ESDC's DSEIS preserves Forest City's right to delay Atlantic Yards, ignores critical need for housing now

It is an outrage that ESDC has produced a supplemental environmental impact statement (SEIS) for the Atlantic Yards project nearly five years after it was required. If properly prepared at the time of the 2009 Modified General Project Plan, it would have led to an informed discussion about the merits of the MGPP among policy makers, elected officials, community members and the board of the ESDC. ESDC waited eighteen months after the New York State Supreme Court ordered it to produce an SEIS before even releasing a draft scope of work for review. After submitting detailed comments on the draft scope a year ago, we were deeply disappointed to find in February of this year that ESDC dismissed our request that it reconcile the 15-year project delay to which it agreed in 2009 with the project’s goals of eliminating blight and providing what the 2006 FEIS accurately described as “much needed affordable housing.”[1] We were even more troubled to discover on March 28 that ESDC would allow only 45 days for public comments on the DSEIS—a period far shorter than it had allotted for comments on either the draft scope of work or the 2006 DEIS. Given the agency’s extended delay in complying with a court order to do what it was otherwise required to do under New York State law, ESDC’s refusal to grant our request for additional time to prepare a response demonstrates again the agency’s contempt for public participation in the Atlantic Yards process, contempt it has consistently displayed since the time it declared itself lead agency in September of 2005.

While not as long as would have been appropriate for a report of this size, our review has nevertheless made clear that ESDC has not taken the opportunity to meaningfully consider strategies that would directly address the 15-year project delay that necessitated this SEIS. Instead, in an effort to cement both Forest City Ratner’s position as sole developer and decision-maker at Atlantic Yards, as well as the firm’s right to wait up to 2035 or longer to make good on its commitments to provide affordable housing, the DSEIS attempts to recast Atlantic Yards as something nearly unrecognizable from the project that was described in previous documents leading up to its prior approvals.

The Atlantic Yards of the 2006 FEIS was a project required to “transform a blighted area” with a population in need of affordable housing into a “vibrant mixed-use community.”[2] In contrast, the DSEIS largely paints the area surrounding Atlantic Yards as one teeming with development and experiencing rapid gentrification, despite the fact that not one unit of housing has been delivered at Atlantic Yards. It informs us that income in the area is up 56% between 1999 and 2010, from $45,231 to $70,513. Rent is up 72%, from $765 to $1,316[3]. Not only that, but the DSEIS acknowledges these trends are not just the product of the completed Barclays Center arena, but were established long before it was even approved and are consistent with the pattern of gentrification throughout brownstone Brooklyn.[4] The DSEIS describes in detail the building boom sweeping nearby neighborhoods[5], and approvingly observes increasing retail rents as evidence of economic strength and increased investment.[6] It tells us that since the 2006 FEIS, households near the project that were vulnerable to indirect displacement have since been pushed out.[7] And the DSEIS notes that the community near Atlantic Yards has become significantly less diverse: African American population in the area ¾ mile around the project declined from 48% to 37% from 2000 to 2010, while the white population increased from 35% to 50%.[8]

These factors, all of which in 2006 would have argued against a finding of blight, now highlight the urgency for Atlantic Yards to deliver on its commitments for affordable housing in the shorter 10-year term originally promised. However, using the pretzel logic of a government bureaucracy serving the interests of an influential developer, the DSEIS instead argues that the strength of the Brooklyn real estate market and its attendant gentrification of neighborhoods surrounding the Atlantic Yards site form a rationale for discounting the impact of the project’s promised housing. Because the areas near the project footprint were already experiencing gentrification, the DSEIS implies that delaying the completion of Atlantic Yards won’t make things any worse than they already are. At the same time, the DSEIS makes the inconsistent and presently false assertion that neighborhoods further from the project, like Bedford-Stuyvesant and Crown Heights, neighborhoods which are now on the front lines of gentrification, will continue to experience stable rents simply because they have been the subjects of rezonings with a voluntary inclusionary housing component[9], with neither empirical data nor testimony from real estate professionals to back up this claim. Finally, the DSEIS brazenly suggests that its forecast of an excess of new housing units built by other developers over the forecast from the 2006 FEIS is a sort of a dividend that will mitigate the delay of the completion of Atlantic Yards’ housing in reducing pressure on rents.[10]

