Friday, January 20, 2006


Some "blight" back story: replacement was planned for building that Ratner wants to raze

Now that the demolition controversy is back in the news, some back story: the smallest of the six buildings Forest City Ratner plans to raze--a one-story garage at 622 Pacific Street (small building at left, below)--had been purchased by an investor who planned a five-story building there. That's before the investor, Menachem Friedfertig, publicly asked the developer for $4 million, according to a 9/2/04 New York Sun report. Did he get it? Unclear--but he likely got far more what he paid: $382,000 on 5/20/03, which was two months before the Atlantic Yards plan was mentioned by the Newark Star-Ledger 7/23/03 and nearly seven months before it was announced officially on 12/10/03.

The building is among those Forest City Ratner either owns or has under contract, according to a company press release, though available documents, at, do not indicate that the ownership has changed.But the transaction adds another layer to the issue of blight and its role in a future eminent domain case. Is the area blighted because it has deteriorating buildings? Is a deteriorated building less an indication of blight if the market was already responding? Or will it make little difference, since as a law professor has noted, current state law on blight is extremely loose?

At 622 Pacific Street, the 25 ft x 68 ft building sits on a lot 25 ft x 73.75 ft. Under current city zoning rules, it could support a Floor Area Ratio of 4, or a maximum of 5,382 square feet. That would suggest a five-story building, much smaller than the arena+high-rises slated to be built at that part of the site. Note that, because Atlantic Yards is a state project, city zoning rules don't apply.

According to the New York Sun, whose 9/2/04 article was headlined Message to Ratner: ‘I Want My $4M’: Brooklyn Developer Looks To Cash In, an effort to develop the site likely added leverage:
Friedfertig pushed ahead with a plan to develop the building, with medical offices on the first floor and five stories of residential condominiums above. He even went so far as to hire architects and get permission from the city’s Department of Buildings....
Despite the risk of eminent domain, Mr. Friedfertig’s threat to wring millions out of Mr. Ratner is formidable because he has the city’s approval to build his development....
“I am waiting for Ratner to make a realistic offer, or I could just go ahead with the development,” Mr. Friedfertig said.
Architects Joe and Moshe Friedman have drawn up plans for Mr. Friedfertig’s building, and the developer expects that each condominium could be sold for about $1 million — the same price Mr. Ratner has paid for other apartments that have stood in the way of the Atlantic Yards development. An additional $1 million to $2 million could be generated by the medical offices, bringing the total for the developed building to $6 million to $7 million, Mr. Friedfertig said.

Friedfertig had the plans drawn up in early 2004, which suggests he could also have been using the condominium project as a bargaining chip. He clearly felt he had lucked out, telling the Sun, "I have the winning lottery ticket and I want my $4 million." Forest City Ratner has not been a chintzy spender. An 11/6/05 New York Times article reported that, one factor that has contributed to the higher projected cost of Atlantic Yards, from $2.5 billion to $3.5 billion, has been the above-market prices the developer has paid to buy out residents who live on the project's footprint. And the company has likely paid above-market prices to buy out other property owners. Such costs factor into Forest City Ratner's profit estimates, which remain unreleased by the MTA.

Developer's blight?

Also, a look at city records suggests that charges of "developer's blight"--that the building deteriorated while under the control of Ratner--may be murky here, as there were several violations and complaints, including a partially collapsed roof cited in January 1998. Then again, it's not clear why the building now poses an immediate danger and must be demolished. By contrast, there are fewer complaints at the recently-inhabited row houses at 461 and 463 Dean Street, at right. There's one violation, from 1922, at 461 Dean Street, and three boiler violations, two dismissed and one active, at 463 Dean Street. That's not to say that complaints are a proxy for deterioration.

Jay Butler, a professional engineer who conducted an external review of the buildings on behalf of community groups suing to stop the demolitions, acknowledged that he couldn't make definitive judgments without going inside, but stated: I cannot conclude that the buildings pose an imminent threat to public safety. Any defects to the buildings or threats to public safety appear to be consistent with conditions found at countless other buildings in New York City.

He did not comment on 622 Pacific Street because, despite statements in Forest City Ratner's initial press release, the report to the developer by LZA Technology did not mention the building. According to the lawsuit filed Wednesday, the lawyer for ESDC said that the agency's Emergency Declaration did not apply to 622 Pacific Street, but noted that the developer planned to submit another engineer’s report in support of demolition there.

