Developer's document suggests four towers needed to meet affordable housing requirement (but three might be enough); May 2025 deadline more questionable (but not impossible)

The chances of delivering all 2,250 units of required affordable housing in the Atlantic Yards/Pacific Park project by the May 31, 2025 deadline seem more questionable--though not impossible--given predictions in a recently produced document and the lack of announced progress on a required platform.

July 2020

The remaining 877 units, according to a document (right, and in larger form below) delivered in July to New York State by master developer Greenland Forest City Partners, would be included in four of the six planned towers over the Vanderbilt Yard. 

The vision in that document seems unlikely. 

That two-block railyard requires an expensive deck (or platform), in two phases, for each tranche of three towers can be built. The first phase was supposed to start in early 2020 and be completed by the end of 2022--a timetable that can't be met.

The first phase of the deck was supposed to start this year--and has received some approvals--but no announcement has been made regarding a timetable. Also, a permit has been filed for the first tower over the railyard, B5, but approvals have not yet been granted.

B5/B6/B7 would be the first three towers over the Vanderbilt Yard

Delays pressure timetable

So, while building that deck and three large towers in 4.5 years remains possible from an engineering and construction standpoint, the time crunch, coupled with the uncertainties associated with the coronavirus crisis, compounds the doubt. 

(Perhaps we'll learn more at tomorrow's CB 2 meeting, and the Nov. 17 Quality of Life meeting.)

The first three towers, at least as indicated in the document, would include 1,790 apartments: 1,010 market-rate units and 780 income-restricted "affordable" ones. That's a significant amount of real-estate product to lease in a short time in adjacent buildings--even assuming that some of the affordable units, if targeted to lower-income households, would be in high demand.

And that's without adding the 97 projected affordable units (plus another 424 market-rate ones) in the fourth tower, B8, over the second railyard block, which requires an even more complicated and expensive deck. So, even if the three towers were completed on that first block, it's even less likely to get that fourth building up by 2025.

Escape hatches from current plan?

If they're serious about meeting the deadline over that first railyard block, expect an plan to redistribute those 97 units to the other three buildings, perhaps by having the state approve a bulk transfer. Or maybe such a transfer isn't necessary, if smaller units are permitted.

If the deadline isn't met, that sets up a scenario in which Greenland Forest City--dominated by Greenland USA--must pay $2,000 a month for each missing unit, with money going to a city housing fund, according to the 2014 settlement that set that new May 2025 deadline.

That could add up. If just 97 units are delayed for one year; that would add up to $2,328,000. But if 276 units are delayed for a year, that would cost $6,624,000.

Alternatively, the developer could seek an extension on the deadline, citing the coronavirus, or an exemption based on the lack of affordable housing subsidies or financing for 50% affordable units. (Of course, they could build 30% affordable housing--not 50%--without direct subsidies, based on the Affordable New York tax break.) 

Beyond the issue of meeting the requirement for total number of units, note the other looming questions: the level of affordability, and the size of units.

Looking at the document

The document, Exhibit M from the Seventh Amendment to the project Development Agreement, is dated 7/30/20 but was effective as of 6/29/20. I acquired it via a Freedom of Information Law request to Empire State Development, the state authority overseeing/shepherding the project.

July 2020

I've annotated, in blue, the four buildings slated to deliver the remaining affordable housing.

Two of the towers (B5, B6) would be 50% affordable, while B7--the third and final tower over that first railyard block, between Sixth and Carlton avenues--would be 30% affordable. As note, the first two towers would apparently rely on discretionary financing (and/or subsidies), while 30% affordability can rely on the Affordable New York tax break.

The B8 tower, over the block between Carlton and Vanderbilt avenues, would--at least according to the chart--have 97 affordable units and be 18.6% affordable, a percentage that does not conform to any existing subsidy program. So it seems a placeholder for now.

As noted, I wouldn't be surprised if those units were shifted to buildings completed earlier. Perhaps the B7 tower, instead of having 179 affordable units (30%), added those 97 units, for a total of 276 units, That would be nearly 47% affordable. (As noted below, a previous Exhibit M had that tower as 50% affordable.)

If all the affordable units are delivered in the first three towers over the railyard, that could set up a situation in which the final three towers--1,429 units--would be all market-rate, all around the lion's share of the project's open space. 

(It's also possible that it would be financially--and politically--advantageous to include some below-market units in those last three towers. It's also possible that those last three towers don't get built for a while, if ever.)

I've annotated, in red, the expected 1,065 parking spaces. Note that, as I've written, the language in an amendment to the guiding project plan--"The project will provide 1,000 permanent parking spaces"--does not indicate a minimum or a maximum.

Exhibit M, December 2018

Let's look at the past two versions of Exhibit M. In the Exhibit M from December 2018 (below), a much larger number of affordable units (255) would've been required in the B8 tower, the first over the second block of the railyard.

December 2018

In that chart, the numbers were already outdated by the time I wrote about it, so I added annotations regarding the expected numbers at the under-construction or soon-to-start towers, each of which contains more units than predicted. Even my annotation was inaccurate.

Exhibit M, September 2019

In January 2020, I wrote about the then-most-current version of Exhibit M, from September 2019.

September 2019

In that case, the estimates for the affordability at B12 and B13, as well as my annotation, were off, and all three towers over the railyard--B5/B6/B7--were supposed to be 50% affordable, leaving 97 units in B8. The current Exhibit M has B7 as 30% affordable.

Now that more affordable units have been included in B12 and B13--instead of 126 or 200, the total is 240--that sets up the possibility that B8 need not be built by May 2025 to meet the requirement.

I'd also note that, annotated in green in the document up top, the square footages of the initial towers are greater than previously reported. Perhaps why footnote #5--which first appeared in the September 2019 Exhibit M--states that below-grade square footage complies with project requirement but has no impact on allowable gross square feet.