Sunday, July 31, 2016

All-cash home purchases (via shell companies) greater than $1.5 million in Brooklyn will get scrutiny

Interesting. In U.S. to Expand Tracking of Home Purchases by Shell Companies, the New York Times's Louise Story (who wrote the series that stimulated such tracking) reports:
More than a quarter of the all-cash luxury home purchases made using shell companies in Manhattan and Miami were flagged as suspicious in a new effort to unearth money laundering in real estate, the Treasury Department said Wednesday. As a result, officials said they would expand the program to other areas across the country.
The expansion of the effort to identify and track the people behind shell companies, begun in March, means that there will now be increased scrutiny of luxury real estate purchases made in cash in all five boroughs of New York City, counties north of Miami, Los Angeles County, San Diego County, the three counties around San Francisco and the county that includes San Antonio.
...The areas being added to the order are places where buyers frequently purchase luxury real estate using shell companies, the officials said. The dollar values involved purchases of more than $500,000 or more in Bexar County, which includes San Antonio; $1 million in Florida; $2 million in California; $3 million in Manhattan; and $1.5 million in the other boroughs of New York City. Title insurance companies, which are involved in virtually all real estate transactions, are charged with carrying out the order.
A good number of condos in the 550 Vanderbilt building are selling for more than $1.5 million, so that means scrutiny for any all-cash purchases there via shell companies. Below, from StreetEasy:


As AEG takes over Nassau Coliseum, Barclays Center GM Rosebrook stretches to oversee both venues

In a press release issued this week, picked up by (among others) the 7/28/16 Amplify, in Brooklyn Sports & Entertainment Selects AEG Facilities to Manage Nassau Coliseum, we learn of some overlap between the Barclays Center and the Nassau Coliseum:
Brooklyn Sports & Entertainment will continue to provide programming, marketing and sales for the facility, while AEG Facilities General Manager Matt Felker handles venue operations at the renovated building. Felker had been the assistant GM at the Barclays Center, and will now transition to Long Island where he currently lives. Felker will report to Barclays Center GM Steve Rosebrook “whose role is expanding to become AEG Facilities Regional General Manager, supervising operations for Barclays Center and Nassau Coliseum,” according to a release from the company. AEG Facilities has provided management services to Barclays Center since it first opened in 2012.
So if Rosebrook supervises both the Barclays Center and the Nassau Coliseum, how much less attention can he give to the regular incursions by arena-related operations on the neighborhood? And how much less likely is it that he will ever attend another community meeting? (He went to a couple, in 2012, as I recall.)

Remember, as I wrote, was the guy who said in 2012, before the Barclays Center opened, there will be “a secured, private, web-based scheduling system. If you're not scheduled to come into the building, you're going to get turned away.” It hasn't quite worked out.

Rosemarie Milano, previously Senior Director of Human Resources at Barclays Center, will serve as AEG Facilities Vice President of Human Resources for both buildings.

Saturday, July 30, 2016

Instagrammable! A style blogger promotes 550 Vanderbilt, thanks to sponsorship

OK, if p.r. shop/consultant BerlinRosen can't always get "earned media" to promote the 550 Vanderbilt condo building and Pacific Park, why not "partner" (with developer Greenland Forest City Partners' money of course) with a vapid style blogger who has lots of Instagram followers?

(Note: the original credit line at the way way bottom was thanking Berlin Rosen for "partnering," but now it thanks 550 Vanderbilt.)

Hence the rather overgeneralized headline APARTMENT HUNTING IN NYC, in which Kendall Kremer of Styled Snapshots writes:
As Matt and I get older, we constantly think about our future, one day starting a family, and when and if we will make the move outside of New York City. We both grew up in the suburbs and know that eventually that is where we want to settle, but with both of our careers it currently makes sense to be close to the the city. We both dread the thought of a long commute! Our lease is up on our current apartment in February, so we have been chatting a lot about next steps and where that may take us. While I always imagined our next step would be renting a two bedroom apartment somewhere in the city, the truth is the rent is outrageous for a two bedroom and it kills me to think about just “tossing” all that money away with no return.
(All emphases added)

Which is of course why buying a two-bedroom for $1.425 million and up is the answer. You might even have absentee Chinese neighbors.


Remember this misleading rendering?
She continues:
Recently I had the opportunity to to check out a new luxury building, 550 Vanderbilt, that is finishing up being built in a charming area of Brooklyn. If you asked me two years ago if I would have ever considered moving to Brooklyn it would have been a quick “no”. I always told myself that I wont be in New York City forever, so while I am here I am living smack dab in the middle of Manhattan. Fast forward a few years, a dog, a marriage and children in the future, I am now discovering the appeal and beauty of Brooklyn and why it makes sense to look into buying and investing in a piece of property right across the bridge (the building offers everything from a studio up to 4-bedroom apartments and a gorgeous penthouse). They also have an incredible amenities package in which I could see myself never leaving the roof deck with the skyline view of Manhattan, but I think Hadley [the dog!] would say the best amenity is the 8-acre brand new Pacific Park that the building sits within.
So, there really are people who haven't heard about "Brooklyn"? Apparently, since she doesn't realize that 550 Vanderbilt is approximately two miles from the Brooklyn Bridge.  Guess what, poor Hadley, that "park" won't be done for nearly a decade.

Getting to know the "neighborhood"

She continues:
While I am a bit familiar with the different neighborhoods in Brooklyn from when Matt attended law school in Brooklyn Heights, it truly wasn’t until my recent visit across the bridge that I started to appreciate the appeal and hype about living in this neighborhood. When heading across the water to check out 550 Vanderbilt, I took advantage of exploring the surrounding neighborhood, as I find that’s just as important as loving the building itself. Vanderbilt Avenue is filled with the cutest restaurants, bars, ice-cream shops and gorgeous brown-stones. Everything is within a 5-8 minute walk from 550 Vanderbilt and the building itself is nestled at the intersection of five of the borough’s most desirable neighborhoods. There are families of all ages, lots to see and do and a quick trip away from being back in the heat of Manhattan. Walking distance from the property there are 11 subway lines and the Long Island Rail Road, making getting in and out of the borough extremely convenient.
Wait a second--the intersection of five neighborhoods? Is Pacific Park a separate, 22-acre micro neighborhood? If so, where exactly does Prospect Heights begin?

