Remember the Urban Room? Well, project documents (as Veconi notes) point to $10M penalty for delay. ESD seems uninterested in pursuing it. Hint that B1 bulk would go beyond Site 5 to other parcels.
This is the fifth of ten articles on the 6/7/22 meeting of the Atlantic Yards Community Development Corporation. The first concerned the affordable housing timetable. The second assessed an estimated 2031 completion date. The third addressed the impact of a potential Greenland default. The fourth concerned expectations of 421-a benefits. The sixth addressed timing for the school. The seventh concerned plans for the platform. The eighth discussed community impacts of construction. The ninth concerned plans for B12/B12 affordable housing. The tenth concerned the Open Meetings Law.
As we learned in discussions of a potential default by the parent of Greenland USA--which owns nearly all of master developer Greenland Forest City Partners--it's hardly clear that New York State will push the developer to adhere to the letter of project agreements.
Gib Veconi, the only AY CDC Director who seems to have read such documents, got a brush-off from Tobi Jaiyesimi, Executive Director of the AY CDC and the Atlantic Yards project director for the parent Empire State Development (ESD).
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| From Nov. 2006 Final EIS |
As I wrote, Solish's unwillingness to confirm a plan to meet the May 2025 affordable housing deadline undermines such assurances.
About the Urban Room
Before Veconi could say much more, Acting Chair Daniel Kummer interjected and asked for clarification about the Urban Room, a glass-enclosed atrium planned as of 2006 at the intersection of Atlantic and Flatbush avenues--at least before the decision not to build the project's flagship tower, B1 (aka "Miss Brooklyn") and leave a temporary plaza in front of the arena.
Near the end of the meeting, as indicated in the video below, Veconi had a question: "As far as I can see, the Urban Room is still a part of this project, is it not? It's in the project plan."
"That's correct," responded Jaiyesimi.Before Veconi could say much more, Acting Chair Daniel Kummer interjected and asked for clarification about the Urban Room, a glass-enclosed atrium planned as of 2006 at the intersection of Atlantic and Flatbush avenues--at least before the decision not to build the project's flagship tower, B1 (aka "Miss Brooklyn") and leave a temporary plaza in front of the arena.
That tower was planned as an office tower, but there was no anchor tenant. Also, the original plan was to build four towers at the arena block simultaneously with the arena, but that was abandoned as the arena was downsized in 2009 after the recession.
"So the current General Project Plan," Jaiyesimi said, "allows there to be the development of what is known as B1... And part of the base for that would have been an Urban Room serving as a form of glass enclosure that" connected the subway entrance, the arena opening and the tower opening.
Indeed, the 2009 Modified General Project Plan--revised from 2006 to allow original developer Forest City Ratner more generous terms--stated:
She referred to a plan, pending since 2015/2016, to create a giant, two-tower project stretching nearly 800 feet and containing 1.1 million square feet. That would be a major change from the 250-foot, 439,050-square foot project approved in 2006. That was more than the zoning allowed, as the state can override city zoning.
"But at this point," Jaiyesimi intervened, "the current project documents still require or allow for there to B1 and also the Urban Room. So that's still what's on paper for the project."
The Development Agreement notes, among Events of Default:
"So the Urban Room had a deadline of the Outside Phase 1 Completion Date, which was 12 years of the anniversary of the Effective Date, which was May 25 of 2010," Veconi said. (That's close, but it was 5/12/10, according to the June 2014 Supplemental Environmental Impact Statement.)
"Given the discussions that we've had related to the arena plaza and also B1 and transferring the bulk over to Site 5, at this time," Jaiyesimi responded, "there's been no discussion about default under the project agreement." In other words, it's not being enforced.
"But those obligations still stand in the project agreement," Veconi said.
"There's been no changes to the project documents," she responded. "Yes, that's correct."
New AY CDC Director Trenelle Gabay again asked about the Urban Room, and Jaiyesimi explained it.
"I'd like to clarify because I think you're misrepresenting what I just stated," Jaiyesimi said.
"I thought I quoted it," Veconi responded.
"There’s discussions in the past where," she said, "we've talked about this in various meetings, where the idea would be to transfer the bulk from B1 over to Site 5 or other aspects of the project location. And so looking at what has become the arena plaza, and noting that the Urban Room is part of what would be the base, or have a relationship between B1 and the arena itself, is what I'm referring to there. There weren't any conversations that the AY CDC has been left out of or hasn't been represented. So I just wanted to clarify that."
