What is the Pacific Park Owners Association? The funding mechanism for the Pacific Park Conservancy.
This is the tenth of ten articles on the 11/19/19 Quality of Life meeting, which focused on the new B12 and B13 towers. The first concerned plans to finally move forward with Site 5. The second concerned the timing of the platform over the railyard. The third concerned the single parking garage entrance on the block. The fourth concerned the design of the new towers. The fifth concerned open space plans on that southeast block. The sixth concerned B4, Times Plaza, and the railyard. The seventh concerned art on the Dean Street construction fence. The eighth concerned recent traffic chaos around Disney on Ice. The ninth concerned the Pacific Park Conservancy.
At the meeting, we learned that the Pacific Park Conservancy, the entity overseeing the project's open space, is funded by the Pacific Park Owners Association--known as the Association. But what is it?
The Declaration at bottom, which established the Pacific Park Owners Association as of 12/19/16, offers some details. Note that it is binding on all present and future owners of development sites. (That omits the Barclays Center operator.)
Each Owner becomes a Member of the Association. In the case of a building with condominiums--so far, only 550 Vanderbilt--the condo board of managers becomes the Owner.
Association Obligations
As indicated on p. 6 of the document, excerpted at right, the Association Obligations include:
What the Conservancy does
Each year, the Conservancy will propose a budget, which will be reviewed by the Association. That review is limited to determining whether the proposed budget will allow the Conservancy "to operate and manage the Open Space in accordance with and not materially in excess of the Operating Standard."
If the Association disapproves of the budget, they can go into arbitration, during which time the funding would either be either 100% of the proposed budget or 105% of the previous year's budget.
The Conservancy can raise money outside the Association.
Funding allocation depends on the building
As stated on p. 17, each owner will be assigned its funding responsibility on the basis of above-grade square footage, citing methodology in Exhibit H and illustrated in Exhibit E, below.
But Exhibit E is illustrative purposes only.Note the 14.64% allocated to the giant B1 tower, which won't be built. If the unused bulk is transferred in large part to the Site 5 project, as is contemplated, presumably that building's percentage will increase.
Exhibit H, on p. 90 of the document, says owners of the B14 (535 Carlton) and B3 (38 Sixth) towers, which contain 100% affordable housing, would pay only $22,000 each year, subject to an escalation factor--and also an adjustment if any other building pays less on a square footage basis.
All other buildings shall pay based on a gross square footage, with a 46% discount for affordable housing, given that each gross square foot attributable to affordable housing units is deemed to comprise .54 square feet,
For 2019, B14 and b3 would pay $22,000 each. For the remainder of the budget, B11 (550 Vanderbilt) pays $175,000, while B2 (461 Dean) pays $50,000. If the total needed was less than $225,000, they'd make a 78/22% split.
(Indeed, according to a various amendments to the 550 Vanderbilt Offering Plan, $175,000 was allocated in 2017 to fund the Conservancy. For 2018 and 2019, the building paid $230,000 each year.)
Keep in mind that the buildings have multiple developers, and owners. So B2, which has different owner (Principal Global Investors) than master developer Greenland Forest City Partners, still pays for the Conservancy, though that building has no nearby access to open space.
Voting methodology and schedule
Exhibit I sets out a methodology for voting on funding, and on all other matters. Regarding funding votes, B3 and B14 essentially have 2.5% voting share.
Notwithstanding that, during the first three years of conservancy operations, those building's voting share regarding the budget must match the percentage that its funding allocation represents of the conservancy budget--a somewhat larger number.
As with the funding obligation, the voting share reflects square footage, adjusted by a 46% discount for affordable housing.
Regarding votes on all matters other than funding vote, the voting share reflects gross square foot area above grade.
Each projected voting share is depicted in Exhibit J, again for illustrative purposes only and assuming a complete buildout. It assumes all buildings are built to the maximum square footage permissible as of 2009, and with no discount factor applied regarding affordable housing units.
Each time a building comes online, the funding allocation and voting share will be revised. The Association has the authority to impose special assessments.
The document
The Declaration establishing the Pacific Park Owners Association is actually 204 pages. The 93-page version below is the full document, minus Exhibit K, which is the project's Design Guidelines. That document is otherwise available separately.
