Elected officials, community organizations and civic groups demand State hold Atlantic Yards developers accountable for missed project deadline

“Urban Room” was to have been a significant public amenity; Hochul administration must collect $10MM in damages from Greenland Forest City Partners for failure to build it

BROOKLYN, NY, July 14, 2022: City and State elected officials and community leaders today called upon Governor Kathy Hochul to hold developers at the Atlantic Yards project accountable for failing to deliver a key element of its design by a contractual deadline. Project documents describe the “Urban Room” as “a significant public amenity comprised of a large, glass-enclosed public space” that would “accommodate the major flows of people to and from the subway system during the day and night, serve as a direct subway entrance to the Arena and allow for a variety of public uses and programmed events throughout the year.” However, developer Greenland Forest City Partners (GFCP) has taken no action to start construction of the Urban Room, which was required to have been completed in May of this year. The project’s Master Development Agreement (MDA) between GFCP and Empire State Development (ESD) provides for a penalty of $10 million if the deadline is missed.

In a letter to ESD CEO Hope Knight, Assembly Members Jo Anne Simon, Phara Souffrant Forrest, and Robert Carroll; State Senator Jabari Brisport; and City Council Member Crystal Hudson wrote, “The Urban Room remains a significant public commitment of the project, and its completion deadline and remedies for non-performance by the developer remain in effect. We request ESD to affirm that liquidated damages will be assessed, as provided in the MDA, for failure to deliver the Urban Room as required, and inform us when they have been collected. We note that the first payment is due this month. ESD’s affirmative response is necessary to retain our confidence in the agency’s ability to ensure compliance with the upcoming affordable housing deadline (we estimate those liquidated damages to be $1.75 million per month), and our support for the agency’s continued role as the lead agency responsible for overseeing the Project.”

“The Urban Room is an important component of the Atlantic Yards project that was key to securing political support at the time of the project’s approval,” said Assemblymember Jo Anne Simon. “It’s a key obligation of the developer and the State to the people of Brooklyn. We call on Governor Hochul and Empire State Development to protect the public’s rights under the project agreements. Failure to do so casts a shadow on the enforceability of other project obligations. If ESD can’t enforce its own Master Development agreement in the face of utter failure, how can the public count on them to enforce the delivery of over 877 units of affordable housing? Time’s up. There’s no excuse.”

“ESD should enforce the Master Development Agreement ("MDA") at the Atlantic Yards/Pacific Park site and collect damages from the developer for not completing the enclosed community

amenity known as the Urban Room,” said Assemblymember Robert Carroll. “If ESD does not enforce its own MDA the community should have no faith in them enforcing any other part of the agreement, including the 877 affordable apartments that the developer needs to complete, and alternative governance structures should be considered.”

“One of our roles in government is to hold the wealthy and powerful accountable, and if we can’t do that, we have failed,” said State Senator Jabari Brisport, whose district includes all of the Atlantic Yards footprint. “If we have an MDA that says the developer must meet a deadline or pay $10 million, and Empire State Development fails to collect, the people can’t trust their government. That’s a very dangerous place to be in.”

“Accountability has been missing from Atlantic Yards since its inception. More than a decade ago, Empire State Development made a clear agreement with this project’s developers on behalf of the people of New York State–and both the developers and ESD have repeatedly failed to

deliver,” said Council Member Crystal Hudson. “The terms of the agreement explicitly spelled out expectations, including what was to happen should they not be met. Our community deserves more than Empire State Development’s deliberate inaction, which only further erodes our trust in their ability to enforce this contract for the benefit of the public. Together, with my colleagues in Albany and our neighbors, we’re calling on Governor Hochul and Empire State Development to do their job and hold these developers accountable once and for all.”

“Empire State Development’s inability to keep the developer accountable to their project commitments around the Urban Room brings into question their oversight over the broader project and affordable housing commitments due by May 2025,” said Council Member Shahana Hanif. “Public commitments to the residents of Brooklyn are on the line, and the current level of inaction is unacceptable. Governor Hochul and ESD need to exercise proper oversight now.”

“Greenland Forest City Partners committed to build the Urban Room to provide public space to the community and has failed to meet its deadline. This raises serious concerns about the developer’s ability to fulfill its commitments, including the project’s critically-needed affordable housing. We need to hold this developer accountable to keep the project on track and to ensure the community sees the benefits they were promised,” said New York City Comptroller Brad Lander.

“We absolutely must hold the developers of Atlantic Yards accountable to their commitments,” said Public Advocate Jumaane D. Williams. “The state must collect on penalties now and push Greenland Forest City Partners to deliver on the project they promised in order to gain support, and the community benefits that Brooklyn deserves and demands. ESD can and must enforce on its original agreement and send a message that New York will not tolerate developers evading their commitments to the communities they build in, and will seek full financial penalties if they do.“

“Developers should be held accountable and government officials should enforce contracts, especially where significant promises are made to a community,” said Brooklyn Borough President Antonio Reynoso. “By neglecting to enforce terms associated with the Urban Room, we allow a dangerous precedent where developers can overlook contractual obligations and face no penalties, as we’re seeing happen with Greenland Forest City Partners and Empire State Development on the Atlantic Yards project. I stand with my colleagues in calling for Governor Hochul’s enforcement of terms, conditions, and penalties.”

“While the community has come to understand that the existing plaza is essential for arena operations in handling their patrons, ESD has not been effective in ensuring that GFCP and past developers deliver on the project agreements” said Regina Cahill, Chair of the North Flatbush BID. “ESD needs to step up its oversight and represent the community.”

The Atlantic Yards plan was last amended in 2019, when developers received additional rights for more than 100,000 square feet of floor area to construct a fitness center and field house below two buildings on Dean Street currently under construction. The change was approved without public review, and with no additional public benefits in exchange. “When developers ask for more, the State bends over backwards to give it to them,” said Howard Kolins, President of the Boerum Hill Association. “But when it comes time to ensure the public gets what was promised, the State has been asleep at the wheel.”

The Atlantic Yards development agreement allows ESD discretion to enforce its terms–or not. “We’ve watched for years as the deadline for completing the project’s affordable housing has gotten closer, but no plan for achieving the goal has ever been released,” said Michelle de la Uz, Executive Director of the Fifth Avenue Committee. “The developers are liable for two thousand dollars per month for every unit not finished by May 2025. ESD has always maintained it will collect on those damages if the time comes. This is a troubling sign that may not happen.”

“Recent reports indicate Greenland USA’s parent company may be at risk of defaulting on its debt, which would also appear to trigger a default under the project agreements” said Gib Veconi, Chair of the Prospect Heights Neighborhood Development Council, Inc. “This is no time for the State to be cutting corners instead of looking out for the public interest.”