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September 6, 2006
In Big Slow Brooklyn Build, Is Affordable Housing Last?
The New York Observer
This is a must-read article by Matthew Schuerman, the one mainstream reporter who has done original analytical reporting on the Atlantic Yards project.
Schuerman looks at Atlantic Yards documents released by the state and recent history to try to answer these important questions:
What if Bruce Ratner never finished his gargantuan arena-and-housing development in central Brooklyn? Or, quite similarly but more likely, what if he put off fulfilling his commitment to affordable housing for years and years?
Here's the link to the article for those of you who want to get started and don't care to waste time reading the following highlights (emphasis added):
Bruce Ratner plans to build the arena and five towers at the western portion of the site first.
More than four-fifths of the subsidized housing, as well as seven acres of open space, will begin construction only in the second phase, between 2011 and 2016.
The article quotes different opinions on the matter:
“The point is that if the venture is not successful or not as successful as planned, much of the affordable housing will be at risk or not happen,” [State Assemblyman Jim Brennan] said. “The real-estate market is softening across the nation, interest rates have gone up, and three million square feet is a lot of feet to sell.”
...
A spokesman for Forest City, Joe DePlasco, said that “FCRC is committed to building affordable housing as part of the Phase 1 plan.” Forest City would not comment further. ...
“The question of whether people will buy these [luxury] apartments is an almost impossible question to answer,” said Julia Vitullo-Martin, a senior fellow at the Manhattan Institute. “This project is going to have a lot of trouble covering its expenses.”“When you add a projected 50 percent affordable housing—whatever that means—and when you include a money-hemorrhaging sports franchise, the economics of it are illusory to me,” an experienced developer who has done work in Brooklyn said. “But I hope it will happen.”
...
“Right now we are absolutely comfortable with the phasing assumptions that are being used by the ESDC,” spokesman Jonathan Rosen said. ACORN is widely seen as the bulldog that will keep Mr. Ratner true to his promise, in part because it stands to make money by marketing the affordable units.
Here's one myth-busting point...
Mr. Ratner must make a large upfront investment that may make him less willing to postpone the second phase, but it is not as large as it seems. Last summer’s bid to the M.T.A. said that it would cost $182 million to create a new train yard. Those relocation costs, though, will be offset by $200 million or more in cash grants from the city and the state.
...and another interesting point that hasn't been brought up by the media, as far as we can remember:
And while his bid book dressed up the moving expense as part of Forest City’s lucrative offer to the M.T.A.—a way to construct a more spacious atmosphere for extracting sewage from commuter cars, which is apparently a primary function of the facility—it turns out that Mr. Ratner needed to get the yard out of the way for his plans. He is sinking the Frank Gehry–designed arena below ground, where the train yard currently is, and will construct a bi-level parking garage right next door, according to construction plans included in the state study.
Posted by lumi at September 6, 2006 9:59 AM