He told Jaiyesimi: "I look forward to hearing what the what your understanding of the situation is with the deadline and for the Urban Room and, which is still a part of the project and has has not been changed formally."
Added Kummer, "So I think that when when you talk to the team about it... it should include a discussion of doing whatever is necessary to preserve ESD's rights with respect to those aspects that that Gib raised, those remedies and, you know, as long as nothing's been waived, we should be fine."
"So the current General Project Plan," Jaiyesimi said, "allows there to be the development of what is known as B1... And part of the base for that would have been an Urban Room serving as a form of glass enclosure that" connected the subway entrance, the arena opening and the tower opening.
What was promised
Indeed, the 2009 Modified General Project Plan--revised from 2006 to allow original developer Forest City Ratner more generous terms--stated:
The Arena Block will contain, in addition to the Arena itself, four buildings, a publicly accessible "urban room," and infrastructure to service the entire complex, including subway improvements and utility improvements.It further stated:
Unlike most arena facilities where activity is hidden from view, the Project would seek to provide a visual and physical connection between the Arena's indoor activity and the Urban Room, a significant public amenity comprised of a large, glass-enclosed public space that will provide access to the subway station, the Arena and Atlantic and Flatbush Avenues. This space would accommodate the major flows of people to and from the subway system during the day and night, serve as a direct subway entrance to the Arena and allow for a variety of public uses and programmed events throughout the year. The Arena is designed to allow passersby to see into the "bowl" of the Arena and view the scoreboard from the Urban Room and Flatbush Avenue.
(Emphasis added)
Why no modification?
Note: it's unclear to me why they couldn't have revised the MGPP to say that the arena block would contain a plaza, rather than an atrium, but the plaza was instead described as temporary.
Perhaps they couldn't argue that the plaza would have the same value--while offering an important safety valve for arena crowds, and somewhat accidentally serving as a place for spontaneous public gatherings--"totally appropriated," as an organizer of 2020 protests in the wake of George Floyd's murder, put it--it is, of course, not enclosed from the elements.
Nor has it had many "programmed events" outside of those promoting arena activities.
Perhaps more importantly, the developers and ESD didn't want indicate that, instead of building the B1 tower, which was key to projected new jobs and tax revenues, they would not do so--but instead later plan to shift the tower's unbuilt bulk to other parcels in the project.
Note: that view of the scoreboard was always obscured from the place, but digital signage over the arena entrance doors, installed in 2020, allows for the showing of the scoreboard and game excerpts.
What's pending
Jaiyesimi continued, "As it's been discussed in the past, the developer has expressed interest in transferring the bulk from B1 over to Site 5 or other parts of the project." Site 5, across Flatbush Avenue from the arena, has long been home to the box-box stores Modell's (now closed) and P.C. Richard. (The Pacific Bear's Garden is adjacent.)
She referred to a plan, pending since 2015/2016, to create a giant, two-tower project stretching nearly 800 feet and containing 1.1 million square feet. That would be a major change from the 250-foot, 439,050-square foot project approved in 2006. That was more than the zoning allowed, as the state can override city zoning.
A telling hint: not just Site 5
Note Jaiyesimi's language: "over to Site 5 or other parts of the project." Indeed, Site 5 could not accommodate all of the bulk from the B1 tower, but perhaps 60% to 70% of the 1.1 million square feet approved.
In other words, perhaps 400,000 square feet--the size of a substantial tower, in itself--might then be redistributed to other parcels in the project, at least if GFCP does not want to give up valuable buildable square feet.
The only parcels left would be towers over the railyard--B6, B7, B8, B9, and B10, which are already substantial.
ESD can approve changes, likely to more residential space at Site 5, after another modification of the MGPP, which involves public hearings and a vote by the ESD board, which typically follows the governor.
Moving bulk to towers over the railyard would another another complication to those proceedings.
Keeping the plaza
Jaiyesimi continued, "And so there is interest of course in taking away the requirement for the Urban Room, right, and instead memorializing the Barclays Center plaza for what it is, especially given its prominence in the community since the summer of 2020, and the civil protests and actions that we've seen there."
Note that she did not call it by its official name, SeatGeek Plaza, which honors the commercial sponsor of the privately-controlled space crucial to arena operations.
Nor has there been any effort to ensure that such space serves the public, at least when it conflicts with the arena's commercial imperatives.