Thursday, January 19, 2006


Observer: ESDC had lawyer recommended by Forest City Ratner

The New York Observer, in a post today on the blog The Real Estate headlined Life in a Small Town, noted that Charles Gargano, chairman of the Empire State Development Corporation, had brushed off questions of a conflict of interest because the agency is using a lawyer who formerly worked for Forest City Ratner's Atlantic Yards project. "I don't know whether we are using the same lawyer,” he told the Daily News.

However, reported the Observer:
It turns out, according to a document The Real Estate obtained through a Freedom of Information request, that Forest City actually recommended the law firm to the E.S.D.C. A letter, dated Feb. 18, 2004, states that “[Forest City] has requested that [E.S.D.C] authorize and/or oversee the following services to be performed with the project” including “legal services to be provided by Sive, Paget & Riesel in connection with the environmental analysis of the project.”

While it is standard for developers to pay for the legal and consulting costs that the state incurs from the project, and the state works with the consultants, the Observer set out the issue:
The question is, do developers regularly get to select—or even recommend--the consultants? And should they?

ESDC did not explain whether the developer usually gets to play that role, and lawyer David Paget did not return the Observer's messages. The issue is murky: Paget had worked for the ESDC several times before, which means that Forest City Ratner's recommendation was likely not the sole reason to consider him.

While the community groups suing to block Forest City Ratner's demolition plans did not get a temporary injunction today, the case will come return to court on Februar 14, which, the Observer said, "would be almost a week before Forest City said it would be able to begin work anyway."


Community groups sue ESDC to block demolitions; engineer expresses doubts

A set of community groups, led by Develop Don't Destroy Brooklyn (DDDB), filed suit yesterday to reverse the Empire State Development Corporation's approval of Forest City Ratner's plans to demolish six buildings controlled by the developer within the footprint of the proposed Atlantic Yards development. The suit also argues that the ESDC lawyer, David Paget, should be disqualified because he until recently represented Forest City Ratner on the project. The suit also names Forest City Ratner as a defendant.

While this dispute may seem relatively minor in comparison to a decade-long, $3.5 billion project, the lawsuit asserts that the demolitions indicate that the project is a done deal: ESDC’s actions do significant harm to the SEQRA process by giving the public the perception that the Atlantic Yards Project is a foregone conclusion headed toward approval and that physical actions are underway to permanently change the fabric of the community.

The plaintiff group includes: Fort Greene Association, Boerum Hill Association, Society for Clinton Hill, Pratt Area Community Council, Fifth Avenue Committee, Prospect Heights Action Coalition, Atlantic Avenue Betterment Association, Prospect Heights Neighborhood Development Council, East Pacific Block Association, Dean Street Block Association (4th to 5th) and DDDB.

What the engineer said

None of the news coverage quoted from the affidavit of a professional engineer, Jay Butler, who conducted an external review of the buildings. Acknowledging that he couldn't make definitive judgments, Butler stated:
Based upon that review I cannot conclude that the buildings pose an imminent threat to public safety. Any defects to the buildings or threats to public safety appear to be consistent with conditions found at countless other buildings in New York City. Such defects can be safely stabilized with commonly-used repair measures.

The Village Voice's blog, Power Plays, in an entry headlined Nets Foes Shoot Suit, took a look at city records and found a mixed record: some, but not all, "like most buildings, had multiple violations of building and environmental codes."

Will part of the suit prevail?

The New York Times had the most extensive coverage, in an article headlined Local Groups Sue to Halt Big Project in Brooklyn. It suggested that part of the lawsuit has a stronger chance of prevailing:
Philip Weinberg, a professor at St. John's University and an expert on the state's environmental review law, said the lawsuit faced "an uphill battle" in trying to get Mr. Paget disqualified. "There's nothing in the law or the regulations saying they can't have the same counsel," he said.
In general, he said, courts have tended to defer to public agencies on questions of fact, which might include whether the buildings are unsafe enough to warrant demolition. Still, Mr. Weinberg added, the agency "is supposed to play it down the middle," and "courts are supposed to step in if it doesn't pass the smell test."