Read more of the post for many, many photos of promotable clothing and visits to "the cutest restaurants, bars, ice-cream shops and gorgeous brown-stones," including R&D Foods, White Tiger, and Little Cupcake Bakeshop ("The entire store was made to instagram").

At the end, "A big thanks to 550 Vanderbilt for partnering on this post!" Shouldn't that been at the top?

Office building coming to parking lot of Co-Cathedral of St. Joseph on Pacific Street just east of Vanderbilt?

This is interesting. If Atlantic Yards/Pacific Park office space won't come online immediately, well, there might be office space nearby.

Rachel Holliday Smith of DNAinfo reported 7/27/16, in Brooklyn Cathedral Plans 4-Story Office Building in Prospect Heights:
A four-story commercial building is set to be constructed next to an iconic Catholic church in the neighborhood, bringing 47,000 square feet of new office space to the church’s Prospect Heights lot, according to permits filed with the city this week.
The Diocese of Brooklyn filed the plans Tuesday to construct the new building on the property of the Co-Cathedral of St. Joseph, the Catholic Church’s 1,500-seat Spanish Colonial church located on Pacific Street between Vanderbilt and Underhill avenues.
The plans call for a four-story building with a combination of office space, roof terraces, indoor parking and “production studios” located in the building’s basement, according to permits filed with the Department of Buildings.
No timetable or other details were announced.

The building on the DOB page is described as either a commercial building or a community facility, but a permit page indicates office space.

Friday, July 29, 2016

Real Deal: Forest City lost some key execs, downsizing staff; execs say all's well (but that's spin)

The Real Deal's Rich Bockmann reports Forest City Ratner: The sequel, subtitled "Key executives leave and layoffs take hold as company makes transition to REIT."

It's an interesting scoop, but I think the situation is even more unsettled than reported, given that some recently departed key executives aren't talking, and the developer's subordinate position in the Greenland Forest City Partners joint venture goes unmentioned.

The company re-sets

A key passage:
But now, in order to work as a REIT [real estate investment trust], Forest City would have to narrow its scope. As the parent company in Cleveland prepared for the transition, FCR saw significant churn: some of it planned, some that came by surprise.

FCR generated net operating income of about $227 million in 2015, investor documents show, up slightly from $218.8 million in 2014 and representing about 37 percent of Forest City’s total NOI. But over the past year, it also cut about 15 percent of its workforce. Some jobs such as accounting, human resources and information technology were consolidated in Cleveland, but other departures were less welcome. 
The main interviewees, CEO MaryAnne Gilmartin and Chairman Bruce Ratner, push back, with Gilmartin saying they still have "a secret sauce in our business... the stuff we do that represents a business that has really high barriers to entry.”

 Translation: wrangling one-off deals from governmental entities.

How much development

In the article, the executives point to all as hunky-dory:
Gilmartin and Ratner say FCR has no intention of becoming less of a developer, and is actually doing more than ever before. Its pipeline includes 1,800 units of housing at Pacific Park, formerly known as Atlantic Yards, as well as a pair of buildings at the Cornell Tech campus on Roosevelt Island and the redevelopment of the Nassau Coliseum on Long Island.

But the firm has also disposed of development sites such as 625 Fulton Street, which it sold to the Rabsky Group for $158 million, and is shopping stakes in two condo projects and an office project at Pacific Park. On the acquisition side, it has focused on cash-flow assets, such as a rental property at 500 Sterling Place.
(Emphasis added)

From January 2016 presentation by Greenland 
Forest City Partners to Department of City Planning
Hold on. The only way they can count 1,800 units in the pipeline is to count the stalled B12 (615 Dean) condo building and the delayed B15 (664 Pacific) rental+school site.  See slide at right.

More importantly, though Gilmartin in the interview uses the phrase "when we take partners," that's a very self-serving framing for Pacific Park.

The project is now 70% owned (minus the arena and B2 modular tower) by the Shanghai government-owned Greenland Group, which controls the joint venture Greenland Forest City Partners (though there must be consensus on key decisions).

So it's misleading to suggest that Forest City's own pipeline has 1,800 units or that the REIT itself is shopping stakes in three Pacific Park development sites. That's the joint venture's work.

Forest City Ratner had long taken minority partners, retaining control, but this is different.

Some big departures

Forest City has lost 23 employees compared to a year earlier, with about 110 employees, and some big salaries have been eliminated:
In January, David Berliner, who joined FCR in 1989 and rose to become COO, left with little fanfare.
His responsibilities were spread out among existing employees, both in New York and Cleveland. Sources said Berliner, who ran the company’s arts program, is transitioning out of real estate.
“David had been at the company for 25 years,” Gilmartin said. “He has a passion for other things including art and the art world and he’s made a good living and decided he wants to make a major change. It’s hard because he’s like family, and it’s exciting.”
But why can't he speak for himself? Berliner couldn’t be reached for comment, and that lack of fanfare regarding his departure contrasted with his prominent appointment as COO. Similarly, the departure of longtime director of retail Kathryn Welch came without any celebration.

(Remember how executive Jim Stuckey left suddenly for "new challenges," which actually meant "forced out after harassment allegations"?)

Neither were interviewed, and perhaps they have nondisclosure agreements. Given the lack of replacement for Berliner (at least), this sure looks like a cost-cutting and/or power-consolidating move, as with the quick 2011 departure of former executive Joanne Minieri, who was not replaced. In other words, I think Ratner and Gilmartin are (duh) putting the happiest face on it.

By contrast, Linda Chiarelli, the longtime deputy to construction head Bob Sanna, said her new job at NYU was a new opportunity. Two other construction officials left, as well, which Forest City executives called understandable, given the desire to rise.

Monetizing Dean Street loading dock: VIP ticket packages to Barclays Center now include below-arena parking (what could go wrong?)

An announcement from Arena Digest headlined Fan Experience Options Added to Barclays Center tells us:
A partnership between Brooklyn Sports & Entertainment (BSE) and QuintEvents will result in some new fan experience options at the Barclays Center. The pairing of the two sides is expected to lead to the implementation of customized event offerings.

