Friday, September 30, 2016

"Brooklyn deserves an iconic office building," says Forest City's Gilmartin (sounds like arena justification)

I somehow didn't get to the Make it In Brooklyn real estate summit held this week by the Downtown Brooklyn Partnership (DBP), but, according to the coverage, Forest City Ratner CEO MaryAnne Gilmartin left some interesting hints.

As the Brooklyn Eagle reported:
Following [new DBP head Regina] Myer's introduction, MaryAnne Gilmartin of Forest City Ratner and Michael Stern of JDS Development Group sat down with reporter Matt Chaban for a panel discussion on the future of Brooklyn's skyline. The trio covered a number of different topics within that context, including their thoughts that the city will re-institute the 421-a tax program that gives developers tax credits in exchange for including low-income housing in their buildings, and the need for office space in Downtown Brooklyn.
“Brooklyn deserves an iconic office building,” Gilmartin said before she explained that any new office building construction would likely have to involve an anchor-tenant prior to any approval. She did explain that the situation was ripe for such a building. Stern agreed and added that the success of residential development over the past 10 years in the neighborhood will only help attract more office space.
"Brooklyn deserves" was also used to justify an override of zoning for a major league team and arena, and that at least had some use by the general public--well, those who could afford tickets--implied.

In this case, Greenland Forest City Partners wants to justify a huge shift of development rights from the arena block to Site 5, currently occupied by Modell's and P.C. Richard.

If an anchor tenant is needed, well, look for the developers too woo a tech company and likely to seek government help.

The Real Deal quoted Gilmartin regarding the 420 Albee Square project, “The days of building spec office are over." I'm assuming that goes for Site 5 as well.

The residential market

Crain's reported that the panelists pooh-poohed the reported glut of apartments in the pipeline. "The idea that there will be a glut, and that there will be ghost buildings that never see residents is just a fallacy," Gilmartin said.

Sure, but landlords are offering concessions, and Gilmartin agreed that rents may not match those projected. Note the implied concessions (aka "incentives") regarding the market-rate units in the 461 Dean modular tower, which is being developed solely by Forest City, unlike the rest of Atlantic Yards/Pacific Park.

The anti-gentrification protests

Also see Technical.ly's coverage of the anti-gentrification protests.


Thursday, September 29, 2016

Yormark says hockey "arrived in Brooklyn" in last year's playoffs

Remember how the puck was supposed to drop last October? Wasn't that the beginning of the New York Islanders' season in Brooklyn?

Now, unsurprisingly, Barclays CEO and Chief Spinmeister Brett Yormark is moving the goalposts.

As Newsday reported, Yormark won't talk about the possibility of the team leaving Brooklyn after the third season, when both the arena and team have an opt-out clause.

Rather, he's focusing on improving the in-game experience, including hiring a full-time ice engineer, and fan accommodation, as the Long Island Rail Road has added trains.

The article closed:
Yormark also said Barclays has seen an uptick in season-ticket sales, primarily from within the five boroughs. He cited John Tavares’ double-overtime goal to defeat the Panthers in the opening round of last year’s playoffs as “one of the signature moments in Barclays Center history.”
“The playoffs represented a moment where we all said hockey has arrived in Brooklyn,” Yormark said. “I think we took that momentum into the offseason.”
Well, the word "uptick" is pretty vague. Maybe they're selling more season tickets, but it doesn't have to be much.

As to when hockey "arrived" in Brooklyn, I get that Yormark wants to stress that attendance improved steadily over the year. But he's still moving the goalposts.

The Times's coverage confirms that the morning skate indicates the Islanders' uncertain embrace of Brooklyn:
The Islanders also have a new practice complex at Eisenhower Park, near the Coliseum, which is being renovated, and most players’ homes are on Long Island. The team stopped having morning skates on game days in Brooklyn midway through last season, and it has become clear Brooklyn will be a place it will venture to only for games.
Yormark reiterated his stance that efforts to increase the fan base would continue to be pronounced on several fronts.
“We have to stay true to the hard-core fan that resides on Long Island,” he said. “And we want to connect with fans throughout the tristate area. It’s all about marketing, community outreach and making the players more visible.”
By contrast, NetsDaily's Anthony Puccio suggests that--finally, in their fifth year--the Brooklyn Nets are becoming a Brooklyn team, with more players living here, thanks to the Brooklyn location of the practice center. Whether they all have Brooklyn "grit" and "pride" perhaps will be more apparent when the season starts.

