As Brooklyn Gentrifies, Some Neighborhoods are Left Behind

In its continues discovery of this place called Brooklyn, the Times learns that this is a big, diverse borough that (contra Brian Williams) does not have artisinal cheese on every street.

“Here, everything remains the same,” [said Theresa Scavo, chairwoman of CB15 in southern Brooklyn]. “They don’t want Trader Joe’s. They don’t want sidewalks crowded with cafes. They want a residential, suburban lifestyle. We’re not looking for innovative ways to do things. I have a hard time setting up a DVR.”

Here’s another story angle for the Times – even among the “gentrified” neighborhoods of Brooklyn, there is tremendous diversity. Just as Brownsville and Sheepshead Bay are very different from Park Slope and DUMBO, so too are these neighborhoods of northern and western Brooklyn different from one another. And did you know that there are neighborhoods in Manhattan that are still – in the 21st century – not Business Class? Strange, but true.

Related, Silverstein Also Looked at Domino

The Commercial Observer has more information on the Two Trees acquisition of the Domino site, including the fact that two other major developers – The Related Companies and Silverstein Properties – were interested in the site.

The Observer seems to agree with everyone else (myself included) that Two Trees is a good fit for the site. But the paper also seems to misunderstand some of the issues that make the property so hard to develop:

Landmark protections at the sugar factory require that its main buildings, a square structure with the Domino logo on its facade and a behemoth brick property with a towering smokestack, be preserved. Those familiar with the site say that it would likely cost many millions of dollars to renovate and make them habitable. CPC also struck a deal with the city to build 30 percent of the project as affordable housing, a larger than normal percentage that people familiar with the development said cuts into the project’s profitability.

The refinery (the “behemoth brick property with a towering smokestack”) is a landmark, but the bin structure (the “square structure with the Domino logo on its facade”) is not a landmark. As part of its landmark approval for the refinery, CPCR did agree to move the (not very historic) Domino Sugar sign to the refinery. But the building that the sign is attached to is toast.

As for the affordable housing, there was no “deal” to develop 30% of the project as affordable housing. CPCR promised to do so, but significantly, neither the city nor CPCR’s community supporters thought it necessary to make that commitment binding. As I noted yesterday, there is a strong incentive for 20% affordable housing on the site, but technically, there is no requirement for any affordable housing as part of the project.

[via Brownstoner]

Community Anxious Over Possible Domino Sale

Crain’s has some follow up community reaction to the news that Two Trees might be buying the Domino site. Apparently the community, or at least Isaac Abraham, is “anxious” about the sale:

Any developer or investor who wants to purchase Domino without committing itself to the 660 affordable units, should really think twice,” said Isaac Abraham, a Williamsburg community leader and housing advocate

Not to worry, says CPC, the parent company of bankrupt developer CPC Resources:

CPC Chief Executive Rafael Cestero, told Crain’s New York Business on Sunday that the new owner would be required to follow the zoning guidelines, which among other things would mean providing the affordable housing.

All of the affordable housing? Or just “the affordable housing” required under the inclusionary program (which amounts to 440 units – 20%)? CPCR was never bound to provide 30% affordable housing. Even the 20% is optional – though, as at other waterfront sites, the incentives are deep enough to make that 20% a very attractive deal. The other 10%? The community supporters of CPCR – and the city – gave that away. Hopefully someone steps up to keep CPCR’s word, but nothing is guaranteed.

Remember – 20% is the baseline. Neither CPCR nor Two Trees (nor any other developer) is obliged to build a single unit more. No one in the community should be surprised if a third party developer does’t live up to CPCR’s unsecured promises. If it wasn’t binding on CPCR, why should it be binding on anyone else?

Two Trees to Buy Domino?

The Daily News and Crain’s are reporting that CPCR has reached a deal with Two Trees to sell the Domino project for $160 million. CPCR and its partner Isaac Katan bought the Domino site in 2006 for $55 million. Since then, they have rezoned the property for residential use and gotten stuck in a morass of bankruptcy and lawsuits. The sale would allow CPC (the not-for-profit parent of CPCR) to pay off its subsidiary’s mortgages on the property (rumored to be $125 million) and go back to focusing on what they do best, which is providing financing for affordable housing.

If true, this latest development in the Domino saga bodes well for the fate of the overall project – not that that was ever really in question (prime waterfront real estate in a hot gentrifying neighborhood is a rare commodity, and someone was going to build there). Two Trees is an experienced developer that brings a wealth of expertise in developing mixed-use projects, and a long-term commitment to the neighborhoods they go into. It is particularly encouraging news with respect to the landmark refinery building – CPCR never had a viable plan for this wonderful structure and clearly saw its preservation as an impediment rather than an opportunity. Two Trees’ track record with historic buildings – including the stunning renovation of the Wythe Hotel – hopefully means that the refinery will no longer be an afterthought.

But when all is said and done, the New Domino project will be judged on the promises made to the community by CPCR. There was never any question that someone would develop this property. The question, still unanswered, is whether anyone will live up to CPCR’s unsecured promises for massive amounts of affordable housing and other community benefits that too many in the community bought into.

