At CB 8 tomorrow: is the 962 Pacific private rezoning, ahead of neighborhood plan, a good deal for the community? A better deal for the landowner?
“Proposed transformation of long-vacant Crown Heights lot might be a model for mixed-use development,” the less-than-rigorous Brooklyn Daily Eagle proclaimed 8/30/23 in what was more a press release than an article.
“[S]ome members of the community are pointing to a new proposal… as a potential early success that embodies many of the AAMUP [Atlantic Avenue Mixed-Use Plan] objectives,” the press release stated, citing increased affordable housing and jobs at 962 Pacific Street, a vacant 33,000-square-foot parcel on the south side of the street between Grand and Classon avenues.
But that un-bylined “content” also promotes a highly lucrative proposed rezoning of 962 Pacific to enable a nine-story building that will be voted on tomorrow night by Community Board 8’s Land Use Committee and by the full board Sept. 14, as part of the city’s Uniform Land Use Review Procedure, or ULURP.
(The Land Use Committee meeting is at 6:30 at Crown Heights Center for Nursing and Rehabilitation, 810 St Marks Ave, while the General Meeting is at 6:30 at Chelsea Piers Field House, 601 Dean St.)
There are pledges of family-sized apartments, “nearly 40” (well, 38) affordable units at 25% of the 150-unit total, and a large amount of space for job-creating uses.
 |
| Residential entry to proposed 962 Pacific |
“[S]ome members of the community are pointing to a new proposal… as a potential early success that embodies many of the AAMUP [Atlantic Avenue Mixed-Use Plan] objectives,” the press release stated, citing increased affordable housing and jobs at 962 Pacific Street, a vacant 33,000-square-foot parcel on the south side of the street between Grand and Classon avenues.
But that un-bylined “content” also promotes a highly lucrative proposed rezoning of 962 Pacific to enable a nine-story building that will be voted on tomorrow night by Community Board 8’s Land Use Committee and by the full board Sept. 14, as part of the city’s Uniform Land Use Review Procedure, or ULURP.
(The Land Use Committee meeting is at 6:30 at Crown Heights Center for Nursing and Rehabilitation, 810 St Marks Ave, while the General Meeting is at 6:30 at Chelsea Piers Field House, 601 Dean St.)
There are pledges of family-sized apartments, “nearly 40” (well, 38) affordable units at 25% of the 150-unit total, and a large amount of space for job-creating uses.
Affordable overview
Previous private rezonings didn’t make that commitment to the job-creatiung space. And while private rezonings on Atlantic Avenue offered more affordability, others nearby on Pacific Street didn't offer Mandatory Inclusionary Housing (MIH) Option 1, with those 25% affordable units required to average 60% of Area Median Income, or AMI, with 10% at 40% of AMI.
What’s the margin?
While 962 Pacific was first presented at the Land Use Committee’s October 2022 meeting and has been discussed multiple times, perhaps the biggest question regarding the project was raised, almost belatedly, at last month’s committee meeting by new member Edward Delman: “what is the projected sort of margin that you are expecting to have on this project as it is currently framed?”
Oelsner's answer: “Let’s come back to the Community Board.”
A candid answer, much less an independently vetted one, is unlikely regarding the owner’s cost basis and loan terms, as well as the value of new buildable square feet and expected revenue from rentable residential and commercial space.
A rezoning that transforms a site shackled by outdated low-rise manufacturing zoning into a mid-rise apartment building is likely worth tens of millions of dollars, even under conservative assumptions. That would vault the property’s value in a sale or joint venture, preceding any analysis of operating margins.
In fact, the coming rezoning of blocks in the Atlantic Avenue Mixed-Use Plan surely will raise the value of many parcels—including this one, should it not get the benefit of a one-off rezoning—especially since that rezoning will deliver not just new density but also public realm, infrastructure, and programmatic investments by the city.
A private rezoning that comes ahead of it could be more valuable for a first mover and a justification for the Community Board and Council Member to ask for deeper affordability and perhaps other things.
(Though there have been proposal to capture some of that financial upside in upzonings, the city does not have a flip tax or a policy regarding impact fees “to offset the development’s impact on local infrastructure, services, and the environment.”)
Moreover, the 962 Pacific parcel—given nearby completed buildings—would be joining a significantly transformed block, rather than forcing new residents to endure construction next door.
