ESD says it's made no attempt to collect fines for missing Urban Room, confusingly proposes, before developer's plan for Site 5, new public engagement
This the third of four articles on the 4/11/23 meeting of the Atlantic Yards Community Development Corporation (AY CDC). The first concerned open questions about the future of the platform and fines for affordable housing. The second concerned the timing and affordability of the income-targeted housing. The fourth concerned AY CDC transparency.
Empire State Development (ESD), the state authority that oversees/shepherds the project, is still resisting its obligation (or option?) to impose fines for the project developer's failure to build the promised Urban Room, a glass atrium attached to the arena but jettisoned when the arena was built as a standalone.
That's not too surprising.
Has ESD waived the damages? asked Veconi.
“The project documents have not changed and so ESD has not waived that requirement,” Jaiyesimi said.
Kummer, a lawyer, asked if ESD considered any actions short of giving notice, such as a reminder letter.
“I can assure you that the developer is well aware of its obligations,” Jaiyesimi said. After all, it was discussed last year.
Kummer said he didn’t see any sign that would constitute a waiver, and noted that, under ordinary contract principles, ESD likely would have six years from May 2022 to try to collect the penalties. “So we should be okay," he said. "We have time. We haven't waived anything.”
New public engagement before bulk transfer?
Veconi asked if there was any schedule for the plan to transfer the density and do a new MGPP, or Modified General Project Plan.
“That's a good question,” Jaiyesimi said. She then pivoted to suggest a broader approach.
“ESD is committed to carrying out a full public engagement process, even before the start of the formal GPP process or the necessary environmental review… for the proposed modifications,” she said, “which would include opportunities for members of the public and key stakeholders to provide feedback on what's been developed at the site to date and also the balance of the project site as well.”
That hasn’t previously been suggested, or welcomed, by ESD, but sounds somewhat like an expanded version of a proposal from departing AY CDC Director Jaime Stein in 2018.
Stein had suggested that, before the Site 5 proposal is released, the AY CDC Board and ESD hire third-party planning, design and construction consultants to review the proposal to inform the board and the public.
Note that, while the Crossroads conversations were expected to culminate in a report, Veconi said this past January "We are currently soliciting additional third party input, with the goal of producing a more detailed vision of challenges and opportunities at the site.”
After referencing the BrooklynSpeaks session, Jaiyesimi mused about what public engagement might mean: “Are those open community charettes? Are those led by a facilitator? Are those led by elected officials?” She said they’d be happy to discuss it.
Site 5 vs. platform: what's the priority?
It’s also important, Jaiyesimi noted, for ESD to provide an update on the status of work on the platform, key to six towers over the MTA’s Vanderbilt Yard.
Though a status update seemed an obvious requirement for this meeting, she pledged to get more information by the next AY CDC meeting.
AY CDC member Ron Shiffman, a veteran community planner, suggested caution. He cited “the dramatic changes in the real estate market” and questioned whether it was ripe to discuss Site 5 at this time.
“That's a good question,” replied Jaiyesimi. “I mean, the project's outside completion date is 2035. And so, if as a result of these project discussions there are questions around timing or phasing of the project, those are all things that we can take into consideration.”
Shiffman said he thought it was “more important to deal with the affordability and completion of the platform and not tie this to that.”
“That's an interesting idea,” responded Jaiyesimi, suggesting that “could be included as part of the public discussions.”
What next?
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| Urban Room & "Miss Brooklyn," from 2006 Final Environmental Impact Statement |
What was surprising is that ESD, apparently anticipating movement on the developer's plan to shift bulk from the unbuilt tower (B1, aka "Miss Brooklyn"), once slated to loom over the arena, across Flatbush Avenue to Site 5, longtime home to the big-box stores Modell's (now closed) and P.C. Richard, is contemplating a new public engagement process.
That process, at least as floated at the meeting, could involve public input on the overall Atlantic Yards/Pacific Park site, past and future.
That was, at minimum, confusing.
