Friday, October 31, 2014

Atlantic Yards, Pacific Park, and the Culture of Cheating (links)

I offer a framework to analyze and evaluate Atlantic Yards (in August 2014 rebranded as Pacific Park) and the Barclays Center: Atlantic Yards, Pacific Park, and the Culture of Cheating.

Note: this post is post-dated to remain at the top of the page. Please send tips to the email address above, rather than posting a comment here.





A model shown to potential immigrant investors in China in 2014,
though not shown publicly in Brooklyn.

From a deceptive 2006 Forest City Ratner brochure,
suggesting 6 acres of railyard would become a 22-acre project.



Thursday, October 30, 2014

Looking at the agreement for affordable housing and public oversight: what was gained, what's missing, what's coming

The first full public discussion of the deal that led to a new 2025 deadline for Atlantic Yards affordable housing--and other important but contested issues--will be held tonight at 8 pm at the Soapbox Gallery at 636 Dean Street, between Carlton and Vanderbilt avenues.

That's across the street from the southeast block of the project, where construction on two towers will begin in December.

The meeting is sponsored by the Prospect Heights Neighborhood Development Council, whose most prominent member, Gib Veconi, was one of the two community signatories of the agreement in June.

"Learn more about the settlement reached between the Empire State Development Corporation [ESD], Forest City Ratner Companies, and community advocates," states the notice (right), citing:
  • Shorter construction duration 
  • New affordable housing commitments 
  • Public oversight with local representation 
Those issues all involve potential complications, as I wrote last week, some of them pointed out by the Dean Street Block Association, whose members live very close to the project site.

As I wrote, the shorter construction timetable, while in some ways superior to an elongated buildout, could lead to cutting corners, especially since Greenland Forest City Partners has put aside plans to use modular construction--supposed to reduce the amount of workers and trucks--on the next buildings.

But I'd like to focus on the other two issues, both of which were distorted in the initial New York Times exclusive on the agreement. (I'd say the history of bad faith and cheating regarding Atlantic Yards should have inspired more skepticism.)

The agreement was signed by members of the BrooklynSpeaks coalition, individual plaintiffs, and other groups preparing a lawsuit on fair housing issues, which argued that delay in building the subsidized housing would have a disproportionate impact on African-Americans, as displacement trends mean fewer could take advantage of the 50% preference to locals in affordable housing lotteries.

The settlement averted a suit and thus allowed the planned joint venture, in which the Chinese government-owned developer Greenland Holdings bought 70% of the project going forward, forming Greenland Forest City Partners and thus (seemingly) rescuing Forest City Ratner.

The new affordable housing commitments

The "affordable housing" mantra reaps inevitable support from elected officials, but the devil is in the details, since "income-linked" is a more precise way to describe subsidized housing for households ranging from low-income to middle-income.

The agreement means all 2,250 affordable apartments must be built by May 2025, with significant penalties for non-performance ($2,000/month per unit), and that two all-affordable towers, with at least 590 units, must start within 12 months. A minimum of 35% of all units for which construction has commenced must be affordable until the first 1,050 affordable apartments are finished.

All penalties will be paid into the New York City Housing Trust Fund administered by New York City’s Department of Housing Preservation and Development to create or preserve affordable housing, with preference for projects in the four Brooklyn community districts around the project. And Forest City will contribute $250,000 to a new tenant protection fund.

Those were major advances. However, unmentioned in the publicity that emerged from the agreement was that half the subsidized units in the two, all-affordable towers would go to households earning 165% of area median income, or about $140,000 for a family of four (and commensurately less for smaller households). 

That means a two-bedroom unit would cost nearly $3,000--below market but hardly "affordable" to many who put their hopes in the project or are getting priced out of the neighborhoods near the project.