Momentum and pushback
The proposed rezoning comes with some momentum: influential members of the Land Use Committee, led by Veconi, support the project, arguing that it fulfills many of the goals of the board’s proposed but never passed M-CROWN initiative, which has influenced the recently-released AAMUP plan, and goes beyond previous private rezonings.
However, Council Member Crystal Hudson has said she doesn’t support private rezonings while the AAMUP rezoning is pending—and the local Council Member’s position typically sways colleagues.
As her land use staffer Andrew Wright explained at one CB 8 meeting, not only does a private rezoning absorb limited resources from the Department of City Planning, the goal of the rezoning is to provide holistically for development.
Then again, Hudson may feel pressure from the administration of Mayor Eric Adams—which has embraced the “City of Yes” and the importance of adding supply—to approve this project, as she did last year with two private rezonings nearby, involving 1034-1042 Atlantic Avenue and 870-888 Atlantic Avenue.
Her approval came with promises of 35% affordability (averaging 54% of AMI) in exchange for increased bulk, part of a last-minute behind-the-scenes negotiation that involved FAC and fellow housing nonprofit IMPACCT Brooklyn, both of which—note the self-dealing in what’s been termed a “Community Benefits Agreement”—also got contracts for anti-displacement work funded by the developers. (Those $100,000 payments, in two phases, start only after those projects get built.)
Details of those agreement did not surface until months after Hudson announced the compromise, which led to skepticism from some CB 8 members about proposals to lock in 962 Pacific promises in a similar way.
So some last-minute negotiations, both at the Community Board stage and Council stage, may be pending regarding 962 Pacific.
One major promoted benefit is the landowner’s plan to devote most of the cellar, 19,355 square feet (plus a 1,030 sf ground-floor entry), to manufacturing uses, plus much of the rest--as well as some of the ground floor--to an early childhood education center, also a job-creating use under M-CROWN guidelines.
The building relies on a significant amount of space that does not “count” as an upzoning, because it is either below-ground or otherwise ineligible. It would contain 214,602 gross square feet (gsf), a 39.6% increase over 153,695 zoning square feet (zsf).
By contrast, two nearby private rezonings had a marginal increase in bulk: 1010 Pacific was 152,292 gsf and 144,580 zsf, while Grand Pacific was 60,480 gsf and 56,000 zsf, according to their respective EAS documents.
That’s unclear, since we don’t know details regarding the loan, the owners’ income streams, or the current—and presumably better—market for sites in the AAMUP area. Oelsner has also said, “We have been told to stop and start multiple times over the last few years and the financial strain of this uncertainty is no longer sustainable for us.”
That does not necessarily translate into construction urgency. After all, some projects last year haven’t proceeded, in part because of the absence of 421-a.
In the absence of the spot rezoning, the most likely scenario to provide income at the lot, Lobel suggested, would be a last-mile distribution center for packages, which would incentivize truck traffic. Oelsner also mentioned a bus parking lot.
Then again, according to the EAS, “Absent the Proposed Actions the lot is expected to remain in its existing condition as a vacant lot.”
Who’d build it?
“What we're trying to do… is work with all of you so that we can maintain control over our property, and that we could then bring in somebody, a developer, that echoes the same values we have and that the community has,” Oelsner said. “We fear the consequences could be dire if we do not proceed with our application soon.”
“We are talking to different developers to do a joint venture to build the building and to stay here for more decades,” she said.
Would the Oelsners maintain a majority ownership, she was asked at last month's meeting. “We pray to God," she responded, "we can we can keep this property and we can have a controlling interest."
No studios, home office space
“Oelsner cites her long-standing connections to the Crown Heights community as her motivation for the planned development,” the Eagle proclaimed. “The team behind the project – HSN Realty Corporation (HSN) – is a women-owned and run business that has been part of the Crown Heights community since the 1940s.”
Asked at CB 8 about other property and whether her family lived in the neighborhood, Oelsner said that her family owned another parcel, 1030 Atlantic, in the area. “I have a residency in New York, it but it's not in the Crown Heights area.” At another meeting, she said, “We do not live in the area, we live outside of Brooklyn but we would love to live in one of the buildings.”
Both 962 Pacific LLC and HSN Realty have an address at a residence, long occupied by Oelsner's family, in Port Washington, in western Nassau County.