Gargano unaware

The Daily News focused on the conflict-of-interest claim, in an article headlined Same lawyer repped state, Ratner: suit. The newspaper reported the developer's explanation, and ESDC chair Charles Gargano's indifference:
A Ratner spokesman said Paget has not worked for Forest City since at least the fall, when he began working for Empire State Development Corp., and never worked for both simultaneously...
Asked about Paget's alleged conflict, Empire State Development Corp. Chairman Charles Gargano said he was unaware of any problem.
"I don't know whether we are using the same lawyer," said Gargano. "I don't know of any conflict."

Gargano, it should be noted, has already endorsed the project without changes.

The New York Post ran a two-paragraph summary, headlined HOOPS-ARENA FOES SUE STATE. The New York Sun didn't cover the story.

The back story on timing

Though the Times did the most to explain the request by City Council Member Letitia James to gain access to the buildings with an independent engineer, even its report lacked some key details:
City Councilwoman Letitia James, whose district includes the site and who is an outspoken opponent, asked the company to allow her to inspect the buildings with a different engineer. At first, Forest City Ratner officials agreed to the inspection, but said later that Ms. James could not bring an engineer.

The Times didn't point out that Forest City Ratner's explanation--that letting that engineer inspect the property would cause undue delay--was undermined by the five-week gap between the receipt of the initial engineering report and the public announcement of the demolition plans.

A reference to that delay would have added some context to statements yesterday from the developer, which appeared in most coverage. The Times reported:
In a statement, Bruce Bender, an executive vice president of Forest City Ratner, defended its initial engineering report and said the lawsuit amounted to "delay tactics."
"While the opponents have another agenda," Mr. Bender said, the developer "will not play games with the public safety and is proceeding as any responsible property owner should and must."

Another look at that delay

Previously, I had speculated that Forest City Ratner had waited five weeks to announce its action on 12/15/05, in part because it needed to get its plans for asbestos abatement in order.

However, it seems likely that the delay could be attributed, perhaps in major part, to the ESDC's Declaration of Emergency, which was dated 12/15/05, the day the company alerted the New York Times. Then again, a look at the ESDC document shows that it was drafted on 12/5/05 (see the footer on the last page). Is it possible that the ESDC had its document ready 10 days earlier but only issued it after discussions with Forest City Ratner? That's speculative, but also consider that the lawyer for the ESDC formerly worked for the developer.

Whatever the scenario, the 11/7/05 report from Forest City Ratner's engineering consultant stated that the buildings posed "an immediate threat to the preservation of life, health, and property." If the threat really was immediate, shouldn't the company have made a public statement upon receipt of the report and/or urged the ESDC to expedite its review?

Wednesday, January 18, 2006


A newspaper covering itself: "like getting your left fielder to cover your baseball team"

It's not easy for newspapers to write about themselves, but it can get dicey when newspapers hire outsiders to cover themselves as well, as the recent experience in Seattle suggests. This issue has resonance regarding the New York Times's coverage of its parent company's Times Tower project with Forest City Ratner, its coverage of eminent domain, and also the coverage of FCR's Atlantic Yards project.

Let's backtrack. In his 12/4/05 column, headlined When a Newspaper is the News, New York Times Public Editor Byron Calame suggested that newspapers set up links to coverage of themselves by other publications. I suggested links regarding coverage of the parent New York Times Company's project with developer Forest City Ratner to build the new Times Tower: after all, other newspapers, notably the Village Voice and New York Observer, have provided more aggressive coverage.

One letter-writer to the Times offered another idea, arguing that "truly independent and critical coverage of yourself" requires hiring reporters who don't work for the Times--in essence, a freelance contractor like the Public Editor. I found an example in Seattle, where the Seattle Times had hired a well-respected freelancer to report on its efforts to end the Joint Operating Agreement--shared business arrangements but separate editorial functions--between the the Times and the Seattle Post-Intelligencer.

However, that three-year arrangement has come to an end, apparently because the reporter turned out to be a little too aggressive. It came down to a judgment call about the scope of his duties--an issue that should intrigue New York Times readers.

In a 12/17/05 article headlined 'Seattle Times' Won't Extend Contract of JOA Freelancer, the trade magazine Editor & Publisher reported that the memo from Managing Editor David Boardman regarding the nonrenewal of Bill Richards' contract was vague: "We have decided to take that coverage in-house moving forward."

