Skip to main content

Featured Post

Atlantic Yards/Pacific Park FAQ, timeline, and infographics (pinned post)

2 comments

In Hochul's proposed 421-a extension, a lifeline for B5 tower (and others with foundation starts). Gov. will work with Legislature on renewal of tax break.

In her proposed FY 2024 Executive Budget, Gov. Kathy Hochul, among her housing proposals, has offered real estate developers a significant benefit, with an extension of the construction deadline for projects fueled by the 421-a tax break for more than 4.5 years:
 In order to unlock thousands of units of housing currently under construction, the Executive Budget extends the 421-A construction deadline through 2030. The Budget also expands HCR’s Tenant Protection Unit as part of a multi-year investment to provide targeted support for tenants in upstate New York.
Of course "currently under construction" is a bit of a dodge, since many developers simply did preliminary work on foundations by June 15, 2022 to qualify for the tax break--and may not have proceeded since then.

There are many reasons for delay, but one, as the Real Deal has reported, is that the June 15, 2026 deadline for construction was getting tenuous, since lenders wanted the buildings completed a year early.

If Hochul's proposal is accepted, that would offer developers significant breathing room. Of course that end-of-2030 deadline might have been proposed to set a point for negotiations and, perhaps, the real estate industry would be happy with a June 15, 2028 deadline.

The Atlantic Yards/Pacific Park impact

An extension past 2026, however long, likely would be good news for the B5 tower, 700 Atlantic Ave., the first of six towers planned over the two-block Vanderbilt Yard, which requires a new at-grade platform, in two phases.

The first phase was supposed to start last year, as announced by master developer Greenland Forest City Partners, thus enabling B5 to start this year.

However, since the platform hasn't started, B5 has been put off at least another year, and a two-year construction timeline would be jeopardized if the current 421-a deadline of 6/15/26 stands. 

The extension could be very helpful for not just B5, but other towers, such as those east of Vanderbilt Avenue approved in spot rezonings--in what Community Board 8 called the M-CROWN district and which is now being studied in the Atlantic Avenue Mixed-Use Plan--that haven't yet begun construction.

A 421-a replacement?

However, the extension can't help the rest of the project. The other five Atlantic Yards/Pacific Park towers over the railyard, as well as the future tower(s) at Site 5 across from the arena block, would have to rely on a replacement for the tax break, which developer Greenland USA has said is crucial to move forward.

The Real Deal reported that, unlike last year, when Hochul proposed 485-w, a replacement for 421-a that would've required the affordable housing to be geared to somewhat lower incomes, now she will  work with the legislature rather than proposing a measure.

Some don't want anything close to Hochul's proposal.  As I wrote last February, the Community Service Society proposed that 421-a be scrapped, and replaced with programs that offer benefits in direct proportion to affordable housing provided.

Some reaction

Of course developers were pleased at the proposed extension. “New York City urgently needs more rental housing, especially at below-market rents, and without a viable program to spur rental housing development by the private sector, this crisis will only get worse,” said REBNY executive Basha Gerhards, according to the Real Deal.

Note support from an affordable housing advocate, below, as well as implicit criticism from city Comptroller Brad Lander.
Labels:

Comments

Post a Comment