Across all of its platforms, BSE will work with QuintEvents to deliver unique experience packages. In addition to sporting events, BSE will leverage its Brooklyn Direct programming division to bring fans closer to exclusive artists at Barclays Center.

Fans can visit BSEexperiences.com to view select BSE Experiences for BROOKLYN BOXING™ events,BROOKLYN HOOPS™college basketball games, Brooklyn Nets games, special events, and concerts, including Barbra Streisand’s return home toBrooklyn onAug. 11 and 13. Experience packages will include a variety of special perks such as walking to the ring with top boxers, such as World Middleweight Champion Daniel Jacobs; private sound checks for shows booked through BSE’s Brooklyn Direct programming platform; exclusive artist meet & greets; parking where celebrities park; one of a kind experiences with Nets players, Islanders legends, and college basketball coaches and personalities; VIP dinners; and access to private entrances.
(Emphasis added)

Access to the loading dock

OK, let's go to that QuintEvents link.

For the Platinum VIP price of $6,990 per person, a huge Barbra Streisand fan can get front-row seats, a pre-concert VIP dinner, a meet & greet with Barbra her self, and the opportunity to drive in to the Dean Street loading dock elevator and go down stairs to park at the event level.

What could go wrong?

Surely, as per the last nearly-four years, all vehicles entering the loading dock will be carefully coordinated by a dispatcher.

There will be “a secured, private, web-based scheduling system,” top manager Steve Rosebrook said in 2012. “If you're not scheduled to come into the building, you're going to get turned away.”

Or, as it's happened, they idle on Dean Street, blocking traffic. Last November, I reported, with video, how congestion on Dean caused by a vehicle waiting for the loading dock caused vehicles to drive on the sidewalk.

Nicole Jordan of Empire State Development, the state authority overseeing and shepherding Atlantic Yards Pacific Park,offered an explanation that conveyed apology without penalty.

"I was informed by Barclays that there was a miscommunication somewhere between the loading dock downstairs and staff at street level managing vehicle intake. Barclays recognizes that this condition is unacceptable and is working internally to eliminate congestion build up on the arena block."

Now, they're adding to the potential for congestion.

As B3 crane is removed, Sixth Avenue between Dean & Pacific closed to through traffic for much of the weekend

On Saturday and Sunday, Sixth Avenue between Pacific and Dean streets will be temporarily closed to through traffic, so the crane at B3 (aka 38 Sixth Avenue) can be disassembled.

The closing is planned for 9 hours on Saturday (6am-3pm) and for 15 hours on Sunday (6am-9pm).

Traffic will be detoured to Carlton and Vanderbilt Avenues as shown in the graphic below. The east sidewalk of Sixth Avenue will remain open to pedestrians. Traffic Enforcement Agents and flaggers are supposed to be on site to assist with vehicular and pedestrian movements.

Thursday, July 28, 2016

At Times Plaza Saturday, pop-up plaza; DOT meeting next Wednesday on Atlantic/Flatbush safety; what about impact from Site 5?

Here are three important things to remember about the fraught intersection of Atlantic, Flatbush, and Fourth avenues.

First, this Saturday 3-7 pm, Transportation Alternatives’ People First on Atlantic Avenue campaign hold a Pop-Up Plaza, aiming to "transform lonely Times Plaza into a fun space with music, art, and food — and make it a safe place to cross!"

Then, next Wednesday, Aug. 3, the New York City Department of Transportation, which is already working on a plan to upgrade the plaza (but was told it had to come with safety improvements) is holding a workshop from 6 to 8 pm at the YWCA, 30 Third Avenue.

Finally, I'm wondering whether that workshop can address the unofficial--but, I'd bet, very much pending--plan (as I reported in City Limits) for a huge two-tower Pacific Park Brooklyn project at Site 5, currently occupied by the big-box stores Modell's and P.C. Richard.

What might be coming to Site 5

The proposed plan, as shown in the slides below, involves 1.1 million square feet, including 188,000 square feet of retail, possibly a large hotel, and large amounts of residential and possibly office space. Servicing such a building requires trucks and possibly buses, and the residents/visitors/workers would also be factored in.

(The developer says the plan is outdated but wouldn't answer more specifically about what elements were off the table.)

In other words, safety improvements at this intersection surely must address the Site 5 project.




Notice how green the not-green Times Plaza is portrayed. Ditto for the arena plaza.



Wednesday, July 27, 2016

de Blasio takes another affordable housing victory lap; experts skeptical (+ AY disconnect)

A mayoral press release yesterday (after a New York Times exclusive) announced Mayor de Blasio: NYC Sets Affordable Housing Record, Highest Production Since 1989, with the subheading "23,284 affordable homes financed in Fiscal Year 2016 – second highest in history." (This follows up on last year's triumphant press release.)

The lead:
NEW YORK—Mayor Bill de Blasio today announced that his administration secured 23,284 affordable apartments and homes during Fiscal Year 2016, the second highest production in New York City history and the most since Ed Koch was mayor.
The Mayor’s Housing New York plan now is ahead of schedule, with 52,936 affordable homes financed so far, enough for 130,000 New Yorkers. Affordable housing for the very poorest New Yorkers – those earning less than $24,000 per year – surged with 3,500 new apartments. More than 4,000 affordable homes for low-income seniors are also underway.
The City is protecting neighborhood affordability on every front. The City is investing more than ever in NYCHA and its 600,000 tenants, evictions have declined 24 percent in two years, and the Rent Guidelines Board just passed its second consecutive rent freeze affecting 2.5 million tenants.
But how much of an impact can this make? Consider that preservation, while certainly important, doesn't help those hoping to get an affordable apartment, and the city has started only 17,341 units, according to the chart in the press release.


Note this paragraph:
One-quarter of all affordable housing financed since 2014 will reach New Yorkers making less than $31,100 for an individual or $40,800 for a family of three. Of these homes, 50 percent are for New Yorkers making less than $19,050, or $24,500 for a family of three. This progress reflects the traction of new programs and initiatives targeting the very lowest-income families, including the formerly homeless.
That's progress, but how significant? The chart below counts "starts" as either new construction or preservation. So we don't know how many new apartments there were for extremely low and very low income households.

The middle-income anomaly

Of course--though it's often not mentioned--"affordable" means that people pay 30% of household income on rent, so it can range from low-income to middle-income.


