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At contentious meeting, CB 8 committee opposes 962 Pacific spot rezoning unless developer improves affordable housing. Coming: revised proposal.

At a charged and sometimes chaotic three-hour meeting, the Brooklyn Community Board 8 Land Use Committee on Sept. 7 refused to endorse the proposed spot rezoning of 962 Pacific Street in Crown Heights until the applicant agreed to increase both the unit count and affordability of the proposed below-market "affordable" housing.

Their goal: 30 deeply affordable units at 40% of AMI, plus 8 units at 60% of AMI and 15 units at 80% of AMI, totaling some 35% of the proposed 150-unit building. Whether that's viable remains unclear.

The vote set up a week of behind-the-scenes revisions in likely not just the proposed building's affordability but also its configuration and total unit count. The applicant should deliver an updated proposal before CB 8's full board meeting this Thursday, Sept. 14. 

Success would allow applicant Nadine Oelsner of HSN Realty to build--if financing's available--or simply attract investors ahead of the broader Atlantic Avenue Mixed-Use Plan (AAMUP), a rezoning from Vanderbilt to Nostrand avenues along and around Atlantic that would allow dense new housing. 

That area, long shackled by outdated manufacturing zoning, has been the subject of several spot rezonings, which require the Community Board to weigh in but are essentially controlled by the Council Member under the city's Uniform Land Use Review Procedure, or ULURP.

Looking southeast from Grand Avenue & Pacific Street toward vacant 962 Pacific parcel

A different vibe

That pushback was perhaps a surprise for Oelsner, who arrived with charts arguing that the proposed 9-story, 150-unit building would be superior compared to other spot rezonings nearby. It would include 25% affordable units, dedicated space for job-creating uses under CB 8's long-pending M-CROWN rezoning proposal (which inspired the city's AAMUP plan), and a plan for home office space and no studio apartments.

Her team also argued that their deal was better than what the AAMUP draft rezoning guidelines would allow, since the latter--at least if not revised--would enable below-market units at higher rents and would not require the same job-creating space nor bar studio apartments. 

(Both comparisons have some validity but also deserve caveats, as I'll describe below.)
From developer's presentation; caveats below

However, unlike in Oelsner's presentations at online meetings at the Land Use Committee, this was in person, and the vibe was different, as Committee members fed off each other's energy, pushing back against fellow member Gib Veconi, architect of the M-CROWN guidelines and, at this meeting, chief supporter of this proposal. 

Moreover, the frustration about displacement expressed by Black committee members, facing an all-white development team, gained potency in person--the meeting was held at the Crown Heights Center for Nursing and Rehabilitation--compared to online.

Rather than focus on refining the project's benefits, the applicant team also faced the frustration that the AAMUP guidelines, released just a day earlier, inspired in several Committee members, who vowed to not only seek more affordability from the area-wide plan but also from 962 Pacific.

So this time the Committee's pragmatist camp--which has prevailed on several rezoning results--was outmatched by radicalized tenants and their allies, who last year, for example, unsuccessfully petitioned for two spot rezonings to be delayed until a neighborhood plan was developed.

If the former seemed ready to accept too little--there's enormous upside in these rezonings--the latter's initial ask at the meeting, 80% affordability, was clearly unrealistic.

But from either direction, it's hard to discern the best deal, as long as an applicant seeking an enormous increase in valuable bulk hasn't opened up their books to explain their cost basis, financing terms, and profit expectations. 

Landowner Nadine Oelsner (r.), attorney Richard Lobel, industrial space advisor Leah Archibald

That leaves the Comminity Board at a disadvantage against an applicant armed with a lawyer, consultants, and a financial black box.

That said, the dynamic at future hearings over this project could change, assuming the presence of YIMBY (Yes in My Back Yard) activists, who prize new density over skepticism of the underlying deal and attended many of the AAMUP sessions. 

Moreover, Council Member Crystal Hudson has previously announced opposition to any spot rezonings while the AAMUP is pending. Still, she last year approved spot rezonings, with 35% affordability, after expressing wariness, and in this case might again want credit for delivering a better deal.

