The mysterious 840 Atlantic project: filings now suggest two buildings, with more (and thus smaller) apartments. Is affordability locked in? Is it just about 421-a filings?

See collected coverage of M-CROWN rezonings: click here.

Something odd is going on regarding 840 Atlantic Avenue, the tower approved last year by the City Council at the southeast corner of Vanderbilt Avenue, at a parcel largely occupied by a still-operating McDonald's.

(It's right across the street from the Atlantic Yards/Pacific Park parcel known as B10.)

Even as McDonald's and landlord/developer Vanderbilt Atlantic Holdings (VAH) battle in court over the latter's effort to end the lease, VAH has filed permits to construct not one but two buildings, one 17 stories and one 11 stories, in an effort to get foundations placed by June 15 to take advantage of the expiring 421-a tax break.

Why two buildings?

From PincusCo

Unclear, but--I speculate--it might be easier to get the Department of Buildings to approve a foundation for the smaller building, designated 851 Pacific Street, than for a larger 840 Atlantic, which relies more significantly on the McDonald's parcel.

That said, there are neighboring parcels along Atlantic controlled by the developer that would contribute to the larger building, so foundations would presumably be possible. So it's perplexing.

And that's only the start of the mystery, which goes to whether the unit count has grown from 270 to 360, whether deep affordability has been locked in, and even whether the developer has committed to perpetual below-market arts space.

DOB Now filing shows pursuit of 421-a tax break

My attempt to email and call Tom Li, principal of VAH, did not generate a response. Nor did an email to the land-use attorneys involved. (The p.r. firm that represented VAH during the approval process told me they're no longer involved.) 

Nor did a query to three leaders of Community Board 8. (Update: they responded 3/31 to my lengthy M-CROWN questions, including, "As you are aware, the Community Board did not confirm the resolution regarding 840 Atlantic that was passed by its Land Use Committee in September 2021. The Board has not had further discussions with the applicants since then."

It could be that everything will be built as previously--if not formally--promised. If so, the developer should be more forthcoming.

The compromise on bulk

The 840 Atlantic tower was originally proposed as 316 units and 18 stories, with a proposed Floor Area Ratio (FAR) of 8.8. (FAR is a commonly-used ratio of bulk to floor plate.)

Community Board 8's proposed but never enacted M-CROWN rezoning, with incentives for job-creating space and bulk limits endorsed in 2018 by Council Member Laurie Cumbo and Borough President Eric Adams, would limit height at 14 stories and FAR to 7--though only for the Atlantic Avenue parcel, not the back of the building at Pacific Street. 

So, applying those guidelines to the 840 Atlantic proposal, the FAR would be 5.8, accommodating 193 units, as shown in the chart below, from a CB 8 presentation by Gib Veconi, the leader of the rezoning effort.

From CB 8 presentation. To clarify, the original proposal was 316 units and an FAR of 8.8

Despite CB 8's initial strong stance on holding the applicant to the M-CROWN guidelines, its Land Use Committee last September agreed to a last-minute compromise, cutting the building to an announced 270 units, a step-down to 14 stories at the eastern end, and a blended FAR of 7.6--still a significant gain for the developer.

(See VAH new 1, above, though I'm not certain all the math is precise.) 

That compromise was encouraged by Council Member Cumbo, who also wanted to deliver low-cost permanent arts space, initially occupied by Jamel Gaines Creative Outlet, a dance studio run by an ally.

A new pledge on affordability

Crucially, Vanderbilt Atlantic Holdings also agreed to the deep affordability option (Option 3) under the city's Mandatory Inclusionary Housing policy, which means units for three-person households earning $42,960. The provision of deeply affordable units, Veconi said, represents “a significant concession on the part of the developer,” given that no previous CB 8 land use application had delivered such units. 

More recently, that's become the norm, likely because the numbers still deliver profits. Such units would help those at greatest risk of displacement, in an area losing lower-income people of color. That said, critics from the Crown Heights Tenant Union contend that, without further anti-displacement efforts, such upzonings that deliver mostly market-rate units put rent-stabilized tenants at risk.

Explaining the compromise, Veconi noted that the median income in CB 8 was once 60% of Area Median Income (AMI), and now exceeds 80%, “not because people here have just earned more money in the last seven years, it's because of displacement.” So they needed to deliver deeper affordability than previously contemplated.

YIMBY's coverage used previous image

He also cited the value of 50,000 square feet of nonresidential job-creating use, and the developer's willingness to memorialize its commitment to a permanent space for the non-profit arts center.

At the subsequent full CB 8 meeting, Veconi noted that the Land Use Committee's resolution endorsing the modification was contingent on the applicants making a binding commitment “for the community benefits." 

But that never happened, because CB 8--with several members abstaining, confused by or resistant to a renegotiation that they had little time to absorb--refused to endorse the committee's action, so CB 8 could not serve as a counter-party, as it did with a previous rezoning, at 985 Pacific Street, aka Grand Pacific.

It's plausible that the developer, which made numerous promises of that permanent arts space, would not want to run afoul of new city Cultural Affairs Commissioner Cumbo, who facilitated that agreement.