Discussion last June re fines
At the previous AY CDC meeting, held last June, Director Gib Veconi brought up an issue that he, along with the BrooklynSpeaks coalition he helps lead, had spearheaded: the failure of the developer, now Greenland Forest City Partners (GFCP), to build the promised Urban Room. (They later held a press conference.)
Since the flagship tower was never built, given the lack of an anchor tenant for office space and the downsizing of the arena into a standalone building, the arena builder--the project's original developer, Forest City Ratner--built a “temporary” plaza that appears permanent.
Discussion last June re fines
At the previous AY CDC meeting, held last June, Director Gib Veconi brought up an issue that he, along with the BrooklynSpeaks coalition he helps lead, had spearheaded: the failure of the developer, now Greenland Forest City Partners (GFCP), to build the promised Urban Room. (They later held a press conference.)
Since the flagship tower was never built, given the lack of an anchor tenant for office space and the downsizing of the arena into a standalone building, the arena builder--the project's original developer, Forest City Ratner--built a “temporary” plaza that appears permanent.
But ESD had made no attempt to enforce the fines that were supposed to kick in starting last May, or to amend project documents.
ESD’s Tobi Jaiyesimi saidthat, “given the discussions that we've had related to the arena plaza,” as well as transferring the bulk of the unbuilt tower to Site 5 across Flatbush Avenue, "there's been no discussion about default under the project agreement.”
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| 2016 proposal to eliminate B1 and the Urban Room, transferring bulk to Site 5 |
That could create a site, supporting two towers, worth perhaps $300 million, depending on the amount of affordable housing and other public benefits.
After she agreed that the obligations remained, Veconi proposed a motion to clarify the situation. Jaiyesimi intervened to block such a motion and said, “I’ll circle back with the team to review the documents.”
Veconi noted that the AY CDC “is responsible for overseeing public commitments” of the project, so any conversations “about replacing that as a public benefit” should be shared.
Jaiyesimi said he was misrepresenting her words, though it sure seems something of a trade has been contemplated, based on the proposal, floated by the developer since 2015/2016.
By next month, after a year, the fines would total $10 million. Then again, there's a loophole in project documents that gives the ESD the Right to Refrain from exercising its rights.
Veconi noted that the AY CDC “is responsible for overseeing public commitments” of the project, so any conversations “about replacing that as a public benefit” should be shared.
Jaiyesimi said he was misrepresenting her words, though it sure seems something of a trade has been contemplated, based on the proposal, floated by the developer since 2015/2016.
By next month, after a year, the fines would total $10 million. Then again, there's a loophole in project documents that gives the ESD the Right to Refrain from exercising its rights.
Urban Room and plaza
From one angle, the discussion over the Urban Room is a sideshow—few if any complained that it was missing. Though an enclosed public space likely would be more valuable to the public for gatherings and performances than an open one, the latter is surely more valuable to the arena operator as a safety valve for crowds.
And that opens up the possibility, as I’ve suggested, for some way to assess the arena operator, BSE Global, which benefits enormously from the plaza, even beyond crowd control.
From one angle, the discussion over the Urban Room is a sideshow—few if any complained that it was missing. Though an enclosed public space likely would be more valuable to the public for gatherings and performances than an open one, the latter is surely more valuable to the arena operator as a safety valve for crowds.
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| SeakGeek Plaza |
The plaza's had three commercial sponsors and likely will get a fourth, given the unwinding of its ticketing contract with SeatGeek. (The arena operator was once the project developer; now those roles are split.)
For Veconi and BrooklynSpeaks, the failure to enforce the Urban Room fines likely point more to the looming May 2025 deadline for affordable housing, which comes with fines, now estimated at $1.8 million a month, for the unbuilt units.
For Veconi and BrooklynSpeaks, the failure to enforce the Urban Room fines likely point more to the looming May 2025 deadline for affordable housing, which comes with fines, now estimated at $1.8 million a month, for the unbuilt units.
In other words, if ESD won't enforce the obligations that came due last year, how will the authority enforce the more significant ones in 2025?
