The Incredible Shrinking Promises at Forest City Ratner
By Mary Alice Miller
In response to Forest City Ratner Companies’ (FCRC) announced plan to sell 70% of its Atlantic Yards equity( worth $3 billion) to Greenland Holdings — a Chinese-based developer — city, state and federal elected officials representing the area are calling for Governor Andrew Cuomo and the New York State Empire State Development Corporation (ESDC) to defer approval of the equity sale. “Our state government cannot allow Forest City Ratner to cash out on the Atlantic Yards project before the majority of the public benefits have actually been delivered,” said Michelle de la Uz, Executive Director of the Fifth Avenue Committee.
The elected officials and a coalition of community groups call on Forest City Ratner (FCRC), Governor Andrew Cuomo and the New York State Empire State Development Corporation (ESDC) to accelerate the delivery of the 2,250 units of affordable housing promised at the site and acknowledge in the newly required environmental impact statement, the socioeconomic damage to the community from the delay.
The coalition also presented demands that must be met before FCRC is allowed to sell a majority interest in the project:
1) ESDC defer approval of any sale of Forest City Ratner’s interest in the Atlantic Yards project until after a study of alternatives to expedite construction, consistent with the order from the New York State Supreme Court, has been completed.
2) That ESDC make any sale of Forest City Ratner’s interest contingent upon a written commitment to deliver the affordable apartments planned for the Atlantic Yards project in the time frame in which they were originally promised.
3) That the Governor, ESDC and Forest City Ratner publicly commit to improving the accountability of the Atlantic Yards project to the public, stating their support of legislation to create a dedicated local development corporation to oversee the project until its completion whose board includes directors appointed by the elected representatives of the people of Brooklyn.
“The reason why New Yorkers invested over $700 million in tax subsidies and abatements is because we wanted to build a home court advantage for Brooklynites, men and women who made Brooklyn what it is today,” Assemblyman Walter Mosley said. Mosley called for real commitments on affordable housing and “remedial measures put in place if those commitments are not met.”
Assemblywoman Joan Millman noted the success of Barclays Arena with the Nets and the Islanders soon to come. But, “The promise of affordable housing convinced many elected officials, including myself, to support the project.” She added, “I can’t imagine what interest Greenland has in low-income working families in Brooklyn. I can’t imagine they have any.”
“In full disclosure, I never was an advocate of this project. I never thought this was going to yield for us as much as we wanted to see come out of a project of this magnitude in terms of jobs and housing, affordable housing. Obviously, the disappointment for me goes very deep,” said State Senator Velmanette Montgomery. She added, “In the beginning, we as a community requested that this project be broken up so we could have a number of developers bidding to create a plan that was commensurate with what the community would like to see. We were not against development, but we were for equitable development so that the entire community’s interests would be realized. That never happened.”
“The governor should consider not-for-profit organizations to build the affordable housing, organizations that have a track record of doing it on time and consistent with the needs of the community,” said City Council member and Public Advocate-elect Letitia James. “It is time that we focus on the needs of the residents of the city of New York. It’s time that we stop appealing to real estate brokers and real estate interests in the city of New York. The people have spoken. They spoke on Election Day loudly and clearly.”
At the time Atlantic Yards was approved in 2006, Forest City Ratner Companies committed to completing its arena and 16 towers with 2,250 affordable apartments by 2016.
However, in 2009, FCRC renegotiated the timetable for the project so that it could delay completion until 2035. A state court ruled that ESDC illegally approved the 2009 change, but construction of affordable housing at Atlantic Yards has continued to languish, with the first units not expected to be occupied before 2015.
Atlantic Yards has received $100 million in state and $236 million in New York City funding to date. Yet, the only promise delivered thus far is the Barclays Arena.
In 2004-06, 15,000 construction jobs were promised. Only 607 were delivered as of September 2013, with 196 hired from Brooklyn. Ten thousand permanent jobs were promised; 1,240 were delivered while 219 were lost. 2,250 units of affordable housing were promised (none have been delivered yet) while 171 were lost.
When the project was approved in December 2006, the arena and 16 buildings were promised for delivery by 2016; at the 2009 project closing the arena and 3 buildings were promised by 2022. Regarding residential units, 6,430 units were promised by 2016, downsized to 1,005 by 2022. Affordable housing units: 300 promised by 2022, down from the 2,250 that were promised by 2016. Initial payment for MTA rail yards was supposed to be $100 million at the 2006 approval; at the 2009 closing, the initial payment decreased to $20 million.
New York City’s direct subsidy was $100 million in 2006; by 2009 closing, it was $236 million. In 2006, 10,000 permanent and 15,000 construction jobs were promised; an annual average of 3,600 is projected for the first 30 years. The projected 10-year construction duration was extended to 25 years with more extensions possible. And the arena economic benefit was projected at $25 million over 30 years but the NYC Independent Budget Office projected a net loss of $8 million over 30 years.
Of the units to be built, only 10 of the 35 affordable 2-bedroom units will be offered to families making an average Brooklyn income. In addition, FCRC has decided to build mostly studios and 1 bedrooms instead of 2 and 3 bedrooms for families.
“The time for promises has ended,” said City Council member and Public Advocate-elect Letitia James. “There will be no new deal without a project agreement with the community that includes a firm timeline.”