Obscuring the issue

In a press release hailing the agreement, issued 6/27/14 by the governor's office, Veconi said:
The economic realities of solving the city’s affordable housing crisis will increasingly call for public/private partnerships similar to the Atlantic Yards project. Today’s agreement shows that communities can work with the State to hold developers accountable for their commitments to the public.
Veconi has a significant record of advocacy and often insightful commentary, but I'd say that's straining to portray the agreement in the best light. In a June 2013 essay, when he had a more critical posture toward Atlantic Yards, Veconi wrote:
The reality is, unless the desired outcomes are quantified, they probably won’t happen. It’s not enough, for instance, for a project to simply claim it will create affordable housing, even in the hundreds or thousands of units. To make sure the expectations of the community will be met, the degree of affordability must also be specified, and schedule on which apartments will be made available must be spelled out.
(Emphasis added)

In the recent agreement, the BrooklynSpeaks negotiators got the second but not the first of those requests. Their explanation deserves scrutiny.

At a 10/9/14 meeting of Community Board 8, Veconi noted that city affordability housing bonds would be used to finance the subsidized towers. "Those bonds require certain income levels to be targeted for the apartments they finance," he said, and those income levels rely on Area Median Income, which is set by the federal Department of Housing and Urban Development. (The New York AMI incorporates wealthy suburban counties.)

Veconi rightly pointed out the growing disparity between federal AMI and local incomes in Brooklyn, which compounds the cost of delay.

"Our settlement did not address directly the issue of affordability levels," he said. "The fair housing claim gave us a platform to demand that the affordable housing be made available sooner, but it did not give us a platform to challenge the city’s calculation of affordability."

That obscures the issue. The housing bonds more precisely require income ranges (not levels) to be targeted within the categories of low-income, moderate-income, and middle-income.

The affordability ranges in the next two towers, while within the range in each category, depart from the previous promises regarding Atlantic Yards. For example, instead of having 20% of the affordable units go to middle-income households earning between 140-160% of AMI, 50% of the affordable units will go to households earning 165% of AMI. And the ceiling for low-income units will be 60% of AMI, not 50%.

(Yes, the two towers represent some 600 affordable rental units, rather than being part of 50% market/50% subsidized buildings, but they will be balanced later by two all-market rental towers, not to mention two soon-to-start condo buildings.)

Also, Veconi's words could have left the impression that it was impossible to "challenge the city’s calculation of affordability," because it's based on AMI. But the city's calculation depends on both AMI and the percentage applied to it. That leaves room for negotiation between the developer and the city and--as BrooklynSpeaks has said--for future advocacy to achieve more affordability.

If the potential plaintiffs couldn't challenge the level of affordability, they didn't have to agree to give up the right to sue on all Atlantic Yards issues existing at the time.

Or, pragmatically accepting the compromise, they might have signed the agreement under the condition that they could call attention to the skewing of affordability. Instead, they participated in a gubernatorial press release and released one of their own that promoted "affordable housing" with no details about the actual affordability.

Also, Mayor Bill de Blasio got to say, "And what’s remarkable is that compared to the project's first building, we’ve secured nearly twice as many affordable units for our City investment.” That's deceptive, since half the affordable units are so expensive they're not eligible for subsidies.

Oversight is advisory

As part of the agreement, the ESD will create a subsidiary, the Atlantic Yards Community Development Corporation (AY CDC), with a 14-member board that includes five members appointed by local elected officials.

That represents a step forward on the oversight issue, but not what BrooklynSpeaks sought, nor what it had pushed Assemblyman Walter Mosley to propose. 

As stated last November, along with requesting a new commitment for affordable housing, the groups asked
that the Governor, ESDC and Forest City Ratner publicly commit to improving the accountability of the Atlantic Yards project to the public, stating their support of legislation to create a dedicated local development corporation to oversee the project until its completion whose board includes outside directors appointed by the elected representatives of the people of Brooklyn.
Even that was secondary to a new timetable, as Assemblyman Jim Brennan acknowledged at a press conference last November: "There are many issues, but our main focus is affordable housing."

“This is the first time in the history of the Atlantic Yards project," Veconi told Community Board 8, "that there has actually been formal local involvement in oversight.”

The CDC will review proposed changes to the plan and advise the ESD board, as well as monitor the developer's compliance with public commitments, and monitor and respond to construction impacts and quality of life issues. It will meet at least quarterly and likely rely significantly on existing ESD staff. It has an advisory role, rather than formal oversight.