As we learned at this most recent AY CDC meeting, given Jaiyesimi's cagey response about how project documents haven't changed "at this time" regarding the affordable housing fines, it seems unlikely.
ESD pressed, says no damages collected
At the most recent meeting, as shown in the video below, Veconi presented the back story: B1 wasn’t built, given the absence of a market for commercial office space at the time, and there’s no market today. But the deadline wasn’t contingent on the rest of the building.
ESD pressed, says no damages collected
At the most recent meeting, as shown in the video below, Veconi presented the back story: B1 wasn’t built, given the absence of a market for commercial office space at the time, and there’s no market today. But the deadline wasn’t contingent on the rest of the building.
So he again asked if ESD had moved to collect the liquidated damages.
Jaiyesimi said no, and repeated that GFCP has “expressed interest” in transferring the bulk from B1. So “ESD is committed to looking at how to preserve the arena plaza as open space, as well as delivering additional open space elsewhere the project site.”
That perhaps reflects a plan for open space at Site 5, were it ever built.
Jaiyesimi said no, and repeated that GFCP has “expressed interest” in transferring the bulk from B1. So “ESD is committed to looking at how to preserve the arena plaza as open space, as well as delivering additional open space elsewhere the project site.”
That perhaps reflects a plan for open space at Site 5, were it ever built.
Note: Jaieyesimi did not say anything, as she did last June, about "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."
After all, it's mostly a commercial space that was, in the words of a protest organizer, "totally appropriated" after the police murder of George Floyd, at a time when the arena was shuttered for COVID-19.
Has ESD waived the damages? asked Veconi.
“The project documents have not changed and so ESD has not waived that requirement,” Jaiyesimi said.
Again, such language does not preclude a proposal to change the documents in the future.
A change in benefits?
“I have to observe that this agency [AY CDC] was chartered to oversee public benefits at the Atlantic Yards project,” Veconi said, “and what you just described as a decision by ESD to change the structure of project benefits at Atlantic Yards that has never been discussed with this board. We've never had any discussion at all about trading the Urban Room for something else. May I ask—“
Jaiyesimi intervened: “I’d like to clarify that ESD isn't trading the Urban Room.”
Acting Chair Daniel Kummer offered back-up: “I didn't hear that in Tobi’s remarks.”
Veconi didn’t quite buy that, and I think he’s right. If not a direct trade, it’s being framed, effectively, as a trade.
“Okay,” he said. “We haven't had a discussion that goes to the idea of preserving, making, effectively sanctioning a change to the project agreements that involve not completing a part of the project plan for what is now the plaza area, in order to preserve the plaza.”
“That’s correct,” Jaiyesimi said.
“That question has never been debated here at the agency that's responsible for overseeing the public benefits,” Veconi said.
“I’m not disputing that,” Jaiyesimi said, citing the developer’s plan for a bulk shift, which would require modifications to the guiding General Project Plan (GPP), which would be subject to a public review process.
“I have to observe that this agency [AY CDC] was chartered to oversee public benefits at the Atlantic Yards project,” Veconi said, “and what you just described as a decision by ESD to change the structure of project benefits at Atlantic Yards that has never been discussed with this board. We've never had any discussion at all about trading the Urban Room for something else. May I ask—“
Jaiyesimi intervened: “I’d like to clarify that ESD isn't trading the Urban Room.”
Acting Chair Daniel Kummer offered back-up: “I didn't hear that in Tobi’s remarks.”
Veconi didn’t quite buy that, and I think he’s right. If not a direct trade, it’s being framed, effectively, as a trade.
“Okay,” he said. “We haven't had a discussion that goes to the idea of preserving, making, effectively sanctioning a change to the project agreements that involve not completing a part of the project plan for what is now the plaza area, in order to preserve the plaza.”
“That’s correct,” Jaiyesimi said.
“That question has never been debated here at the agency that's responsible for overseeing the public benefits,” Veconi said.
“I’m not disputing that,” Jaiyesimi said, citing the developer’s plan for a bulk shift, which would require modifications to the guiding General Project Plan (GPP), which would be subject to a public review process.
Waiving the obligations?