Reason: tough coverage?

Richards had an innovative arrangment. He was paid without any required quota of stories, and could cover any angle of his choosing--and the Times would have to publish it. Were there a disagreement, they could go to a mediator, but neither side did so. In fact, paper had nominated Richards for a Pulitzer Prize.

Still Richards wrote that one deal appeared to have violated anti-trust laws and also questioned the newspaper's accounting practices. The story is very much alive, with upcoming hearings in a lawsuit. "It is easier for an outsider to cover," Richards told E&P. "The business has gotten tougher and tougher to cover yourself. It's like getting your left fielder to cover your baseball team."

Richards told the Seattle Weekly, in a 1/11/06 article headlined Conflicted Disinterest that he was not told why his contract wasn't renewed, but offered some speculation: "Reading between the lines, I could sort of guess they were not happy with the aggressiveness of the coverage." Richards added that he was "stonewalled" by the Times's publisher, a key source.

Times Managing Editor David Boardman described it as a dispute over scope, which he distinguished from aggressiveness: "We valued that [aggressive coverage]. Where we sometimes differed with Bill was on what information was truly relevant to this ongoing struggle [over the future of the JOA] and what wasn't," he told the Seattle Weekly. "It was just a whole combination of issues, and we made the decision that, moving forward, we would try a different approach."

What would the NY Times do?

Imagine for a moment that the New York Times hired a respected freelancer to cover the Times Tower, to catch up with articles in the Voice and the Observer, and even recent coverage by the New York Sun. Would the freelancer stop at the legal battle brewing over the exercise of eminent domain to assemble land for the Times Tower? Would the reporter follow his/her journalistic curiosity and look into other development projects involving Forest City Ratner and/or the exercise of eminent domain? Would the heightened consciousness ensure that the Times acknowledged, in a national survey of the eminent domain dispute like the 1/18/06 article Developers Can't Imagine a World Without Eminent Domain, that its parent company has also benefited from eminent domain? (It didn't.)

I'm not suggesting that the Times Tower project and the Atlantic Yards project are equivalent; in the former, the newspaper is challenged to ensure that its coverage does not appear self-serving. The challenge regarding Atlantic Yards--a project regarding the parent company's business partner but not Times itself--is more indirect. Public Editor Calame wrote his 6/29/05 Web Journal: The Times's most important obligation, of course, is to make sure there's no bias in any articles it does publish about Mr. Ratner. But avoiding the perception of any tilt toward Mr. Ratner in its pages is also essential.

Because of that, he offered a recommendation: The New York Times, I believe, has an obligation to alert readers when they are reading substantive articles about a company or individual with whom the newspaper has some business or professional relationship.

That same recommendation would seem to apply to the Times's coverage of eminent domain in general. To adapt Calame's language: The New York Times, I believe, has an obligation to alert readers when they are reading substantive articles about a controversial issue that has been crucial to the newspaper's business strategy.

More subtle than bias

Calame was dealing with disclosure, a threshold issue, but the issue is more subtle than bias. I doubt it was bias, for example, that led the Times to ignore the 5/26/05 City Council hearing on Atlantic Yards, where Forest City Ratner officials announced significant changes in the plan, subtracting office space (jobs) and adding condos. (See Chapter 6 of my report.) It was neglect; editors and reporters were not taking the project seriously enough.

In that case, the Times had made a decision, either actively or passively, that the hearing wasn't important. It was a judgment call. Had there been a heightened consciousness about the Times Tower (thanks to someone on staff or, following the Seattle experiment, an independent freelancer), that might have led to heightened consciousness about the Atlantic Yards project.

I'm not saying the Times should hire a freelancer to cover all Forest City Ratner projects or even Atlantic Yards; the case is stronger when it comes to the Times Tower, and coverage of the other issues would like be too broad for one person. It's just that, as in Seattle, where the newspaper official said they "sometimes differed... on what information was truly relevant," outsiders may approach coverage more aggressively (or define 'scope' differently) than in-house staff.

Then again, as the Seattle experience shows, outsiders may not last. In New York, the Times's Public Editor, by constrast, has a fixed term and editorial independence. He doesn't cover a beat but writes every two weeks, usually analyzing the coverage of a complicated or charged issue. Many readers are still wondering when and if he'll address the Times's coverage of Atlantic Yards and Forest City Ratner.