Wednesday, September 28, 2016

After four years, Barclays Center now on 20th Temporary Certificate of Occupancy


Four years after its opening, the Barclays Center is on its 20th three-month TCO, or Temporary Certificate of Occupancy, issued by the New York City Department of Buildings (DOB). That permits use and occupancy but indicates the building's still not done.

As I wrote in October 2013, an extended TCO is nothing new for sports facilities. Yankee Stadium got its Final Certificate of Occupancy after nearly three years, but Citi Field got its document more than four years after opening. The Barclays Center may push beyond it.

A final Certificate of Occupancy is issued when the completed work matches the submitted plans. Documents confirm the work complies with all applicable laws, all paperwork has been completed, all DOB fees have been paid, all relevant violations have been resolved and all necessary approvals have been received from other City agencies.

What's missing

While the TCO at right indicates that there are "27 outstanding requirements," a look at another page (below) on the  DOB's web site indicates there are 24 such requirements.

That almost completely duplicates the outstanding requirements as of one year ago, with one exception: apparently the "structural safety of existing buildings" was confirmed. But such final certification awaits regarding many aspects of the building, such as life safety aspects as smoke detectors and fire alarms.

There are also various pending violations facing the building, including several--with details completely unspecified--from this past June regarding elevators.

Tuesday, September 27, 2016

Carlton Avenue residents face bolts falling into front yards, trucks scraping trees on narrow street, paint-like substance drifting in

Elisabeth Martin holds bolt;
coincidentally, Marion Phillips III of
ESD wipes his forehead at table;
photos by Norman Oder
This the third among articles based on the 9/20/16 meeting of the Atlantic Yards Community Development Corporation (AY CDC), set up to advise Empire State Development (ESD), the state authority overseeing/shepherding Atlantic Yards/Pacific Park. See also coverage of Site 5 plans and project delays.

Atlantic Yards/Pacific Park construction has become hazardous for some of the nearest neighbors.

At the end of the meeting, during the public comment period (at 50:50 of the video below), Elisabeth Martin, who lives in a house on the west side of Carlton Avenue between Dean and Pacific streets, told the board of the persistent issues faced by her and her neighbors.

"This is not a joke, this is not frivolous, this a serious problem," she said, citing impacts from construction of 535 Carlton, a 17-story rental building, across the street.

She hefted the end of a bolt, which she said was among others cut off the 535 Carlton facade, which lacked screening. "I heard something heavy falling," Martin said, and later discovered the bolt in her front year. A neighbor found others. "This could have killed somebody," she said.

"Would you like me to pass it around?" she asked.

She didn't get takers at first, but then did.  "This is pretty heavy," acknowledged board member Daniel Kummer.



"This is why we are afraid for our lives," Martin said. Martin addressed ESD executive Marion Phillips III., who also serves as AY CDC President (which means the advisory board he heads is advising himself).

Endangered tree on Carlton Ave.
"Mr. Phillips, I am sorry to say, when I made the comment about fearing for our lives"--she referred to a tense exchange she had with him at a meeting a week earlier--"this was not disrespectful.... Because if you were walking on my block, I would be fearing for your life."

The public comment period is not a Q&A session, so there was no opportunity for the building's developer to either confirm or deny Martin's report.

Trees endangered by narrowed street

Martin also pointed out that Carlton Avenue, narrowed to some 11 feet wide by a giant construction fence (that has since been lowered but not moved in), has become quite hazardous.

First, northbound drivers must shy slightly left, as the fence is not uniformly straight.

Then trees that have long leaned out toward the street frequently get "hit by huge trucks that are basically not supposed to go on our block, but they take the shortcut to avoid the traffic jam," she reported.
Narrowed Carlton Avenue

Residents have put up orange netting and metal shields around trees, but the latter in one case lasted two days, Martin reported.

Whose trucks?

Later in the meeting, Jennifer Bienemann of HDR, the state's environmental monitor, said "we have rarely seen project related trucks on Carlton between Dean and Pacific."

If so, that suggests a much greater role for enforcement by city agencies.

Bienemann said that the project site has signs reminding drivers to follow truck protocols, but not to direct trucks, because every site has a different approved truck route.

Note the photo below left, at Carlton near Pacific Street. It does remind drivers of requirements but does not, as Bienemann said, warn about potential fines. (That message may be at other location.)

Warnings to truck drivers: Carlton Avenue near Pacific Street

Construction damage reported

Martin also said that several buildings on the block have been shaken by construction, with cracking of the walls and falling ceilings.

Phillips said he would ask ESD staffer Greg Lynch to look into it and add such incidents to the agency incident log.

There was no discussion of sanctions, though.