“The documents permit for ESD to have the option to collect and to issue notice regards to the liquidated damages, and that notice has not been issued yet,” Jaiyesimi said, framing it more as an option rather than an obligation to act on an Event of Default.
“The documents permit for ESD to have the option to collect and to issue notice regards to the liquidated damages, and that notice has not been issued yet,” Jaiyesimi said, framing it more as an option rather than an obligation to act on an Event of Default.
Kummer, a lawyer, asked if ESD considered any actions short of giving notice, such as a reminder letter.
“I can assure you that the developer is well aware of its obligations,” Jaiyesimi said. After all, it was discussed last year.
Kummer said he didn’t see any sign that would constitute a waiver, and noted that, under ordinary contract principles, ESD likely would have six years from May 2022 to try to collect the penalties. “So we should be okay," he said. "We have time. We haven't waived anything.”
New public engagement before bulk transfer?
Veconi asked if there was any schedule for the plan to transfer the density and do a new MGPP, or Modified General Project Plan.
“That's a good question,” Jaiyesimi said. She then pivoted to suggest a broader approach.
“ESD is committed to carrying out a full public engagement process, even before the start of the formal GPP process or the necessary environmental review… for the proposed modifications,” she said, “which would include opportunities for members of the public and key stakeholders to provide feedback on what's been developed at the site to date and also the balance of the project site as well.”
That hasn’t previously been suggested, or welcomed, by ESD, but sounds somewhat like an expanded version of a proposal from departing AY CDC Director Jaime Stein in 2018.
Stein had suggested that, before the Site 5 proposal is released, the AY CDC Board and ESD hire third-party planning, design and construction consultants to review the proposal to inform the board and the public.
Those consultants would convene and facilitate at least two preliminary public meetings and then share community priority issues with the board, which is supposed to advise ESD. However, when Veconi brought up that possibility at a subsequent meeting, it was pooh-poohed by an ESD executive.
Jaiyesimi said that ESD would, by the next AY CDC meeting or in the coming months, provide “a sense of what that public engagement could look like” and would welcome “your feedback.”
Coming from the public?
Veconi pressed on. “So an MGPP process hasn't been initiated yet, because that would require a plan, and the plan would be the product of the community engagement exercise that you mentioned—?”
Jaiyesimi nodded yes.
“Is it this developer's intention to participate in that process?” Veconi asked a little quizzically. “Is this developer going to solicit, y’know, be a part of soliciting community input and then developing a plan?”
“That’s the expectation,” Jaiyesimi said.
“Typically MGGP’s start with the developer’s plan, not the public's plan,” Veconi said.
“That’s the expectation,” Jaiyesimi repeated.
Veconi said, “The developer then I guess has some say and when that process began—“
Jaiyesimi intervened, “I don't think the developer has some say, but would be involved as part of the discussions.”
Jaiyesimi said that ESD would, by the next AY CDC meeting or in the coming months, provide “a sense of what that public engagement could look like” and would welcome “your feedback.”
Coming from the public?
Veconi pressed on. “So an MGPP process hasn't been initiated yet, because that would require a plan, and the plan would be the product of the community engagement exercise that you mentioned—?”
Jaiyesimi nodded yes.
“Is it this developer's intention to participate in that process?” Veconi asked a little quizzically. “Is this developer going to solicit, y’know, be a part of soliciting community input and then developing a plan?”
“That’s the expectation,” Jaiyesimi said.
“Typically MGGP’s start with the developer’s plan, not the public's plan,” Veconi said.
“That’s the expectation,” Jaiyesimi repeated.
Veconi said, “The developer then I guess has some say and when that process began—“
Jaiyesimi intervened, “I don't think the developer has some say, but would be involved as part of the discussions.”
Again, that seemed like a pivot never previously floated--but perhaps, I speculate, would reciprocate a greater public investment in the project.
What is necessary, Veconi asked, “for ESD to begin the public engagement process?”
“That's a good question,” responded Jaiyesimi. “And we're happy to have a discussion with the directors about what that public engagement process looks like."