Developer's initial pledge

Oelsner had promised 38 affordable apartments, or 25%, under the city's Mandatory Inclusionary Housing (MIH) Option 1, which requires an average of 60% of Area Median Income (AMI). That would mean 15 deeply-affordable units at 40% of AMI, 8 at 60% of AMI, and 15 at 80% of AMI. 

Under MIH, new market-rate units, enabled by an increase in bulk, cross-subsidize the lower-income ones.

It's notable, as shown in my annotation of the chart below, how much AMI has risen: at 40% of AMI, a three-person household would've earned $31,000 as of 2016, when MIH was passed under the administration of Mayor Bill de Blasio. Now that's $50,840, in part because AMI is calculated not based on the neighborhood or Brooklyn but a multi-county region including well-off suburbs.

2016 NYC fact sheet, updated with 2023 income levels

So two-bedroom rents, at least under current guidelines, would be $1,271, $1,906, and $2,542 for the respective bands of 40%, 60%, and 80% of AMI, though the $2,542 figure may be unrealistic. Meanwhile, market-rate rents have soared.

Toward deeper affordability

During the meeting, Oelsner accepted swapping MIH Option 1 for Option 3, with deep affordability: 20% of the units, or 30 total, at 40% of AMI. (That's similar to a renegotiation announced in 2021 for the 840 Atlantic project; however, it was not locked into a side contract with either Friends of Community Board 8 or a local nonprofit.)

From 2016 City Council page, updated with 2023 AMI levels & rents

That would mean two-bedroom apartments at $1,271 a month, under today's guidelines, though surely the baseline will rise by the time the building opens. (In 2016, as shown above, the rent would've been $775.)

But that compromise wasn't enough for the Land Use Committee, which sought additional below-market apartments, albeit somewhat less affordable ones.

Getting to 53 affordable?

It's unclear whether or how much the ad hoc request--for 30 units at 40% of AMI, plus 8 units at 60% of AMI and 15 units at 80% of AMI--will be granted, as Oelsner goes back to the spreadsheet and architect Nick Liberis (of Archimaera, the firm behind several spot rezonings nearby) reconfigures the building.

But the discussion was so last-minute--shouldn't this have been debated months ago?--the resolution sought a unit count, not a percentage. Nor did it specify unit size. So that leaves wiggle room.

The requested 53 affordable units would represent 35.3% of the proposed 150 units. But the applicants, I speculate, could honor the letter of the resolution by building the maximum 199 allowable units. If so, 53 affordable units would repesent 26.6% of the total.

Would that dishonor the spirit of the request? Maybe, maybe not. Those seeking more affordable apartments want to get more people housed and--I suspect--care less about keeping the proposed home office space, since lower-income people are less likely to work from home.

Proposed second floor, with home office space and no studios

Still, adding more affordability via either a higher unit count or a reconfiguration of the current plan means tradeoffs. It could mean sacrificing not only some home office space but also--as Committee Chair Sharon Wedderburn suggested--the applicant's pledge to eschew studios and include three-bedroom units.

Starting with the context

Veconi led off the meeting by recapping the Department of City Planning's (DCP) presentation of the draft zoning guidelines, which don't set aside space for the light industrial jobs CB 8 had sought to encourage via the M-CROWN plan. 

That means commercial space enabled by the AAMUP plan, if not revised, likely would go to office, retail, and hospitality jobs, he observed, likely driving out most manufacturing use.

Not only does the city seem prepared to allow somewhat larger buildings--about 18% more bulk than in previous discussions--it envisions allowing MIH Options 1, 2, and 3, Veconi noted. 

Thus Option 2, aimed at households earning 80% of AMI and allowing higher rents, likely would be chosen by developers. But it wouldn't help those most at risk. 

"So those are all things that that are somewhat at odds with the community board's resolutions," Veconi said. 

Moreover, as I wrote, the guidelines and report don't mention the deal Hudson got in last year's spot rezonings of 870-888 Atlantic and 1034-1042 Atlantic--35% affordability at an average of 54% of AMI-.