The problems continue, as noted on Instagram

Yesterday, some white, water-soluble paint-like material appeared to drift from 535 Carlton into the yards of the row houses and interiors of across Carlton Avenue between Dean and Pacific streets, staining metal work and garbage cans. It could be inhaled by passers-by. This has to be some kind of violation.


Trucks at 535 Carlton last Saturday left a lot of dirt on the ground, as shown in the photo below. Spraying and wheel washing are supposed to diminish dust.

Monday, September 26, 2016

Yes, three buildings will open soon. But they and others are behind previous tentative schedule.

This the second among articles based on the 9/20/16 meeting of the Atlantic Yards Community Development Corporation (AY CDC), set up to advise Empire State Development (ESD), the state authority overseeing/shepherding Atlantic Yards/Pacific Park. See also coverage of Site 5 plans.

So, how well is Atlantic Yards/Pacific Park progressing? Yes, three buildings will be opening in next several months, and a fourth is due next year.

But all four of them are well behind the tentative schedule noted in the document below, released in August 2014 by Greenland Forest City Partners. Yes, the schedule was and is subject to change, but there's reason enough to question the progress, including the question marks surrounding the 421-a tax break.

At the meeting, Greenland Forest City Partners' Scott Solish said the B2 tower, 461 Dean Street, would welcome tenants in the fall. Keep in mind that this building broke ground in December 2012, and was originally supposed to take two years.


At 535 Carlton, aka B14, the 100% affordable building will open in late 2016 or early 2017. In the graphic above, it was supposed to open in July.

The condo building 550 Vanderbilt, aka B11, is supposed to open at the beginning of 2017. In the graphic above, it was supposed to open in July/August of this year.

The B3 affordable rental building, 38 Sixth, is supposed to open by June 2017, said Solish. In the graphic above, it was supposed to open in January 2017.

Affordable housing timetable

Both Solish and ESD officials said that the affordable housing was still due by 2025. But B4, a mixed-use tower on the northeast corner of the arena block, was once supposed to start in March 2017 and include 275 affordable units. No timetable for the building has been confirmed.

In fact, Greenland Forest City has indicated it would like to switch B4 to office use, but has not said where the 275 affordable units--key to maintaining a ratio of 35% affordability in the first stretch of the buildout--would go.

B4 and two condo sites, B12 and B13, have been put up for sale, with no announced deal--or timetable--pending.

What's next?

Solish said that B12 (aka 615 Dean) was among the next two towers to be built, but did not specify timing. Forest City executive Susi Yu said that footings were installed for B12 to qualify for the 421-a tax break. But B12 was once projected to open by February 2017, and that date is not even close.

Solish identified B15, a market-rate rental tower known as 664 Pacific (that includes a middle school), as the other building coming next. But 664 Pacific, once projected to open by February 2018, has been delayed by litigation, and likely won't be finished until 2020.

A neighbor comments

Peter Krashes of the Dean Street Block Association reminded the AY CDC board that "the. duration of the project is really long" and that the project, as originally passed in 2006, "was meant to be complete by now."

"As the project is being implemented, we have kids that are going to be born on the block and go to college, and exposed to construction" throughout, he noted.

Board member Jaime Stein noted that there was a request by the Barclays Center Impact Zone Alliance (BCIZA) to "think about this project in its length and scope." She said that helped her better understand quality of life issues facing residents, as "the duration and uniqueness of the project became very clear."

Sunday, September 25, 2016

So, when developers in Syracuse and Buffalo get an RFP crafted for them, there's an indictment

As reported in the 9/23/16 New York Times,  Ex-Cuomo Aides Charged in Federal Corruption Inquiry, the corruption charges against former aides to Gov. Andrew Cuomo, Joseph Percoco and Todd R. Howe, as well as state official Alain Kaloyeros involve the award of “lucrative projects to a few favored developers."

That involved cooked requests for proposals, or RFPs. And that made me think of the way the Metropolitan Transportation Authority 's Vanderbilt Yard, the key property in the Atlantic Yards project site, was awarded to Forest City Ratner.