So, why did I highlight middle-income housing? Because in the upcoming two "100% affordable" buildings in Atlantic Yards/Pacific Park, 65% of the units, or 390, are middle-income units.

That's not where the need is greatest. Nor is it the focus of de Blasio's program. As announced in 2014, only 11% of the total were supposed to go to that cohort.

From Housing New York, Mayor de Blasio's 10-Year Plan, 2014
Several elected officials praised de Blasio's progress, including Assemblymember Walter Mosley and Council Member Brad Lander.

The coverage

In De Blasio Administration Says It’s Ahead of Schedule on Affordable Housing, the Times reflected the administration's line, but then noted criticism from housing activists and pointed out that "nearly a quarter of affordable apartments preserved with city financing last year were in two Manhattan projects, both devoted to middle-class tenants: Stuyvesant Town-Peter Cooper Village, on the East Side between 14th and 23rd Streets, and the Riverton Houses, in East Harlem."

The article concluded:
“We are pleased to see that the administration has increased the pace of production of housing for low- and extremely-low-income New Yorkers,” said Barika Williams, deputy director of the Association for Neighborhood and Housing Development, a nonprofit advocacy group. “But the need and demand for that kind of housing has only increased. And it won’t be met by the administration’s housing plan.
AM New York, in Mayor Bill de Blasio announces affordable housing progress, met with mixed reviews, supplied significant skepticism, pointing to the amount of new construction:
“The key figure for me is NOT 23,284 — which includes 17,187 units that received additional subsidies to extend already existing rent caps — but 6,097,” the number of new affordable homes actually built, said Matthew Lasner, co-author of “Affordable Housing in New York: The People, Places and Policies That Transformed a City.” 
While de Blasio’s affordable housing creation is 11% higher than the average annual output of Mayor Michael Bloomberg, it falls short of De Blasio’s stated goal of 8,000 new units per year, said Lasner, an associate professor of urban studies and planning at Hunter College.
The 421-a issue

DNAinfo, in City Claims Record-Breaking Affordable Housing Despite Loss of 421-A Break, noted the challenge with the lack of restoration of a certain tax break:
[Deputy Mayor Alicia] Glen said one of the worst consequences of the loss of 421-a is the inability to build affordable housing in expensive neighborhoods.
"That's tragic, and Albany needs to be held accountable for that," she said. "Our ability to do the kind of mixed-income building and neighborhood planning that's a sort of tent of our Housing New York plan is definitely at risk."...
Glen said the administration is "ahead of schedule," though they created only 6,097 new units in FY2016, which was 28 percent fewer than in the previous fiscal year and fewer than they would need to be on track if they were aiming to build 8,000 units per year to meet the goal of 80,000 in 10 years. 
[Housing Preservation and Development Commissioner Vicki] Been also suggested that the higher number in FY2015 was a "bump up... because of the natural rush to get into the ground" before the 421-a tax break expired.
The Observer, in De Blasio Administration Now Says It Can Hit Its Housing Goals Without 421a, reported:
Nonetheless, numerous experts have told the Observer that the mayor’s grand designs are largely dependent on getting the state to create a new 421a program. The centerpiece of his housing agenda is Mandatory Inclusionary Housing, which obligates market-rate developers to set aside a percentage of new rental apartments for middle and low-income tenants.
But without 421a, there is little incentive for developers to build rental units.
“When you look at a budget for a building, if all of a sudden your taxes are running at 30 percent of your operating expenses, there’s not a lot of room for profit,” real estate attorney Steve Hochberg explained to the Observer earlier this year. “The concept of what the mayor planned was meant to go hand in hand with a 421a.”
A union head warned that the only profitable unsubsidized developments are now condominiums. And unless a new version of the exemption arrives, developers just won’t build the low-income units de Blasio’s plan requires.


Another mess outside arena: stopped truck idles on Sixth Avenue, blocking traffic

Oh sure, the Democratic National Convention would have just gone fine in Brooklyn.

Actually, I'm not sure developer Forest City Ratner really wanted the convention to come to the Barclays Center (where, at the time the DNC was under consideration, the developer was selling tis 55% share of the operating company). After all, it would have shut down construction of Greenland Forest City Partners' Pacific Park Brooklyn project.

Because they couldn't have had project-related trucks idling outside the arena, blocking traffic on Sixth Avenue, as shown in the Instagram and video below from Wayne Bailey. Note the quote overheard from the driver: he didn't know where to go.



Tuesday, July 26, 2016

Around B3, photos show pedestrians pushed into street with no safeguards, questionable sidewalk closure, easier path for trucks

Imagine if the Democratic National Convention were being held at the Barclays Center? On top of creating a frozen zone that would impact blocks of retail businesses and residences, they surely would have had to shut down Pacific Park construction.

After all, as these Instagram posts showing conditions on 7/18/16 around the 38 Sixth Avenue (B3) site remind us, it's dicey just for locals. That building is flush to the Barclays Center.

Sidewalks on both sides of Dean Street between Flatbush and Sixth avenues were closed, with unhelpful signage--seemingly ad hoc--and no intervention by pedestrian managers, forcing pedestrians into the street, with no protected area.

The sidewalk was closed, workers said, because pedestrians were still in danger from debris falling from the building under construction, but those workers nonetheless took breaks, without helmets, in that area. (Were they just creating a private zone?)

Consider: if there'd been a convention, and construction shut down, the sidewalk still might have had to close.

The final photo shows that the exit from the B3 site should allow trucks to exit down Sixth Avenue to Flatbush Avenue rather than use residential Dean Street, which was approved last year as an alternative. (Trucks are supposed to go the shortest distance to a truck route.) Why no further evaluation?