Developer's case

Oelsner this time made a presentation standing in front of posters rather than narrating a digital slideshow. "We have been long term stakeholders in the community." she said, for the first time amending that to "business stakeholders," indicating her family's experience operating businesses and owning land. (Her company address is in Port Washington, in Nassau County.)
From previous developer presenttion; 962 Pacific in pink

Their parcel, she said, deserves the same zoning as that granted to the parcels to the east and west on the map, beneficiaries of spot rezonings.

 "This is a travesty," she said, "because it has the potential to create much needed benefits for the community," meets CB 8's goals in M-CROWN in terms of affordability and job-creating space, and goes further than other rezonings on Pacific Street seeking the same bulk.

(Unmentioned: the rezoning also could deliver significant financial returns, and most of the job-creating space does not require HSN to sacrifice new bulk but rather convert underground space, which otherwise might be fallow or devoted to expensive parking. )

The applicant's environmental consultant Kevin Williams explained how their analysis of parking availability showed existing capacity and thus no need to add parking. So they seek and expect a waiver of required parking, given that the city aims to disincentiveze driving.

To find tenants for that industrial space, Oelsner said, they'd engaged the nonprofit Evergreen Exchange.


Attorney Richard Lobel then contrasted this project with the nearby 1010 Pacific and 1050 Pacific rezonings, noting that 962 Pacific would provide more affordability, larger units, and M-CROWN space.

Unmentioned: those weren't good deals, as negotiated by Council Member Laurie Cumbo; promises weren't locked in. It was a bit rich to hear Lobel--whose rate is $650/hour--acknowledge that "1010 and 1050 Pacific made verbal commitments and signed developers' letters that were not adhered to," since, well, he made some of those commitments. 

Developer's comparison of 962 Pacific proposal vs. nearby spot rezonings approved

It's worth noting that the chart above, while it lists the count of total and affordable units, does not calculate the percentage of affordability, which is higher in the three rezonings along Atlantic Avenue.

A second sheet, below, compared 962 Pacific to the draft AAMUP guidelines, noting that the latter wouldn't require M-CROWN uses and would allow less affordable MIH Option 2.

Also, those guidelines would allow a larger building, 125 feet vs. 95 feet, and more above-ground bulk, 167,000 zoning square feet vs. 153,000 zoning square feet. (Unmentioned: 962 Pacific proposes a far larger building overall, with 214,602 gross square feet, thanks to strategic use, for example, of below-ground space.) 

Developer's comparison of 962 Pacific proposal vs. allowable under draft zoning

Timing issues

Moreover, the area rezoning wouldn't be approved until spring 2024, Lobel noted, "whereas as Nadine likes to tell us on the team, we're shovel ready." 

That's unclear, because, at another point in the meeting, Lobel stated, "There's no mixed residential buildings that are being built right now without 421-a," referencing a now expired state tax break that Gov. Kathy Hochul has tried to revive.

"It may seem crazy," Lobel observed, that the 962 Pacific team would accept less new (above-ground) bulk and deeper affordability than the draft guidelines. "Part of it is just the fact that Nadine and [husband] Bill have been around for years and had been part of this for years." 

That suggests they recognized and planned to respond to CB 8's guidelines. Alternatively: they also recognize the advantage of getting ahead of the area-wide rezoning, when multiple developers might build into a short-term glut; they face financial pressures; and/or that they foresee that significant profit remains achieveable, attracting an investor after the spot rezoning raises property value. 

"I think it's time for us to move forward as a community," Oelsner said. "And I have given everything to this for the last ten years of my life. And I'm asking you to work with us, not against us."

Committee pushback

The pushback began immediately, cordially and then more forcefully. "Is there any way that we can get more affordability," asked Karen Gray, "because people are really being pushed out."

Lobel played defense. Having represented the two spot rezonings on Atlantic Avenue that offered 35% affordability, "there was more flexibility" because those applicants had requested more bulk.

"So the bottom line is, I get it and we understand the need for affordability," he said, but this would be better than neighboring rezonings on Pacific Street because of 15 deeply affordable units. Those units, he said at one point, are "no small thing."

