In 2013, incoming Mayor de Blasio said of Atlantic Yards, "On my watch, [the affordable housing] will happen." It's not close to complete (or at income levels promised). Now what?

Two days ago, as I wrote, lame-duck Mayor Bill de Blasio sounded all gung-ho about the Barclays Center, though there was reason to be a little more tempered. 

For example, even after the current four towers under construction are completed, 876 more affordable housing units are required to be delivered in less than four years, by May 31, 2025, and that seems unlikely. Plus the definition of "affordable housing" has been stretched so the units delivered serve a far greater percentage of middle-class residents than initially promised.

A too-sunny profile

So eight years later, let's look back at a 10/31/13 New York Times profile of Public Advocate and Mayoral front-runner de Blasio, hadlined On Council, de Blasio Blended Idealism With Push for Power. It ended with the following paragraphs, which I reproduce in full, with some comments:

But it was the Atlantic Yards project, a gigantic housing and arena development at the intersection of Flatbush and Atlantic Avenues, that cemented the image of Mr. de Blasio in some critics’ minds as a too-willing partner for developers.

Eric McClure, a founder of the civic group Park Slope Neighbors, met with Mr. de Blasio, hoping that 2,200 signatures he had gathered on a petition would be enough to turn the councilman into a critic of the project. He did not succeed; Mr. de Blasio argued that development was needed to create affordable housing.

“He was insistent,” Mr. McClure recalled. “We had an affordable housing crisis, sometimes you have to do certain things to get that affordable housing built that might rub people the wrong way, but that was the ultimate goal, and for that reason he was for the project.”

Mr. de Blasio, according to Mr. McClure, acknowledged that Fourth Avenue “had not turned out the way he hoped.” But he argued that Atlantic Yards would be different, because Acorn, a community organizing group with which he had a long association, had joined the developer, Forest City Ratner, to see that the affordable housing was built.

By 2010, of course, ACORN had disbanded, reincarnating in New York as New York Communities for Change (NYCC), while ACORN head Bertha Lewis founded a new "action tank," The Black Institute. Ismene Speliotis, who headed ACORN's housing arm, led the similar Mutual Housing Association of New York (MHANY).

Moreover, a renegotiation of project terms in 2009 led to a Development Agreement, revealed in January 2010, that gave the developer until 2035 to finish the project.

Also in that Development Agreement--though I didn't report on it until later (here's a June 2017 example)--was a loose definition of affordable, defining such units as those "subject to income and rent restrictions" as part of a city or state regulatory agreement, with rents set at no more than 160% of  Area Median Income, or AMI. 

In other words, by the time of the article--which was well after the de Blasio-McClure conversation--ACORN had lost some clout, because the Development Agreement offers more generous terms than the 2005 Housing Memorandum of Understanding (MOU) that ACORN and Forest City had signed, or the 2005 Community Benefits Agreement (CBA) that incorporated the Housing MOU.

The lingering challenge

The Times article continued:

The Barclays Center arena opened in 2012, but the first affordable apartments are still at least a year away. Critics say that Mr. de Blasio was too close to the developer, Bruce Ratner, who hosted a birthday fund-raiser for him, and did not push the firm, Forest City Ratner, to deliver the promised housing.

On Monday Mr. de Blasio blamed some “objective reasons” for the delay, but said “it’s clearly behind schedule,” and allowed that “there were missteps by everyone involved.” He said the next mayor needed to hold Forest City Ratner and state officials accountable.

“On my watch, it will happen,” he vowed.

That closing went unrebutted. At the time, I wrote that de Blasio could be challenged on his failure to speak out about first tower (B2), which did not meet a promised goal of family-sized affordable units, or his lack of comment on Forest City's failure to hire the promised Independent Compliance Monitor required in the CBA.

I did not mention the Development Agreement, nor the likelihood that Atlantic Yards, which Forest City two months earlier had announced an intent to market, would soon be controlled by another company, Greenland USA, an arm of the Shanghai-based Greenland Holdings, which in mid-2014 bought 70% of the project going forward (cxcluding the arena and first tower).

Did "it" happen?

Regarding de Blasio's statement, "“On my watch, it will happen,” I wrote: "And it may, in ways that do not at all represent accountability."

After all, we didn't know if he'd use carrots or sticks.

Well, only part of it did happen: two 100% affordable towers (B3, B14), skewed to middle-income households, and one condo building (B11) were constructed by the joint venture.

That was something of a carrot--the availability of financing for two mixed middle-income buildings--and a stick, albeit one wielded by the BrooklynSpeaks coalition, which got a new 2025 affordable housing deadline by threatening the state with a fair-housing lawsuit.

But de Blasio couldn't control the economy or the project or the previously signed Development Agreement. Or the boom in Downtown Brooklyn, coupled with the loss of the 421-a tax break provision for Atlantic Yards/Pacific Park, led Forest City in 2016 to call a unilateral pause and then, in 2018, sell all but 5% of the rest of the project to Greenland.

Greenland then leased two sites (B12/B13) to TF Cornerstone, one (B15) to The Brodsky Organization, and began to jointly construct B4 with Brodsky.

The upshot: four towers are under construction, with 30% affordable housing, likely skewed to middle-income households. The first tower may start accepting residents later this year, and all should be done by mid-2023.

However, 876 more affordable units must be delivered by 5/31/25. Complicating that is the expiration of the current 421-a tax break, which will not be available to any building that starts after 6/15/22.

And the new units are not shovel ready. They would go in some (two?) of the six towers to be built over the railyard, which requires an expensive, two-phase platform. 

There's also a tower--or two--to be built at Site 5 catercorner to the arena, longtime home of Modell's and P.C. Richard, but that requires a lengthy public process to shift the bulk of the unbuilt B1 tower across Flatbush Avenue.

What next?

A legislative "fix" may be needed, according to the head of Empire State Development (ESD), to get the project done under the deadline requirements--but that fix (a 421-a extension?) is unclear, and we now have a new governor, Kathy Hochul.

We'll have a new mayor, most likely Eric Adams, who as Brooklyn Borough President has supported the project and proclaims himself generally pro-development.

Does that mean new subsidies or tax breaks? Possibly. In this case, it might be wise to take a look at the suggestion from mayoral candidate Shaun Donovan, who, despite his ignorance of the real Atlantic Yards story, nonetheless offered some intriguing guidance for future mayors.

As I wrote in City Limits, Donovan proposed “a sliding scale for public financial support—by way of subsidy, tax abatement or exemption, land, or other methods—that matches the amount of support to the amount of affordable housing being produced.”

An examination of Atlantic Yards/Pacific Park, for example, might assess a dubious tax break that delivered no new affordable units but saved wealthy condo buyers millions, bolstering the developer’s high sticker prices. Or, perhaps, the state approval of new below-grade space for a fitness center and fieldhouse, with no reciprocal public benefit.

These more complicated stories were not part of de Blasio's press conferences.