Atlantic Yards and the Culture of Cheating (links)

I offer a framework to analyze and evaluate Atlantic Yards and the Barclays Center: Atlantic Yards and the Culture of Cheating.

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Honors and complications: on Dean Street parking lot fence, a plaque for BUILD's Marie Louis

Atlantic Yards Community Benefits Agreement (CBA) signatory Brooklyn United for Innovative Local Development (BUILD) may be defunct and in court.

But there's a more positive perspective on its legacy, a plaque--surely temporary, and movable--honoring BUILD's Chief Operating Officer Marie Louis, who died in late 2011 of cancer.

The plaque is affixed on Dean Street just east of Sixth Avenue on the fence--otherwise occupied by Artbridge canvas--enclosing the parking lot mainly used by satellite TV vans. It was put up about a week ago, quietly, according to James Caldwell, BUILD's former CEO, because Louis "always did things behind the scenes."

Developer Forest City Ratner helped Louis with medical treatment, Caldwell noted. "A year later, after BUILD closed, I asked them if they would put up something in her memory," he said, "and they [ultimately] did it." He said he expected the plaque will be moved.

Indeed, the house next to the parking lot, as well as two other adjacent houses and the building behind it, are slated to be taken by (or under the threat of) eminent domain.

The cleared site may serve as staging for construction across the street and should, in a few years, become home to B15, a residential tower with (likely) a school at its base.

Honors and complications

The dedication honors Louis "In recognition of decades of hard work, steadfast dedication, and tremendous sacrifice to ensure the residents and communities of Brooklyn were the beneficiaries of the historic Atlantic Yards Project."

Louis advocated vigorously for Atlantic Yards and helped run an organization that provided job-training advice to thousands of people and placement to several hundred. 

That said, a consultant hired by Forest City, Ritchie Tye, found that it appeared the developer supported the CBA organizations for their potential to secure support for Atlantic Yards, not for their capacity to fulfill the programmatic goals in the CBA, according to papers in the pending lawsuit over BUILD's pre-apprenticeship training program (PATP).

And it's highly debatable that the "the residents and communities of Brooklyn" have benefited more than certain larger entities.

As the record in the lawsuit shows, however Louis supported Forest City publicly, she clashed forcefully with the developer over whether that PATP could lead, as seemingly promised in the CBA and other documents, to union apprenticeships or, as Forest City insisted, to yet another training program.

It might be tempting to think of the plaque as damage control, an effort to smooth ruffled feathers caused by documents unearthed in the lawsuit, such as a Forest City executive, commenting generally about BUILD, that "these people are snakes.”

But some sort of tribute has been in the works for a while. Maybe the lawsuit pushed it along, maybe it didn't. Still, the unresolved lawsuit remains a question mark over the legacy of BUILD.

Transition at ESD: Roy and Lynch depart, newbie in-house replacements to be succeeded by subsidiary?

Those on Empire State Development's distribution list for the two-week Construction Alerts might have noticed something different about the one released yesterday, since it was sent by Nicole J. Jordan, ESD's Director of Community Relations, rather than Derek Lynch, ESDC's recent manager of community and government relations for Atlantic Yards.

And a look at ESD's Atlantic Yards page shows that Paula Roy, who was Director of Atlantic Yards, no longer appears.

I got a statement from ESD: "Paula recently left to pursue a new opportunity at [New York City] HDC {Housing Development Corporation] and Sam Filler is now Director of Atlantic Yards. Derek also recently left and Nicole Jordan is now Director of Community Relations for Atlantic Yards."

Though Roy and Lynch were relatively recent hires, the transition suggests even less continuity for Atlantic Yards at the state level and, accordingly, more clout for developer Forest City Ratner. And it may mean less oversight as construction work ramps up, including a new green roof on the arena and railyard drilling.

It's not clear whether Filler and Jordan are stand-ins for the next several months, until the promised Atlantic Yards Community Development Corporation launches, or whether they will continue in that role. But neither of them have much experience with either ESD or, apparently, large-scale development projects.

Developer Forest City funds the community relations position. So by having that position filled in-house, at least for the interim, the developer saves some money.

