Wednesday, December 07, 2016

Forest City Realty Trust reverses itself, will drop family control; Bruce Ratner to leave board (Pacific Park loss a factor?)

Some six weeks after the controlling Ratner family rejected a plan to change the dual-class stock structure of Forest City Realty Trust--which investment analysts, corporate governance experts, and activist stockholders have criticized as avoiding best practice and contributing to a lower stock price--the family reversed itself yesterday.

From Scopia Capital August 2016 presentation
The timing suggests that a precipitating factor was the $300 million impairment--loss in asset value--announced in early November on the Pacific Park Brooklyn project

Notably, Bruce Ratner, Chairman of the Brooklyn-based subsidiary Forest City Ratner, is stepping down from the parent's board and, unlike his cousin Chuck Ratner, who's stepping down as chairman, got no praise from the company. Bruce Ratner's spot on the board, to be taken by an independent director, will help tip the board to non-family control.

The headline on the press release was Forest City Enters into Agreement to Eliminate the Company's Dual-Class Share Structure; Announces Board Changes and Corporate Governance Enhancements.

On board was Scopia Capital Management, which (as the Plain Dealer noted) owns 8.4% of FCRT's Class A shares, and surely wants to see the value unlocked. Scopia titled its August 2016 critical presentation "The ABCs Of the Dual-Class Structure at Forest City: Towing an Anchor."
From Yahoo Finance

Forest City's stock went up 9.81% yesterday, but, as shown in the chart at left from Yahoo Finance, 10%, that only partly recovered from the loss that occurred after Forest City announced a $300 million impairment, mostly on Pacific Park.

So what changed?

The press release was silent, but I have to believe that last month's announcement was a factor.

Also, on 12/1/16 downgraded the stock (see below right) from C (hold) to D+ (sell). Yesterday, in response to Forest City's announcement, Citigroup upgraded Forest City from neutral to buy.

The details

Under the proposed reclassification, shares of Forest City's Class B stock, owned by the extended Ratner family, would be exchanged shares for 1.31 shares of Class A stock. Shareholder approval is expected, as the Ratner family, and Scopia, have signed on.

In a joint statement, Chairman Chuck Ratner along with Scott S. Cowen, Chairman of the Special Committee set up to evaluate the change, said, "Eliminating the dual-class share structure is an important step in Forest City's continued evolution. After carefully reviewing the Company's options to further enhance value for shareholders, we determined that now is the right time to collapse the dual-class structure."

That doesn't explain why it wasn't the right time six weeks ago.

Chuck Ratner will retire from Forest City at the end of this year, after 50 years of service, and will step down from the Board; he said he'd always aimed to retire at age 75. FCRT President and CEO David LaRue saluted him. He will be succeeded by cousin James A. Ratner, now Executive VP of Development, as non-Executive Chairman, and James Ratner will give up his management job.

Regarding Bruce Ratner

Also, in full: "The Company also announced that Bruce C. Ratner, who has served as a Director since 2007, will also step down from the Board by year-end. Bruce Ratner will continue in his role at the Company's New York subsidiary."

That's not saying much.

Tuesday, December 06, 2016

From the latest Construction Update: electrical service moves ahead at B3 site

According to the latest Atlantic Yards/Pacific Park Construction Update (bottom), covering the two weeks beginning Dec. 5 and circulated today at 12:55 pm (late) by Empire State Development after preparation by Greenland Forest City Partners (GFCP), there's some new work.

Notably, for the modular 461 Dean tower, aka B2, "Installation of hoist run enclosure panels will occur during this reporting period."

For 38 Sixth Avenue, aka B3, "Pursuant to permits, Con Ed vaults installation will commence." (In the previous update, that installation was said to "continue," which implied it had started.) "Pursuant to permits, Con Ed will install new ducts and manholes for B3 electrical service."

While the Sidewalk Bridge outside B11 (550 Vanderbilt) was previously predicted to be possibly taken down last month, now it may be taken down during these two weeks.

A hoist at B14, 535 Carlton will be dismantled and removed. At B14, "Open space work will continue" was listed as new work, though it wasn't part of the last update.

At the Vanderbilt Yard, "Water and sanitary piping installations will be ongoing in Block 1121 during this reporting period." While this was not stated as new, it was not on the previous update.

