Looming: the May 12, 2025 deadline to start the platform. But there's an "Unavoidable Delays" escape hatch and a penalty that might not be painful.

More than a year ago, on Feb. 21, 2023, I wrote (link) that the May 12, 2025 deadline to start the platform over the Vanderbilt Yard "shouldn't be too hard to meet."

After all, various plans had been announced for the first platform block, between Sixth and Carlton avenues and Atlantic Avenue and Pacific Street.

Filed with Department of Buildings

Well, maybe it will be hard to meet, after all. The project is stalled, and it's hardly clear that developer Greenland USA is ready to move forward--as it had previously indicated--nor that any new developer yet wants to take over the six railyard development sites facing a foreclosure auction.

They can't be developed without the platform. But it's unlikely anyone would bid without knowing whether they face May 2025 penalties for not delivering 876 more units of affordable housing, or what tax breaks might be available for new construction. Also, interest rates are currently high.

Looking east from Sixth Avenue near Atlantic Avenue. Photo: Norman Oder

Fifteen years later

That May 12, 2025 date, as I wrote in July 2019, is the 15th anniversary of the project's "Effective Date," which is the date Empire State Development finally cleared vacant possession of key project properties after previous condemnation.

As I wrote in January 2010, when the project's Development Agreement first surfaced, the section regarding the project's platform stated that the developer must begin construction of the platform over the railyard no later than the 15th anniversary of the Effective Date.

That deadline was one of several that indicated that the project likely would not, as often projected, be completed in ten years but rather could take 25 years, until 2035.

See excerpt below, which states that the AYDC, or Atlantic Yards Development Company, shall Commence Construction by that 15th anniversary, but with an asterisk.

"Unavoidable Delays"

Note that the requirement is subject to "Unavoidable Delays."

Might we expect that to be invoked? Maybe, and even if it weren't, the penalty may not be too painful. 

Failure to Commence Construction would be an Event of Default, as noted in section 17.1(g) of the Development Agreement. 

What's the penalty?

As noted in section 17.2(a)(iii), the developer would then be precluded from requesting the severance of a development parcel or begin any development work.

That would be a meaningful penalty only if the deadline were not met at a time when parcels on terra firma were ready for development. 

As of now, the only parcel that qualifies would be Site 5, across from the arena block, though the developer has long aimed to build a much larger project there, which would require a public approval process.

Otherwise, building at the six tower sites over the railyard necessarily require the platform to be built, and thus no development would start unless the platform started.

Milestone issues

What does "Commencement of Construction" mean?

In this case, it means delivery of a completion guarantee required by the applicable development lease for a tower, and the execution of documents that affirm that the platform--"or any portion thereof"--that can support a building in accordance with that development lease, with documents showing agreement with the Metropolitan Transportation Authority (MTA) and its affiliates.

Note that there's no deadline to complete the platform, just to complete the project, within 25 years of that Effective Date. In other words, as long as they get started, they meet the benchmark.

Previous expectations

B5 center-left, plus (built) B4; Dattner Architects

I had previously thought the deadline would be met, given that developer Greenland USA was designing B5, across Sixth Avenue from the arena block, and was beginning to design adjacent B6 and B7.

Indeed, Greenland released designs for B5 and later said that it had come to an agreement with the MTA The first three towers would cover one of two blocks requiring a platform.

In early 2022, construction seemed imminent, but it never started. 

In August 2023, a Greenland rep and an MTA rep at a meeting of the Atlantic Yards Community Development Corporation (AY CDC) said they had come to agreement, but the Greenland rep said there was no business reason to proceed.

No Greenland rep attended the most recent meetings of the AY CDC, on Jan. 23 and March 26 of this year.