Transition: Director

Roy was publicly announced as succeeding Project Director Arana Hankin in September  2013. She had been the agency's Vice President of Real Estate since July 2013 and in 2012 was hired as Vice President, Portfolio Management. She previously served as Deputy Project Manager for the New Domino mega-project in Williamsburg, working for CPC Resources.

Roy is now Executive VP for Real Estate for New York City Housing Development Corporation,
which oversees the financing of affordable housing, including for Atlantic Yards. Beyond her role in Atlantic Yards, she served as President of Queens West Development Corporation, an ESD subsidiary.

Filler

Filler, who served as the Director of Programs for the Transportation and Land Use Collaborative (TLUC), an urban planning consulting firm in Southern California, came to ESD in September 2012 as an Empire State Fellow, a two-year leadership training program. 

At ESD, according to the Fellows page, he "currently leads Governor Cuomo’s Craft Beverage Initiative at Empire State Development."

Transition: Community Relations Manager

Lynch was hired in September 2012, just before the Barclays Center opened, as a Government and Community Affairs Manager for the position long left open by the June 2011 departure of Forrest Taylor, once billed as an ombudsman but more of a disempowered facilitator.

The position was left open as neighbors endured a steady stream of untoward impacts--seeming violations of construction and traffic protocols or procedures with too little safeguards. Now that construction is ramping up, neighbors may wonder about deja vu.

Jordan

According to Jordan's About Me page, she is ESD's Director of Community Relations, "where she is responsible for various ESD real estate development projects. In addition to large development projects she assists with the execution of ESD's legislative agenda, interfacing with both the Executive and State Legislative Branches on behalf of the agency and as liaison to NYC Community Boards." She joined ESD in March 2014.

Before that, Jordan served as the Executive Director of the New York State Black, Puerto Rican, Hispanic and Asian Legislative Caucus.

From the latest Atlantic Yards Construction Alert: pace of modules increases, to 246 of 930

According to the latest two-week Atlantic Yards Construction Alert (below), dated and distributed July 21 by Empire State Development after preparation by Forest City Ratner, there were some 57 modules delivered to the B2 modular tower in a two-week period, far more than 24 in the previous two weeks and even 48 in the period before that.

The total is now about 246 of 930 modules. Should a pace of 50 a week be maintained--which depends on the factory--the modules could be delivered in just 14 weeks. There's surely additional work after that, but it's possible the building could be finished much closer to its previous December 2014 completion date rather than a year later.

Also, work promised in the previous alert--such as constriction of Atlantic Avenue and Pacific Street for construction activities--has begun or is expected to begin.

Below are some verbatim excerpts from the report.

B-2 Tower, Modular Residential

Erection of 9th floor is complete and the 10th module erection will follow during this reporting period. During this same period mechanical, plumbing and electrical mate line work will continue. 

Masonry and spray on fireproofing on the 1st floor are completed. Exterior and interior wall framing will begin during this reporting period. 

Hoist is operational and will continue to be jumped up the building during this reporting period. 

Work related to the perimeter framing for the metal panels on the 1st floor and Dean Street entrance will continue during this reporting period.

LIRR Yard Activities - Block 1120 & 1121 

Pacific Street between 6th Avenue and Carlton Avenue has been converted to one-way only (westerly traffic flow) and MPT has been installed along the north side of Pacific Street in order to allow for pile drilling preparations in this area. Work will include support of excavation (SOE) work including the installation of soldier piles, lagging and tiebacks.

During this reporting period, the contractor will prepare the area inside of the Pacific Street MPT for drilling. This work includes sidewalk removal, grading, and relocation of light poles.

Pile drilling along the north side of Pacific Street is scheduled to begin during this reporting period and is expected to take approximately 4 months to complete. During this time period the north sidewalk will be closed. Once pile drilling is complete, the MPT will be shifted further north allowing two-way traffic to be returned on Pacific Street; however the north sidewalk in the area of the work will remain closed for ongoing SOE installations. The MPT will remain in this location with this portion the north sidewalk closed for approximately 8 months. Noise blankets will be installed on the chain link fence around the work area. Compressors will be located below grade in the LIRR yard.

During this reporting period, demolition of the existing concrete site access ramp will begin at the west end of Block 1120 just east of 6th Avenue. Construction access to the yard will be shifted to the earthen ramp located on Pacific Street just east of Carlton Avenue, which will be completed during this reporting period.