Concrete truck barreling down Dean Street between Carlton and Vanderbilt from B3 on Monday, July 18th at 9:26 AM. Lower photo is the truck exit at B3 at 9:30 AM the same day. That photo is from 6th Avenue looking north into the construction site. We've been told there is a turn somewhere that it is difficult for trucks to make, and that is why DOT allows B3 contractors to step outside DOT truck route regulations. This has been going on for at least a year without a clear explanation why it is necessary. We've heard it is because a turn is too sharp for the trucks to make. Originally we were told it was this one out of the construction site, but the photo shows these concrete trucks could drive south on 6th (and conform to DOT regulations) without a problem. In fact I haven't seen a single circumstance in a year in which 6th Avenue couldn't have been used. Can someone once and for all say what the specific problem is? Why can't the State, the developer or NYC DOT answer a straightforward question in a straightforward way? I guess kicking the ball down the road almost always pays off. #bciza #pacificparkbk @pacificparkbk @nycmayorsoffice @nyc_dot @nypd78thpcc @hdr_inc @STVGroup @atlanticyards_pacificpk_report @matrixneworld @nyc311
A photo posted by @pplegacy on

Monday, July 25, 2016

Forest City's fabulist Greene: buildings "very low density," modular provided a 20% discount

Forest City Ratner's Adam Greene is apparently willing say what it takes to create a new reality--the Brett Yormark of real estate. Consider his statement to the Daily News in June:
“The buildings were designed to be of the neighborhood,” Greene said. “They're very low density. There's a lot of sensitivity about scale. It has the scale of a (Robert) Moses plan but with the sensitivity of Jane Jacobs. This is designed to grow out of small stoops.”
That doesn't make a shred of sense. With 6,430 apartments over 22 acres, that's 292 apartments per acre. The ratio gets higher if you cut out the arena plaza and arena air space: call it 19 acres, which would mean 338 apartments per acre.

Small stoops? Jane Jacobs? Note that 535 Carlton (B14), pictured at right across the street from row houses with small stops, is the shortest and least bulky of the project's buildings.

The successful modular plan?

Now Bisnow, reporting 7/22/16 on Bisnow’s Residence of the Future panel, DEVELOPERS, FINANCIERS LOOKING FOR CLARITY IN A CHAOTIC RESIDENTIAL MARKET, tells us:
For Adam and his Prospect Heights master plan, for example, the solution was good design, with oversized windows to change the perception of the space. He also extolled modular construction—like Forest City is building at Pacific Park—pointing out that building units in a weatherproof factory gave his company a 20% discount and predicting the method would soon be the norm.
What? Building modular was supposed to save 20% if it worked as planned, since work could proceed simultaneously on site and in the factory.

But the plan sure did not work with 461 Dean Street, aka B2, which, rather than save time in construction, has taken twice as long.

Forest City Ratner had to buy out its investment partner, had to pay off a tax-exempt loan early (and not draw down the remaining expected tax-exempt financing) and has taken an huge paper loss (aka "impairment") on the building, the cost of which has grown.

If modular will be the norm, well, wouldn't they have announced new contracts for the modular factory? As of this past March, the lack of such contracts led to the loss of many workers.

The cost of density

Another issue raised at the panel was the cost of density:
The panelists of Bisnow’s Residence of the Future said while the market was holding for now and co-living communities, modular construction, and amenities keep spaces interesting and innovative, chaotic market forces and stifling regulations could do some serious damage if a solution isn’t found.

...“Even building for density doesn’t help,” ...Greene added. “It obviously depends on how you design the building, but more density means more bathrooms and kitchens, meaning higher costs.”
Interesting. Aren't there economies of scale once you get bigger?

Perhaps he was also acknowledging that a modular building is taller than a conventional one because each unit comes with both a ceiling and a floor, so that means redundancy.

Sunday, July 24, 2016

At Queens Museum, "Highest and Best Use" shows growth of Downtown Brooklyn towers

Photo of Highest and Best Use, Queens Museum
Work by Lawrence Mesich; click to enlarge
Hey, what's going on here? You really have to click on the photo to enlarge it and, frankly, see the work in person, since it can't fully be captured.

In the Queens International 2016 exhibition (closes July 31!) at the Queens Museum comes Highest and Best Use (388 Bridge St.), From the blurb:
In Highest and Best Use, Lawrence Mesich wryly examines the ongoing effects of the 2004 rezoning of Downtown Brooklyn. The digitally manipulated photographs in this series elongate the facades of each newly-built residential tower that breaks the current building height record for Queens’ neighboring borough. The title, a real estate valuation term, invokes the absurdity of how developers describe the ostensible success of this incremental change in zoning laws.
(Emphasis added)

The change in zoning was more than incremental--it was a gold rush. On his web site, Mesich explains that this is an ongoing project:
Highest and Best Use wryly examines the ongoing effects of the 2004 rezoning of Downtown Brooklyn. A rash of lucrative residential developments have pushed out long-time residents and businesses and overtaxed area resources at an alarming pace, while the need for new commercial space continues to be underserved. The opening of the area's air rights has set off a height race among developers, with each successive new building breaking the height record of the one built immediately before it.
The digitally manipulated photographs in this series extend the facades of each newly built residential tower that breaks the current height record for the borough. The title of the piece, a real estate valuation term describing the optimal use of a property which produces the highest possible profit, was invoked by Tucker Reed (President, Downtown Brooklyn Partnership) in a statement to the press while the group was promoting its assessment of the rezoning in 2014. The elongated facades coupled with absurd, oblique industry terminology produce a counter-narrative to the rezoning's ostensible success.
This is an ongoing series; a new image will be generated for each building that breaks the current height record for the borough.
About 388 Bridge and the Atlantic Yards implication

Between Fulton and Willoughby streets, 388 Bridge bills itself as Brooklyn's tallest residential building, though at 595 feet it's about the height of the nearby Avalon Willoughby West and, oddly enough, does not appear in the slide below, prepared by Greenland Forest City Partners (GFCP).

As noted in my recent article for City Limits on plans for Site 5 of Atlantic Yards/Pacific Park, GFCP has floated plans to build a two-tower project that could extent 785 feet--the tallest building in Brooklyn at the time, though it will be eclipsed by a "supertall" next to Junior's. See the slide from GFCP's presentation.










Saturday, July 23, 2016

The new Pacific Park Brooklyn "neighborhood" meets the reality of a map

From the web site for 461 Dean (with similar language for 535 Carlton):
A NEIGHBORHOOD EMERGES
461 Dean is the first residential building to open at Pacific Park Brooklyn, a new neighborhood that extends from 4th Avenue to Vanderbilt Avenue. Pacific Park includes everything you need and want from a neighborhood; great transportation, green outdoor space, retail shopping, local restaurants and so much more. Pacific Park Brooklyn, welcome home.
Well, let's put aside for the moment the fact that the 22 acres of Pacific Park itself doesn't yet include any green outdoor space or retail or restaurants, beyond what's in the arena.

