Atlantic Yards/Pacific Park Report

The Brooklyn Nets are planning to build a new practice court, and training facility in Sunset Park, at 148 39th Street, just west of Second Avenue (and near Costco) along the waterfront in Industry City, reports the New York Times in  Nets Look to Get Both Feet in Brooklyn . The article builds on a 10/30/13  report  in NetsDaily, which estimated the investment at $50 million. Assuming the deal goes through, the Nets by fall 2015 also will move their front offices to Brooklyn, thus changing their off-court center of gravity from New Jersey to Brooklyn, and leading to the probability some players, seeking convenience, would finally move to Brooklyn rather than live in Manhattan or New Jersey. The location is a straight shot down Fourth Avenue from the Barclays Center, a little more than three miles. The impact on Sunset Park The Times, I think, goes a little far in predicting the impact on the area: The neighborhood is in an intriguing state ...

So, why exactly did Forest City Enterprises announce on Monday, 12/16/13 that they had a "definitive" agreement with Greenland Group for the Atlantic Yards joint venture, but wait until yesterday to issue another press release with more specific information? Well, that let them stress the positive earlier in the week, a progress of a deal that includes the right to build 15 additional towers (but not the Barclays Center or the under-construction B2). And perhaps--I speculate--some journalists are trying to figure out the numbers, so Forest City got ahead of them. Greenland's cash payment is $200 million, for 70% of a project on which Forest City and partners have invested $545 million in equity. That might suggest that the value of the total current investment, based on expected costs and revenues going forward, is only about $286 million. But I'll trust others to do more sophisticated financial accounting, since we don't know, for example, what the expect...

Three building blocks of Atlantic Yards B2, the future modular tower, were brought to the site  eight days ago, on 12/12/13, including a large module  at night  occupying a good portion of a flatbed, and another at night. A  rather small one was delivered during the day (left), so small it would cause little disruption while being moved down Flatbush Avenue or unloaded on Dean Street. Then there was a highly publicized stacking of the mods. But no mods have been delivered since then. The schedule: six to eight mods a day That's no way to build a building, right? They're supposed to deliver  and install six to eight mods a day, according to a 9/13/13 affidavit (excerpted below right) from Forest City construction chief Bob Sanna, filed in response to the lawsuit challenging the developer's modular plan. From Sanna affidavit Yes, the first overnight delivery was delayed , apparently by weather, then postponed for two nights. Still, it sure look...

We should expect the discussion around the Atlantic Yards affordable housing--in which 20% of the rental units are low-income, 10% moderate-income, and 20% middle-income, all keyed to an Area Median Income (AMI) much higher than that of Brooklyn--to expand. After all, the average subsidized 2BR apartment in the first tower would rent for $1946, with the largest cohort renting for $2740, according to 2012 figures that should rise when the tower opens in late 2014. "Workforce housing" Former New York City Economic Development Corporation President Seth Pinsky wrote in the Daily News 12/2/13: However, there are two ways in which Mayor-elect de Blasio can improve upon this approach. First, we must ensure that, in creating affordable housing, we are not only focused on our most vulnerable, but also on our economic backbone, including teachers, nurses, firefighters, and young people starting their careers. For this critical population, our next mayor should invest in re...

The January 2014 Barclays Center event calendar includes eight Nets games, two concerts (Jay-Z), and one boxing match, plus seven Disney on Ice shows over four days. That's more than the calendar in January 2013, as shown below. But there are enough open dates to make arena operators happy that the New York Islanders are coming, no later than the 2015-16 season and, if they break their lease at the Nassau Coliseum, in the fall of 2014. The January 2013 event calendar had seven Nets games, plus four Disney on Ice shows.