At the CB 8 meeting, Dean Street Block Association representative Tracy Collins (a photographer who's regularly contributed to this blog) read a block association statement raising caveats:
In addition, differing from BrooklynSpeaks’ longtime goals, the oversight structure is merely advisory. Decision-making and enforcement remains with the current ESDC board and staff, who continue to let the public down in so many ways. The Governor has retained nine of the fourteen appointments, as well as the Chairmanship. The developer can reach the Governor, but we can’t. Despite a relatively broad scope of work, the board has no defined resources, and the State may choose to support the committee with the staff the board is being created to oversee.
Any oversight regime will work to some extent if it is approached in good faith. But each oversight regime with Atlantic Yards/Pacific Park has failed because the State and developer approached them in bad faith.
Veconi responded to the notion that "we somehow broke away from our advocacy position on oversight, on representative oversight, because the Atlantic Yards CDC is advisory, because it doesn't replace the ESDC board."

However, he said, even if legislation to create such a body had passed, the public authority would still have been controlled by the governor. "We did not feel we were giving up the world by having an advisory agency with a board made up of gubernatorial appointees," Veconi said.

Perhaps, but the difference was significant enough for Forest City and the state to resist. And Veconi seemed to be arguing against a point he made in a June 2013 essay:
And unlike other State projects, Atlantic Yards doesn’t benefit from a local development corporation dedicated to achieving the project’s goals. Instead, decisions made by its developer are rubber-stamped by the board of the Empire State Development Corporation, all of whose members are appointed by the Governor.
The decisions will remain with the ESD board.

That said, Mosley told me earlier this month that he considered it a reasonable compromise, given the difficulty in getting legislation past the Republican-controlled state Senate, where legislators follow the lead of Brooklyn Sen. Marty Golden, who's close to Forest City. "I think this was the best case scenario for us," he said.

The bill sponsored by Mosley to create the Atlantic Yards Development Trust would also have established a stakeholder council--essentially adding another layer of local input beyond the entity's new board--and that council would have a non-voting member on the board. (The bill was a return of more prescriptive legislation, rather a more general governance bill, which Forest City still opposed.)

And Mosley's latest bill would have come closer to fulfilling one of the Regional Plan Association’s recommendations for large-scale projects: "An independent entity should monitor project costs and benefits over time."

What might be missing

I wonder whether the focus on affordable housing will make for other trade-offs. Consider the example of the New Domino Project in Williamsburg, in which the second iteration meant far taller towers in exchange for more open space and new office space.

Perhaps the Atlantic Yards model (right) shown to potential Chinese investors--which seems (though I'm not certain) to represent buildings with different heights than proposed--is a harbinger of future changes in the project design. The model has not been shown publicly in New York.

Such changes, I'd bet, would go through as long as "affordable housing" is delivered.

More transparency, new penalties?

When the agreement was signed in June, the Dean Street Block Association, which left the PHNDC, warned:
Decision-making and enforcement will stay as always with the overarching ESD board, also appointed by the Governor. The funding and staff of the new board is undefined, and there is no description whatsoever of how the board will fulfill its key mission of monitoring on-site conditions.
For example, while the state has implemented additional measures to improve construction oversight, including requiring the developer to hire an outside On-Site Environmental Monitor, that hasn't convinced the closest neighbors.

As Dean Street resident Peter Krashes observed last week, "At the end of the day, what the community impacted by construction deserves is transparency in real-time, meaningful recourse like penalties when things go wrong, and oversight during work that is impartial and motivated."

At a Dean Street Block Association meeting last week, he noted that the new penalties for affordable housing delays are not matched by similar penalties for lack of compliance with environmental commitments.

Nor has there yet been increased transparency. A July 2012 report to Atlantic Yards Watch by Sandstone Environmental Associates recommended that the quarterly reports from consultant Henningson, Durham & Richardson (HDR) to ESD regarding compliance with environmental commitments be issued more quickly, and that HDR's weekly report be posted online without a Freedom of Information Law requested needed to pry it open. We'll see if the new CDC can achieve that advance.

Making it work

Veconi, speaking at Community Board 8 earlier this month, defended the new CDC, noting that "this is the way the project can be made accountable. It’s not some other way. We actually have to make this work."