Tuesday, January 17, 2006


Jobs at Atlantic Yards: overpromised from the start (and here's another reason)

A key element of Forest City Ratner's "Jobs, Housing, and Hoops" slogan was the 10,000 office jobs the developer promised to provide at the Atlantic Yards development. But that figure has always been questionable--and for more reasons than previously discussed.

First, the company calculated more jobs than would be standard for the available space. But there's another piece of evidence, one I haven't seen cited elsewhere: two weeks before the developer announced the project on 12/10/03, a city report on the rezoning of Downtown Brooklyn cautioned that only about two-thirds of the projected new office space might be filled--which meant that the additional space planned for the nearby Atlantic Yards project likely would add to a glut.

Had the press and public officials raised this issue, they might have questioned the "jobs" projections for Atlantic Yards. Today, as the New York Observer has recently reported, it's questionable that even the smaller amount of projected office space will be built in Downtown Brooklyn.

Trading office space for housing

Most of those projected jobs at Atlantic Yards have since vanished, as office space was traded for market-rate condos, a better economic bet for the developer. Forest City Ratner VP Jim Stuckey has fudged the latter explanation. At an 11/22/05 American Institute of Architects panel discussion, he said that, "As part of our meetings with the community, it’s become very clear, for a number of reasons, that we needed to do more housing, and less office." But the additional housing was 2,800 luxury condos, certainly not part of a request by ACORN, the low-income group that signed the affordable housing agreement. (Photo of Stuckey from FCR bio.)

Stuckey later in that session gave a more accurate explanation: "We took... what was planned to be office development, and we converted it to condominiums. And it’s a very simple reason why: because condominium development is… a higher land value, which then allows us to do the cross-subsidization" of the affordable housing." (I recently listened to a tape of the session.)

Routine changes?

Stuckey also explained changes in the plan, in an 11/6/05 New York Times article headlined Routine changes or 'Bait and Switch'?:
"Projects change, markets change," said Forest City Ratner's executive vice president for development, James P. Stuckey. "When you do a project over a long period of time, it's very difficult -- unless you're Nostradamus -- to figure out what the market changes and land changes and all those things are going to be."

That explanation deserves challenge, because of the developer's initial calculations as well as the Downtown Brooklyn plan.

First, Forest City Ratner promised 10,000 jobs repeatedly, such as in this flier issued in May 2004, touting "10,000 new, permanent jobs." But the developer could promise that many jobs only by neglecting to factor in a vacancy rate and calculating 200 square feet per worker, while the industry standard is 250 square feet. (Stuckey told a 5/26/05 City Council hearing that "we use [200] based upon what we know to be the case of MetroTech.")

By contrast, the New York City Economic Development Corporation (NYCEDC), hardly a project critic, projected 7,100 jobs for the same space. NYCEDC, in its report, used the industry standard and also calculated a vacancy rate. Moreover, NYCEDC estimated that only 30% of the jobs would be new to New York, rather than moved from Manhattan, a pattern with the developer's other projects, such as the office space at MetroTech or at Atlantic Terminal.

The NYCEDC document, released 6/27/05, reflects calculations made more than a year earlier and stated in part at a May 2004 City Council meeting. But anyone could have done the math. Despite the example of MetroTech, the industry standard was even used by Andrew Zimbalist, the Smith College economics professor who produced a report for Forest City Ratner projecting economic benefits from Atlantic Yards.

Looking at Downtown Brooklyn

Also worth noting is a city report on rezoning for Downtown Brooklyn Redevelopment, completed in November 2003. The Draft Environmental Impact Statement (DEIS) is not online, but the hard copy I saw contains the same relevant text that appears in the Final Environmental Impact Statement, issued in April 2004. Notably, the Executive Summary states (page S-4):
The proposed actions are projected to stimulate approximately 6.7 million square feet of new development, including 4.6 million square feet of office space.
(This also appears on page S-4 of the DEIS. The Final EIS (p. 14) gives the timeline: A DEIS was prepared for the proposed actions, and a notice of completion for the DEIS was issued on November 28, 2003. The hard copy of the DEIS I have is dated simply November 2003.))