During this reporting period, the Contractor will begin excavation and hauling of soil from Blocks 1120 and 1121. Soil that has been classified as clean, contaminated or hazardous will be removed from the site as part of the excavation activities and brought to appropriate disposal locations.

Contractor will continue installation of tiebacks, lagging, excavation of soil and demolition of the lower portion of the concrete retaining wall along Pacific Street, between Carlton and Vanderbilt Avenues during this reporting period.

All work shall be done during daytime hours pursuant to approved DOT permits; while not expected, if required, any nighttime or weekend work would be pursuant to proper permits and advance notification will be given to the community.

Particulate monitoring will continue during these activities and soil will be kept damp as needed.

LIRR Yard Activities – Atlantic Avenue

During this reporting period, installation of Maintenance and Protection of Traffic (MPT) work on Atlantic Ave, between Fort Greene Place and South Cumberland Street will commence. MPT installations, which will include removal of existing concrete medians (starting at Fort Greene Place and proceeding east), placing MPT barriers and shifting/altering of traffic lanes (3 westbound lanes and 2 eastbound lanes will be maintained throughout the term of the MPT installation), will allow for construction of the LIRR West Portal along the south side of Atlantic Avenue. MPT installations along Atlantic Avenue will be modified as work progresses. This work will be ongoing and MPT will be in place along Atlantic Avenue for approximately 24 months. Transportation Enforcement Agents (TEAs) will be in place, as outlined in the DOT permit stipulations.

This MPT installation and striping is being done at night per DOT permit stipulations and is expected to take 2 nights to complete.

With the MPT is in place, the Contractor will begin work to remove the Atlantic Avenue concrete median. This work will be done during daytime hours. Equipment used during the course of this work may include hoe rams and/or jackhammers. A noise shroud (noise blanket) will be placed around any hoe ram that may be used. Quieter make/model jackhammers as described in DEP noise code will be used if such are required.

How to Reach Our Community Liaison Office (CLO)

The Community Liaison Office is located at 752 Pacific Street. The CLO’s hours are M-F from 9am–4pm and the phone number, 866-923-5315 and email, communityliaison@atlanticyards.com will remain the same. Visitors seeking the office should enter through the guard booth at the corner of Carlton Avenue and Pacific Street.

Atlantic Yards Construction Alert July 21, 2014

Engineering firm offers optimistic look at Atlantic Yards modular project (but doesn't mention delay)

In a 7/11/14 article in the in-house Arup Connect, Engineering the Factory Built Tower, David Farnsworth of Arup, the structural and mechanical engineering firm behind the Atlantic Yards B2 modular project, offers an intriguing and optimistic look at the future of modular.

However, he writes that the building will be "completed later this year," though developer Forest City Ratner, which is building the tower via the FC Skanska joint venture, has said it's one year behind schedule, expected to open in late 2015.

Once the modules are delivered from the factory in the Brooklyn Navy Yard, he writes:

The lift process can take as little as ten minutes per module. Considering trucking restrictions, delivery logistics, and rigging, it would be entirely feasible to erect 12 modules and associated braced frames in a normal workday. With 36 modules per floor, this could equate to a floor every three days.

That would be fast. The most recent pace, however, was 24 modules delivered and installed over two five-day weeks, an average of 2.4 per business day. (Update: the pace has picked up, according to the alert delivered later on July 21, with 57 modules delivered in ten days.)

Farnsworth writes:

At this point in time, construction speed is limited by factory production rates rather than erection speed. When modular construction becomes more common and economies of scale are created, this should be quickly overcome.

Modular design has grown increasingly popular for low- and mid-rise building projects over the past decade, amply demonstrating its viability and value. Based on our experience with B2, we believe that the technology can be pushed further — and, in the process, potentially revolutionize urban housing around the world.

That's what they've been saying all long, albeit without the acknowledgment of the factory snags. But if the technology is successful, that may be one reason why the Greenland Group decided to invest in the Atlantic Yards joint venture.

