Like a game of telephone: how numerous errors sneak into a recent story about the future of Atlantic Yards/Pacific Park

It's dismaying to dissect bad journalism about Atlantic Yards/Pacific Park, especially when it's most likely the result of a carelessness and an imprecise clip file, rather than a reporter or publication allowing themselves to be manipulated by a developer's spin.

Still, accuracy is important, so it's worth taking a look at the real estate publication Bisnow's July 8 article, Related Maneuvering To Take Over Pacific Park From Chinese Developer In Default, which was triggered by The Real Deal's report identifying Related Companies as the developer apparently negotiating to acquire development rights to six sites over the MTA's Vanderbilt Yard.

From the article:

Pacific Park, the development that was hatched as part of the deal to build the Barclays Center arena, is supposed to include 15 commercial and residential buildings over railyards between the neighborhoods of Prospect Heights, Boerum Hill, Park Slope, Fort Greene and Clinton Hill.

(Emphases added) 

Well, it was hatched as Atlantic Yards, with a planned arena, which later became Barclays Center and Pacific Park.

It's supposed to include at least 16 buildings: the arena plus 15 towers, though it was approved to include 16 towers. 

The B1 tower bulk has been proposed to be transferred across Flatbush to create a much larger, two-tower project at Site 5, currently home to the big-box stores P.C. Richard and the now-closed Modell's. If that counts as one building, it would be 15 towers total, but if it counts as two, then 16 towers.

Of the 22-acre site, only 8.5 acres comprised of the MTA's Vanderbilt Yard, but the majority of remaining area left to build, putting aside Site 5, is comprised of six parcels over the railyard.

Nearly all the project site is in Prospect Heights, with Site 5 at the tip of Park Slope.

About the loans

From the article:

Just nine of the towers have been delivered to date. Last year, Greenland defaulted on $350M of loans from EB-5 lenders the U.S. Immigration Fund and Fortress Investment Group covering the six remaining development sites.

That link isn't actually sourced, but only eight towers have been built. Nine buildings have been completed, including the arena.

While the two loans organized by the U.S. Immigration Fund (USIF) totaled $349 million, they were partially repaid, leaving $286 million. 

The USIF doesn't act like a bank or even a nontraditional lender; it's a "regional center" that recruits immigrant investors under the EB-5 investor visa program. So the "lenders" waiting to be repaid are the investors, mainly from China, while the USIF as manager may effectively function as the "lender."

Fortress apparently bought a piece of the debt--how?--but was not an original "lender."

Who's in charge?

From the article:

An ownership change could prove difficult. Atlantic Yards Community Development Corp., a subsidiary of the state’s economic development agency, Empire State Development, would have to approve the takeover.

No, the Atlantic Yards Community Development Corporation is only advisory. Empire State Development is controlled by the governor, so it will do what the governor wants.

From the article:

The agency is expecting a proposal from the potential new developer and from USIF and Fortress lender, The Real Deal reported.

That's a not-fully-coherent rewrite of the Real Deal, which stated:

The company’s lenders, Nick Mastroianni’s U.S. Immigration Fund and Fortress Investment Group, filed to foreclose on the property, but the scheduled auction has been postponed four times.

As I've written, the U.S. Immigration Fund is a middleman, though an associated company serves as manager and thus controls the fate of the loan, which was made by funds from immigrant investors under the EB-5 program.

From the article:

With the timing of any transfer to Related up in the air, it remains unclear what will happen next year when the original deadline passes to deliver Phase 2 of Pacific Park, with more than 3,000 units, nearly 900 of which would be affordable. If those units aren't open by 2025, the developer could have to cough up $2K a month in fines for every unit not delivered.

It wasn't the "original deadline" for Phase 2, which would complete the project, with 3,218 more total approved units.

Rather, it was the deadline renegotiated in 2014 to ensure that the 2,250 affordable units, of which 876 are left to build, would be delivered by May 2025. That surely will be the subject of renegotiation.