At the meeting, we learned that the Pacific Park Conservancy, the entity overseeing the project's open space, is funded by the Pacific Park Owners Association--known as the Association. But what is it?
The Declaration at bottom, which established the Pacific Park Owners Association as of 12/19/16, offers some details. Note that it is binding on all present and future owners of development sites. (That omits the Barclays Center operator.)
Each Owner becomes a Member of the Association. In the case of a building with condominiums--so far, only 550 Vanderbilt--the condo board of managers becomes the Owner.
Association Obligations
As indicated on p. 6 of the document, excerpted at right, the Association Obligations include:
- review and approve the annual Conservancy Budget
- review and approve the annual Budget for the Association
- impose and collect Association Charges and Special Assessments from the Owners and fund the operation of the Conservancy and any other Association Obligations
- perform the POA Maintenance Obligations
- establish rules and regulations
What the Conservancy does
Each year, the Conservancy will propose a budget, which will be reviewed by the Association. That review is limited to determining whether the proposed budget will allow the Conservancy "to operate and manage the Open Space in accordance with and not materially in excess of the Operating Standard."
If the Association disapproves of the budget, they can go into arbitration, during which time the funding would either be either 100% of the proposed budget or 105% of the previous year's budget.
The Conservancy can raise money outside the Association.
Funding allocation depends on the building
As stated on p. 17, each owner will be assigned its funding responsibility on the basis of above-grade square footage, citing methodology in Exhibit H and illustrated in Exhibit E, below.
But Exhibit E is illustrative purposes only.Note the 14.64% allocated to the giant B1 tower, which won't be built. If the unused bulk is transferred in large part to the Site 5 project, as is contemplated, presumably that building's percentage will increase.
Exhibit H, on p. 90 of the document, says owners of the B14 (535 Carlton) and B3 (38 Sixth) towers, which contain 100% affordable housing, would pay only $22,000 each year, subject to an escalation factor--and also an adjustment if any other building pays less on a square footage basis.
All other buildings shall pay based on a gross square footage, with a 46% discount for affordable housing, given that each gross square foot attributable to affordable housing units is deemed to comprise .54 square feet,
For 2019, B14 and b3 would pay $22,000 each. For the remainder of the budget, B11 (550 Vanderbilt) pays $175,000, while B2 (461 Dean) pays $50,000. If the total needed was less than $225,000, they'd make a 78/22% split.
(Indeed, according to a various amendments to the 550 Vanderbilt Offering Plan, $175,000 was allocated in 2017 to fund the Conservancy. For 2018 and 2019, the building paid $230,000 each year.)
Keep in mind that the buildings have multiple developers, and owners. So B2, which has different owner (Principal Global Investors) than master developer Greenland Forest City Partners, still pays for the Conservancy, though that building has no nearby access to open space.
Voting methodology and schedule
Exhibit I sets out a methodology for voting on funding, and on all other matters. Regarding funding votes, B3 and B14 essentially have 2.5% voting share.
Notwithstanding that, during the first three years of conservancy operations, those building's voting share regarding the budget must match the percentage that its funding allocation represents of the conservancy budget--a somewhat larger number.
As with the funding obligation, the voting share reflects square footage, adjusted by a 46% discount for affordable housing.Regarding votes on all matters other than funding vote, the voting share reflects gross square foot area above grade.
Each projected voting share is depicted in Exhibit J, again for illustrative purposes only and assuming a complete buildout. It assumes all buildings are built to the maximum square footage permissible as of 2009, and with no discount factor applied regarding affordable housing units.
Each time a building comes online, the funding allocation and voting share will be revised. The Association has the authority to impose special assessments.
The document
The Declaration establishing the Pacific Park Owners Association is actually 204 pages. The 93-page version below is the full document, minus Exhibit K, which is the project's Design Guidelines. That document is otherwise available separately.
I would LOVVVEEEE to know what that $230,000 went towards. The landscaped area behind 550 Vanderbilt needs some serious mulching, and dead plants have not been replaced. Note that that landscaped area at 535 Carlton received a fresh layer of mulch and dead plants were replaced this summer (only to die within weeks from lack of watering). There are also three dead street trees on Vanderbilt in front of 550 Vanderbilt that have not seen a day of life in 2019.
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