Consider the incredible claim that the "neighborhood" extends from Fourth to Vanderbilt avenues. If so, then how coherent and cohesive could a neighborhood be that is bisected by wide Flatbush Avenue?

And what about those question marks I added, marking territory between Dean and Pacific streets that are nonetheless between Fourth and Vanderbilt? They're not within the project site, nor a discrete "neighborhood."

Friday, July 22, 2016

Are Islanders considering a new arena in Queens? Leverage for Barclays improvements is more likely

So, consider this thinly-sourced Bloomberg News report yesterday, NHL’s Islanders Are Considering a Move to Queens With Mets Help:
The New York Islanders are in talks with the owners of baseball’s New York Mets about building a hockey arena adjacent to Citi Field in Queens, people with knowledge of the discussions said.
Willets Point is emerging as a persuasive alternative to the team’s current home at Brooklyn’s Barclays Center if the Islanders’s owners and arena officials can’t agree on a series of hockey-specific improvements, said the people, who asked for anonymity because the negotiations are private.
...The prospective arena at Willets Point, also the home of the National Tennis Center where the the U.S. Open is played, would put the team closer to its original fan base in Long Island.
Well, sure, it would put the team closer to the fan base, at least for people driving.

But there's only one subway, the 7 train, and the Mets-Willets Point station on the Long Island Railroad connects only to the Port Washington line.

Moreover, an arena costs a lot of money to build, which means seats wouldn't be nearly as cheap as the former Nassau Coliseum, and one-sport arenas are at a disadvantage in filling seats around the year.

So, despite derivative stories with unskeptical headlines like the New York Times's Islanders May Build Hockey Arena in Queens With Mets’ Help, I have to agree with Greg Wyshynski of Puck Daddy, who suggested the statement was about leverage in getting renovations at Barclays.

(Ditto for a rumored move to Elmont, an option floated in the Post.)

As Newsday reported:
Barclays Center spokesman Barry Baum said, “Last week Jon Ledecky told the media and later fans at a town hall event that ‘Barclays is our home.’ If you have any further questions, please call Islanders’ ownership.”
Last week's statements

Indeed, as numerous press outlets reported last week, Ledecky did reaffirm Barclays as their home, though he did cite challenges and said hoped for more improvements in the fan experience.

“There were challenges last year,” he said, according to Newsday. “I would be lying to you if I said there wasn’t. Does that mean you blow up Barclays Center and leave? No. You try to improve the home you have.”

Indeed, Ledecky may be using the five-year opt-out option in the Islanders' contract to get Barclays renovated sufficiently to host a NHL All-Star game. 

Barclays apparently needs hockey upgrades. Here's part of a transcript of his remarks, according to Neil Best of Newsday:
“Then I think Montreal, the citadel of hockey. To go there at 2 o’clock in the afternoon and they have 20 people squeegeeing the boards, the glass. That was one of my big things from folks taking premium seats [at Barclays].
“They said, ‘Jon, I can’t see through the glass.’ I finally went to Brett and said, ‘I’m sorry, each pane of glass is $750. You need to buy new panes of glass and when I get that complaint you have to fix that. That’s our stockholder.’
Ledecky did praise Barclays for improving the video and improving the ice.

No Islanders games at Coliseum?

The real headline, as Newsday reported, was Jon Ledecky won’t commit to Islanders games at new Coliseum:
The 2013 lease between Nassau County and Nassau Events Center, the entity formed by developer Bruce Ratner to renovate the Coliseum, included a clause that called for the Islanders to play six games per season at their former home.
But since then Mikhail Prokhorov, owner of the Brooklyn Nets, purchased an 85-percent stake in Nassau Events Center and Ledecky and childhood friend Scott Malkin bought a controlling interest in the Islanders from Charles Wang.
In other words, there new people in charge. So it depends on the enforceability of the lease, or whether Nassau Events Center will simply pay an annual penalty of at least $1 million.

As I reported in April 2015, Barclays Center CEO Brett Yormark expressed near-certainty about the six-game stint when speaking at a 9/23/13 Nassau Legislature hearing, saying he expected the commitment "over the next couple of months"--though we now know that process could not launch until the Coliseum gets renovated.

Newsday also reported that Ledecky does not plan to move the Islanders’ minor-league affiliate, the Bridgeport Sound Tigers, to the Coliseum, though the Coliseum lease requires an American Hockey Leaggue tenant.

As I wrote in a 5/21/15 Newsday essay, Nassau must be wary about plans for Coliseum.

Fence outside 535 Carlton should be lowered beginning Wednesday, July 27

According to a Community Notice circulated Wednesday, the construction fence outside the 535 Carlton site between Dean and streets will be reduced.

The fence, now 16 feet high, will be lowered to 8 feet. Contractors will lower the fence in 20-foot segments. The work should be completed by August 5. This follows the lowering of the 16-foot fence outside the 550 Vanderbilt site, which began earlier in July.



Thursday, July 21, 2016

Given skew to middle-income "affordable" units, will future buildings emphasis lower-income ones?

I recently looked back on my 12/16/14 coverage of the groundbreaking for the "100% affordable"
535 Carlton tower, and an answer from Mayor Bill de Blasio that might have been an intriguing hint, or maybe not.

The lingering question: will any future towers with affordable units be skewed to lower-income units? Or will the current imbalance, which diverges from longstanding promises, persist?

The background

The background is that 50% of the approximately 300 units in 535 Carlton and the "100% affordable" 38 Sixth Avenue would go to households earning up to 165% of Area Median Income, or AMI, while another 15% would go to middle-income households earning up to 145% of AMI. AMI as of 2016 is $90,600.

Estimates for approximately 600 total units at 535 Carlton and 38 Sixth; AMI as of 2016 is $90,600.

But 65% of the affordable units should not be going to such households; the figure should be 40% (or 20% of the units in a 50% market/50% affordable building), as noted in the Affordable Housing Memorandum of Understanding (MOU) that developer Forest City Ratner signed with ACORN in 2005, and which was incorporated into the Community Benefits Agreement.

The skewing is most noticeable regarding Band 5, which should be 20% of the total affordable units, not 50% (or 10% of the total units in a 50% market/50% affordable building).