On page S-17, the FEIS explains that the figure of 4.6 million square feet derives from careful estimates:
Together, the projected and potential development sites could total approximately 6.7 million square feet of office development. However, the appeal of these sites is primarily for back-office operations, particularly for those that require larger floorplates. This segment of the market is more limited. Therefore, although it is theoretically possible to develop 6.7 million square feet within the project area by 2013, this is not considered likely....Based on the screening criteria, it is reasonable to assume that approximately 4.6 million square feet of office development would occur in the next 10 years on sites identified by the City...
(This also appears on page S-14 of the DEIS.)

In other words, the city was saying that, even though an extra 2.1 million square feet of office space could be built in the next decade, the market for it was unlikely. And this was before the Atlantic Yards announcement added an additional 2.1 million square feet to the mix. No press coverage I found compared the two projects. Part of that may be attributed to balkanization; at the New York Times, for example, the rezoning issue was covered by Brooklyn bureau reporter, while the Atlantic Yards announcement was covered by the metro real estate reporter.

Economic estimates ignore office glut

Six months later, the amount of projected office space had declined only slightly. Zimbalist, in his May 2004 report, Estimated Fiscal Impact of the Atlantic Yards Project on the New York City and New York State Treasuries, writes that the project would eventually create 1.9 million square feet of first-class office space to be added in equal increments in 2007, 2009, and 2011. He cites a "housing and commercial office space shortage in Brooklyn and New York City" and offers some questionable statistics:
Since 1988, downtown Brooklyn has absorbed an average of 600,000 square feet of new office space per year. As of early April 2004, the vacancy rate of class A office space built in Brooklyn since 1985 was less than one percent.

Zimbalist makes no mention of the Downtown Brooklyn Final EIS issued a month earlier. His report reads as if the office space at Atlantic Yards would be brought to a borough that desperately needed such office space, and as if no potential for similar space might be in the offing.

In a June 2004 critique of Zimbalist's report, ESTIMATED FISCAL IMPACT OF FOREST CITY RATNER’S BROOKLYN ARENA AND 17 HIGH RISE DEVELOPMENT ON NYC AND NYS TREASURIES, Gustav Peebles and Jung Kim pinpoint problems in Zimbalist's assumptions. For one thing, as they write in section 5.3, Zimbalist did not calculate a vacancy rate. Also, they note that Zimbalist's observation regarding the vacancy rate requires a huge caveat. Most of the Class A office space in Brooklyn is at Forest City Ratner's MetroTech development, which has relied heavily on subsidies and government tenants to fill the space.

The authors calculate that at least 55% of the Class A office space in Brooklyn was filled by the public sector or with the help of incentives to private companies. "The vacancy rate used by Dr. Zimbalist to generate 7,600 jobs is an artificial rate, inflated by government expenditures and nothing to do with what economists would call a 'market,'" they write. Because of that, they recommend lowering Zimbalist’s projections for new commercial income and sales tax revenue by up to ten percent.

Peebles and Kim could have further questioned Zimbalist's vacancy rate projections had they factored in the recently-released Downtown Brooklyn Final EIS. It cast doubt not just on the prospects for filling such a large amount of office space at the "less than one percent" vacancy rate, but also on the wisdom of building that much office space in the first place.

Responding to the market

Apparently Forest City Ratner questioned its own projections as well. By 2005, the company revised its plans, and at a City Council hearing on 5/26/05 announced a reduction in office space as part of two potential reconfigurations. Zimbalist, in a June 2005 update to his report, acknowledges those potential changes:
The FCRC Atlantic Yards General Project Plan will eventually create 1.2 million square feet of first-class office space. The Alternative Plan will create 259,078 square feet of new commercial space. Since 1988, downtown Brooklyn has absorbed an average of 600,000 square feet of new office space per year. As of early April 2004, the vacancy rate of class A office space built in Brooklyn since 1985 was less than one percent.

Even though Forest City Ratner had reacted to a potential downturn in the market--reducing an original estimate of 2.1 million square feet to a potential 259,078 square feet--Zimbalist remains nonplused. He repeats the same decontextualized citation regarding Brooklyn's "less than one percent" vacancy rate even though the developer by then was planning to cut 43% to 88% from the originally announced space. Again, he doesn't acknowledge any competing supply of office space, not from Lower Manhattan, nor from the Downtown Brooklyn rezoning.

