With Recession in the Wind, Local Mega-Projects Scale Back and Slow Down

by Sandy Ikeda
Sun, 2 Mar 2008 at 1:54 AM

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It was only a couple of months ago that the prospects for growth in Downtown Brooklyn were so rosy. There were estimates of more than 14,000 new residential units to be built in the next few years, the tempestuous but on-going plans for Atlantic Yards, and a lively revamped Metrotech district were just a few of promising developments. Things have changed.

Recent postings in the blog "Atlantic Reports" have noticed an apparent scaling back in the description of the Atlantic Yards development — the proposed future home of the Brooklyn Nets and an enormous Frank Geary-designed mixed-use complex. Crain's New York Business also reported

a previously undisclosed transcript of an Forest City meeting with investors in early October at the New York Times Building. During the meeting, Forest City executives said the Brooklyn project would span "21 acres in downtown Brooklyn, with 6.5 million square feet of residential and commercial development." That's smaller than the 8-million-square-foot, 22-acre project publicly outlined by the company.

The article continues:

During the meeting, Forest City also referred to the Frank Gehry-designed Miss Brooklyn tower as having 528,000 square foot of zoning rights. Earlier, it had been pegged at over 900,000 square feet. Forest City has nixed plans to include condominiums, instead offering additional office space, which is now seen as more profitable. A company spokesman says the smaller square footage reflects the concession announced last fall to reduce Miss Brooklyn's height to 511 feet, one fewer than the borough's tallest building, One Hanson Place.   Among other disclosures, Forest City executives said it will take up to five years to rebuild the Metropolitan Transportation Authority rail yard, instead of the three-and-a-half year estimate in an initial environmental review. The developer is even reducing the number of planned hospitality suites (from 170 to 130) it will rent out in the Nets' new 18,000-seat arena.

Forest City Ratner has also pulled out of another big project, the 100-story "Mr. Brooklyn" tower at Tillary and Jay streets, according to the Brooklyn Paper. The Renzo Piano-designed tower would have been the tallest residential building in New York. The paper quotes councilman David Yassky, who cites "the nation's on-going credit crunch and [Ratner's] own shaky finances" as the reason for the pull-out.

Feel a chill?

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A related article in the same issue of the Brooklyn Paper reports that federal funding for so-called below-market or below-cost residential units is drying up. It would take $7 billion of federal money to build all of the projects currently proposed in the state of New York, but only $1.33 billion was granted (in bonds) in 2007, with no change expected in 2008. Apparently, if the funding for these units doesn't come through, none of the 2,250 units will get built, and Mr. Ratner will have to pay a $500,000 penalty for going back on his promise. Evidently, the rest of the multi-billion dollar mega-project will go on as planned without further consequences.

FYI.

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While all this has been going on, we learn that the Toll Brothers, a well-known suburban developer, is planning a 447-unit, mixed-use development along the banks of the still-dirty-but-not-as-disgusting-as-it-
was-not-too-long-ago Gowanus Canal. In addition to getting the zoning changes and the obligatory environmental-impact study (in this case it's unclear if we're talking about the construction's impact on the environment or the fetid canal's impact on the construction), the Toll Brothers hope to make the project more attractive to the locals by promising — guess what? — below-market housing.

Gee, don't they read the papers?

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And on the other side of the East River (that would be Manhattan) we learn the fate of the ambitious plans to use state-owned property north of the Jacob K. Javits Center on the Far West Side. Read about it here. According Governor Spitzer himself, "The Javits Center expansion is done," as cost estimates doubled from $1.6 to $3.2 billion. Escalating construction costs were blamed. Uh, by 100% in a few months? (See my earlier post, "Our costs runneth over," on why these things happen.) They must be using my former apartment contractor.

Again, it wasn't too long ago — about a year — when we read in the New York Times that the Governor wanted to "redraw the current plans favored by the city and expand the center to the north and south. His proposal would make the Javits Center even larger."

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The upside? Turning down the flow of what Jane Jacobs aptly called "cataclysmic money" — mega-spending that overwhelms the fine structure of a community, creates visual architectural homogeneity, constructs high-cost buildings of the same vintage, and erodes local social capital — may in the long run be a good thing.

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