Moreover, the justification is post-hoc, since the effort to preserve the plaza began with the new Site 5 plan floated in 2015. (Also, I'd bet that the original developer promised the initial buyer of the arena operating company, Mikhail Prokhorov, that they wouldn't build and thus disrupt the plaza.)
"But up to this point--" Veconi said.
"But at this point," Jaiyesimi intervened, "the current project documents still require or allow for there to B1 and also the Urban Room. So that's still what's on paper for the project."
Her implication: paper can change.
Time for a fine?
"And as far as you understand," Veconi continued, "the deadline for completing the Urban Room has not changed, has it?"
"There have been no changes to the project documents related to B1 or the Urban Room," she said.
"Okay, well, my read of the MDA [Master Development Agreement]," Veconi said, is that the Urban Room was supposed to have been completed on the 25th of May of this year. Does that--is that the case?"
Time for a fine?
"And as far as you understand," Veconi continued, "the deadline for completing the Urban Room has not changed, has it?"
"There have been no changes to the project documents related to B1 or the Urban Room," she said.
"Okay, well, my read of the MDA [Master Development Agreement]," Veconi said, is that the Urban Room was supposed to have been completed on the 25th of May of this year. Does that--is that the case?"
The Development Agreement notes, among Events of Default:
If AYDC shall fail to cause the Substantial Completion of the Urban Room on or prior to the Outside Phase I Substantial Completion Date, subject to Unavoidable Delays..."There have been no changes to the project documents and, as I've noted, there's been public discussion about memorializing the plaza and also transferring the bulk from what would have been B1 to other sites of the project," Jaiyesimi responded. "So what specifically are you getting that I'm not following?"
"So the Urban Room had a deadline of the Outside Phase 1 Completion Date, which was 12 years of the anniversary of the Effective Date, which was May 25 of 2010," Veconi said. (That's close, but it was 5/12/10, according to the June 2014 Supplemental Environmental Impact Statement.)
"So it should have been completed on May 25 of last month," he said. "If it's not being completed, it’s a default under the MDA and it carries liquidated damages. The liquidated damages are $10 million to be paid out over 12 months beginning with the first payment, this month, of $200,000."
"Given the discussions that we've had related to the arena plaza and also B1 and transferring the bulk over to Site 5, at this time," Jaiyesimi responded, "there's been no discussion about default under the project agreement." In other words, it's not being enforced.
"But those obligations still stand in the project agreement," Veconi said.
"There's been no changes to the project documents," she responded. "Yes, that's correct."
Time for brushback
"Right," said Veconi. "I think we need ESD to clarify that then for us, because the project documents call for that Urban Room to have been completed last month and provide for liquidated damages as a remedy for default. I'd like to make a motion to—"
Jaiyesimi intervened: "I don't think—we don't need a motion, Gib. Thank you for bringing that to our attention. I'll circle back with the team to review the documents. I think we can all note that the Urban Room has not been developed and there's been no action taken to the development of the Urban Room. So I'll follow up with the team and get some details with you on that."
"Okay, thank you," Veconi said.
Indeed, the agreement says, regarding damages, that, if the Urban Room isn't built, the developer shall pay $10,000,000 over a 12-month period, starting with two monthly payments of $200,000, then two of $400,000, then two of $600,000, $800,000, $1,000,000, and $2,000,000.
A new public space?
"Right," said Veconi. "I think we need ESD to clarify that then for us, because the project documents call for that Urban Room to have been completed last month and provide for liquidated damages as a remedy for default. I'd like to make a motion to—"
Jaiyesimi intervened: "I don't think—we don't need a motion, Gib. Thank you for bringing that to our attention. I'll circle back with the team to review the documents. I think we can all note that the Urban Room has not been developed and there's been no action taken to the development of the Urban Room. So I'll follow up with the team and get some details with you on that."
"Okay, thank you," Veconi said.
Indeed, the agreement says, regarding damages, that, if the Urban Room isn't built, the developer shall pay $10,000,000 over a 12-month period, starting with two monthly payments of $200,000, then two of $400,000, then two of $600,000, $800,000, $1,000,000, and $2,000,000.
A new public space?
New AY CDC Director Trenelle Gabay again asked about the Urban Room, and Jaiyesimi explained it.
(Gabay, who heads the Carey Gabay Foundation, named in honor of her late husband Carey Gabay, Assistant Counsel to Gov. Cuomo and Empire State Development, is a gubernatorial appointee. She has no previous profile regarding Atlantic Yards/Pacific Park.)