How many units? How many affordable?

Perplexingly, the two recent filings from VAH indicate a total of 360 apartments (267 and 93, respectively), which suggests much smaller units. 

If so, that also would mean more affordable units--but also far fewer family-sized apartments, as the developer initially pledged.

That said, despite promises by the developer, it's unclear which affordable units would be built.

The City Council formally approved two options under the city's Mandatory Inclusionary Housing (MIH) policy: Option 1, with 25% low-income units averaging 60% of Area Median Income (AMI), and Option 3, the deep affordability option, with 20% low-income units at 40% of AMI.

From HPD, using 2016 income levels

At 20% of the total, Option 3 meant 54 units from a 270-unit building. That would mean, according to current rent guidelines (which presumably will rise by the time the building opens), studios at $598, 1-BRs for $756, 2-BRs for $900, and 3-BRs for $1,032.

So if there are 360 total units rather than 270, that could mean 72 deeply affordable units, or 90 low-income ones at Option 1.

This seemingly represented progress for Community Board 8. The first two rezonings in the M-CROWN district, 1010 Pacific and 1050 Pacific, were passed by Council Member Cumbo, who allowed for Option 2, the least affordable option, with 30% of the units at 80% of Area Median Income-- though in one case the applicant indicated they were aiming for Option 1. (I'll describe them in a separate articles.)

Cumbo did ensure that, with 985 Pacific, only Option 1 was available. In the case of 840 Atlantic, though, Option 3 wasn't locked in via a separate agreement with Community Board 8.

Department of Buildings records

According to the DOB Now, Job# B00657569 for Block 1122, Lot 1, describes total building square footage as 237,197. Job# B00658180 for Block 1122, Lot 69 describes total building square footage as 98,701.

 
So that comes relatively close to the announced compromise in square footage, but with about 8,000 sf more residential space and less commercial space.

From PincusCo

The overall project would contain 34,825 square feet of commercial space and 8,000 square feet for a community facility.

With 250,420.7 square feet of residential space, 360 units would average a rather tight 696 square feet. At 270 units, they'd average 927.5 square feet. As originally planned, as indicated in an image below, the average would be 811.1 square feet per unit. 

At City Council

Before the compromise, when Vanderbilt Atlantic Holdings was still aiming for below-market units that were less affordable, the applicant team promised City Council at an 8/3/21 hearing, as the screenshots below show, a "family friendly unit mix," with an "above-average mix of two- and three-bedroom apartments," the latter averaging 1,000 square feet and 1,200 square feet, respectively. According to my math, that meant an average of 811.1 feet/unit.

8/3/21 presentation to City Council suggests 40% of the units would be family-sized

 
Land use attorney Benjamin Stark promised two floors of nonresidential, totaling 50,000-55,000 square feet, including approximately 8,000 square feet for the dance studio.

"So, although we are negotiating a long-term well below-market lease to give the community comfort, he said, "that particular space will remain affordable for a non-for-profit or an arts oriented use in perpetuity, we are willing to execute and record a restrictive declaration to that affect."

From 8/3/21 presentation to City Council

Cumbo noted that both Community Board 8 and Borough President Adams recommended Option 3, the deep affordability option, for the affordable housing, with 20 percent of the units for hourseholds at 40% of Area Median Income.

Li, VAH's principal, said that they'd proposed Option 2, which would maximize the number of affordable unit, and were open to Option 1, "Going down to Option 3, I think we lose another 20 units or so of affordable units."

Li told Cumbo "we’re considering ground floor retail with other commercial uses on the second floor. Essentially having office space on the second floor."

A lesson from 840

At an 11/4/21 meeting of Community Board 8, Veconi urged fellow board members to approve a complicated resolution that--based on the 840 Atlantic example--first called for a neighborhood rezoning in line with the Community Board's M-CROWN resolutions, but provided guidance on negotiated alternatives regarding the pending 870-888 Atlantic Ave. and 1034-1042 Atlantic Ave. rezoning proposals, which are both seeking bulk well beyond the M-CROWN guidelines.

Map by Kaja Kühl; rezonings in light blue are pending; apartment counts, from Environmental Assessment Statement filings, include full areas rezoned, not just promised projects

(The M-CROWN acronym refers to "Manufacturing, Commercial, Residential Opportunity for a Working Neighborhood," but it is rarely explained in CB 8 presentations.)

If Council Member Crystal Hudson wants to approve the applications, he said, "we will want to have binding commitments" for Option 3 (deep affordability), for job-creating M-CROWN uses, and a limitation to 15 stories.

"And the only way we get those for sure is if we have a vote from the general membership that allows us to enter into that binding commitment as a counterparty, as we did with Grand Pacific," he said. 

And it did pass, after Veconi observed that, with the CB 8's non-endorsement of the 840 Atlantic deal, "the Community Board can now not be a counterparty to such a binding commitment, and that action potentially cost us some of the commitments the developers made."

"So that is another reason to vote for this resolution," he said. "It doesn't mean you don't want a neighborhood rezoning, but it does mean that you want to see the developers held accountable for what they've promised that's in excess of zoning."