No one drilled down on Oelsner’s answers, but “have a residency” does not necessarily mean a main residence. The firm Nichols Oelsner Management, according to state records, has an address in Charleston, SC, at a home Oelsner and her husband bought in 1997. In 2020, that Charleston-based firm got a Paycheck Protection Loan of $30,272.
Oelsner’s business phone, in a city Lobbying database, has a Charleston area code.
Other issues
Regarding the early childhood center, Oelsner said they’ve considered providers including Brooklyn Preschool of Science, University Settlement, and Little Sun People
She said at one meeting that they were aiming to offer reduced rates for those in the affordable housing units and families in the community. That, of course, would have to be locked in.
That early childhood center would have a garden, 3,250 square feet, and the building would have a residential garden, a modest 1,950 square feet.
Given concerns about limited open space and a growing population, Oelsner has said “we would be open to working with the Community Board on ways to open and make available these spaces for community use.”
One committee member, Peter Krashes, said he didn’t think the community would “choose to pass through the building to use this space” and asked if it could be moved to the street. That did not gain assent.
Current rents at 60% of AMI are $1,589 for a one-bedroom and $1,906 for a two-bedroom, and at 40% of AMI are $1,059 and $1,271, though both likely will rise by the time the building opens.
Note that the 60% of AMI average ensures there will be some less affordable units--perhaps 80% of AMI or higher--to balance the 40% of AMI units. For a three-person household, the income ceiling is $76,260 at 60% of AMI and $50,840 at 40% of AMI.
Much of the housing thus may not be, as CB 8 member Sarah Lazur has pointed out, "deeply affordable housing," which is "the desperate need in this neighborhood."
It’s unclear whether the AAMUP may—we’ll learn at a City Planning meeting tonight—offer similar bulk without such mandates.
The 962 Pacific promises would have to be locked in via a private agreement with landowner Nadine Oelsner’s HSN Realty, which would have to be binding on future partners.
The Eagle article comes with positive quotes from respected nonprofit leaders who are essentially Oelsner’s business partners, such as Michelle de la Uz of the Fifth Avenue Committee (FAC), who says her organization “and other advocates have long called on all communities to do their fair share in addressing the deepening affordable housing crisis.”
It does not, however, deal with any of the questions or contradictions raised at previous public discussions regarding 962 Pacific, such as whether a “shovel ready” site would get built in the current economic environment and "deliver affordable housing now"; whether that space for manufacturing is a sacrifice by, or a benefit to, the owner; how committed the owner is to the community; and whether the owner’s debt puts her in danger of losing the property absent this rezoning.
The Eagle article comes with positive quotes from respected nonprofit leaders who are essentially Oelsner’s business partners, such as Michelle de la Uz of the Fifth Avenue Committee (FAC), who says her organization “and other advocates have long called on all communities to do their fair share in addressing the deepening affordable housing crisis.”
It does not, however, deal with any of the questions or contradictions raised at previous public discussions regarding 962 Pacific, such as whether a “shovel ready” site would get built in the current economic environment and "deliver affordable housing now"; whether that space for manufacturing is a sacrifice by, or a benefit to, the owner; how committed the owner is to the community; and whether the owner’s debt puts her in danger of losing the property absent this rezoning.
 |
| From developer's presentation |
What’s the margin?
While 962 Pacific was first presented at the Land Use Committee’s October 2022 meeting and has been discussed multiple times, perhaps the biggest question regarding the project was raised, almost belatedly, at last month’s committee meeting by new member Edward Delman: “what is the projected sort of margin that you are expecting to have on this project as it is currently framed?”
Oelsner's answer: “Let’s come back to the Community Board.”
A candid answer, much less an independently vetted one, is unlikely regarding the owner’s cost basis and loan terms, as well as the value of new buildable square feet and expected revenue from rentable residential and commercial space.
The developer, as shown in the slide below, makes the not unreasonable case that the context of the block has already changed: parcels on each side of 962 Pacific (in pink) have already been rezoned, so don't they deserve the same?
Alternatively, perhaps CB 8 has learned that, with the previous Council Member, too little was asked of those other landowners.
 |
| From: developer's presentation |
A rezoning that transforms a site shackled by outdated low-rise manufacturing zoning into a mid-rise apartment building is likely worth tens of millions of dollars, even under conservative assumptions. That would vault the property’s value in a sale or joint venture, preceding any analysis of operating margins.
