The Site 5 back story: Forest City's $1.47 million purchase in 1997, with development rights retained by NYC. Which was responsible for underutilization/blight, right?
On July 3, 1997, generations ago in development time, the parcel known as Site 5 of the Atlantic Terminal Urban Renewal Area (ATURA), bounded by Fourth, Flatbush, and Atlantic avenues and Pacific Street, was sold by New York City to developer Forest City Ratner.
For $1.47 million, as shown in the first document embedded below, and excerpted at right.
It soon became home to the big-box stores Modell's and P.C. Richard, which have, despite approved Atlantic Yards plans for a much larger tower, still hung on.
A substantial tower, 250 feet tall and nearly 440,000 square feet in bulk, was approved in 2006 as part of the initial Atlantic Yards plan.
Since 2016, Greenland Forest City Partners has floated an ambitious plan--not yet advanced, and delayed by litigation--to build far larger: a huge, two-tower project enabled by shifting the bulk of the unbuilt "Miss Brooklyn" tower, once slated for what's now the arena plaza.
Also, as I reported yesterday, during last year's bid for a second Amazon headquarters, Site 5 was proposed as a single 28-story tower with the bulk of the taller, narrower two-tower project. Such an office tower also could recur.
But what's the back story?
City retained rights
New York City, via its Department of Housing Preservation and Development (HPD), may have sold the site for what seems in retrospect a bargain, but it did retain important control.
At the time, with big-box stores contemplated--one for Modell's on Forest City property, the other for P.C. Richard after that company bought a segment of the site from Forest City--construction on that block would be limited to one-story buildings.
The city sold the land without an auction or sealed bids, but--I speculate--the market was weak and Forest City was already the designated developer for Atlantic Center, having earlier that decade bought into a project launched by Rose Associates and then becoming sole developer.
The city reserved "all development rights" beyond a Floor Area Ratio (FAR) of 1, as shown in the screenshot at right. The underlying zoning was C6-2, with an FAR of 6.02, allowing buildings six times bulkier.
The economics weren't quite right. Less than seven years later, as the economy boomed, and the city approved the rezoning of nearby Downtown Brooklyn, it never made an effort to monetize those development rights, allowing Forest City to announce its ambitious Atlantic Yards plans.
(Today, as I'll explain in a separate article, the city might gain very modestly, at most, from the Site 5 parcel.)
Lot subdivided for P.C. Richard
Not long after the purchase, as shown in a document below, Forest City got the parcel's single lot, Lot 1, subdivided into a second lot, Lot 16, which it sold to P.C. Richard. Given that the retailer was cited in the original deal between HPD and Forest City, that plan was part of what the city negotiated.
The price is not recorded, but P.C. Richard did get a mortgage for $5 million, as shown in a document below. That presumably covered its investment in both the land and the building.
Meanwhile, Forest City got a "project loan mortgage" and a "building loan mortgage," each for about $1.8 million, for the smaller Modell's site, as shown below.
It was known as the "Sneaker Stadium Store at the Shops at Atlantic Center," because Site 5 was once seen as an adjunct to the Atlantic Center mall across Atlantic Avenue and to the east.
Underutilization = blight
It is curious, though, that both lots on Block 927 were deemed "critically underutilized" and thus blighted in the Blight Study conducted in 2006 by Empire State Development Corporation (today Empire State Development), to enable eminent domain for the Atlantic Yards project.
Lot 1 and Lot 16 exhibited no other indicia of blight, such as structural damage or building code violations. However, underutilization was enough to doom it as among "Properties Exhibiting One or More Blight Characteristics," as shown in far left of the map, from the Blight Study.
After all, it was New York City's failure to exercise the development rights on reserve that left those lots underutilized. Perhaps, if New York State had truly aimed to address blight, it could've pressured the city to exercise those development rights.
Instead, the use of eminent domain was supposed to enable the Atlantic Yards developer control over the Modell's lease and the P.C. Richard building. That hasn't happened, however.
The documents
For $1.47 million, as shown in the first document embedded below, and excerpted at right.It soon became home to the big-box stores Modell's and P.C. Richard, which have, despite approved Atlantic Yards plans for a much larger tower, still hung on.
A substantial tower, 250 feet tall and nearly 440,000 square feet in bulk, was approved in 2006 as part of the initial Atlantic Yards plan.
Since 2016, Greenland Forest City Partners has floated an ambitious plan--not yet advanced, and delayed by litigation--to build far larger: a huge, two-tower project enabled by shifting the bulk of the unbuilt "Miss Brooklyn" tower, once slated for what's now the arena plaza.
Also, as I reported yesterday, during last year's bid for a second Amazon headquarters, Site 5 was proposed as a single 28-story tower with the bulk of the taller, narrower two-tower project. Such an office tower also could recur.
But what's the back story?
City retained rights
New York City, via its Department of Housing Preservation and Development (HPD), may have sold the site for what seems in retrospect a bargain, but it did retain important control.
At the time, with big-box stores contemplated--one for Modell's on Forest City property, the other for P.C. Richard after that company bought a segment of the site from Forest City--construction on that block would be limited to one-story buildings.
The city sold the land without an auction or sealed bids, but--I speculate--the market was weak and Forest City was already the designated developer for Atlantic Center, having earlier that decade bought into a project launched by Rose Associates and then becoming sole developer.
The city reserved "all development rights" beyond a Floor Area Ratio (FAR) of 1, as shown in the screenshot at right. The underlying zoning was C6-2, with an FAR of 6.02, allowing buildings six times bulkier.
The economics weren't quite right. Less than seven years later, as the economy boomed, and the city approved the rezoning of nearby Downtown Brooklyn, it never made an effort to monetize those development rights, allowing Forest City to announce its ambitious Atlantic Yards plans.
(Today, as I'll explain in a separate article, the city might gain very modestly, at most, from the Site 5 parcel.)
Lot subdivided for P.C. Richard
Not long after the purchase, as shown in a document below, Forest City got the parcel's single lot, Lot 1, subdivided into a second lot, Lot 16, which it sold to P.C. Richard. Given that the retailer was cited in the original deal between HPD and Forest City, that plan was part of what the city negotiated.
The price is not recorded, but P.C. Richard did get a mortgage for $5 million, as shown in a document below. That presumably covered its investment in both the land and the building.
Meanwhile, Forest City got a "project loan mortgage" and a "building loan mortgage," each for about $1.8 million, for the smaller Modell's site, as shown below.
It was known as the "Sneaker Stadium Store at the Shops at Atlantic Center," because Site 5 was once seen as an adjunct to the Atlantic Center mall across Atlantic Avenue and to the east.
Underutilization = blight
 |
| From the Blight Study |
It is curious, though, that both lots on Block 927 were deemed "critically underutilized" and thus blighted in the Blight Study conducted in 2006 by Empire State Development Corporation (today Empire State Development), to enable eminent domain for the Atlantic Yards project.
Lot 1 and Lot 16 exhibited no other indicia of blight, such as structural damage or building code violations. However, underutilization was enough to doom it as among "Properties Exhibiting One or More Blight Characteristics," as shown in far left of the map, from the Blight Study.
After all, it was New York City's failure to exercise the development rights on reserve that left those lots underutilized. Perhaps, if New York State had truly aimed to address blight, it could've pressured the city to exercise those development rights.
Instead, the use of eminent domain was supposed to enable the Atlantic Yards developer control over the Modell's lease and the P.C. Richard building. That hasn't happened, however.
The documents
HPD 1997 Sale of Site 5 to Forest City by Norman Oder on Scribd
P.C. Richard Mortgage Site 5 Block 927 by Norman Oder on Scribd
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