Downtown Brooklyn today: housing

Today, even the estimates of 4.6 million square feet of office space in Downtown Brooklyn seem overoptimistic, since housing is a better bet. In a 1/16/2006 article headlined Office Builders Balking At Downtown Brooklyn, the New York Observer noted:
When city planners rezoned much of downtown Brooklyn 17 months ago, it was meant to make the city’s third-largest business district even larger. Now it is looking more and more like a bedroom community.
It is not just the half-dozen condo projects sprouting up around the edge of downtown, transforming weed-strewn parking lots into glassy towers.
Even the 10-block area envisioned as the “commercial core” of the new downtown is leaning residential. The developers of the two sites furthest along in the planning process are suggesting that as few as 200,000 square feet of office space might go up where two million square feet were once envisioned, with the balance going for hotel rooms and apartments. A third property owner wants to erect a hotel right in the middle of a site where a 20-story office tower was supposed to be built. An existing office tower in that central core—7 MetroTech Center, the 1930 Verizon building—was purchased last April to be converted into condos.
In other words, Brooklyn’s booming residential market has overtaken the supply of office space—making it harder for roughly 19,000 jobs that were originally seen as the fruit of the rezoning to find their way into the new downtown.

There's a silver lining, Brooklyn’s boosters told the Observer: Downtown Brooklyn (especially Forest City Ratner's MetroTech) has been called dead at night, but the area will gain much new life. Still, the rezoning was supposed to spur jobs more than housing:
In order to promote commercial construction in a borough that many still consider to be an unacceptable business address, commercial buildings in the core could rise 20 percent higher than apartment buildings. Yet the residential market is so strong—or the commercial market so weak—that that incentive has not tempted anyone to gamble on offices.

The difference is a Floor Area Ratio (FAR) of 12 for office space and 10 for residential space at certain parcels that have been rezoned to C-6.45. See p. 7 of the Executive Summary of the Downtown Brooklyn Redevelopment Final EIS.

Did Ratner just learn this?

The switch to housing led the Observer to cite a similar example, at Atlantic Yards:
Bruce Ratner, Forest City Ratner’s president and C.E.O., recently came to a similar conclusion. He originally proposed 2.1 million square feet of office space to be included in his Atlantic Yards complex, which lays adjacent to the boundaries of the downtown rezoning to the southeast. Then, last summer, he reduced that amount to 628,000 square feet and made up the difference with market-rate condos.

It wasn't a zero-sum trade, though, given that the project increased from an initial 7.7 million square feet to 9.1 million square feet this year, thanks in part to the addition of Site 5 across Flatbush Avenue. On that site, P.C. Richard and Modell's currently occupy a low-slung cinderblock complex; a 430-foot tower is planned.

But the bigger question is: did Bruce Ratner recently "come to a similar conclusion"? The company may have announced the changes recently, but, as noted, the addition of condos on top of the rental apartments came only a week after the affordable housing agreement was signed, which suggests the switch from office space had been in the cards for a while.

Could the switch had been considered from the start? That November 2003 Draft Environmental Impact Statement suggests that Forest City Ratner should have known that the market for additional office space was questionable, even office space well-located at a transit hub, as at the proposed Atlantic Yards. But the slogan "(Temporary Construction) Jobs, Housing, and Hoops" wouldn't work as well.

[Graphic from]

Monday, January 16, 2006


The Kings (Martin Luther & Albert) highlighted in Ratner-sponsored Brooklyn hoops tourney

There was a lot of high school basketball in New York City yesterday, but likely most hoops fans chose Madison Square Garden for the Nike Super Six or even Baruch College for the Big Apple Basketball H.S. Invitational.

In Brooklyn, attendance was light as Long Island University hosted the Seventh Annual Brooklyn Basketball Challenge, a three-game event sponsored by Forest City Ratner. The program, using smaller type than that used to highlight the sponsorship, reminded us that the event was "In Celebration of the Birthday of Dr. Martin Luther King, Jr."

Despite some local teams and at least one excellent game, I'd estimate that about 60 people were in the bleachers for the second game (Brooklyn's Canarsie blew out Long Island's Valley Stream) and maybe double that for the hard-fought third game, featuring two schools from adjacent Fort Greene, Benjamin Banneker and Bishop Loughlin. (I missed the first game.)