What is necessary, Veconi asked, “for ESD to begin the public engagement process?”
“That's a good question,” responded Jaiyesimi. “And we're happy to have a discussion with the directors about what that public engagement process looks like."
"I know about a year and a half ago at this point, there were public engagement sessions," she said, "which you were a part of, that sought public feedback on the balance of the project site and what visioning the future of Atlantic Yards could be.”
Learning from Crossroads?
That was a reference to BrooklynSpeaks’ Crossroads series, led by Veconi. Asked in January 2022 if ESD was aware of that series, Jaiyesimi gave something of a brush-off: “We don't have any responses to them at the moment, but are happy to be able to engage BrooklynSpeaks and also to engage other members of the community with regards to the project.”
That was a reference to BrooklynSpeaks’ Crossroads series, led by Veconi. Asked in January 2022 if ESD was aware of that series, Jaiyesimi gave something of a brush-off: “We don't have any responses to them at the moment, but are happy to be able to engage BrooklynSpeaks and also to engage other members of the community with regards to the project.”
Similarly, the developer of the Brooklyn Crossing tower, which includes GFCP, in January 2022 offered similarly dismissive comments:
Asked on Friday about the BrooklynSpeaks campaign, developers for Brooklyn Crossing told Patch they "welcome the community's input as we continue to deliver on our commitments to Brooklyn and New York City."Of course, now they're not continuing on their commitments, given the announced plan to start the platform, and failure to do so.
Note that, while the Crossroads conversations were expected to culminate in a report, Veconi said this past January "We are currently soliciting additional third party input, with the goal of producing a more detailed vision of challenges and opportunities at the site.”
After referencing the BrooklynSpeaks session, Jaiyesimi mused about what public engagement might mean: “Are those open community charettes? Are those led by a facilitator? Are those led by elected officials?” She said they’d be happy to discuss it.
Site 5 vs. platform: what's the priority?
It’s also important, Jaiyesimi noted, for ESD to provide an update on the status of work on the platform, key to six towers over the MTA’s Vanderbilt Yard.
Though a status update seemed an obvious requirement for this meeting, she pledged to get more information by the next AY CDC meeting.
AY CDC member Ron Shiffman, a veteran community planner, suggested caution. He cited “the dramatic changes in the real estate market” and questioned whether it was ripe to discuss Site 5 at this time.
“That's a good question,” replied Jaiyesimi. “I mean, the project's outside completion date is 2035. And so, if as a result of these project discussions there are questions around timing or phasing of the project, those are all things that we can take into consideration.”
Shiffman said he thought it was “more important to deal with the affordability and completion of the platform and not tie this to that.”
“That's an interesting idea,” responded Jaiyesimi, suggesting that “could be included as part of the public discussions.”
(Shiffman has suggested public help for the platform in exchange for increased involvement of public and non-profit entities.)
Kummer asked about the status of the proposed condemnation at Site 5, which property owner P.C. Richard initially fought.
Jaiyesimi said there’d been an agreement between the developer and P.C. Richard, which doesn't require condemnation.
Kummer asked about the status of the proposed condemnation at Site 5, which property owner P.C. Richard initially fought.
Jaiyesimi said there’d been an agreement between the developer and P.C. Richard, which doesn't require condemnation.
What next?
Veconi asked how a public engagement process would work. Would a steering committee and a facilitator be needed?
Jaiyesimi said she didn’t have an answer but could return for additional feedback,
Veconi said “we should have an idea of what's necessary to begin it” and noted, that if, as Shiffman suggested, it's not the right economic environment, “we could consider that as well.”
“I absolutely agree there are a lot of moving parts,” he said, “but at some point we have to start attaching some of them to the floor.”
Jaiyesimi said she didn’t have an answer but could return for additional feedback,
Veconi said “we should have an idea of what's necessary to begin it” and noted, that if, as Shiffman suggested, it's not the right economic environment, “we could consider that as well.”
“I absolutely agree there are a lot of moving parts,” he said, “but at some point we have to start attaching some of them to the floor.”
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