Will B5 tower qualify for 421-a benefits? Developer says yes, as deadline approaches. (Next two towers won't.) AY CDC would like confirmation from HPD.

This is the fourth 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 fifth concerned the deadline for the Urban Room. 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.

During his slide presentation, Scott Solish of Greenland USA pointed to the location for the first phase (of two) of platform development: Block 1120 of the Vanderbilt Yard--from Sixth to Carlton avenues and Pacific Street to Atlantic Avenue.

That will support three towers, the first of them B5, aka 700 Atlantic Avenue, and later B6 and B7 to the east, as he explained in the video below. (Greenland USA owns nearly all of Greenland Forest City Partners, the project's master developer.)

"We're hopeful that [the platform work] will start sometime in the next few weeks," he said, noting that Long Island Rail Road infrastructure--including tracks and a ramp--will co-exist with the construction work.

Indicating the green section, he said, "You can also see that we've pre-placed some footings and foundations... to help expedite the beginning of the platform work." 

Qualifying for 421-a?

Director Gib Veconi, the best-informed member of the AY CDC, interjected. "Is it is it your view that the foundation and footing work you just described will be sufficient to qualify buildings B5, 6, and 7 for 421-a [tax benefits] under the current authorization?"

The expiring 421-a program, which was not reauthorized (but may return, if real estate industry lobbying is successful), requires foundations placed by June 15, 2022, and construction completed by June 15, 2026. 

The program, known as Affordable New York since 2017, is particularly advantageous to developers, because they can get the tax break while providing "affordable housing" limited to middle-income households earning 130% of Area Median Income (AMI), which is often near or above six figures.

Solish said no.

"And so none of the three will qualify for 421-a under the current authorization," Veconi followed up.

B5 would qualify

"It's possible that B5 may have, but not the others ones," said Solish, who later amended his comments to indicate more certainty.

(I'd assume that B6 and B7 wouldn't qualify because, even if they have foundations pre-placed, they wouldn't be complete by the June 2026 deadline. That said, if the tax break gets revised or reauthorized--it expired in the recent legislative session but surely will be discussed more--that could be crucial to those construction starts.)

"Okay, well the expiration is obviously Wednesday of next week," Veconi continued, referring to June 15. "So when do you think it will be known whether you've qualified?"

Rebar indicates previous work on footings

Under Affordable New York, Solish responded, "you don't certify until after the project is finished. So you don't know until the very end."

"So you won't know if you're qualified maybe for two or three years," Veconi continued.

"Yeah, we anticipate that we have," Solish said, but it's not up to the developer but requires approval by HPD, the city's Department of Housing Preservation and Development.

Any record?

Attorney Daniel Kummer, the AY CDC Director serving as Acting Chair of the meeting, asked if there was a current filing that makes a record of the construction progress.

Solish said yes, that there is "some pre-certification work that can happen," but acknowledged the issue was for experts. "So you really don't know until the end," he said, "but we believe that we've met the threshold to qualify under the existing program."

So that means that the potential start of work this week--which seems to involve fencing more than foundations--may not be relevant to the deadline, given the previously completed work.

Asking for proof

Veconi then moved that the AY CDC request the parent Empire State Development--the state authority that oversee/shepherds Atlantic Yards/Pacific Park--to ask HPD to confirm that that the threshold qualifications had been met for B5.

The motion was unanimously approved.

Previous obfuscation

Last month, I reported on Solish's unwillingness to confirm, at both a meeting of the North Prospect Heights Association and then the ESD's bi-monthly Atlantic Yards project Quality of Life meeting, that Greenland expected 421-a benefits for B5.

"Norman, you were at the meeting last night," Solish responded somewhat sharply at the second meeting, in response to the question I posed in the chat. "We went through the schedule for B5, so I'm not sure why things would have changed between last night and tonight."

Except he chose not to answer that same question at the previous meeting.

Last week, he answered the question. There's no reason why he couldn't have done so in May. So there's a value to the AY CDC ventilating some basic transparency.