In fact, the coming rezoning of blocks in the Atlantic Avenue Mixed-Use Plan surely will raise the value of many parcels—including this one, should it not get the benefit of a one-off rezoning—especially since that rezoning will deliver not just new density but also public realm, infrastructure, and programmatic investments by the city.
A private rezoning that comes ahead of it could be more valuable for a first mover and a justification for the Community Board and Council Member to ask for deeper affordability and perhaps other things.
(Though there have been proposal to capture some of that financial upside in upzonings, the city does not have a flip tax or a policy regarding impact fees “to offset the development’s impact on local infrastructure, services, and the environment.”)
Moreover, the 962 Pacific parcel—given nearby completed buildings—would be joining a significantly transformed block, rather than forcing new residents to endure construction next door.
Gib Veconi, a key member of the Land Use Committee who led the M-CROWN initiative, has, while serving on the advisory Atlantic Yards Community Development Corporation, asked the parent Empire State Development to assess the financial feasibility of Atlantic Yards/Pacific Park.
In the case of 962 Pacific, he and Brooklyn Borough Hall land use maven Richard Bearak met with Oelsner before the project was publicly announced, and at CB 8 meetings Veconi has acted as a general advocate for the project.
In the case of 962 Pacific, he and Brooklyn Borough Hall land use maven Richard Bearak met with Oelsner before the project was publicly announced, and at CB 8 meetings Veconi has acted as a general advocate for the project.
Momentum and pushback
The proposed rezoning comes with some momentum: influential members of the Land Use Committee, led by Veconi, support the project, arguing that it fulfills many of the goals of the board’s proposed but never passed M-CROWN initiative, which has influenced the recently-released AAMUP plan, and goes beyond previous private rezonings.
However, Council Member Crystal Hudson has said she doesn’t support private rezonings while the AAMUP rezoning is pending—and the local Council Member’s position typically sways colleagues.
As her land use staffer Andrew Wright explained at one CB 8 meeting, not only does a private rezoning absorb limited resources from the Department of City Planning, the goal of the rezoning is to provide holistically for development.
Then again, Hudson may feel pressure from the administration of Mayor Eric Adams—which has embraced the “City of Yes” and the importance of adding supply—to approve this project, as she did last year with two private rezonings nearby, involving 1034-1042 Atlantic Avenue and 870-888 Atlantic Avenue.
Her approval came with promises of 35% affordability (averaging 54% of AMI) in exchange for increased bulk, part of a last-minute behind-the-scenes negotiation that involved FAC and fellow housing nonprofit IMPACCT Brooklyn, both of which—note the self-dealing in what’s been termed a “Community Benefits Agreement”—also got contracts for anti-displacement work funded by the developers. (Those $100,000 payments, in two phases, start only after those projects get built.)
Details of those agreement did not surface until months after Hudson announced the compromise, which led to skepticism from some CB 8 members about proposals to lock in 962 Pacific promises in a similar way.
So some last-minute negotiations, both at the Community Board stage and Council stage, may be pending regarding 962 Pacific.
As Veconi said at one meeting, “it is true that the Council Member has stated that… it's not preferable to have additional private applications,” but she’s approved other applications that go beyond the guidelines. Former Land Use Chair Ethel Tyus also has responded positively.
 |
| Note gross square feet vs. zoning square feet |
A project much bigger than the zoning
One major promoted benefit is the landowner’s plan to devote most of the cellar, 19,355 square feet (plus a 1,030 sf ground-floor entry), to manufacturing uses, plus much of the rest--as well as some of the ground floor--to an early childhood education center, also a job-creating use under M-CROWN guidelines.
HSN has partnered with industrial advocate Evergreen Exchange to advise on what industrial users might need space.
Note: plans for the project have shifted regularly, so a Revised Illustrative Drawings document circulated at the Aug. 3 CB 8 Land Use Committee meeting contains different dimensions of various floors than that in the Environmental Assessment Statement, dated two weeks earlier.