From 2005 Affordable Housing Memorandum of Understanding:
These percentages, which apply to a 50% affordable building, should double for a fully affordable building.
Also note that 40% of the affordable units are supposed to be low-income, but only 30% in the next two "100% affordable" towers would be low-income.

Querying the mayor

When de Blasio took questions in 2014, I asked, "You said in your speech that this met the original Atlantic Yards vision. However, 20% of the original affordable housing promise was the highest income band. This building, 50% is the highest income band. So how does that meet the original promise?"



"Well, this is the first of many buildings," responded de Blasio. "This parallels the reality with our affordable housing plan writ large. In the year 2014, we're on track to get over 16,000 units out of 200,000. As you see the plan progress, neighborhood by neighborhood, you're going to see buildings that are 100 percent affordable, you're going to see buildings that are a lower percentage, you're going to see buildings that are primarily for folks at the lowest side of the income scale, you're going to see buildings that are mixed. Here, you're going to the original vision, in terms of tiered income scale, we intend to achieve. This building is 100 percent affordable – it's tiered, but we intend for the whole project to ultimately meet those goals."

(Emphasis added)

In that highlighted section, de Blasio was speaking generally and, indeed, the city's affordable housing program does encompass a wide mix of buildings.

What's next?

But what about Atlantic Yards/Pacific Park?

Consider: based on the plan in the MOU, of the 2,250 affordable units, 450 each are supposed to go to top three "bands," involving middle- and moderate-income households. Then 675 units are supposed to go to the upper low-income band, and 225 to the lower low-income band.

However,  there are already 300 units assigned to the top upper-income band in these two towers, rather than the expected 120 units (20% of the total 600 affordable units). There are only 30 units in the lower low-income band, rather than the expected 60 (10% of the total). There are 150 units in the upper low-income band, while there should be 180 (30% of total).

Overall, 40% of the affordable units in these two buildings, or 240 units, should be for low-income households. Instead, the number is 180 units. They're 60 units behind.

That suggests that, if the MOU is to be followed that there may have to be Atlantic Yards/Pacific Park buildings that, as de Blasio said, are "primarily for folks at the lowest side of the income scale." But we don't know it if will be followed.

What about B2?

The first building with affordable units, 461 Dean, or B2, comes closer to following the MOU, but does not, in a couple of ways.

As shown in the document below, the numbers (36 each) of units in each of the top three income bands conforms to the MOU. However, there are five 1BR and 16 2BR units in the uppermost band, and 16 1BR and five 2BR units in the one below it. (The New York City Housing Development Corporation pushed for more 2BR units from a paltry proposal, and still got fewer family-sized units than promised earlier.)

However, there are only 11 units in the lower of the two low-income bands, and 62 units in the higher of the two. The ratio, based on the MOU, should be 3-to-1, not more than 5-to-1.  (The total number, 73, is 40% of the affordable units, thus meeting that overall ratio.)

That 5-to-1 ratio has recurred in the next two all-affordable buildings. So that suggests that there will be fewer units in the lower low-income band throughout the project--unless we see changes.


Wednesday, July 20, 2016

Fantasy graphic portrays cute and charming Pacific Park & 550 Vanderbilt

Hmmm.. check out the graphic below on the Contact page for the 550 Vanderbilt condo tower.

Somehow the tower, some 19 stories (including bulkheads), is portrayed as a modest eight stories, with relatively giant trees nearby. It's as if the only part of the building is the smaller portion fronting Dean Street, as shown in the recent photo I took at right.

It even stretches beyond demapped Pacific Street. A full "Pacific Park, between Carlton and Vanderbilt avenues, is portrayed, but without the seven towers planned on that eastern block.

Moving west, the block between Sixth and Carlton avenues and Dean and Pacific streets is portrayed as an extension of the park, though it includes exactly zero open space but rather row houses and small apartment buildings, as well as the significant Newswalk condo. At the far west end is a 100-foot-wide vacant lot, destined for the 664 Pacific (aka B15 building).

North of that block, between Pacific Street and Atlantic Avenue, a current railyard with w couple of buildings jutting below it, is portrayed as a pair of modest three-story row houses.

Finally, the arena block is portrayed as pretty much the oculus, with no actual arena nor two towers (461 Dean, 38 Sixth) topped out. And the (comparatively giant) bicycle is going the wrong way.

No credit, but is this the work of Mike Perry, creator of other whimsical, misleading graphics??

Perhaps it is, as the advertisement below suggests, "Setting the Standard for Brooklyn Living." But it's sure not setting the standard for remotely accurate promotion. Nor is it "Everything You Love About Brooklyn." In fact, it recalls the 2004 effort to portray the project in gentle neighborhood scale.

Tuesday, July 19, 2016

Ratner gives $42,500 to Cuomo; also, $15K to Thompson; $5K to Golden, $4.4K (+?) to Mosley

If you scroll down Politico New York's article yesterday, Campaign reports show Cuomo continues to rely on big donors, there's a chart listing the top 87 donors.

At #55, though actually tied with others starting at #51, is a listing for "Ratner," the only individual donor listed without a first name.

Did Bruce Ratner in fact give $55,000 since January 2015? I couldn't confirm it. 

Rather, it looks like he should have barely missed the listing of the top 87 donors, who gave a minimum of $45,000, as he gave $42,500.

Bottom line: he gave enough, I'd bet, to get his phone calls returned.

Looking at the reports

Cuomo's July 2016 disclosure form listed contributions from Ratner of $7,500 and $15,000. Cuomo's January 2016 disclosure form listed no Ratner contributions. Cuomo's July 2015 disclosure form listed contributions from Ratner of $5,000 and $15,000. Cuomo's January 2015 disclosure form listed no Ratner contributions.

The $42,500 figure is confirmed in the screenshot below, as well. (Ratner did give another $9,500 to Cuomo in January 2014.)

Ratner's other contributions

As the screenshot below from the state database shows, Ratner has not only given to Cuomo, the self-described liberal Democrat gave $5,000 to Republican Senator Marty Golden, whose representation in the Republican-controlled Senate is a firewall for things like, say, residential permit parking or a real oversight plan for Atlantic Yards/Pacific Park.