Also, "Drilling of piles for foundations in the B5 Building area will resume during this reporting period" and "Installation of the new MG Building foundation and duct banks will continue at the north side of the Carlton Avenue Bridge." (Not sure what MG Building means, but they didn't explain it.)

After-hours work

As in previous weeks, there may be Saturday and weekend work. Saturday work could occur at B2, B3, B11, B12 (615 Dean Street), and B14.

Weekend electrical utility work will continue at the LIRR rail yard.

The demolition that hasn't happened

As stated in the past 13 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 permits. A community notice will be distributed. Maybe it's not actually going to happen.

WTF: Gilmartin said to treat #461Dean modular project as a victory

From Bisnow, quoting (in paraphrase) Forest City Ratner CEO MaryAnne Gilmartin:
Forest City itself tried to innovate, she said, with its modular construction for 461 Dean St. Committed to using union labor and hindered by a partner locking it out of the factory where the units were assembled, Forest City was still able to assemble the world’s tallest modular building, although for much more money and time than expected.
Still, MaryAnne treats the project as a victory, believing she and Forest City were able to get the ball rolling on modular construction so it can be used by others and speed up the construction process considerably.
Oh really? Didn't Scopia Capital call B2 (ak 461 Dean) a "value destructive" transaction?

Wasn't the project a financial debacle?

Didn't Forest City plan to build all the towers in Atlantic Yards/Pacific Park using modular technology?

Didn't Forest City aim to "establish and grow a viable, cost competitive modular factory business"?

And didn't Forest City sell the modular business for a sum (and thus loss) it was unwilling to disclose?

C'mon, Forest City is not some government-funded or industry-supported general research lab. They aimed to innovate and drive profits, and for that generated a lot of anticipation. It didn't work out for them.

Post-truth and real estate

Gilmartin's statement was about as credible as that by Chuck Ratner, then CEO of parent Forest City Enterprises, claiming that his 2007 prediction of a 15-year project buildout really meant the time from conception to completion. We know how that worked out.
This recalled for me an 8/10/16 Washington Post article about an even more prominent real-estate figure, now the president-elect:
That deposition — 170 transcribed pages — offers extraordinary insights into [Donald] Trump’s relationship with the truth. Trump’s falsehoods were unstrategic — needless, highly specific, easy to disprove. When caught, Trump sometimes blamed others for the error or explained that the untrue thing really was true, in his mind, because he saw the situation more positively than others did.
“Have you ever lied in public statements about your properties?” the lawyer asked.
“I try and be truthful,” Trump said. “I’m no different from a politician running for office. You always want to put the best foot forward.”
Gilmartin and colleagues also see the situation more positively. That doesn't make it true.

The Long Island Nets in Brooklyn: "It made the most sense to play in an empty arena."

From a 12/5/16 Wall Street Journal article, The Golden State Almost-Warriors, about the D-League Santa Cruz Warriors:
There was a professional basketball game in the Brooklyn Nets’ arena last week and nobody showed up.
Really—nobody. It was 1:30 p.m. on Thursday, and the Santa Cruz Warriors and Long Island Nets were supposed to be playing a NBA Development League matinee. But tickets weren’t sold to the public. It made the most sense to play in an empty arena.
This is the peculiar situation for the players who are almost on the best team in basketball. The line between the Santa Cruz and Golden State Warriors can be the line between playing in empty arenas and playing with Stephen Curry and Kevin Durant.
(Emphasis added)

It didn't make the most sense for the players, or for the potential audience (retirees? school groups if they got a field trip?) who might enjoy $5 tickets.

It made the most financial sense for the arena, which didn't have to staff the building with ticket-takers, ushers, security guards (beyond the minimum), and concession workers. The arena operating company and the Brooklyn Nets/Long Island Nets are owned by Mikhail Prokhorov's Onexim.

The people's arena!

(The Long Island Nets next year will move to the Nassau Coliseum, where, presumably, there will be cheap seats for sale.)

Monday, December 05, 2016

Atlantic Yards/Pacific Park and the common use of PTACs (461 Dean, 535 Carlton, etc.)