Thus, the Dean Street Block Association has participated in the process, suggesting to CB 8 that the new CDC "needs technical expertise and candidates who bring their own resources."

Mosley said that he and colleagues would recommend board members with technical expertise regarding construction, environmental impacts, and finance as they relate to mega-construction projects.

He told me that "ESDC has assured us they will be providing us with appropriate staff level, to complement and supplement whatever is lacking… this board will not be out there left to fend for itself."

Speaking at a Dean Street Block Association meeting on 10/2014, Mosley acknowledged more uncertainty, saying “it’s still an ongoing negotiation as to what type of resources are available.”

At the meeting, he said he and fellow legislators had recommended several appointees to both Assembly Speaker Sheldon Silver and the governor's office. (The governor has nine appointees, while the other five will be appointed by the Mayor, Brooklyn Borough President, Council Speaker, Senate President, and Assembly Speaker, in consultation with local legislators.)

In response to skeptical questions from the audience, Mosley said he felt more confident the new CDC could pursue compliance regarding the project. But when asked about the CDC's power, both Mosley and Council Member Laurie Cumbo exaggerated the issue.

"They have the ability to veto," Mosley said. "Let’s say there are engineering concerns, transportation plans, just like any corporation, you can bring it to a vote.”

Cumbo later added, “The board is going to have the power and authority that the state would have.”

That's not so, and Krashes later tried diplomatically to clarify the issue without criticizing the legislators. "We would love for a powerful board, but that’s not what we were necessarily getting," he said, adding he hoped the board would be able to provide significant input.

For now, Empire State Development seems to be playing it close to the vest. I asked ESD who was vetting the names submitted and making recommendations to the governor, and when the CDC would start meeting.

I didn't get a full response, but was told "members will be announced and a meeting will take place in December."

Wednesday, October 29, 2014

Community victory? What the New York Times exclusive on Atlantic Yards settlement got wrong: sequence, affordability, city triumph, accountability

Now that there's a public discussion tomorrow, "Accountability and Atlantic Yards," it's worth looking at the settlement between members of the BrooklynSpeaks coalition, individual plaintiffs, and other groups preparing a lawsuit on fair housing issues.

The suit argued that delay in building the subsidized housing would have a disproportionate impact on African-Americans, as displacement trends mean fewer would be in Brooklyn Community Districts 2, 3, 6, and 8 to take advantage of the 50% preference to locals in affordable housing lotteries.

The settlement averted a suit and thus allowed the planned joint venture, in which the Chinese government-owned developer Greenland Holdings, bought 70% of the project going forward, forming Greenland Forest City Partners and thus (seemingly) rescuing Forest City.

The settlement is complicated, as is Atlantic Yards. Unfortunately, the New York Times misled the public through errors and omissions in its exclusive 6/27/14 article Plan Expedited for Affordable Housing Near Barclays Center in Brooklyn, which should have added caveats to its portrayal of a community victory. (I called it a "victory with flaws," before all the details emerged.)

The article exaggerated the pace of construction, downplayed the high rental rates for many units in the next two towers, claimed erroneously that the settlement addressed affordability levels, let city officials over-claim success on affordability, and failed to illuminate the compromises on accountability.

Settlement details

First, the settlement details. Forest City Ratner agreed to build all 2250 affordable units (of 6430 total) by 2025, rather than the previous outside date of 2035. (That means a 15-year buildout since the project was reapproved in 2009 and property transferred in 2010, far better than the 25-year buildout previously allowed, but also not the ten-year buildout long promised.)

Not actually "10 Years Early"
Also, two all-affordable towers would be started within the next year. Affordable housing must be built along with market-rate units. There are new penalties for delay, which would fuel the New York City Housing Trust Fund, which would fund affordable housing in the four Brooklyn Community Districts.

Finally, the settlement sets up a new monitoring body, the Atlantic Yards Community Development Corporation (CDC), with nine of 14 board members appointed by the governor, and one each by the mayor, Brooklyn borough president, Council Speaker, Assembly Speaker, and Senate President, after consultation with local community boards.

