, "subject to extensions set forth in the Development Agreement and the General Project Plan." If not, the developer would pay $2,000/month per delayed unit.
“To date, the developer hasn't made any request for changes to that deadline,” she said. “Were that the case, it would require a force majeure” or similar unavoidable delay. (Note that the developer did get a force majeure extension in the deadline for the new Vanderbilt Yard, so we shouldn't dismiss the possibility.)
Doing the math
Right now, she said, of the units built, the 782 affordable units represent about a 60% affordable rate and “we hope to continue that standard of keeping affordable housing on par with other market-rate development at the site.” (The project requirement is 35% total. Note that the 60% affordability is achieved by skewing toward middle-income “affordable” housing.)
What’s the unit count? “I don’t have that in front of me,” Jaiyesimi said.
Scott Solish, GFCP project manager, clarified that B4 would have about 800 units, B15 about 300, and B12 and B13 would have about 700 total, but are still in the planning stages. (Others have reported 800 total units at those two sites.)
So that’s a total of either 1,800 or 1,900 apartments in the next four buildings, all being built on terra firma.
(The other development sites are six sites that require a costly, yet-to-be-built deck over the railyard and Site 5, currently home to P.C. Richard and Modell's, which almost surely will require a public process, lasting at least a year, to transfer the bulk from the unbuilt B1 tower--once planned for what's now the arena plaza--across Flatbush Avenue.)
With 25% affordability in these next four buildings, that would mean a total of 450 or 475 affordable units, depending on the total number of units. With 30% affordability, that would be 540 or 570 units.
Still a heavy lift
Given the total of 1,468 more affordable units required, that would leave—from worst-case to best-case scenario—1,108 to 898 units left to be built by 2025, after the construction of these four towers.
That’s a heavy lift, at least if they’re going to be built as a percentage—25% to 30%—of larger buildings containing market-rate units.
Put another way, 1,468 is 25% of 5,872 total units, leaving 4,404 market-rate units to be built by 2025, or 30% of 4,893 units, leaving 3,425 market-rate units.
That’s a lot of product to build in six years, much less to lease up.
That raises the possibility of building towers with a much higher percentage of affordable housing, though perhaps aimed at middle-income households (like 535 Carlton and 38 Sixth, or even the buildings at Hunters Point South).
Or, perhaps, seeing the deadline stretch.
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