Weekly Digest: As May 31 Deadline Approaches, Cirrus Lobbying Emerges
Would future deal just include the railyard sites, or extend to Site 5? Flashback to a 2022 penalty ignored--and protested. More on BSE Global's Brooklyn "ecosystem."
This digest offers a way to keep up with my Atlantic Yards/Pacific Park Report blog and my other coverage in this newsletter and elsewhere.
This should be crunch time for Atlantic Yards/Pacific Park, right? On May 12, everyone ignored one deadline: to start the platform that would support six towers (B5-B10) over the Vanderbilt Yard.
OK, well, there’s no meaningful penalty.
But there are $2,000/month penalties for each of 876 units of below-market “affordable housing” not delivered by May 31, set in a June 2014 settlement with the coalition BrooklynSpeaks.
What now?
Can Empire State Development (ESD), the state authority that oversees/shepherds the project, impose penalties on master developer Greenland USA, which has defaulted on $286 million in loans and is about to lose the collateral (the rights to build six towers)?
I don’t see why not.
Greenland may (strategically?) be out of cash, but it retains a huge asset: the right to build a tower at Site 5, catercorner to the arena, as well as support from ESD to transfer bulk from the B1 tower, once planned to loom over the arena, across Flatbush Avenue to B1.
ESD also has leverage over Greenland, since its governing board hasn’t yet approved that transfer.
Greenland has been retreating from the project—it no longer even has a representative on the board of the Pacific Park Conservancy—and surely doesn’t plan to build at Site 5 itself. It would either be a partner or, more likely, sell the development rights.
What next?
ESD may be more interested in negotiating a new deal with Cirrus Workforce Housing Partners, which, as part of a contemplated joint venture with creditors, does not have the experience to qualify as a “permitted developer.”
The contours of that deal are unclear, but, as I reported, Cirrus appears to be lobbying for concessions. (They either have to a hire a construction manager with a decade of experience to be a “permitted developer” or otherwise get a pass from ESD.)
It’s unclear if Cirrus is also interested in Site 5, but if the “single developer” model that has disserved Atlantic Yards/Pacific Park has not been abandoned, ESD might want the seeming convenience of one master developer to take on the project’s obligations, and opportunities.
Remember one of my mantras: “Atlantic Yards is a never-say-never project.”
One meeting, or two?
There’s an ESD board meeting Thursday. Would Atlantic Yards/Pacific Park get a mention? Well, the agenda isn’t public yet; there’s always a short window to learn about such meetings.
Note that, in March, the Chair of the advisory Atlantic Yards Community Development Corporation, after discussion of the project’s uncertain path, agreed that another meeting should be scheduled in late April or May. The clock is ticking for that meeting.
A 2022 proxy protest
Also, keep in mind that BrooklynSpeaks in July 2022 held a press conference, backed by several elected officials, calling attention to the failure to build the Urban Room, the atrium attached to the unbuilt flagship tower (B1, aka “Miss Brooklyn”).
That should have triggered a $10 million fine. But ESD didn’t enforce the fine. Both it and Greenland said the arena plaza, the part-replacement, was a better alternative. (The biggest beneficiary, the arena operator, didn’t comment.)
That press conference clearly aimed to put ESD on notice about the affordable housing deadline. That clock is ticking for ESD to make a statement about the fines, and for BrooklynSpeaks and local elected officials to weigh in.
There’s a cost to delay, as shown in the graphics below, recently updated. The baseline for calculating affordability continues to grow.
"If we can't trust ESD to collect the damages owed," asked Gib Veconi of the Prospect Heights Neighborhood Development Council in 2022, "how can we trust them" regarding other commitments?
Michelle de la Uz of the Fifth Avenue Committee, another key BrooklynSpeaks leader, demurred when asked if they'd OK waiving the fines if the developer agreed to follow BrooklynSpeaks’ call for deeper affordability and other public amenities.
"Any time you have a contract where a party hasn't fulfilled its obligations, it's an opportunity to renegotiate," de la Uz said. "The state of New York has leverage it's not using." It’s not clear whether it’s using it now.
Some basic candor
Atlantic Yards watchers may recall that veteran professionals, who don’t owe fealty to their (former) client, may offer the most candor. Remember how landscape architect Laurie Olin in 2007 told the New York Observer that Atlantic Yards would take "probably 20 years."
That was quickly countered by developer Forest City Ratner, claiming a ten-year buildout. Olin’s estimate was too optimistic, it turns out.
When I recently interviewed landscape architect Thomas Balsley, who in 2015 revised Olin’s master plan (but is no longer with the project) for Pacific Park,” he spoke similarly. “I've been working with developers for a long time," he observed. "Nobody knows how long anything is going to take. The market comes and it goes."
So any predictions should be taken with a grain of salt, though presumably the 11-year window to build affordable housing, as of 2014, offered a cushion.
From this newsletter
May 15: Emerging Developer Cirrus Seeks Tax Abatement, New Funding, & (More?) Entitlements for Railyard Sites.
When will details of request for concessions emerge? What public benefits? The lobbying report cites Empire State Development, local elected officials, and even Attorney General Letitia James.
Do they need/want James’s help, or is this the long game, given that she could become Governor?
From Atlantic Yards/Pacific Park Report
May 12: Today's deadline to start the platform over the Vanderbilt Yard, precursor to six towers, won't be met. It doesn't seem meaningful. After all, the state’s only penalty is to refuse to sever any parcels for development.
May 13: Unlike with the first EB-5 loan from immigrant investors, ESD didn't require current creditors to hire an advisory professional. Nor did ESD retain an option to acquire the asset. This seems… a lapse.
May 14: Citing "competing" complaints from dog owners about limited hours & neighbors plagued by noise, Pacific Park Conservancy affirms policy for dog run near 595 Dean. No one is happy.
It probably can’t be fixed without some new investment for sound barriers or sound protection.
May 16: Do the Tsais, owners of the Brooklyn Nets and the arena operating company, have their eyes on Site 5, across from the arena, for "hotels and restaurants"?
Well, NY State has already endorsed a large hotel there, but it needs public approval. This would all be part of the envisioned “ecosystem” in which BSE Global extends its brand.
May 17: Art or advertising? Well, the NY Liberty CEO says the arena's "You/We Belong Here" signage is part of Clara Wu Tsai's "mystique," helping forge a business success. So, um, that doesn’t sound like art.
Soon I’ll write about another piece of the “ecosystem.”