Mimi Mitchell, a Crown Heights Tenant Union member with a assertive style, pointed out that the AAMUP Community Vision and Priorities report issued a week before the draft zoning guidelines cited great concern regarding affordable housing.

Dismissing Lobel's comparisons to previous rezonings, she pronounced, "That committee was that committee at that time. This committee is this committee at this time.... This community is in an affordable housing crisis." 

"So when an applicant says we're doing everything we can to help this community," Mitchell said, "15 units of deeply affordable housing, as much as I appreciate you, it's not acceptable."

Noting that Black families earn far less than white ones, Mitchell (who's Black), said they needed to help "people who actually live here, especially those of color." The slide below, from last week's Draft Zoning Guidelines presentation, shows, a distinct shift in the AAMUP context area from majority Black to plurality white.

From AAMUP Draft Zoning Guidelines presentation

Developer's response

Oelsner responded cordially, saying it was "like a juggling act" to configure a project. She likened it to or "putting together a quilt" and ensuring it's functional.

So they're "looking at all sorts of different alternative financing mechanisms," she said, and had gained hope when Hochul proposed that developers in Gowanus get the equivalent of 421-a. Potential partners want certain financial returns, she said, and that lowers their land value.

"Now I don't want it [land value] to go down to completely nothing," Oelsner said, "because then we're going to be here and say, 'Hey, that AAMUP process looks actually much better. We'll wait it out.'"

Lobel, citing recent neighborhood rezonings, warned that the city wouldn't deliver deeper affordability. "If nothing happens tonight, that building potentially goes [MIH] Option 2, and the number of deeply affordable units is zero," he said

So delivering 15 deeply affordable units, he said, "it's something. It has to be something."

"It's crumbs," riposted Mitchell.

Lobel noted that 962 Pacific would include other below-market units: "That's a decision to be made. Do nothing or do something."

Murky financials

Committee member Peter Krashes noted that at the August meeting, Oelsner was asked to share the building's financials, and she said she'd come back to the Community Board.

Oelsner didn't quite answer. She described her not unreasonable expectation that, after Borough President Eric Adams, Cumbo, and the CB 8 Chair in August 2018 signed a letter seeking a rezoning, the landowners began to prepare 962 Pacific. They got a $2 million loan to relocate the parcel's tenant and have further spent to clean up the site and to pursue the spot rezoning.

But the Department of City Planning did not endorse CB 8's proposal, citing "differences over how to achieve a mixed-use neighborhood." Other spot rezonings started in 2019. "This is tortuous. It's very expensive," said Oelsner. "We're property managers we're not property developers." While they expected a 2.5-year process, with COVID, it's been four years.

Meanwhile, documents show that 962 Pacific took out additional loans of $4 million and $2.5 million, consolidated into one $8.5 million note, though the terms are unclear. Banks don't loan on land with no cash flow, Oelsner said, they have "to go to a real tough lender." (That would be this firm.)

"You have made it clear what your priority is," she told the committee. "And we could go back and try to jiggle things."

Committee member Princess Benn James, however, pointed out, "You stay in this fight because you know in the long run at the end of the rainbow, you're going to be the winners."

"I don't consider myself a developer," said Oelsner, who at the previous month's meeting said her firm was "talking to different developers to do a joint venture" but could only "pray" they'd keep a controlling interest.

 "I'm the last season of my life," she said. " I'm here to try to educate the next generation of kids that are coming through this community, provide jobs for this community, provide something that we can all walk by, and have a sense of pride, and that's what motivates me. I don't like to look at the numbers and get all that excited."

Mitchell than proposed "80 for 80," or 80% of the units below 80% AMI.

Committee member Robert Callaghan suggested that the head start on the AAMUP had "been baked into your models." While the Community Board had reaffirmed the M-CROWN emphasis on manufacturing space, he wasn't part of that, he said, and suggested that space could be traded for affordability.

Committee member Cathy Iselin suggested, "We either take a stand that we need more affordable housing all of these buildings, or we don't and this may be that moment." Can the applicant, she asked, "do better"?

Side discussions with applicant?