We requested that the SEIS consider how the project site would have developed if Atlantic Yards had never been approved in order to better understand the impact of delayed development on a site the State formally committed to a single developer for at least 25 years. ESDC refused this request. In all of its analyses of future development without the project, the DSEIS instead takes the unsubstantiated position that nothing will be built within the project footprint, even though it acknowledges a crush of development activity is happening all around the site that began before the project was approved. Fixing on such an unlikely scenario disregards a pattern of rezoning throughout Brooklyn and New York City to increase available density that was well-established during the Bloomberg administration and appears set to continue under the City’s new Mayor. (In fact, the first project—Domino—negotiated by the new administration includes affordable housing with lower income targets and larger apartment sizes than have thus far been proposed for Atlantic Yards.) The DSEIS of course does not acknowledge that many successful residential developments had already been completed within the footprint prior to Atlantic Yards’ approval, nor does it assess what impact upon the neighborhood those developments would have had if they had not been demolished to assemble land for Atlantic Yards. The gap between where we are today versus what could have happened at Atlantic Yards if ESDC had not allowed Forest City to hold the site hostage is the measure of Atlantic Yards’ drag on economic and neighborhood development in northwest Brooklyn, but we will never know its true weight. Not only has not one unit of housing been delivered in Phase I of the project (which originally was to have been completed by now), Atlantic Yards has caused displacement by razing homes and businesses which have not yet been replaced. The developer has continuously delayed building the promised affordable housing which was to make up most of the site. Nor do increased rents charged to new businesses after viable long-term businesses were pushed out represent increased economic activity. They represent increased rents. Longevity of any such businesses remain to be seen, and have not been analyzed in this DSEIS.

The DSEIS does offer a multitude of analyses to argue that the impacts of extended construction on the local community will be either insignificant or limited to Atlantic Yards’ immediate neighbors. But reassurances about Forest City’s compliance with the project’s environmental agreements are belied not just by the general nature of the statements made in the DSEIS, but also by inconsistencies within the statements themselves. We hear that “the majority” of trucks were required to use internal staging areas to avoid queuing on public streets[11], even though 49% of trucks could be out of compliance for the statement to be true. We hear that signage and driver education materials led to a “substantial” reduction in idling violations, but with no specifics about the before and after conditions.[12] (The number in each case was probably pretty small, because according to the DSEIS the violations were issued by the Onsite Environmental Monitor, a Forest City employee assigned many tasks other than watching for idling trucks.) We hear, without irony, that “a large quantity of stockpiled soil was temporarily stored in Block 1229, Lot 81 for several months without being covered or kept adequately damp (emphasis added).”[13] The passage almost certainly refers to Block 1129, since the project footprint does not contain a Block 1229; the dirt pile in question was directly across Dean Street from residences whose tenants complained frequently to ESDC about exposure to fugitive dust during construction[14]. And last we hear confirmation that Forest City, ESDC, and ESDC’s environmental consultant waited until Barclays Center was complete and the arena was open to discuss how to improve compliance with agreed-upon air quality protocols[15]; too late, unfortunately, for the residents who had to live through the effects of its construction. Little in the DSEIS gives them reason to expect the future will be different from the past in any way other than the length of time they will be subjected to similar impacts from an extended build out at Atlantic Yards.

ESDC’s true priorities are revealed in the DSEIS’ evaluation of the opportunity to return the completion of Atlantic Yards to its originally-approved 10-year schedule through engaging multiple developers at the site. The DSEIS’ four case studies of development projects intended to demonstrate that extended development will not harm a neighborhood show the opposite. The one example of a single-source development cited by the DSEIS has stalled, resulting in delayed retail demand on First Avenue due to development sites remaining vacant.[16] Nevertheless, the DSEIS’ discussion of a multi-developer approach at Atlantic Yards is utterly dismissive, instead placing a premium on Forest City’s “extensive contractual and property rights in the Phase II site”[17]. The rights in question, however, exist solely due to ESDC’s illegal approval of the 2009 MGPP, upon which the various Atlantic Yards development agreements were predicated, and thus cannot be given controlling weight. The DSEIS further explains that “FCRC affiliates also have spent hundreds of millions of dollars in performing their obligations under these contracts, and have used many of those agreements as security for financing the Project,”[18] without noting that Forest City did so in years not only during which the legality of the 2009 MGPP was being challenged in court, but also during years in which the public awaited ESDC’s production of the court-ordered DSEIS itself after the challenge proved successful. The DSEIS doesn’t explain why contractual rights gained and expenses incurred based on ESDC’s illegal approval of the 2009 MGPP should limit the public’s right to the same scope of review that would have been possible prior to that approval.