Structural issues

Farnsworth writes that structural engineering was a challenge for the 32-story tower, given "substantial wind, gravity, and seismic loads." They considered but rejected a core based on reinforced concrete, but decided that "concrete would require too much work onsite." By contrast, structural steel is lighter and can be built in the factory:

One of the key breakthroughs came when we decided to use the roof of each module as the lateral diaphragm (used to stabilize a given structure by transferring loads from wind and earthquakes to a lateral-resisting braced frame system). This allowed workers to make the primary structural connections between modules from outside the apartment units, avoiding the risks associated with doing heavy steelwork inside the finished modules after they were delivered to the site.
In the final design, the basic building block of the modular system is a factory-welded steel-framed chassis. The sides of each module act as trusses, and the corner columns in the modules carry the weight of all others above. The building’s base was constructed conventionally, providing a level steel platform for stacking modules.
The lack of concrete in the modules makes the structure as a whole very light compared to typical construction. This, combined with the building’s orientation and massing, meant that the structure would sway more in high wind than conventional buildings of similar height. We therefore incorporated two 100-ton tuned mass dampers (not typically found in buildings of under 40 stories) into the design to reduce wind-induced motions to acceptable levels.

Mass customization, not mass production

Rather than stack a single module template, the partners developed what he calls mass customization rather than mass production:

In the final design, although details and methodologies are consistent throughout, each module is very much constructed to its own design. In fact, given the building massing variation along the height and the client’s desire for a wide range of unit types, the final building has 225 separate module structure types. With variations in piping and façade, many of the 930 modules are completely unique.

Typical floor plan, with 36 modules per floor. (Source: Arup)

In case you're wondering, studio apartments generally require one module, one-bedroom units two modules, and two-bedroom units three modules. The modules come with bathrooms, floors, walls, kitchen units, and air conditioners already in place. (Unmentioned: sometimes the facade isn't quite sealed.)

Rentals > condos?

Farnsworth notes:

We took shipping requirements into consideration from the project’s outset. Most modules fit within maximum dimensions of 15-foot width, 50-foot length, and 10-foot, 6-inch height, allowing for wide load shipping on New York’s public roads. These limits work quite well for rental apartments, where living rooms are typically 13 feet wide and bedrooms 11 to 12 feet wide.

This raises two questions. First, if most modules fit within the maximum dimensions for wide load shipping, does that mean some don't? And, if so, how do they get there?

Also, it the limits work well for rental apartments, do they work less well for condos? It's certainly possible to pair modules to create larger rooms, but the implication is that modular doesn't work as well for condos. Note that Greenland has decided that the next few Atlantic Yards towers will be built conventionally, and will include condos.

The crane at work

Farnsworth writes:

Crane requirements also influenced module size. Since B2′s tower crane can lift a maximum of 26.5 tons, we ensured that the heaviest weighed no more than approximately 24 tons. (The smallest weigh only seven.) Modules farthest from the crane were made smaller in order to fall within the specific lift limits at that radius.

To replace Nets' mascot, Brooklyn Paper offers suggestions, including Nimbie the Arena Protester

The Brooklyn Paper has a typically whimsical article about the demise of the much-derided, hard-to-spell, cartoonish Nets mascot, BrooklyKnight, The Knight shift! Help choose the new Nets mascot.

From this week's issue

Their suggestions include Mr. Net, an homage to Mr. Met.; Crummy the Pigeon ("the street-wise cousin of Cyclones mascot Sandy the Seagull"); Condo the Inexplicable Luxury Apartment Building ("Nothing says new Brooklyn like a contorted metal-and-glass box that appeared overnight out of nowhere"); Jerzy the Vintage-Uniform Hipster ("into the Nets before they were cool"); and Nimbie the Arena Protester. (Nimbie? Why not NIMBY?)

The latter:

If you can’t beat ’em, join ’em. Just kidding, Nimbie is still angry as ever about the construction of the Barclays Center in the midst of bucolic Prospect Heights. The arena is not going anywhere, so why not try to bottle that energy and direct it at visiting teams? Actually, judging from the protest sign, it seems that animosity will be directed at the Nets for the foreseeable future, but what better way to motivate our aging athletes than through the rage that can only come from constant nagging?

Constant nagging, of course, because of violations of construction rules like this, which go unreported in the Brooklyn Paper.

For first half of 2014, Barclays Center again leads U.S. venues in tickets sold, but total is less than half the 2013 figure

Pollstar magazine, 2014

The Barclays Center again ranks first nationally among venues in the number of tickets sold for concerts and family shows--but the total is less than half the comparable number for 2013.