So, what's with these PTACs, or packaged terminal air conditioners?
PTAC grilles have been the least of the issues at 461 Dean 

PTACs have a bad rep. As Gothamist's Dan Nosowitz put it recently, "These Hideous Built-In Air Conditioners Are Spreading Across NYC Like A Virus." (Actually, the unit also includes a heater.) He wrote:
...they're typically long, low-slung boxes in appealingly nothing shades of beige and white, with a few dials on top, that fit snug against a wall. They're common throughout the country in hotels and motels, because they allow for the temperature of an individual room to be precisely controlled.
They're common in New York City, and thus often--though not necessarily--result in unsightly grilles in the exterior. I can't say the examples in the Atlantic Yards/Pacific Park seem particularly glaring, so unless they don't function well perhaps they'll escape scorn.
A PTAC at 461 Dean, from video

With PTACs, the metal sucks heat in the summer and absorbs apartment heat in the winter. And veteran real estate broker David Maundrell says some break down in ten years; a maintenance expert consulted by Gothamist says they can last far longer, if tended properly.

PTACs protrude at least nine inches into a room, according to Gothamist. PTACs are in the 461 Dean 50% affordable/50% market modular rental building-- though it was not explicitly described in the Construction Updates, given that the work was done in the factory.

The screenshot above left from a video about a 461 Dean model unit shows a PTAC, as does the screenshot below right from the 461 Dean web site.

And the slide below, from a 2016 case study on 461 Dean from the consultant Arup, confirms that they're using PTACs.

PTACs can be very costly for tenants, if they pay for heat, but the notice for the affordable housing lottery indicated that the rent includes does electric for heating.

At 535 Carlton

The 100% affordable 535 Carlton tower, as an Atlantic Yards/Pacific Park Construction Update indicated in April, was undergoing the installation of PTAC gas piping.

The 535 Carlton web site seems to show--maybe it's the angle--the PTAC protruding only modestly into the apartment. See image below. No finished photos have yet emerged.

The notice for the 535 Carlton affordable housing lottery indicated that the rent includes gas for cooking and gas for heating. (Some PTACs use gas, others electric, so this is surely a different component than the one used at 461 Dean.)

Not at 550 Vanderbilt, but likely at 38 Sixth

There's been no mention of PTACs regarding the 550 Vanderbilt condo building, which likely has a more sophisticated HVAC system.

But PTACs likely will be used in the 38 Sixth Avenue 100% affordable building, since it's being built along with 535 Carlton.

Below, a look at some building exteriors

535 Carlton/B14
461 Dean/B2
38 Sixth/B3

Sunday, December 04, 2016

OK, 550 Vanderbilt wasn't first: hiring Instagram fashionistas to tout new development

Ok, it's definitely a thing, hiring fashionistas with major Instagram followings to post photos of themselves looking glam and throwing that fairy dust over a new residential development. Extra points for picturing said fashionista on nearby, better established blocks.

And, it turns out, the developers and marketers of the 550 Vanderbilt condo, whose campaign I described, actually were not first.

Consider the 11/30/16 cover wraparound for the freebie Metro NY newspaper, toting the 365 Bond development in Gowanus.

It suggests an Instagram post by Linh Niller, though I couldn't actually find a post with her saying "Strolling through this dreamy neighborhood with the pup."

And the very modern 365 Bond, next to a Superfund site (see Pardon Me For Asking coverage), doesn't look like landmarked Carroll Gardens nearby. Whatever.

See, Linh Niller Hunyh, according to her LinkedIn page, describes herself as "Stylist for 365 Bond lifestyle photoshoot for Marketing Campaigns; worked with Lightstone Group and Douglas Elliman to collaborate on the goals of the campaigns."

So she worked on this and this, part of a campaign shot in April by several "bloggers," er, marketers. (I didn't see any disclosures, as required by the FTC, of sponsorship.)

While this came before 550 Vanderbilt, I'm not sure if this was the first ever. Still, it's enough of a trend to be part of today's real estate marketing. It's not "fake news." But sponsored-but-seemingly-grassroots social media certain qualifies as "fake social media."

Saturday, December 03, 2016

An RFEI for a railyard in the South Bronx. Not for the one in Brooklyn. Despite what Gargano said.

