Atlantic Yards/Pacific Park in 2024: the year of foreclosure & renegotiation? A school & some retail will open. The Nets likely will trail the Liberty (in win %).

As I wrote in my recent 2023 wrap-up (link), it was a relatively quiet year for the project, at least in terms of construction activity, given completion of 595 Dean towers and adjacent open space, no new housing starts, and a stalled platform. 

This year is one of uncertainty, with the possibility of big swings.

After all, there was no renegotiation, as I and others saw as possible in 2023, regarding the requirement to deliver 876 (or 877) more affordable units by May 2025, with $2,000/month fines for each missing unit, as established in a 2014 agreement.

Indeed, while Empire State Development (ESD), the gubernatorially-controlled authority that oversees/shepherds the project, in August floated a possible tax deal and public engagement, that never happened. 

Nor was a requested report on the project's financial feasibility delivered. That's not much of a commitment to transparency.

The foreclosure

What did happen was a murky report of a Jan. 11 foreclosure sale: the interest in six tower sites (B5-B10), held by a Greenland USA affiliate and used as collateral for two loans from immigrant investors under the EB-5 program, with more than $300 million required to be repaid.

It's hardly clear, as I wrote, whether anyone would bid without knowing the ability to activate those sites, including the enforcement of the housing penalties, construction of the platform, and the availability of the expired 421-a tax break. 

So it's possible that sale will be delayed and conditions on the site will be renegotiated. 

Last week emerged a potential mayoral tax subsidy program for proposals with 70% affordability. I suspect, however, that other, less complicated projects would go first in line.

The renegotiation?

"Empire State Development is focused on the successful buildout and completion of this project," we were told. "We are currently reviewing the situation and are working to determine the best path forward.”

What that means is anyone's guess, because the factors affecting the project include:

• financing the platform
• tax break for residential construction
• fines for missing affordable housing

Does this mean a greater role for public agencies? A new master developer? 

This all could take a while, but we should get some clues soon.

What about Site 5?

I've previously written that a renegotiation also could include the long-pending proposal to build a giant project at Site 5, longtime home of P.C. Richard and the now-closed Modell's, moving bulk from the unbuilt "Miss Brooklyn" tower once planned to loom over the arena.

(This is not related to the foreclosure, but would require a state revision of project agreement and a new process.)

The carrot might be deeper affordability. That also could mean some of Miss Brooklyn's bulk redistributed to towers over the railyard--a plan only hinted at but surely in the minds of the developers. (No developer wants to discard buildable square footage.)

One black box here is Greenland USA's Shanghai-based parent Greenland Holdings, which is struggling financially and has seen its credit rating plummet.

Another black box, so far, is New York State, which does not yet see fit to share--or allow vetting of--its assessment of the potential paths forward.

But Gov. Kathy Hochul likely will have an expansive housing agenda, and that could include policies that make the future buildout more plausible.

What's next?

Given the uncertainties, it's hardly clear what might be built, and at what scale and affordability.

As I've written, if the platform does start, the first railyard block--bounded by Sixth and Carlton avenues, and by Atlantic Avenue and Pacific Street--would be surrounded by fencing, constraining traffic and eliminating parking. The B5 tower could start a year later.

Two advocates in BrooklynSpeaks, the coalition that has advocated to improve the plan, recently wrote, in a Daily News essay, that Atlantic Yards deserves a new plan, and even federal support for affordability.

As I'll write in an upcoming response, I think that the project first deserves a more transparent process.

Neighborhood impacts: school 

One question mark is the expected opening of a school, with 806 seats but a smaller initial enrollment, in the base of the B15 tower, 662 Pacific Street.

As I reported, rather than operate, as long expected, as an intermediate school, it could be the home of Design Works High School, plus M.S. 915, and a small special needs program associated with that intermediate school.

How will dropoffs work? Where will teachers and staff park? Where will students go after school? How will after-school events intersect with arena operations? 