Ratner promotions

It was also an opportunity for Forest City Ratner to promote its connection to basketball. Programs and a banner featured the company's name, and all attendees were given keychains that said "Brooklyn" on one side and "Nets" on the other. Former NBA player Albert King, who grew up in Fort Greene, was on hand to present trophies to winning teams and MVPs.

Albert King, though a Net for six years, was not as successful a hoopster as his older brother Bernard, a three-year Net and four-time All-Star, who initially was a key part of the Atlantic Yards promotion. Then again, Albert doesn't have Bernard's baggage, as the latter was dropped by Forest City Ratner as a spokesman after he was accused of beating his wife. (He avoided jail time and battery charges by agreeing to counseling.)

From what I can tell, Forest City Ratner also sponsored the 2005 version of the Basketball Challenge, but did not do so previously. The real estate developer had no real interest in basketball, understandably, before announcing the Atlantic Yards project in December 2003. For more on the company's efforts regarding amateur basketball in Brooklyn, see the 11/26/05 Daily News story headlined Jump ball: Brooklyn groups still up in air over Ratner proposal.

So expect some photos and articles about this event in Forest City Ratner promotional materials--maybe even the next edition of the Brooklyn Standard. Proceeds from the event benefit the youth development programs of Youth America, which operates educational, cultural, recreational, and health programs, and the Right Bounce, which helps student athletes seeking college scholarships. Note that Youth America has its office in Forest City Ratner's MetroTech complex; such nonprofits likely get a break on rent.

MLK's legacy

There were few references to the man ostensibly honored by the event beyond the text in the program program, which reminded us that "Dr. King gave his life for the principles he believed in: peace, dignity, and equal opportunity." (Then again, I did miss the first game.)

At one point, though, a public address announcer encouraged all attendees to go home and read something about the martyred civil rights hero. I took a look at his 1967 "Beyond Vietnam" speech:
"I knew that America would never invest the necessary funds or energies in rehabilitation of its poor so long as adventures like Vietnam continued to draw men and skills and money like some demonic, destructive suction tube. So I was increasingly compelled to see the war as an enemy of the poor and to attack it as such."

Now I'm not going to debate the costs and morality of the war in Iraq. But I will say this: Absent the issues of terrorism and war, this country would much more likely have begun serious discussions about poverty, and the best ways to create jobs and affordable housing for those not sharing in the country's prosperity.

Sunday, January 15, 2006


The Observer inflates a Gehry reference, invents "Atlantic Yards terminal"

In a 1/16/06 New York Observer article headlined Life Getting Hot For Architect Rafael Viñoly, an offhand reference to architect Frank Gehry and the Atlantic Yards project contained two mistakes.

The article stated: The case sheds light on an issue that has dogged architecture firms that attempt massive and politically difficult urban projects, while at the same time attempting to deliver state-of-the-art design.
Witness Mr. Libeskind’s increasing marginalization at Ground Zero, or the recent shouting match from which architect Frank Gehry absented himself over the weekend over his plans for the Atlantic Yards terminal.

Shouting match?

There was no "shouting match" at the 1/7/06 Times Talk session; Gehry was faced with some respectful but persistent questioners about the Atlantic Yards project, and at one point cut off the questions.

Another Observer reporter, who actually attended the session and wrote it up for The Real Estate blog, described "a handful of jeers" in response to a Gehry statement. Ok, but I think it was more like a spontaneous correction. The reporter also stated that Brooklynites "hurled questions" at Gehry; again, that's somewhat overstated, but even at that, no shouting match.

Atlantic Yards terminal?

More significantly, there's no such thing as "the Atlantic Yards terminal." There's the Atlantic Terminal, which refers to a mall, a transit hub for subways and the Long Island Railroad, and a longstanding urban renewal area. The 8.3-acre railyard just east of that is called the Vanderbilt Yard by the MTA. Atlantic Yards does not exist; it is the name of Forest City Ratner's proposed (and evolving) 22-acre project that would include the railyard and adjacent streets, industrial buildings, vacant lots, homes, and businesses.

Errors like this may spread when reporters work outside their range of expertise. The reporter on the Viñoly story works on the Observer's politics desk, not the real estate desk, whose reporters have provided more solid coverage of the project.

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