From Crain's NY Business's Joe Anuta yesterday, State eyes massive development over South Bronx rail yard:
The state wants to deck over a nearly 13-acre rail yard in the South Bronx to make way for a massive waterfront development in the area, which is attracting more private investment as land costs rise elsewhere in the city.
Last month, Empire State Development released a request for expressions of interests [RFEIs] inviting developers to present offers for leasing or purchasing the land, decking over the yards, then building a sizable residential or mixed-use project on top.
The parcel sits along the Harlem River, just north of the Willis Avenue Bridge. It is currently used as a transfer station to move goods between cross-country trains and trucks that traverse the tristate area—a use the state plans to maintain going forward.
"It's exciting, and very rare to offer the opportunity to develop more than a dozen acres of prime waterfront land in New York City," ESD head Howard Zemsky said in a statement.

The parallel with Atlantic Yards isn't precise, but it's not absent, either. In this case, the state Department of Transportation owns a 96-acre area called the Harlem River Yards, which it leases, and now wants to develop 13 acres of it.

By contrast, with Atlantic Yards, the state--the Metropolitan Transportation Authority--owned an 8.5-acre railyard, but a private developer, Forest City Ratner, already had conceived a plan to tether that to private property, city streets, and other public property to make a 22-acre site. Only after that came the request for proposals, or RFPs. There was no RFEI.

In both cases, the state can override zoning.

According to RFEI document, bottom, the development objectives include:

  • Preserve the designated intermodal rail facility footprint at Harlem River Yards...
  • Maximize economic benefit to the State while minimizing the State’s economic and
  • environmental risk
  • Enhance the Harlem River Yards as an economic engine for the South Bronx and New York;
  • Increase public access to the Harlem River waterfront;
  • Increase the availability of high-quality affordable housing in New York;
  • Maximize incorporation of green building and sustainable design practices; and
  • Feature meaningful participation of Minority Business Enterprises, Women Business Enterprises and Service-Disabled Veteran-Owned-Business

The missing parallel

But the true head-spinner for Atlantic Yards watchers regards the RFEIs (requests for expressions of interest), because the state official whose authority approved the project, Empire State Development Charles Gargano, said in an interview that that was how the project was being developed.

As I reported, Gargano, on 11/15/05, appeared on the Brian Lehrer show on WNYC radio and was asked by the host, who'd just cited an essay by Hunter College planning professor Tom Angotti,  "Is this a through-the-looking-glass version of how development should work?

The exchange occurs near the beginning of the embedded audio below.

"If you understand development and how it does work," Gargano responded, "we have a process in government, state government and I’m sure other government bodies have the same, whereby we put out, first of all, on any area we’re trying to develop, we put out what we call an RF--I, request for-- EI, expressions of interest. And the reason why we do that is we want to pick the brains of the private sector, and see what kind of ideas they have, and after all, they’re the ones with the resources who are going to build these projects, so we want their ideas. We put out this RFEI, that’s the initial—that’s the first part of the process, and it has worked very well for many, many decades."

Not this time.

The MTA did not issue an RFP for the Vanderbilt Yard--the main public property contained in the proposed Atlantic Yards footprint--until 5/24/05, nearly 18 months after the Atlantic Yards plan was announced on 12/10/03.

The ESDC never issued an RFEI. Forest City Ratner had been in discussions with city and state agencies for a long time. That's not the "process" Gargano described.

Friday, December 02, 2016

Why might B4 return as office tower? Would have had slow-leasing apartments. (Where are promised site amenities?)

The dormant B4 site; photo excerpt from AY Webcam
As I wrote yesterday, in 2009, the consultant KPMG estimated that market-rate buildings in the Atlantic Yards project would, on average, take one year to fill up.

However, there was one glaring exception, as indicated in the annotated graphic below left: B4, the behemoth tower at the northeast corner of the arena block, which was estimated to take two years.

That's surely not an ideal situation for a developer.

And that may be why B4's proposed configuration has changed multiple times, as the developer tries to figure out what to do with a huge, nearly 825,000-square-foot building, more than the combined bulk of the two other arena-adjacent towers, 461 Dean and 38 Sixth, both of which near completion.

From 2009 KPMG report
And it may be why B4 seems indefinitely delayed, with no plans by the state to require--as was once predicted--temporary open space and public amenities on such a stalled development site.

That would be costly, given that the footings of the tower would be 20+ feet below street level, once part of the Vanderbilt Yard.

Now, as shown in the photos, the site is filled with generators and other equipment, with pedestrian access barred by fences.