Mitchell re-asked a question previously raised by Jack Robinson, which District Manager Michelle George, who was taking notes, clarified: had the developer taken private meetings with CB 8 members? After all, said Mitchell, CB 8 Chair Irsa Weatherspoon had sent an email disclosing such a meeting,

Wedderburn said she, Veconi, Weatherspoon, and Kaja Kühl (an urban planner who supported last year's petition but who's praised aspects of the 962 Pacific proposal) met with Oelsner and stressed affordable housing for "people that are being forced out of the community."

"The challenge that we have is that you cannot put this on the backs of one project," Wedderburn said, lamenting that the nearby Atlantic Yards/Pacific Park has not served as the affordable housing safety valve as expected. (That project has delivered 1,374 below-market apartments, but most go to middle-income household.)

The Community Board, Wedderburn said, had to work collectively to set standards, given the broken promises in previous rezonings, via contractual restrictions.

Oelsner said that, after the meeting, she'd started reassessing the numbers.

Who's got the power?

Mitchell later said, "regardless of what the DCP said last night, we're not going to be taking that." (That's a question of political power, however. Having criticized Hudson on last year's spot rezonings, the CHTU didn't get a member on the AAMUP Steering Committee.)

Callahan warned that a focus on this rezoning detraced from "the people power that comes with a neighborhood wide agreement." So CB 8 deserved more, since the applicant got a head start.

Lobel responded "when the chair talks about not taking out on this applicant. There's something to be said for that. Williams added that, given the need for the environmental review to assess the expected affordability options, a change in the guidelines would require a revised study, which would delay everything.

The market-rate impact

Esteban Girón  of the Crown Heights Tenant Union pointed out that pressures on rent-stabilized tenants, prompted by landlords seeking to move units to market rates, reflects the increase in market rents.

"So what is your projected market rate rent?" he asked. 

From 1010 Pacific Street (Pacific House) website

He didn't get an answer--Oelsner offered an unspecific account of past market assessmentss--but the easiest comparison would be neighboring 1010 Pacific, which is seeking nearly $3,000 for studios and more than $4,000 for small, 600 square-foot two-bedroom units, as shown in the screenshot above.

Girón noted that another commenter had cited $3,500 for a two-bedroom apartment. Actually, at 1010 Pacific, some larger two-bedroom units rent for more than $5,000, as shown in the screenshot below.

1010 Pacific Street larger units, via StreetEasy

Defending the deal

Veconi pushed back. "If we don't build any additional market rate units, housing costs will go up," he said. "Because the real driver is demand. "

"And there's no way we're going to deal with demand by not building housing," he said. "Somebody talked about taking a stand. We've been taking a stand against the Department of City Planning on this for 10 years."

"The developers are not the people we have to be worried about," he said. "We have to be worried about government. I've been working on Atlantic Yards for 20 years.... I organized two lawsuits against Atlantic Yards." 

(Both were as part of the BrooklynSpeaks coalition; one, paralleling an earlier suit organized by project opponents Develop Don't Destroy Brooklyn, got a court-ordered study of project delays. The other threatened suit got a new 2025 deadline, with penalties, for the project's below-market units, though it couldn't deliver deeply affordable units and it seems unlikely the state will enforce the deadline.)

My take is that, while government is key, developers deserve scrutiny and skepticism. Also, a Community Board, however advisory in this case, is the first rung of government.

"So if you have an idea that you should just take a stand and win on the battlefield against the government in the short term, it might not be realistic," Veconi continued. The 962 Pacific project "largely meets the guidelines this community board has set."

"The only way we can deal with displacement in the near term is by building more affordable units," Veconi said. "And the only way to build affordable units right now is through MIH and we have to seek the best MIH options we can get while we're trying to fight for better ones."

Modifying the deal

Then Veconi addressed the applicants. If they could get 421-a or a similar tax-break, would they agree to MIH Option 3, with 30 deeply affordable units. Oelsher said yes.

The applicants also agreed--in an extension of earlier promise--to have a nonprofit approve leases for the industrial space. Archibald, of Evergreen Exchange, said they'd serve in that role.