"The idea is to preserve... the plaza—it’s kind of taken on a life of its own as we've all seen over the last few years," Jaiyesimi said, 'and so to preserve that open space, preserve that relationship with the community and the utility of the plaza for various civic purposes."
"I don't know that that's exchangeable for the Urban Room, quite frankly," Veconi said. "The Urban Room is an interior atrium and it was designed for public gatherings and of a kind that would be different that would take place in the plaza for the arena."
"The idea is to preserve... the plaza—it’s kind of taken on a life of its own as we've all seen over the last few years," Jaiyesimi said, 'and so to preserve that open space, preserve that relationship with the community and the utility of the plaza for various civic purposes."
"I don't know that that's exchangeable for the Urban Room, quite frankly," Veconi said. "The Urban Room is an interior atrium and it was designed for public gatherings and of a kind that would be different that would take place in the plaza for the arena."
That may have been an oblique reference to the proposal by the BrooklynSpeaks coalition, which Veconi helps lead, regarding expected discussions over the proposed transfer of bulk from B1:
Programming for a modified Site 5 with increased density must include space for large community gatherings, to be administered by a non-profit steward not affiliated with project developers, or by a City cultural institution such as Brooklyn Public Library.
I wouldn't be surprised if the two issues are linked.
Continued debate
"As I described earlier," said Jaiyesimi, "there's been conversation related to" moving the bulk from B1 "to either Site 5 or other aspects of the project site and the Urban Room definitely is part of that. So like I've noted, I'll circle back with the team on the point that you've raised with regard to the default considerations for the transaction documents and we'll get back to you accordingly."
"I do want to point out at the Urban Room is a public benefit of the Atlantic Yards project and this board is responsible for overseeing public commitments of the Atlantic Yards project," Veconi said. "So if there are conversations going on about replacing that as a public benefit, that are not being shared with the members of this board, I'm not sure I understand why that wouldn't be happening."
"I'd like to clarify because I think you're misrepresenting what I just stated," Jaiyesimi said.
"I thought I quoted it," Veconi responded.
"There’s discussions in the past where," she said, "we've talked about this in various meetings, where the idea would be to transfer the bulk from B1 over to Site 5 or other aspects of the project location. And so looking at what has become the arena plaza, and noting that the Urban Room is part of what would be the base, or have a relationship between B1 and the arena itself, is what I'm referring to there. There weren't any conversations that the AY CDC has been left out of or hasn't been represented. So I just wanted to clarify that."
Well, the developer has been floating proposals regarding Site 5 since 2015/2016, and it hasn't been discussed at the AY CDC.
"Nor have there been any agreements, right, with respect to actually effectuating that transfer" asked Kummer.
"There's been no agreement related to the transfer of bulk from B1 to or any or any general modifications to the General Project Plan," Jaiyesimi responded. "We understand that the developer has interest and there is desire to look at the next phase of development of the project and Site 5, but we have not put pen to paper related to the General Project Plan modification."
"In fact, those there was a there was a period of time when there was an injunction against having any of those discussions," Kummer said. Jaiyesimi assented. But Veconi pointed out that that litigation--involving P.C. Richard--was settled in October.
"Nor have there been any agreements, right, with respect to actually effectuating that transfer" asked Kummer.
"There's been no agreement related to the transfer of bulk from B1 to or any or any general modifications to the General Project Plan," Jaiyesimi responded. "We understand that the developer has interest and there is desire to look at the next phase of development of the project and Site 5, but we have not put pen to paper related to the General Project Plan modification."
"In fact, those there was a there was a period of time when there was an injunction against having any of those discussions," Kummer said. Jaiyesimi assented. But Veconi pointed out that that litigation--involving P.C. Richard--was settled in October.
He told Jaiyesimi: "I look forward to hearing what the what your understanding of the situation is with the deadline and for the Urban Room and, which is still a part of the project and has has not been changed formally."
Added Kummer, "So I think that when when you talk to the team about it... it should include a discussion of doing whatever is necessary to preserve ESD's rights with respect to those aspects that that Gib raised, those remedies and, you know, as long as nothing's been waived, we should be fine."
He spoke as if he were expecting ESD to try to claim the $10 million in penalties, rather than do what it can to enable the development.
The latter seems more likely. As I've noted, there's a loophole in project documents called the Right to Refrain:
ESDC [ESD] shall have the right, in its sole discretion, to refrain from exercising any of its rights under this Agreement at any time or from time to time.
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