Mayor Mike Bloomberg said today, in a valedictory , "In 13 days, I will walk out of office knowing that – whether you agreed or disagreed with me – I always made decisions based on the merits, and we always put the needs of future generations ahead of the demands of today’s special interest groups." That may be true in many cases, but consider Bloomberg's posture toward Atlantic Yards, as described by developer Bruce Ratner in September 2012. "As a matter of fact, I remember a day in 2003, in June, I went in to see the mayor to present our project, and he stood there, he looked at it"--Ratner waved his hand as if scanning the room--"he had all the deputies around, he just looked at it and he said, after a while"--Ratner waved decisively--" I want to get it done. And he used a certain extuperative [sic] and said, Get it done no matter what ."  (I think Ratner meant "expletive.")

The rendering at right of the Atlantic Yards B2 tower, now under construction, has been used frequently to show what the 32-story, 363-unit building will look like when it's finished in late 2014. The rendering, by SHoP, is but one in a long history of skewed and misleading renderings produced for the Atlantic Yards project and, frankly, in the world of development. There's a lot confounding about it, especially the mysterious and misleading appearance of the Williamsburgh Savings Bank tower in the background. Note, for example, that, when standing on the southwest corner of Dean Street and Sixth Avenue, as shown in the photo below left, you can't see the bank building and can barely see the Bank of New York tower over the Atlantic Terminal mall. The new residential tower would take up a lot more space on the skyline. Below I'll show perspectives directly across the street from the Dean Street entrance, as shown in the rendering, but first some history about t...

For a little while, it looked like state Supreme Court Justice Eileen Rakower was sympathetic to the argument that construction of modules for Atlantic Yards was less like a building component such as a dishwasher and more like a building itself--and thus would require the presence of licensed plumbing contractors and fire suppression contractors, who had sued the New York City Department of Buildings (DOB). However, after a 70-minute hearing today at a small courtroom at 80 Centre Street in Lower Manhattan, Rakower swiftly dismissed the suit, ruling from the bench, "I also find that DOB did not exceed its mandate in permitting the manufacture of these systems." That wasn't precisely on point, since she was using "permitting the manufacture of these systems" as a shorthand for several issues aired in the legal papers and oral argument, and perhaps will be discussed in her forthcoming written opinion. One of those issues: why, as the judge's ruling ind...

The lawsuit over the city of New York’s approval of Forest City Ratner’s modular building plan--which involves offsite prefabrication without licensed plumbing and fire suppression work--goes to a hearing today less than a week after the developer started delivering modules (aka “mods”) to the building site. (The hearing is at 11 am at state Supreme Court at 80 Centre Street, before Justice Eileen Rakower, Part 15.) The timing suggests it’s highly unlikely a judge would stop construction of this building, which would be the world's tallest modular tower, though the case, if successful, may affect future towers. The lawsuit it wasn’t mentioned in the public statements regarding Forest City Ratner’s deal with the Chinese government-owned Greenland Group, so it doesn’t seem to loom as a huge risk. Still, the case--according to the legal papers I read--raises questions about an apparently cozy relationship between the Department of Buildings (DOB) and Forest City Ratner, as wel...

Yesterday's announcement that Forest City Enterprises and the Chinese government-owned Greenland Group have reached a definitive agreement--still subject to expected approval by the respective national governments--for the latter to invest in 70% of the remaining Atlantic Yards project should have prompted some skepticism. The real cost to the parties First, Greenland, according to the press release, "would also make a capital contribution to reimburse Forest City for certain costs incurred to date." [ Updated and clarified ] That sum was unspecified, but it certainly suggests that Forest City's paper loss on Atlantic Yards--an "impairment of $250 million to $350 million"--is not nearly as bad as announced. Or--I am told--that's a roundabout way of saying Forest City is selling its share at a discount. The Journal reported: The price of the stake wasn’t disclosed, but it appears Greenland is getting it for significantly less than what Forest...