After Veconi told the Land Use Committee that the job-creating space is far greater than sought under the M-CROWN framework, fellow Committee member Kaja Kuhl pointed out that a below-ground location doesn’t count as buildable floor area, since it doesn't add space in the rezoning and doesn't represent a sacrifice of the developer's additional space.
 |
| The cellar floor plan, from August 2023 CB 8 Land Use meeting |
After Veconi told the Land Use Committee that the job-creating space is far greater than sought under the M-CROWN framework, fellow Committee member Kaja Kuhl pointed out that a below-ground location doesn’t count as buildable floor area, since it doesn't add space in the rezoning and doesn't represent a sacrifice of the developer's additional space.
“It's additional rentable space in my view,” she said. “And this is not necessarily negative because I think it's great. But I think we should be clear about this.”
Another way to see it: it’s a bonus to the landowner, which is asking, according to the Environmental Assessment Statement (EAS, at bottom), to waive the otherwise required 59-62 parking spaces, which could be below-ground or crowd out above-ground rentable space.
Another way to see it: it’s a bonus to the landowner, which is asking, according to the Environmental Assessment Statement (EAS, at bottom), to waive the otherwise required 59-62 parking spaces, which could be below-ground or crowd out above-ground rentable space.
 |
| Cellar floor plan, from EAS |
Such parking “would be both prohibitively costly and would cause a reduction in the number of residential dwelling units,” according to the EAS. “As such, the proposed waiver in parking significantly contributes to the financial feasibility of the project.” City Planning and local elected officials have generally supported such parking waivers in transit-accessible areas.
The building relies on a significant amount of space that does not “count” as an upzoning, because it is either below-ground or otherwise ineligible. It would contain 214,602 gross square feet (gsf), a 39.6% increase over 153,695 zoning square feet (zsf).
By contrast, two nearby private rezonings had a marginal increase in bulk: 1010 Pacific was 152,292 gsf and 144,580 zsf, while Grand Pacific was 60,480 gsf and 56,000 zsf, according to their respective EAS documents.
According to the 962 Pacific EAS, dated 7/20/23, the total includes 177,492 gsf and 135,815 zsf of residential, 25,210 gsf and 8,530 zsf of community facility space, and 11,900 gsf and 9,350 zsf of commercial space. That’s not necessarily confirmed by the document released to CB 8 last month, as excerpted here.
 |
| Ground floor plan, presented to CB 8 |
Financial urgency?
Oelsner has said her family owned a car dealership and and other businesses since the 1940s in the area. About 15 years ago, they consolidated multiple particles into the 962 Pacific lot that was rented until 2018 to a local business owner, who used it for truck and property storage.
The family then took a loan on the property, using it to clean up the lot, help relocate the business owner, and pursue the rezoning. That loan has grown to $8.5 million, though its terms are unclear.
At an October 2022 Land Use Committee meeting, attorney Richard Lobel—whose pledges to Council Member Laurie Cumbo on a different rezoning were far from reliable—claimed the Oelsners face a growing financial burden with regards to the property.
Oelsner has said her family owned a car dealership and and other businesses since the 1940s in the area. About 15 years ago, they consolidated multiple particles into the 962 Pacific lot that was rented until 2018 to a local business owner, who used it for truck and property storage.
The family then took a loan on the property, using it to clean up the lot, help relocate the business owner, and pursue the rezoning. That loan has grown to $8.5 million, though its terms are unclear.
At an October 2022 Land Use Committee meeting, attorney Richard Lobel—whose pledges to Council Member Laurie Cumbo on a different rezoning were far from reliable—claimed the Oelsners face a growing financial burden with regards to the property.
 |
| Ground floor plan EAS |
Given the “financial markets”—presumably rising interest rates—and the loss of the 421-a tax break, going forward with the rezoning would help them keep the property, he said.
That’s unclear, since we don’t know details regarding the loan, the owners’ income streams, or the current—and presumably better—market for sites in the AAMUP area. Oelsner has also said, “We have been told to stop and start multiple times over the last few years and the financial strain of this uncertainty is no longer sustainable for us.”
That does not necessarily translate into construction urgency. After all, some projects last year haven’t proceeded, in part because of the absence of 421-a.
In the absence of the spot rezoning, the most likely scenario to provide income at the lot, Lobel suggested, would be a last-mile distribution center for packages, which would incentivize truck traffic. Oelsner also mentioned a bus parking lot.
Then again, according to the EAS, “Absent the Proposed Actions the lot is expected to remain in its existing condition as a vacant lot.”