The comparison isn't exact, but the special treatment in both cases was blatant. As the Times put it regarding the recent case:
In one instance cited in the complaint, prosecutors say Mr. Howe sent an email to Dr. Kaloyeros saying he had “vitals for Buffalo and Syracuse friends.” He was working with a prominent corporate donor, LPCiminelli, a builder based in Buffalo, to create a request for proposals that effectively made LPCiminelli the only eligible bidder.
Or, let's go to the press release from U.S. Attorney for the Southern District, Preet Bharara:
More specifically, in or about October 2013, Fort Schuyler issued requests for proposals (“RFPs”) to solicit bids from interested and qualified developers for the Syracuse and Buffalo projects. KALOYEROS, with HOWE’s assistance, oversaw the drafting of the RFPs and, unbeknownst to Fort Schuyler, KALOYEROS and HOWE secretly solicited from AIELLO, GERARDI, CIMINELLI, LAIPPLE, and SCHULER qualifications of the Syracuse Developer and Buffalo Developer to put in the RFPs so that the RFPs would request qualifications specifically held by those companies. For example, the Syracuse RFP requested the use of specific project management software used by the Syracuse Developer. After HOWE emailed GERARDI and AIELLO a draft of the Syracuse RFP approximately two weeks before its public issuance, GERARDI sent back to HOWE and AIELLO a handwritten mark-up of the draft RFP, on which GERARDI had, among other things, underlined the software names and wrote “too telegraphed?? I would leave out these specific programs.” For its part, the Buffalo RFP, as initially issued, required 50 years of experience by a local developer – a qualification touted by the Buffalo Developer in promotion materials provided to KALOYEROS. This requirement was later changed and claimed to be a “typographical error.” The Buffalo Developer also was provided internal State documents to use in its submission.
From the complaint; click to enlarge
(Emphases added)

The Vanderbilt Yard comparison

OK, there's no evidence of bribery in Brooklyn, but how different was this, in a material way, from the Vanderbilt Yard RFP? As the Brooklyn Paper reported 7/16/05:
Even the MTA request for proposals seemed tailor-made to Ratner, stating that the “City of New York’s designated Atlantic Terminal Urban Renewal Area developer has proposed a high density mixed-use project for the site and surrounding parcels including an arena.” 
Indeed, the RFP stated:
The subject property is adjacent to the Atlantic Terminal Urban Renewal Area (ATURA). The City of New York’s designated ATURA developer has proposed a high density mixed-use project for the Site and surrounding parcels, including an arena. Additionally, it is contiguous to the recently expanded Downtown Brooklyn Special Purpose District, which provides for C6-4 zoning, allowing for an FAR of 10.
Just because the city had a "designated" developer for the Atlantic Terminal Urban Renewal Area (ATURA) didn't mean that the developer deserved to win the RFP. But in the Brooklyn case, the irregularity was even more blatant: there was already a project proposed. 

How an after-the-fact RFP was not considered tainted remains an enduring mystery of Atlantic Yards.

Eminent domain valuation that accepted potential rezoning is upheld in appeals court

An important Atlantic Yards eminent domain valuation has just been validated by an appellate court. I wrote in May 2014 how a condemnation judge, in valuing and empty lot off Atlantic Avenue within the project footprint, denied the state's claim that there would have been no rezoning.

Kings County Supreme Court Justice Wayne Saitta agreed with the property owner's argument that the site, without the project, could have become a 12-story hotel, concluding, "Most probably, the entire M1-1 [one-story manufacturing] district in the Atlantic Yards footprint would have been upzoned."

Why is this important? Because Empire State Development Corporation (aka Empire State Development, or ESD), in the 2006 Atlantic Yards environmental review, claimed the project site would not "experience substantial change in the future without the proposed project... due to the existence of the open rail yard and the low-density industrial zoning regulations."

When the very reasonable possibility of a rezoning was raised, the state authority stonewalled, claiming, "While the City, if it desired, could rezone the project site, it has not."

The original case

730 Equity Corp. v New York State Urban Dev. Corp. involved an empty lot on Block 1120, Lot 35, at 730-740 Atlantic Avenue just west of Carlton Avenue. It juts into the below-grade Vanderbilt Yard.


Following that conclusion, Saitta rejected the state's claim that the property was barely worth $2 million as a gas station, and instead valued it at nearly $9.2 million, far less than the $20.6 million that the owner sought but still a major gain.

As I wrote, the developer, which pays for the land, likely still got a good deal, since the property will later be part of a plot for a 460-foot tower with 733,810 square feet, six larger in bulk than the hotel

The appeal

In a recently released appellate decision, judges unanimously rejected the appeal by ESD, the state authority overseeing/shepherding the project, including condemnation. (The state's lawyers were from Berger & Webb; the property owner's from Goldstein, Rikon, Rikon & Houghton.)

The decision notes more details about the valuation:
The court made certain adjustments to the claimant's appraisal, including the deduction of $2,792,576 in extraordinary costs related to a need to excavate and replace unsuitable soils and the costs of LIRR approvals and monitoring, on which ESDC had provided expert evidence. The Supreme Court determined that just compensation for the taking of the property was $9,186,000. Judgment was entered in favor of the claimant and against ESDC in the principal sum of $6,906,000, representing the valuation of the property less an advance payment of $2,280,000. 
While courts typically are limited to assessing the uses permitted by current zoning, the judges said, "when there is a reasonable probability of rezoning, some adjustment must be made to the value of the property to reflect that fact."