Ratner gave a significant $15,000 to the campaign for District Attorney Kenneth Thompson. And the database reports two $4,400 contributions--the limit for Assembly primary and general elections--to 57th District Assemblyman Walter Mosley. That may be an error: each $4,400 contribution, though given on the same date, appears in a separate semi-annual report. 

The state database also shows the two contributions that show up in a search of the city campaign database: $250 to the campaign of Council Speaker Melissa Mark-Viverito, and $400 to the campaign of Mayor Bill de Blasio.



Monday, July 18, 2016

In Los Angeles, Greenland condo project said to be 30% sold to Chinese investors (model for Brooklyn?)

Who will live in the super luxe Metropolis condos? asked the Real Deal 7/13/16, with the sub-heading "The project developer Greenland USA wants to market some of the units to buyers in New York":
Greenland USA, whose billion-dollar Metropolis project is the biggest development under construction in Los Angeles, has recently filed a request to market 51 Phase II condos to buyers and investors in the Big Apple.
Once both phases are complete in 2018, Metropolis will have three condo towers with 1,500 condo units in total and a 19-story boutique hotel, as well as plenty of retail space.
In New York, out-of-state developers must apply with the Attorney General’s office to solicit buyers. But given high demand for condos in L.A., specifically marketing outside of La La Land is an atypical move among developers.
Metropolis official rendering
But this is unusual, though not unique, because it's in downtown L.A.

A chunk of Chinese buyers

More interestingly, the Real Deal references (without the link) a 12/15/15 report from public radio station KPCC that said a good number of condo buyers are Chinese investors who paid all-cash. for a project that's promoted in English and in Mandarin.

Indeed, KPCC reported that the six-acre site, now due for 1500 condos, had faltered:
Other developers have tried for decades to raise enough financing to turn the six-acre Metropolis site into something other than parking lots. The only one to pull it off has been Greenland Holding Group, a Chinese state-owned real estate behemoth. Bankers and real estate lawyers say a big reason why it has succeeded where so many others have failed is because Greenland has a big advantage: a direct line to millions of potential buyers in mainland China.
Exactly how many such Chinese buyers there are is unclear, but one banker interviewed said the company's target was 30%, since he'd been "told that figure by Greenland because his bank is writing the mortgages for some Metropolis buyers who can’t do all-cash."

Nationally, about 70% of Chinese buyers pay cash, which is good for condo projects because, as KPCC reported, "most banks require up to half a building to be under contract before they’ll approve a mortgage"

Many Chinese guyers nationally--more than 60%--are absentee owners, which could pose a problem in terms of foot traffic around Metropolis and, as a commenter suggested, might lead to Airbnb listings.

And in Brooklyn?

That, of course, raises questions about the condos coming at Greenland Forest City Partners' Pacific Park Brooklyn, formerly Atlantic Yards, with the first condo building, 550 Vanderbilt, said to be 50% sold.

What percentage of buyers are Chinese? Will/can units be put on Airbnb?

The former Greenland USA CEO

A friendly 7/11/16 Bisnow interview, EXCLUSIVE: URBAN LINK CEO I-FEI CHANG TALKS FOREIGN INVESTORS, features the founding head of Greenland USA, now head of the company Urban Link:
I-Fei refers to her departure from Greenland USA as "a happy early graduation." She says her value is in providing a vision for projects, establishing a team and introducing capital, so it is her passion to lead "when there’s no team, no direction, no vision, and when the land has yet to create its value." She is proud of her accomplishments, saying she initiated major, mixed-use, "multiple function" projects in both LA and NY for Greenland. Both projects were fully entitled and Phase 1 [of Metropolis] was "fully permitted and topped out," according to I-Fei.
OK, but the suddenness of her November 2015 departure, coupled with the lack of a new job at the time, doesn't suggest graduation.

Today's, she's aiming "to initiate the 'learn-work-live-play environment in urban areas,' helping local city officials and project partners reach out to Asian capital," according to the report. She's focusing on satellite cities such as Oakland and Jersey City.

Sunday, July 17, 2016

Trump "Creative With the Truth"? Ratner too.

Saturday, July 16, 2016

From the latest Construction Update: more progress on B3, including dismantling of tower crane

According to the latest two-week Atlantic Yards/Pacific Park Construction Update (bottom), covering the two weeks beginning Monday July 18 and released yesterday (lead time, for the first time in a while) by Empire State Development after preparation by Greenland Forest City Partners, some previously predicted work may finally start in this period, and work on the B3 tower is moving ahead.

Notably, the superstructure phase of B3 (38 Sixth Avenue) should be completed with the pouring of the bulkhead, the jumping of the hoist should be completed, curtain wall delivery and installation will begin. Also, the dismantling of the tower crane is projected to occur during the weekend of July 30. A community notice will be distributed.

Some major work promised in previous Construction Updates is again expected in this period. At the B2 modular tower, aka 461 Dean Street, overnight sewer installation at the intersection of Flatbush & Dean Street may occur, prefaced by a community notice.

Demolition at Block 1120--buildings on Atlantic Avenue that bump into the Vanderbilt Yard--could commence upon receipt of Department of Buildings and Department of Transportation permits. MPT [maintenance and protection of traffic] could be installed on Atlantic Avenue. A community notice will be distributed.

As previously stated, test pits will be performed at the gate near the intersection of Vanderbilt Avenue and Pacific Street in connection with water main infrastructure installations. Underground vault installations may start; street closures will not be required but flaggers will be used as needed and a community notice will be distributed.

Also, at the railyard test pits will be performed and mobilization of equipment will continue in the MPT area located along Atlantic Avenue between the LIRR Site Entrance and Carlton Avenue. Drilling of SOE Piles is expected to begin in the area. There was no mention of the noise level.

After-hours work

Also, there will be late shift, Saturday, and overnight work. Saturday work is expected at B2, at the corner of Flatbush Avenue and Dean Street, as well as other sites, including B3 (38 Sixth Avenue), B11 (550 Vanderbilt Avenue), B12 (615 Dean Street), and B14 (535 Carlton Avenue). Second-shift work also may occur at B2, which is the first tower expected to open.

Weekend electrical utility work will continue at the LIRR rail yard, and demolition of the LIRR tunnel should continue on weekends, continuous from Friday night through Sunday morning.