In exchange, the plaintiffs gave up their right to sue, not only on fair housing issues, but all claims regarding Atlantic Yards as of 6/27/14, though they can still sue if the agreement is not "materially complied with."

These gains came with question marks and omissions, ones that were not immediately apparent, especially in the Times. I already wrote about the Times exaggerated the gain, claiming the towers would be "10 Years Early" and "10 years ahead of the current schedule."

Next two buildings not both affordable

The first error may not be huge, but it should serve as a red flag. As shown in the screenshot at right, the Times reported that the next two residential buildings "will be entirely affordable housing."

However, that's belied by the graphic below that, which shows that the one building starting in December will be all affordable, while another will be condos.

And it's belied by another paragraph in the article, which states:
Forest City also expects to begin construction on two luxury condominium towers by December and July.
In other words, instead of building promised towers with 50% subsidized and 50% market units, Forest City--or, actually, the new joint venture--would build four towers that worked out to a similar configuration.

That's a gain in certain ways for the developer, because there's likely more profit in market-rate units that are in an exclusively market-rate building than in one in which residents must share with the hoi polloi.

It would have been more accurate to say the next two rental buildings will be affordable. I tried multiple times without success to get the Times to make this simple fix.

Were affordability levels specified?

The article states:
The new agreement specifies that a portion of affordable units would be for low-income families of four that make $48,000 or less, moderate-income families earning up to $88,000 a year, and middle-income families earning up to $104,000.
Actually, the agreement says nothing about the affordability levels. Nor do the affordability levels correlate with those previously announced in either the Atlantic Yards Community Benefits Agreement or the B2 modular tower, now stalled at ten stories.

More missed on affordability

Moreover, the figures provided do not represent the affordability levels in the next two towers, given that 50% of the units could go to households earning up to 165% of Area Median Income (AMI), or nearly $140,000. (Was that $104,000 a typo? If so, that's a major one.)

The Times let de Blasio claim that "we've secured nearly twice as many affordable units for our city investment," and let Deputy Mayor Alicia Glen claim that “We’ve fundamentally changed how developers are working with the city to deliver affordable housing,” she said.
The Times missed the real story: the affordability levels in these next two subsidized towers would skew significantly toward less affordability, as half the units would go to a middle-income cohort in which four-person households would pay nearly $3,000 for a two-bedroom apartment and commensurate sums for smaller units.

The city investment is less because those units are too expensive to even qualify for subsidies, as noted in the letters at bottom from the New York City Housing Development Corporation and as I explained in a long article for BKLYNR.

The BrooklynSpeaks press release when the deal was announced used the term "affordable" more than 40 times without defining it. Since then, BrooklynSpeaks signatories have said the actual affordability was outside the scope of negotiations.

Maybe so, but the parties did negotiate other issues, such as a one-time payment by Fores tCity of $250,000 to an Atlantic Yards Tenant Protection Fund.

And given the secret negotiations--the results announced as a fait accompli--it was both off-key and misleading to proclaim triumph without caveats. (Remember, Public Advocate Letitia James, a long-time project opponent but also one who pushed for accountability, said, "To negotiate this deal behind my back is totally unacceptable.")

What about accountability?

The Times article states:
“This project has been crying out for real public accountability, and the community has been crying out for affordable housing now,” said Michelle de la Uz, executive director of the Fifth Avenue Committee, one of the groups that signed the covenant. “I’m heartened that everyone realized you can’t have one without the other as part of realizing Atlantic Yards’ full promise.”
That remains to be seen. There's an inherent tension between getting Atlantic Yards built on a tight timetable and not cutting corners in construction, at least as shown in the construction of the arena. Note that the developer is already late on the arena green roof, though neither the developer nor the state has explained that.

The new Atlantic Yards Community Development Corporation (AY CDC) likely represents an improvement over the status quo, but its effectiveness remains unclear. The Times called it "a 14-member board responsible for ensuring compliance with the agreement, and for monitoring the mitigation of community impacts during the construction period."

Unmentioned is that the AY CDC is an advisory body, not a subsidiary charged with overseeing the project as a decision-making body, for which BrooklynSpeaks had steadily advocated.