A shifting plan

B4, at 511 feet, was long slated to be the second-tallest and second-bulkiest tower, after B1, aka Miss Brooklyn. It would retain that status even if most of the B1 bulk gets moved across the street to Site 5, as is planned.

Remember, the four towers around the arena were once supposed to house office space. Then three of the towers--including, presumably, B4--were to become condos.

As of 2009, B4 was apparently envisioned as an 80/20 (80% market/20% low-income) rental building, with the 711 market-rate units taking 24 months to rent out, and the remaining 176 below-market units taking just three months.

Below grade at B4 site
(Though the chart above says the affordable units would be "middle-income," I think it's an error. There aren't any 80/20 buildings in which the affordable units are middle-income.)

In October 2013, the state approved a change to the building's design, with the justification that, without such a modification, B4 would be a much smaller building, and would substantially decrease affordable housing.

As of August 2014, as shown in the graphic below, Building 4 was to be a mixed building, with 213 condos and 551 rentals, half of them affordable. Construction was to start in March 2017.

That's changed too. Earlier this year, developer Greenland Forest City Partners announced a plan to convert B4 into office space, and also to sell a stake in the building (along with two planned condo towers).

Nothing has happened since then and, presumably, it would be tougher to sell that stake before Empire State Development, the state authority overseeing/shepherding the project, amends the official Atlantic Yards plan to allow office use.

Perhaps they recognized that, not only does the residential market seem glutted, that location is suboptimal for residents, with no room for open space at the ground level.

October 2016 annotation
The missing amenities

B4 site from Atlantic Avenue sidewalk
I took a look at the Technical Memorandum produced by Empire State Development in 2009 after project deal terms were revised.

It claimed that delayed construction would be alleviated by new amenities:
Temporary open space and public amenity use such as retail kiosks, landscaped seating areas, and plantings would be provided on the building footprints not under development, particularly Buildings 3 and 4. These amenities would enliven the street-level environment and provide a buffer between the arena and residential district to the south.
B4 site from Sixth Avenue
Well, B3, when the arena opened, had some green space and bicycle racks, but no seating or retail. B4 has remained an equipment zone.

I don't recall any evidence that the purported commitment was memorialized in contract documents (though I'll check again).

But the promise was brought up again in the ESDC's Response to Comments document:,
Comment 27: A number of commenters strongly disagreed with the conclusion of the Technical Memorandum that the environmental impacts of a delayed Project will not increase relative to a Project completed on schedule. The modification of the Phase I development would radically modify the original strategy of the Project to mitigate the placement of the Arena within residential neighborhoods by integrating it with commercial and residential density.
Response: As described in the Technical Memorandum, should prolonged adverse economic conditions result in delayed construction of Buildings 3 and 4 on the Arena block, temporary open space and public amenities such as retail kiosks, landscaped seating areas, and plantings would be provided on these building footprints. These amenities would enliven the street-level environment and, along with Building 2, would provide a buffer between the Arena and existing development to the north and south.

Thursday, December 01, 2016

2009 report: one year to fill market-rate buildings; some affordable units faster than others

New apartment buildings don't just fill up lickety-split. Buildings get TCOs (temporary certificates of occupancy) that approve certain floors for residence, while work continues elsewhere.

The interest in market-rate units fluctuates with price and competition. So luxury units at the slowly-opening 461 Dean, for example, have been said to come with "incentives" (aka discounts), as do others in the for-now glutted market in and around Downtown Brooklyn.

Even low-income affordable units don't fill instantly, despite huge demand, because of the challenges in processing applications. Moderate- and middle-income affordable units also face challenges, apparently.

One huge lesson of Atlantic Yards/Pacific Park is that predictions are fuzzy.
How fast are they filling up?

We don't know exactly how fast the rentals are filling up at 461 Dean, which is said to be partly occupied, and which includes 181 below-market units and 181 market-rate ones. (Maybe we'll learn at the recently rescheduled Quality of Life Community Meeting, set for Jan. 24.)

My October 2016 annotation of August 2014 tentative timetable
It has a TCO dated 11/1/16, which expires at the end of January; more than half the building is ready for occupancy. However, as I wrote yesterday, the lights are on, but few, if any people seem to be home.

By contrast, neither of the two other nearly finished buildings are ready for occupancy, though contracts have been signed at the condo building and, presumably, tenants are being selected for the rental one.