Two Trees is not a developer of affordable housing1 – what does that mean in terms of the promises made to the community? Certainly Two Tree can partner with an experienced affordable housing developer – but how much housing will they build, and how affordable will it be?

1. But then again, neither is CPC – and its for-profit subsidiary, CPCR, never had the depth of experience needed for a project of this scope.

War on Street Life

Community Board #1’s “war on brunch” has now officially became news last week, having been picked up by both WNYC and the New York Times. Credit for originating the story belongs to Aaron Short at the Brooklyn Paper. Too bad they let a catchy headline distract them from the real story (and no, it’s not about gentrification, though that’s a catchy headline too).

Image

Sadly, these planters – civic though they may be – are
probably illegal.

The big story here is that the “war on brunch” is really a crackdown on street life. The Community Board, upset at a few bars and restaurants, has chosen to use a hatchet instead of a scalpel. Restaurants and property owners are getting summonses and warning letters about sidewalk benches, sidewalk planters and the like1. As with dining al fresco before noon on Sundays, these targets of the Community Board’s ire are actually the kinds of things that make a neighborhood more livable and more enjoyable.

There is a reason why city planners obsess over things like bench heights, and it goes all the way back to the great neighborhood advocate Jane Jacobs herself. Street life, be it seniors sitting on a bench or patrons waiting for a seat at an insanely popular restaurant, makes for better neighborhoods and better communities (or, as Holly Whyte put it, you can measure the health of a city by the vitality of its streets). Outlawing benches and planters isn’t going to make Pies ‘n’ Thighs any less popular (or any less good), though it will mean that more people – not less – are standing around waiting for a table and clogging up the sidewalk.

To be clear, all this wonderful street furniture is also illegal. But using laws against sidewalk furniture to go after a broad swath of businesses is a stop-and-frisk approach to a very specific problem. If the problem is that certain restaurants are flouting the laws about sidewalk cafes and creating an actual nuisance, go after those restaurants. If neighbors have specific complaints, the Community Board should (and traditionally has) acted as a broker, talking to the owners and the residents to work out a solution. If that doesn’t work, then use the relevant city agencies to crack down on the specific troublemaker.

In the long run, trotting out arcane, outdated blue laws is not an effective approach, if for no other reason than that it turns the target into a victim and the enforcer into a bully. The story now is not that some number of restaurant owners are breaking the law and creating a community nuisance, but rather that the Community Board, through City agencies, is using outmoded, ticky-tacky laws to bully a whole business sector (and in the process sweeping in private citizens who have rogue planters, benches and other contraband street furniture (lawns!!) in front of their houses). Ironically, the perennially bad neighbors on the nightlife scene haven’t been impacted by the crackdown, and may not be – most of their sidewalk cafes are legal, and they don’t open before noon on any day.

Image 2

A nice place for seniors to sit or a public nuisance?
(Probably the latter – this bench looks to be on private
property

In other developments, Councilman Steve Levin is promising to introduce legislation to rescind the ridiculous prohibition on sidewalk eateries before noon on Sundays. Given that many of the neighborhood clergy – including Ann Kansfield of Greenpoint Reformed Church and Monsignor Calise of Our Lady of Mt. Carmel (and a member of CB1) – have gone on record saying that Sunday morning eateries are not a threat to their religious observance, this is a good thing. Hopefully cooler heads will prevail on the bigger issue of the street furniture crackdown too.

1. It would be wonderful if this was the biggest issue facing our neighborhood – have we solved all our problems and are now ready to focus on this?


77 Commercial Street Sells

According to the Real Deal, Manhattan-based Chetrit Group has purchased the 95,000 sf warehouse at 77 Commercial Street in Greenpoint. The property is one of the northernmost waterfront parcels that were rezoned to residential in the 2005 rezoning, and the potential development on the site could in a big, bigger or biggest development scenario.

It will be interesting to see how this plays out. What is the market for housing at this location, and how much of a market is there? First off, the site is, in the words of the broker on the deal, “‘not the most centrally located’ site in Brooklyn”. This site is basically at the very end of Manhattan Avenue, a long walk from either the bus, subway or ferry. The property does have 220 feet or so of water frontage, and will have great views and (hopefully) a beautiful city park next door. But – that water frontage is all along the mouth of Newtown Creek; a lot of those views are of Queens (and eventually more towers across the creek in Hunters Point South); and, the City has yet to acquire the adjacent property for a park, let alone fund clean up and capital costs. (It’s also worth asking when the developer plans to building – they’ve completed one project in the area, at 175 Kent, but have at least one other large development site, at Union and Metropolitan, that they’ve been sitting on for a few years now.)