The trial court "properly determined" that reasonable probability of rezoning, the appellate judges wrote:
 Contrary to ESDC's contention, the court's failure to delineate the exact boundaries of a probable rezoning did not undermine its finding that the property would probably [*2]have been rezoned absent the project. The court's findings that many of the buildings in the immediate area had been converted to commercial and residential use, that New York City policy was to rezone underutilized industrial sites to allow for commercial or residential development, and that a zoning district with a FAR of 6 would be in scale to this portion of Atlantic Avenue were supported by the record.
The court properly distinguished the Atlantic Avenue corridor from lots on the more narrow Pacific Street, which are more functionally part of Prospect Heights than the subject property. 
The judges also rejected the claimant's effort to stop the trial court's "deduction of extraordinary costs to account for excavation and replacement of unsuitable soils, with related excavation protection, underpinning and pile foundation, and LIRR costs."

When it comes to the Barclays Center, Zimbalist now switchable as independent academic analyst

It was rather entertaining to read this 9/5/16 Newsday article, by Jim Baumbach, headlined Islanders’ pact gives team a Barclays opt-out after 3 seasons. Not only is it a good analysis of the potential to dissolve the deal between the team and the arena, it contains these paragraphs:
This type of setup is unusual for a professional sports team, experts said. Multiple sports executives and sports business experts said they know of no other sports team among the four major sports that has a deal similar to the Islanders’ in which the arena, acting as the landlord, has control over items such as ticket prices, marketing and even the team’s website. The deal was designed to provide the Islanders short-term financial stability with the $53.5 million annual fee that didn’t exist at Nassau Coliseum but also give the team an exit strategy.
“Charles Wang wanted to keep his options open, but at the same time he wanted to have the best short-term plan that he could, and Bruce Ratner wanted to have another tenant for another 45-plus dates a year,” said Andrew Zimbalist, sports economics professor at Smith College. “That’s the way in which the sides came together, and that’s why the deal is fragile for the longer term.”
An academic hat

So here's Zimbalist, wearing his academic hat, forgetting how he was paid by arena developer Forest City Ratner to write a deeply flawed report on how the arena would be a gold mine for the public, as I dissected it in 2006 as The $6 billion lie.

After all, to quote Zimbalist's 2005 report Estimated Fiscal Impact of the Atlantic Yards Project onthe New York City and New York State Treasuries
Many of the numbers used in this report concerning Nets attendance, ticket prices, construction costs and other items come from projections done by or for the Nets. I have discussed these estimates with the Nets and they seem reasonable to me. The Nets project that the arena will not host an NHL team and that it will host 226 events during the year (assuming the eventual closing of CAA, no new arena in Newark, no NHL and no minor league hockey events at the Atlantic Yards arena.) The Nets project out three scenarios over time based on aggressive, moderate and conservative assumptions. I use the estimates from their moderate scenario.
As Jung Kim and Gustav Peebles pointed out in their response to Zimbalist's report, he thought it "reasonable" that the Continental Airlines Arena (CAA) at the Meadowlands would close and there would be no new arena in Newark. But that left nowhere for the New Jersey Devils to play and, indeed, that Newark arena did arrive.

The great irony is that Ratner made a decision to downsize the Brooklyn arena to save money, but the Islanders decided that the local fan base and TV contract were worth it to play in a venue with awkward layout and sightlines.

Saturday, September 24, 2016

From the latest Construction Update: drill track being constructed in railyard

According to the latest two-week Atlantic Yards/Pacific Park Construction Update (bottom), covering the two weeks beginning Monday, Sept. 26 and released Thursday at 2:40 pm (early!) by Empire State Development at 5:43 pm (late) after preparation by Greenland Forest City Partners, there's not a lot new planned.

Notably, construction of a new temporary drill track in the center block of the Long Island Rail Road's Vanderbilt Yard, between Sixth and Carlton Avenues, is expected to begin during the two weeks. A drill track allows trains to switch from one track to another.

Also, as previously reported, "sewer refurbishment activities have started on Pacific Street including surveys, cleaning, relining, and manhole grates replacement work."

After-hours work

Also, there may be late shift, Saturday, and overnight work. Saturday work is expected at B2 (461 Dean Street), and may occur at 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.

As stated in the past eight construction updates, demolition at Block 1120, the railyard block between Sixth and Carlton avenues, could commence upon receipt of Department of Buildings and Department of Transportation. A community notice will be distributed.