There's no TCO yet for 535 Carlton, the "100% affordable" rental building, which developer Forest City Realty Trust--parent of Forest City Ratner, part of Greenland Forest City Partners, said 11/3/16 "is expected to begin phased opening in the fourth quarter of 2016."

Nor is there a TCO yet for the 550 Vanderbilt condo building, which Forest City said is "expected to begin phased opening in the first quarter of 2017." The fourth tower, the "100% affordable" 38 Sixth Avenue, "is expected to begin phased opening in the second quarter of 2017."

As Forest City suggested in a document filed with the Securities and Exchange Commission, each of the three upcoming buildings--and, I'd guess, 461 Dean--might take up to a year to fill up.

It's not clear if that relates to the slow absorption of apartments and/or a fuzzy start for leasing.

How fast do buildings fill?

But it's worth looking back to a 2009 report on Atlantic Yards by the consultant KPMG. The report was conducted for the Empire State Development Corporation, the state authority overseeing/shepherding Atlantic Yards, and it rather unwisely supported the purported ten-year project buildout.

The report is not necessarily current, since it addresses a configuration of buildings that has since changed, but it does suggest that market-rate buildings could take a year until 100% occupancy was reached, with a few rental buildings coming faster (but the largest building quite slow), and the condo buildings taking a year.

From 2009 KPMG report
The report stated:
Given the lack of affordable housing in New York City, and its waiting list, it is reasonable to assume that low income units at each building will be absorbed as soon as they are brought to the market. Displayed on the following page are the market and middle income absorption estimates for the Subject Property.
Yes, the low-income units will be absorbed quickly, so any delay has to do with the processing of applications. But it's interesting to see that, at least in 2009, KPMG estimated that below-market middle-income rentals would take seven months to fill up.

It's not clear why, but presumably that was based on the history of other projects. I'd guess that, as long as enough people participated in the lottery, they'd be easy to fill up. Maybe it has something to do with the possibility that the more expensive below-market units will be on higher floors that get the TCO later in the construction process.

From 2009 KPMG report

Prokhorov shopping minority stake in the Nets to "local minority partner" to strengthen local ties. (We'll see.)

From a statement released yesterday by Brooklyn Nets (and Barclays Center operating company) owner Mikhail Prokhorov, via NetsDaily:
“I am beginning the search for a strategic minority ownership partner of the Brooklyn Nets. I have retained Steve Greenberg, Managing Director of Allen & Company, to assist me in this process. As I’ve said, I’m passionate about owning the Nets and our emerging sports and entertainment businesses, and will continue to look at growth opportunities. My goal in seeking a local minority partner is to further strengthen the team’s New York presence in order to expand upon our business and community relationships. I’m proud of the steps we’ve taken this year, including the opening of the world-class HSS Training Center and developing a new culture with GM Sean Marks and Head Coach Kenny Atkinson. I’m committed to the Nets and will remain the majority owner of the team.”
Given that investors from around the country and world had expressed interest in the Nets, let's see if Prokhorov actually sells to a "local minority partner is to further strengthen the team’s New York presence in order to expand upon our business and community relationships" or, rather, takes the best offer.

Given that a year ago the team was valued , upon the sale of Forest City Enterprises' remaining 20% stake to Prokhorov, at $875 million, that suggests that he could get $400 million--though he'd still be paying off the equivalent of the $175 million he pledged for the Nets.

As NetsDaily noted, "One question for potential investors is whether Prokhorov would grant minority owners the right of first refusal if he chooses to sell the majority stake and/or agree to a full purchase at a later date."

Again, the Atlantic Yards housing blind spot from de Blasio critics

From the Wall Street Journal today, Some Liberals Seek a Challenger to Unseat de Blasio:
In a letter scheduled to be sent Thursday to Alicia Glen, deputy mayor for housing and economic development, several liberal groups said her approach to housing didn’t include enough units for the lowest-income New Yorkers.
“So far, your housing policies have largely failed to address the needs of the lowest-income residents, many of whom face homelessness and a frightening future in shelters,” said the letter, which was signed by six groups, including New York Communities for Change and the Black Institute.
Except those groups have saluted, without criticism, affordable housing in Atlantic Yards/Pacific Park distinctly skewed away from "the needs of the lowest-income residents."