Expect a meeting with representatives of the Department of Education to discuss such things.

Neighborhood impacts: Dean Street sewer work

Another question concerns the sewer installation on Dean Street starting next spring, through November 2025. 

How much traffic will it snag? How will it impact the expanded garage at the 535 Carlton building.

What's coming: retail

We're waiting for Simo Pizza and Ni Hao (a Chinese restaurant) to open at the two-tower 595 Dean, on the project's southeast block.

At 461 Dean, which opened flanking the arena in 2016, there's still a space to lease along Dean Street.

At 38 Sixth Avenue, a retail space at Dean Street, once occupied by construction teams, still hasn't opened up. Would it again be used to house construction offices if the platform starts?

At 18 Sixth Ave. (aka Brooklyn Crossing), a Life Time Fitness will open over three flooers, joining ground-floor Spear Physical Therapy, but another ground-floor space, perhaps for a restaurant, awaits.

The Triangle Building at Fifth and Flatbush avenues, empty since before the arena opened, still awaits renovation. While reportedly for a branch of Rihanna's Savage x Fenty lingerie shop was supposed to arrive, that seems ever less likely.

Similarly, a major space on Pacific Street near Flatbush, across from the arena, is still waiting to become a Walgreen's, as announced.

And yes, the craziest situation near the arena is unrelated: the huge volume of delivery guys, with e-bikes, gathering outside Chik-fil-A (and Shake Shack) on Flatbush Avenue across the street. How long can that persist?

Accountability questions

The project's limited accountability declined ever more in 2023, with interruptions in the previously bi-monthly scheduled Quality of Life meeting, as well as the failure to schedule more than two purportedly quarterly meetings of the (purportedly) advisory Atlantic Yards Community Development Corporation.

Both have been fora for at least some transparency.

The coalition BrooklynSpeaks, led by a handful of people, has the ear of local elected officials, and held a press briefing after the foreclosure announcement, charging ESD with inadequate oversight. That seems clear, but the state authority should be required to answer questions, such as at a legislative hearing.

Interest in the project may not be galvanized until the daily newspapers cover the issue--hey, New York Times?--and/or more elected officials take notice.

Beyond the footprint

The Atlantic Avenue Mixed-Use Project (AAMUP), the plan to rezone the area just east of Vanderbilt Avenue, the eastern end of the Atlantic Yards/Pacific Park footprint, with not only higher densities but also civic investments, including open space and road improvements, should reach fruition.

Unclear, however, is whether the buildings will be more affordable than initially proposed, which trailed the affordability--in terms of income level and quantity--in some spot rezonings.

The Nets and the arena

The Brooklyn Nets, who rebooted last year after losing superstars and rebuilding their roster, remain on the mend, stuck in mediocrity. There should be a lot less drama, and a lot fewer headlines.

It's the WNBA's New York Liberty, who made the finals last year, who have a better chance at a championship. So the Nets likely will trail the Liberty in win percentage, though not attendance.

December 2023 marked a distinct increase in arena bookings, perhaps related to the return to Ticketmaster from SeatGeek. Let's see if that continues--it doesn't, this month--and potentially lifts arena revenues.

I'd previously predicted a potential new naming rights agreement for the arena. That seems less likely, but who knows.

What's the 2024 surprise?

There's always a surprise with this project.

For 2023, I speculated on a potential default--albeit involving the developer's parent--and, indeed, we got a different one.

In 2024, could Greenland USA walk away completely and a new master developer emerge? Would the bidders on the foreclosure then steer the project?

Or could/should the state take a more significant role? Does it even have the capacity? Is a federal bailout possible?

From those seismic changes might emerge a new timetable, a new project plan, new subsidies (and thus new affordability), and some new agreements.

Whatever happens, the surprise should not be that this all gets decided behind closed doors. Or that accountability structures get set up with only facial transparency.

But that's been the pattern.