Further, the arguments put forward in the DSEIS to justify its dismissal of a multi-developer alternative at Atlantic Yards are superficial and lack any of the depth of analysis that characterizes the rest of the document’s content. Their elliptical nature is typified by the following statement: “Since the FCRC affiliates have given no indication that either they or their secured lenders would be willing to give up their existing rights, issues arising in connection with a switch by ESD and MTA to a multi-developer alternative would take years to resolve, prolonging the construction period.”[19] We are left to guess as to whether ESDC actually broached the subject with Forest City, or if its having “given no indication” allowed ESDC to assume no such negotiation was possible. We are told “a multi-developer alternative would take years to resolve, prolonging the construction period,” but no attempt is made to quantify such prolonged construction, let alone compare it to the minimum fifteen year delay to which ESDC agreed in 2009. ESDC has extensive experience bidding development projects, but the DSEIS whines that managing such a process at Atlantic Yards would be “complex and time-consuming;”[20] again, no attempt is made to quantify the impact of such a process, even though ESDC must surely have dozens of case studies upon which to draw. The DSEIS continues with unsupported conjecture when it shrugs, “it is not clear that multiple developers would have an interest in the opportunity presented” at Atlantic Yards[21]. We wonder why it isn’t clear to ESDC. The other sections of the DSEIS indicate that the agency surveyed real estate professionals and developers with knowledge of the study area about residential and retail demand and found both to be strong. But there is no mention of the agency having even an informal discussion about the potential for expanding the development teams active at Atlantic Yards, let alone circulating an RFI to gauge interest.

The DSEIS asks we accept without analysis that shared elements at Atlantic Yards, like the rail yard platform, parking facilities, and open space are inconsistent with a multi-developer approach. But such a proposition seems inconsistent with the experience at Battery Park City and Riverside South presented in the DSEIS’ case studies, or the example of the Hudson Yards project in Manhattan, or for that matter, many other large projects, including those overseen by ESDC. The DSEIS makes no attempt to describe how multiple developers solve problems related to shared services at other successful projects, let alone explain why similar solutions wouldn’t apply at Atlantic Yards.

Having brushed aside a multi-developer alternative with unsupported and questionable rhetoric, the DSEIS bends to embrace the proposed joint venture between Forest City Ratner and Greenland Holdings Group: “In the event that the joint venture transaction with the Greenland Group affiliate were to close, it is likely that it would inject substantial additional capital into Phase II, and thereby be more effective in accomplishing an accelerated development schedule than pursuit of a multiple developer alternative.”[22] The logical leaps here are many, and they start with the acknowledgement that the deal in question not only hasn’t closed, but wasn’t on the horizon when ESDC released its draft scope of work, let alone when the agency was ordered by the court to produce a DSEIS. Is it “likely” Greenland would bring “substantial” capital to the project? Perhaps, but it’s equally likely the joint venture could be deadlocked by a capital crunch affecting either of the partners. No attempt is made to compare the resiliency of the proposed joint venture’s ability to complete the project with an alternative involving multiple independent developers, so there is no basis for us to agree it is more likely to result in an “accelerated” development timeline.

The complete lack of analysis behind the DSEIS’ determination that a multiple-developer approach won’t work at Atlantic Yards therefore brings us no closer to understanding the opportunity to avoid the impacts of 25 years of construction by restoring the original completion schedule of 10 years. Forest City could easily make the question moot by simply agreeing to amend the project agreements to reflect a 10-year build out. It should go without saying that doing so would also make an SEIS unnecessary. Unfortunately, the fact remains that Forest City has instead chosen to spend millions of dollars on the SEIS in order to preserve its right, based upon ESDC’s illegal approval of the 2009 MGPP, to wait until 2035 to complete Atlantic Yards.

One is thus reminded of the words of the 20^th century economist and reformer Leland Olds, who once characterized government’s function as “handling certain administrative details for an immensely powerful ruling class.” Yes, after five years ESDC has finally produced the SEIS that should have accompanied the 2009 MGPP; whether its effort will be seen as complying with the court’s order is yet to be determined. But to get to this point, ESDC has largely abandoned the blight characterization of the Atlantic Yards area that was so critical to the project’s original approval with its massive public subsidies. It has tried to recast the project as just one in a string of developments gentrifying Brooklyn, and given up any sense of urgency about the need for its promised affordable housing, at a time when historic efforts are being made by the current administration to do just that. It has attempted to paper over its own failure to limit the impacts of construction on Atlantic Yards’ neighbors. It has forgotten about how it has built other large projects in the past, with multiple developers and dedicated and representative project oversight.

Perhaps ESDC hopes the community has forgotten the past, too. But we haven’t.

BrooklynSpeaks' full comments on the Atlantic Yards DSEIS are available here.