At Atlantic Yards meeting, state says no expectation foreclosure auction will proceed April 30. Quorum allows AY CDC budget passage.

This is the first of two articles on the April 18 meeting of the Atlantic Yards Community Development Corporation (AY CDC), charged to advise on the project and monitor obligations. The second concerned a revised affordable housing analysis.

The meeting was brief and mostly uneventful--though my update tomorrow will address the effort by Empire State Development (ESD), the state authority that oversees/shepherds the project, to update its official affordable housing chart.

Notably, ESD officials said they had no expectation that the foreclosure auction of the rights to six development sites over the Vanderbilt Yard, scheduled for April 30 but already postponed twice, would proceed, as the entity controlling the debt has not presented a potential developer to them.

Budget approved

With a quorum, the AY CDC directors were finally able to approve--as they were precluded form doing, at their March 26 meeting--of approving the body's $250,000 budget, which is provided by the developer, Greenland USA.

Page 24 of AY CDC Agenda April 18, 2024

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Anna Pycior. ESD's Senior Vice President, Community Relations, said that $220,011 in personnel costs represent prorated portions of staff time.

What was not explained was how, previously, when ESD had two employees assigned to Atlantic Yards/Pacific Park, other staff were able to work on the project while being paid their regular salaries.

Pycior said there were funds in the account to support the budget, and "we're examining if there's any outstanding obligations." After all, Greenland has stepped back from the project and seems likely to lose the rights to develop all but one parcel.

Other budget issues

AY CDC Chair Daniel Kummer noted past discussions about AY CDC engaging a consultant for community outreach, if and when the project proposed for Site 5, catercorner to the arena, moves forward, and asked if there was money for that.

"If we were in the position to be doing community engagement and mapping a path forward. I think we'd make sure that there were funds to hire consultants," responded Joel Kolkmann. ESD's Senior Vice President, Real Estate.

AY CDC Director Gib Veconi noted the ongoing requests to meet in the Brooklyn, rather than at ESD offices in Midtown Manhattan, and asked if there were funds to upgrade ESD's office at 55 Hanson Place for videoconferencing services.

Pycior said they'd look into it.

Meetings in Brooklyn would not only make it easier for Brooklyn directors to attend, but also for the public.

The stall continues

Given that the announced auction was 12 days away, would ESD enough time to evaluate a potential developer, asked AY CDC Director Ron Shiffman.

"We will not rubber-stamp" a developer, Kolkmann said, suggesting that, while they couldn't request a postponement, they expected the auction to be postponed again. 

(Here's my coverage of ESD's conditions; a "Permitted Developer" must have ten years of experience in urban high-rise projects, or "reasonably acceptable to the authority.)

Could the party auctioning off the collateral--an affiliate of the U.S. Immigration Fund (USIF), the regional center or middleman for an EB-5 loan to immigrant investors--be required to produce more than one bidder?

"We can't force them to present an alternative," said ESD lawyer Richard Dorado.

Director Ethel Tyus said the situation "sounds very bleak" and asked about the possibility of eminent domain to take over the project "rather than limping along hoping for the best."

Dorado observed that the expected legislative successor to the 421-a tax break, known as 485-x, would resolve one of the variables that potential bidders face.

Other variables, however, include the cost of a platform, a precursor to vertical development, and $2,000/month in damages for each of the 876 affordable units not delivered by May 2025, as negotiated in 2014.

AY CDC Director Ron Shiffman asked, "Why don't we begin some thinking about who are potential developers that could come in and salvage this project?"

Dorado noted that they had to abide by the project agreements, and the loan agreements, and they'd "just have to wait until those rights play out."

At the next meeting?

Kummer asked if there was anyone present from Greenland--no--and whether they had been invited.

They weren't, noted Kolkmann. (They did attend in January and, of course, made regular presentations when the project was moving forward.) But he said they'd be invited for the next meeting, which is supposed to be quarterly.