Gib Veconi of the Prospect Heights Neighborhood Development Council, who signed the settlement with de la Uz, has argued that the new CDC is not much of a change, since the subsidiary also would have been controlled by the governor.

Perhaps, but it's notable how BrooklynSpeaks was willing to retreat from a long-held position. And surely Forest City Ratner and Empire State Development didn't want such a subsidiary.

That raises questions about how much the negotiators and political backers concerned primarily about affordable housing--note the stress in the press release--were willing to trade off regarding accountability.

The errors that were fixed

In the article, Times editors and reporter Charles Bagli were sloppy enough to get several basic things wrong, including the first names of Michelle de la Uz and MaryAnne Gilmartin, as well as the affiliation of people in the photo.

Those were quickly corrected. The more meaningful errors and omissions remain uncorrected.

Tuesday, October 28, 2014

Date/venue change for Quality of Life meeting: Nov. 19 at Brooklyn Hospital

See details here.

In federal lawsuit filed by trainees “promised” Atlantic Yards construction jobs, judge leaves Forest City on potential hook; plaintiffs' lawyer claims victory

The 20 plaintiffs who sued Forest City Ratner, Community Benefits Agreement (CBA) signatory BUILD (Brooklyn United for Innovative Local Development) regarding promises of construction jobs and union cards, got a significant—if incomplete—victory from U.S. District Judge John Gleeson, who refused to dismiss key aspects of the case.

Gleeson, in a ruling (bottom) issued yesterday, did agree to remove from the case Forest City Ratner Chairman Bruce Ratner, who had only an indirect connection to the pre-apprenticeship training program (PATP), but would not, as a matter of law, remove executive Jane Marshall and the company.

Thus, if a jury finds for the plaintiffs, Forest City, the deepest-pocketed defendant, could be liable for millions of dollars in projected wages that the plaintiffs didn’t get—though that also depends on a highly-contested calculation of the earning potential of each plaintiff.

Notably, Gleeson would not agree to delink BUILD CEO James Caldwell, who admitted making extravagant promises of jobs to the trainees but said it was not authorized, from Forest City.

“The question whether Caldwell was an agent of the Forest City Defendants cannot properly be resolved as a matter of law,” Gleeson wrote, saying the issue should go to a jury that could evaluate his testimony.

“It’s a complete victory for everything that matters,” plaintiffs’ attorney Matthew Brinckerhoff commented. “All of these plaintiffs are going to have their day in court, and have a jury determine whether they were lied to by Forest City Ratner as well as BUILD, and whether they’re entitled to millions of dollars in damages. We’re looking forward to that day.”

A gloomy denouement

The case represents the gloomy denouement of one of the most valuable aspects of the CBA, a program to put 36 people on the path to rewarding construction careers. It was the only aspect of the CBA that carried with it a cash payment—in this case, $500,000 to BUILD—if was not enacted.

The suite was filed in November 2011. BUILD a year later went out of business. Documents and depositions in the lawsuit revealed a previously fraught relationship between BUILD and Forest City, its main funder and a major factor in its creation. While Caldwell publicly hailed Forest City, behind the scenes he pressured the company to get the PATP started, while Forest City's Marshall, in a message to colleagues, called BUILD "snakes."

In my coverage of the July hearing in this case, I suggested it was unlikely to go to trial, once Gleeson narrowed the case allowing the parties to have a better sense of the case's value, and revisit the issue of settlement. But who knows.

I don't think Forest City would want Caldwell to go on the stand and face cross-examination for his series of conflicting statements. Some of the plaintiffs, who in depositions displayed fuzzy or untrustworthy memories, may not be the best witnesses, either, which makes going to trial a calculated bet for both sides.

Atlantic Yards has always been unpredictable, so it’s possible that Forest City will spend additional resources on legal fees—a significant chunk of a settlement figure?—to get itself and an executive off the hook.

That would leave trainees--a few of whom who gained union jobs on their own, but many who are struggling--to try to collect from the defunct BUILD and the not wealthy Caldwell. (Forest City is paying for BUILD’s defense, though BUILD and Forest City do not necessarily have the same interests.)

Gleeson put off to a later date a motion by the defense to preclude expert testimony that they say exaggerates the earning potential of the trainees. He also said it was too late for one additional former trainee to join the lawsuit.