Who’d build it?
“What we're trying to do… is work with all of you so that we can maintain control over our property, and that we could then bring in somebody, a developer, that echoes the same values we have and that the community has,” Oelsner said. “We fear the consequences could be dire if we do not proceed with our application soon.”
“We are talking to different developers to do a joint venture to build the building and to stay here for more decades,” she said.
Would the Oelsners maintain a majority ownership, she was asked at last month's meeting. “We pray to God," she responded, "we can we can keep this property and we can have a controlling interest."
 |
| Second floor plan presented to CB 8; red is home office; green outlined area eliminated studios |
No studios, home office space
While the requested R7A zoning would allow for up to 199 units at the site, the landowner is proposing just 150 units, eliminating studio apartments that were in an earlier version—a promise that would have to be locked in via a separate agreement with the community board and/or nonprofit groups, since it can’t be accomplished via a Council-passed rezoning.
There would be nine three-bedroom units, according to my rough estimate, the rest one- and two-bedrooms.
A majority of the units would include home office space, a nod to the work-from-home trend. That said, Oelsner’s claim of “spacious units” deserves a caveat: “home offices” in the smaller units, one-bedrooms between 600 and 700 square feet, look to be very small, as shown in the graphic above.
Note that, as shown by the contrast between the recently released document (above) and the EAS (below), the studio apartments were eliminated by converting, in the case of the second floor at least:
A majority of the units would include home office space, a nod to the work-from-home trend. That said, Oelsner’s claim of “spacious units” deserves a caveat: “home offices” in the smaller units, one-bedrooms between 600 and 700 square feet, look to be very small, as shown in the graphic above.
Note that, as shown by the contrast between the recently released document (above) and the EAS (below), the studio apartments were eliminated by converting, in the case of the second floor at least:
- a two-bedroom and two studios (highlighted below left) to three one-bedrooms (highlighted above left), and
- a three-bedroom, two two-bedrooms, and a studio (highlighted below right) to three two-bedrooms and one one-bedroom (highlighted above right).
 |
| Second floor plan in EAS; highlighted area includes studios |
Local ties?
At CB 8 meetings, Oelsner has said, variously, that her family has been “long term stakeholders in this community." She added at one meeting, “As long as I am here, I am going to fight tooth and nail for this community."
At CB 8 meetings, Oelsner has said, variously, that her family has been “long term stakeholders in this community." She added at one meeting, “As long as I am here, I am going to fight tooth and nail for this community."
“Oelsner cites her long-standing connections to the Crown Heights community as her motivation for the planned development,” the Eagle proclaimed. “The team behind the project – HSN Realty Corporation (HSN) – is a women-owned and run business that has been part of the Crown Heights community since the 1940s.”
Asked at CB 8 about other property and whether her family lived in the neighborhood, Oelsner said that her family owned another parcel, 1030 Atlantic, in the area. “I have a residency in New York, it but it's not in the Crown Heights area.” At another meeting, she said, “We do not live in the area, we live outside of Brooklyn but we would love to live in one of the buildings.”
Both 962 Pacific LLC and HSN Realty have an address at a residence, long occupied by Oelsner's family, in Port Washington, in western Nassau County.
No one drilled down on Oelsner’s answers, but “have a residency” does not necessarily mean a main residence. The firm Nichols Oelsner Management, according to state records, has an address in Charleston, SC, at a home Oelsner and her husband bought in 1997. In 2020, that Charleston-based firm got a Paycheck Protection Loan of $30,272.
Oelsner’s business phone, in a city Lobbying database, has a Charleston area code.
Other issues
Regarding the early childhood center, Oelsner said they’ve considered providers including Brooklyn Preschool of Science, University Settlement, and Little Sun People
She said at one meeting that they were aiming to offer reduced rates for those in the affordable housing units and families in the community. That, of course, would have to be locked in.
That early childhood center would have a garden, 3,250 square feet, and the building would have a residential garden, a modest 1,950 square feet.
Given concerns about limited open space and a growing population, Oelsner has said “we would be open to working with the Community Board on ways to open and make available these spaces for community use.”
One committee member, Peter Krashes, said he didn’t think the community would “choose to pass through the building to use this space” and asked if it could be moved to the street. That did not gain assent.
Comments
Post a Comment