The second question is how big will the developer go here? The base zoning – as with all the waterfront parcels rezoned in 2005 – is relatively low, but there is a sizable floor area incentive under inclusionary zoning for a developer to add 20% affordable housing (without any public review). Beyond that, though, there are also a ton of air rights available from the adjacent parcel at 65 Commercial Street (300,000 sf, according to the Real Deal). Those air rights come with strings attached – in addition to a full ULURP review, the purchasers are supposed to build an additional 200 units of affordable housing (15% of the new affordable housing committed to by the city). And the rights are supposed generate at least $12 million (in 2005 dollars) to create a $2 million “Greenpoint Williamsburg Tenant Legal Fund” as well as provide $10 million to help offset costs associated with creating inclusionary housing on other waterfront properties.

Which raises a third question (largely related to the first one), is there even a market for these air rights? Either with this developer, or the developer of the other adjacent parcel at 37 Commercial.

Say Goodbye to the Salvation Army

Brownstoner notes that the demolition of the Salvation Army building at Bedford and North 7th Street is imminent (the site appears to include the stucco building adjacent at 153 North 7th Street too). What will go in its place, though, remains a mystery. Brownstoner has an image of a zoning diagram showing a two-story commercial structure – which could be for a new Salvation Army or could be for another retailer. No clue on what it will look like, either, though a promising sign is that the architect is Fradkin McAlpin, whose portfolio includes the recent renovation of the Brooklyn Brewery.

Cue the Apple Store rumors. Or perhaps the architect is a clue?!

Things Get Worse at Domino

Crain’s reports this morning that the partners in the Domino project are in court, with Isaac Katan, the long-silent partner in the deal, alleging mismanagement, “misdirection and inaction” on the part of CPC Resources. According to Katan, CPCR has nothing to show for the over $100 million in equity and financing that the project has received. Now CPCR is trying to restructure the project’s $120 million in debt, in a deal that (according to the plaintiff) leaves Katan out in the cold:

Last month, CPC Resources told Katan it would enter a Letter of Intent that would allow Pacific Coast to restructure its debt. Under the arrangement, Pacific Coast would be able to convert its loan into an equity interest in the project, therefore reducing Katan’s interest in the project to 8% from 50%. Katan said in the filing that it never consented to such an agreement. Also, the new structure would give the lender the right to remove the current partners in the development from the project at any time and without reason.

But, at the same time, leaves CPCR with a guarantee of something:

But CPC Resources would still be paid an annual management fee of about $750,000, plus expenses.

Suddenly, even CPCR’s supporters seem to be having second thoughts:

“The tenants associations and the area residents, who worked hard to support Domino with its 660 affordable housing [units], are shocked that this project is now in jeopardy of collapse because of the spending spree and unaccountability by CPC,” said Isaac Abraham, a Williamsburg community leader and housing advocate. “Residents hope and pray that 660 affordable units and the entire Domino project doesn’t go up in the refinery smokestack.”

Of course, the 660 units were never guaranteed, and are certainly not part of the entitlements that CPCR has been looking to protect.

Lured by Profits

Charles Bagli has an in-depth piece in today’s Times on the fall of Community Preservation Corp. There is not much in here that I hadn’t been hearing in bits and pieces over the past few months, but still, seeing it all together is jus incredible. Real estate deals like Domino (though Domino is far from the only one) have almost shut down one of the most important conduits for funding affordable housing in the NY region. As I’ve said in the past (and despite their claims to the contrary), CPC is a funder of affordable housing, not a builder of housing – clearly they lost focus on their core mission.

For anyone who thinks CPCR (the for-profit arm at the root of the problem) is going to do the Domino project, let along do it as the community was promised, this has to be pretty sobering.

50 Best Blocks in Brooklyn

The L Magazine has published its annual list of the best blocks in Brooklyn – an eclectic and fun 29-page clickfest through the entire borough. Some annotated local highlights:

11. Best Example of Gentrified Ugliness: North 3rd between Berry and Bedford. Quadriad’s development on the south side street (fully rented out on the retail side, but still no one living there – even though parts have been completed for over a year). “Looks like a public high school airlifted from the Des Moines suburbs, c. 1996.”

12. Best Example of Gentrified Perfection: Wythe Street [sic] between Metropolitan and North 3rd. A block away from #11, and a good choice. But I would have gone with North 3rd between Wythe and Berry – a great mix of new buildings, converted lofts and strong local retail throughout (which the L tags as one of the 5 best blocks in Brooklyn to live on, so I guess we kind of agree on this one – but what’s up with the photo of Wythe?).

13. Best Block for Illustrating the Multiple Stages of Gentrification: South 2nd street between Wythe Avenue and Kent Avenue. A lot going on here, from Stage 1 through endgame (though the preschool dates to the pre-gentrification days of the neighborhood, and the “Soho-esque trattoria doubles as a job-training facility for local residents).

17. Best Block for Accidental Voyeurism: Grand Street between Driggs and Roebling. True. Excellent picture choice too (William H. Gayor’s ca. 1888 Tuttle Department Store, a cast-iron beauty that has absolutely nothing to do with the accidental voyeurism in question).

25. Greenest Block: Grand Street between Bedford and Driggs. Never thought of it that way, but I guess it works.

And my favorite of the 50:

1. Best Dead-End Block: Central Avenue between Cooper and Trinity Cemetery. Perfect.



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