Finally, Veconi asked, "Are you willing to provide funding for anti-displacement services"--helping tenants resist predatory landlords--a template developed in both the 2014 Atlantic Yards deal and last year's spot rezonings along Atlantic Avenue.

Mitchell interrupted, suggesting, "you know the answer to that.... We already know there's $100,000 " for anti-displacement work.

Lobel said it was $50,000: $25,000 upon upon approval of the rezoning and $25,000 upon issuance of a Temporary Certificate of Occupancy (TCO), so "that the building doesn't have this huge debt on it before they even know if they can build." 

(That would improve over last year's deals, which stated the money would start a year after the TCO. One question is whether it would go to the Fifth Avenue Committee, already the 962 Pacific housing partner; it's supported the earlier proposal, with 25% affordability.)

Lobel noted that no previous applicant along Pacific Street had pledged such funds. Oelsner, he said, had told him "let's like start facing this... and trying to fix some of the problems."

Mitchell charged Veconi with working with Oelsner to come up with "some good terms for us."

"That's not accurate," Veconi said, later adding, "What I proposed to them tonight has never been discussed before." (If so, Oelsner surely knew how previous spot rezonings were resolved with last-minute concessions.)

Veconi proposed a motion denying Committee support unless, among other things, the applicant added MIH Option 3, pending new tax abatements.

That didn't fly. Iselin suggested 55 units, so a request for more units wouldn't result in a negligible increase, and that a reference to any potential tax break be omitted. (That total later became 53, in a motion Veconi read, but I'm not sure how it was modified.)

Who benefits?

Mitchell returned to "80 below 80." Lobel said no such model existed. Veconi warned that, at 80% of AMI, income levels for a "family of three is probably about $110,000," so they're not those most at risk.

(The current AMI is $101,680, with an allowable rent of $2,542 for a two-bedroom. But that's likely too high to get those units rented. In January, 1010 Pacific asked $2,002--well below the allowable $2,402 maximum under 2022 guidelines--for two-bedroom units aimed at households earning 80% of AMI.

Mitchell said the percentage could be lower, but "we need a mix of incomes, and we need more affordable housing."

"Why don't we get 30 deeply affordable apartments out of this project?" Veconi said.

"What about the other units?" Mitchell said.

"The other units do not matter in the same way as the deeply affordable," Veconi said. (That's true, but they're also less burdensome to the developer.)

Moving ahead

Consultant Williams said Oelsner could only promise more affordability after running it by "our lenders."

The meeting was then extended by a half hour, and the applicant team took a break in a conference room.

When the meeting resumed, Oelsner said, "we think maybe we can do is 30 units at 40% of AMI. "And we could come back and get a few more. We could switch the bands and get a certain amount." That wasn't a pledge to meet the 53-unit request.

"Even though I do have doubts that it's buildable," Veconi suggested a new motion.

Lobel proposed asking the applicants to commit to the 30 units at 40% of AMI, and Oelsner could report further on increased affordability to the full board.

Krashes, echoing an earlier discussion, suggested removing the part about manufacturing,

Veconi disagreed forcefully: "We're not supportive of watering down" previous recommendations. Part of that the focus on jobs for people without college degrees. (Unmentioned: it's impractical request, because below-ground space can't be traded for housing.)

Wedderburn then speculated that, to make the numbers, the applicants might have to rethink the plan for no studios, and might remove three-bedrooms. "It's not what they say," she said. "It's what the bank says." (True, but it also depends on other assumptions.)

The final motion was to recommend denial of support to the application pending:
  • that MIH Option 2 be removed from the applications and Option 3 be added
  • that the applicants commit to no less than 30 affordable apartments at 40% AMI, eight at 60% AMI, and 15 at 80% AMI
  • that the applicants restrict use of at least 8,500 square feet of ground floor use for targeted light industrial uses and 19,000 square feet of below-grade space to such uses
  • that they agree to designate a third-party industrial development organization to approve new leases for that restricted floor area
  • that they provide $100,000 to a local community-based organization for anti-displacement services
It passed 14-3, with one abstention. 

How much of that the developer can deliver--and how--should emerge soon. It also will face a full Community Board 8, which may not be fully reflective of last week's Land Use Committee voters.