It seems nicely orchestrated, doesn't it, the hoisting of the first mods at Atlantic Yards B2 last week, and today, the signing of a "Definitive Agreement for Joint Venture at Atlantic Yards in Brooklyn" with the Chinese government-owned Greenland Group. While the closing of the agreement, which does not include the Barclays Center or the under-construction B2 tower, is subject to approvals, including the Committee on Foreign Investment in the United States (CFIS) as well as the government of China, there don't seem to be any roadblocks. And it looks like New York State will offer support rather than scrutiny. As noted in the press release at bottom, Empire State Development (ESD) CEO Kenneth Adams said, "Atlantic Yards is an important project that will bring thousands of jobs, affordable housing, open space and community facilities to Brooklyn. We look forward to welcoming Greenland Group to our effort of bringing this project and all of the public bene...

The big Atlantic Yards news last week--bigger than the media event in which the first "mods" were delivered to the site of the first tower (aka B2)--was the revelation, via parent Forest City Enterprises, that the value of its investment in the project had been cut by some $250 million to $350 million, or about half. That reflects greater than expected costs past and future, as well as expected future revenues.  According to a Forest City Enterprises  press release , 12/9/13, CEO David LaRue said: "As our investors are aware, we have been actively committed to Atlantic Yards in Brooklyn for a decade, even as the project has been delayed by numerous lawsuits from opponents and the impact of the recession. To date, we and our minority partners have invested equity of approximately $545 million, with total costs of approximately $770 million, including debt." New positioning It makes for some very interesting positioning, in which: the pending deal with the...

The Brooklyn Nets raised the minimum season ticket price  to $25 per game, but they can't fill all the seats--the team's been way down, and now up somewhat. So they're practicing dynamic pricing, with discount packages and, in some cases, seats as low as $8 and $10, plus service charge. Tonight they're offering a "family 4-pack" for $100, including a food coupon. However, as the graphic at right suggests, you can actually buy tickets for tonight's game against the Philadelphia 76ers for $10, plus service charge. Click to enlarge all graphics. The prices are in the bottom right corner of each screenshot. For the game Wednesday night against the Washington Wizards, another lousy team, tickets actually start at $8. See graphic at left. By contrast, available seats for next Monday's game against the league-leading Indiana Pacers cost $55, plus service charge. See graphic at right. Then things get interesting. The Chicago Bulls are sufferin...

Presumably thousands of Brooklynites got Borough President Marty Markowitz's annual holiday card, with a mostly cheery ditty set to the tune of "The Twelve Days of Christmas": In the twelve years of Marty, who would have thought we'd see... MTV in Brooklyn Barclays is booming Nets playing downtown GQ said we're way cool Too many bike lanes Donna Summer singing Cruise ships in Red Hook Tourist destination FUH-GEDD-A-BOUD-IT Coney came alive Foodies all rejoiced Leaving Brooklyn... Oy Vey! And the hippest zip is one... one... two...! "How Sweet It Was," signed off Markowitz and his wife Jamie. Below, a fanciful illustration that suggests a major thoroughfare somehow has two bike lanes sandwiched in between car lanes, and with no center median. Yup, that is too many bike lanes.

The Real Deal, on 12/1/13, published  De Blasio’s short list for real estate jobs: As inauguration day nears, sources point to the contenders to take over posts key to the industry . The lead: Indeed, on the short list for chair of the Department of City Planning (which arguably has the most direct impact on the real estate business) are three people who are on the 13-member City Planning Commission now under Mayor Michael Bloomberg, according to several industry sources. The candidates mentioned to The Real Deal are: Anna Hayes Levin, Michelle de la Uz and Kenneth Knuckles. “The changes are not going to be nearly as great as people assume,” said Fred Siegel, a senior fellow at the Manhattan Institute, a New York-based think tank, who worked on Rudy Giuliani’s 1993 mayoral campaign. ...The [transition] team, which was announced last month and also includes developer Douglas Durst and Forest City Ratner CEO MaryAnne Gilmartin, is expected to start naming commissioners in early D...