Governance reform

Agreement calls for delivery of 2,250 promised units of affordable housing ten years earlier than previously agreed; imposes penalties for failure to meet deadlines; creates tenant protection fund and special oversight subsidiary

Today, following weeks of intense negotiations, BrooklynSpeaks sponsor organizations and local residents announced they have reached a landmark settlement with Forest City Ratner Corporation (FCRC), the developer of the Atlantic Yards Project in Brooklyn, and the Empire State Development Corporation (ESDC), with the support of the City of New York. 

The accord, which includes a signed  agreement with ESDC and another with FCRC, ensures at least 590 units of promised affordable housing are started within the next 12 months and delivers 2,250 promised affordable housing units ten years earlier than previously agreed.  It also establishes an Atlantic Yards Tenant Protection Fund and penalties for failure to meet affordable housing milestones. The settlement will also result in the creation of the Atlantic Yards Community Development Corporation, a subsidiary of the ESDC charged with overseeing compliance with all project commitments.

Under the terms of the agreement, construction on the first of the affordable units will begin by the end of the year, and all affordable apartments must be completed by May 2025.

The terms include:

• Completion of all 2,250 affordable apartments by May 2025 (with penalties for non-performance);
• Start of construction of at least 590 affordable apartments within 12 months (with penalties for non-performance); and
• Creation of an ESDC subsidiary, including locally-appointed directors, to monitor compliance with all project commitments.

In addition, through a complementary commitment by FCRC, the developer will make a contribution of $250,000 to establish the Atlantic Yards Tenant Protection Fund to provide eviction prevention services to members of the community vulnerable to displacement.

In a decision issued yesterday, New York State Supreme Court Justice Marcy Friedman confirmed what many observers of the Atlantic Yards project have long suspected: if the Empire State Development Corporation (ESDC) had fully disclosed the terms of its 2009 agreement with Forest City Ratner Companies (FCRC), the Barclays Center arena might not have been built. Justice Friedman’s decision granted a motion filed by BrooklynSpeaks sponsors for recovery of legal fees from a 2009 suit challenging ESDC’s approval of changes to the Atlantic Yards plan. Those changes allowed FCRC to extend the construction of the residential portion of the project—including the majority of its promised affordable housing—from ten to twenty-five years.

In legal papers filed in response to BrooklynSpeaks’ 2009 suit, ESDC had suggested its agreement with FCRC included provisions to ensure the completion of Atlantic Yards on its original ten-year schedule. However, ESDC delayed releasing the text of the agreement to the Court prior to arguments being heard in the case. Yesterday, Justice Friedman wrote, “Had the ESDC disclosed the terms of the Development Agreement that were being negotiated when the petitions were initially heard, or brought the Agreement to the court’s attention promptly after it was executed, construction would not have been as advanced on the arena at the time of the court’s determination requiring an SEIS, and the balance of the equities may have favored a stay pending preparation of the SEIS.” If such a stay had been issued after initial arguments, FCRC’s access to $500 million in bond financing for arena construction would have been in jeopardy.

BROOKLYN, February 27, 2013: In advance of a public hearing on a draft scope of work for a court-ordered environmental review of 2009 changes to the Atlantic Yards project which extended its construction from ten to twenty-five years, community leaders and elected officials expressed dismay that the draft scope contains no analysis of alternatives that would enable the project to be completed in its original ten-year time frame.

A group of BrooklynSpeaks sponsors, local residents and elected officials filed suit in November of 2009, charging that the Empire State Development Corporation (ESDC) approved Atlantic Yards’ 2009 Modified General Project Plan (MGPP) without sufficient study of the effects of a 25-year construction period on surrounding communities. In July 2011, State Supreme Court Justice Marcy Friedman ruled that ESDC’s approval of the 2009 MGPP lacked a rational basis and violated New York State environmental law. Justice Friedman ordered ESDC to complete a Supplemental Environmental Impact Statement (SEIS) and revisit its approval of the 2009 MGPP. ESDC’s issuance of the SEIS draft scope of analysis was delayed until December 2012, while the agency unsuccessfully fought to have the court’s decision overturned.

“Atlantic Yards was approved on the basis of removing blight conditions in and around the Vanderbilt rail yards,” said Jo Anne Simon, Democratic District Leader of the 52nd A.D. “Instead, the project has actually created blight by demolishing buildings, displacing residents and businesses, and causing massive disruptions for the project’s neighbors across its 22-acre site. It’s outrageous that ESDC would fail to even consider how a decade or more of delay could be avoided.”