In 2013, the Brooklyn arena ranked third worldwide, with 657,423 tickets; this year the figure is 11th, with 302,726 tickets in the first six months. according to Pollstar magazine.

That compares to 356,512 in little more than three months in 2012, when the arena opened with a very busy schedule.

So there's clearly significant demand for the Brooklyn venue, but it's not being promoted quite as hard. It's possible that bookers are not offering artists as generous terms as they did previously.

Interestingly enough the former home of the New Jersey Nets, the marooned-in-suburbia Izod Center, ranked second in the U.S. so far in 2014 and 18th internationally, with 237,420 tickets sold.

Maidson Square Garden ranked sixth in the U.S., and 27th internationally, with 207,482 tickets, a modest increase over the comparable 2013 figure of 194,327.

Note that MSG historically earns far more per ticket than the Barclays Center, according to Billboard compilations.

Sporting events are not part of the poll. When the Brooklyn arena adds the hockey Islanders in 2014, that should steady arena revenue while limiting--as with MSG--open dates for concerts and family shows.

Pollstar magazine, 2013

The perspective from New Jersey


From John Brennan in the Bergen Record, 7/18/14, Izod Center ranks 2nd in US for 2014 for concerts/family show tickets sold so far, per Pollstar:

Izod Center, the venerable 33-year-old Meadowlands arena, placed second in the U.S. to Brooklyn’s Barclays Center in concert and family show tickets sold at such facilities in the first six months of 2014, according to Pollstar magazine.
The concert industry publication recorded 237,420 tickets sold in events reported to the magazine, compared to 302,726 for Barclays Center. The latter arena placed 11th worldwide compared to 18th for Izod Center, with the top 10 sites in Europe or Mexico.
Madison Square Garden, which completed its three-year, $1 billion “transformation” last fall, placed sixth in the U.S. with 207,482 tickets sold. Prudential Center in Newark ranked 13th in the U.S. with 154,844.

Evercore (not without conflicts) touts Forest City joint venture with Greenland as "certainly a positive" (but murkiness remains)

From Barrons: Research Reports: How analysts size up JD.com, Moody's, Forest City and a half-dozen other companies., 7/4/14:

by Evercore
The commercial and residential real-estate development company announced the closing of the much-anticipated deal with Shanghai-based Greenland, forming a Joint Venture for further development at Atlantic Yards (AY) in Brooklyn, NY. This is certainly a positive for Forest City.
We are reiterating our Overweight rating for Forest City. Moreover, we believe that FCEA shares are still at significant discount to our net-asset-value estimate of $24, which we set as our price target.
Simplification of its financing, refinancing its Ridge Hill project in Westchester County, accelerating the AY project, and deleveraging should all contribute to a closing valuation discount for the company.

Now Evercore has some skin in the game--having been hired to advise Forest City on its sale of its 20-percent stake in the Brooklyn Nets. But I don't doubt that the joint venture is a reasonable deal, "de-risking" the project.

After all, four top Forest City executives just got $1.6 million in bonuses. And the faster the project gets built out, the faster Forest City gets its 5% development fee.

Murkiness remains

Without further information, however, several things around the deal appear murky to me.  

Greenland is paying Forest City $200 million for a 70% share of the project (without the arena and B2) going forward, after the developer and partners invested some $545 million (or $547M), which has led Forest City to announce an impairment of $242.4 million or $148.4 million net of tax.

The company once hoped to break even, so that looks like a loss, at least on paper.

But the value of land in nearby Downtown Brooklyn has simply skyrocketed in the last few years. That suggests Forest City's holdings--despite the carrying cost, and the future cost of the railyard deck--are quite valuable.

That's surely one reason why Greenland--despite Forest City's claim it was only cost-effective to build modular--is planning to build the next few towers through conventional means.

Is it that Forest City's board just ran out of patience?

If so, will the Atlantic Yards deal resemble in some ways the deal to sell 80% of the Nets at a discount to Russian oligarch Mikhail Prokhorov, who has since seen the value of the team leap? If so, that would reflect of the challenges for a publicly owned company--even one controlled by a family--in taking a longer-term view.

Another question: if Forest City's modular plan--not delaying the first tower, B2, by a year--would they have needed to seek a joint venture partner, or would they have entered a joint venture on different terms?