Narrowing charges of unpaid wages

The plaintiffs also charged that they should have been paid for participating in the training program, especially some ten weeks of unpaid construction work at a site in Staten Island run by Gausia Jones, an instructor for BUILD whose company, Orbin’s Big Green Machine, had been hired to do a $20,000 job.

Gleeson partly narrowed those charges, saying it could not be said at this point that Forest City and BUILD were not joint employers under the Federal Labor Standards Act (FLSA). The potential recovery for unpaid wages likely would be significantly less than that for the lack of unionized construction work.

Wrote Gleeson:
Stripped of hyperbole, the plaintiffs’ argument that the Forest City Defendants and BUILD were joint employers for the purposes of the FLSA and the NYLL [New York Labor Law] relies on numerous interactions, joint actions, and shared motivations among those defendants. The plaintiffs have adduced facts that reasonably support the inferences that the Forest City Defendants created and funded BUILD; that together they created the PATP program; that the Forest City Defendants were intimately involved in the design, administration and implementation of that program; and that BUILD and the PATP program, and the goodwill they were created to generate, were an integral component of the success of the Atlantic Yards project, which at the time was facing strong opposition from some segments of the surrounding communities. A rational jury could find from the facts advanced by the plaintiffs that the economic reality was the Forest City Defendants and BUILD were joint employers of the plaintiffs.
He agreed to remove Ratner as a potential joint employer, but not Marshall, which means a jury will have to assess how much operational control Forest City had.

BUILD argued that it was exempt from the FLSA because it was a not-for-profit organization. However, wrote Gleeson:
But a jury could reasonably find that the Forest City Defendants had such control over the creation, operation and existence of BUILD that, in essence, BUILD and the PATP program and goodwill they were intended to foster in the local communities were integral to the commercial success of the Atlantic Yards project itself, that is, that their activities were performed for that common business purpose.
He did, however strike the classroom training portion of the PATP as not compensable under the FLSA. Similarly, according to the NYLL, the BUILD Defendants cannot be liable for the first 10 weeks of the 15-week PATP, because state law says the first ten weeks of a program classify participants as “learners.”

He agreed that Jones and Orbin’s were not joint employers, and thus not responsible for back wages.

Nor could Jones and Orbin’s be liable for additional charges of unjust enrichment, because PATP participants agreed to “participate in an unpaid internship.”

While the plaintiffs argued that the contract was unenforceable, Gleeson agreed that “lack of compensation is allowable where the ‘work’ in question was preliminary to but not integral or indispensable to other principal work activities, and added the plaintiffs’ complaint was based on earlier promises of union membership for their participation.

Charges continue

The whole case was not in jeopardy of dismissal. There was been no attempt to dismiss breach of contract claims against Caldwell and BUILD, as well as the contract claims of eight plaintiffs who claimed that they had heard promises from Marshall.

Forest City, however, tried to dismiss claims made by 11 plaintiffs who either don’t remember or don’t say they received promises from Forest City that they would get union jobs after compleeting the program.

The plaintiffs argued those claims should continue, because Marshall allegedly made such promises at a session at which they were present, while Caldwell did so too, and acted as an agent of Forest City. And that, said the judge, should go to a jury.

Halloween dance music event moved from Barclays Center, averts bass leakage to neighbors

An electronic dance music show (EDM), BOO!, scheduled for the Barclays Center on Halloween night, Friday, has been moved by the promoters to Pier 94 in Manhattan, with less than a week before the debut.

All tickets for the "massively spooktacular night" will be honored at the new venue, where the planned lineup will be combined with other acts,  or can be refunded.

No explanation has been offered, but some commenters on promoter Insomniac' Facebook page concluded the promoter was combining two events because not enough tickets were sold.

Others noted the Barclays Center tickets were far more expensive than the Pier 94 tickets.

Averts bass leakage

Given that Halloween Massive was advertised as "a twisted Halloween party [with] bone-rattling beats," the event, like Sensation and Swedish House Mafia, is of the ilk that has caused the most problems in leaking bass into neighborhood residences.

That was supposed to be addressed first by acoustical baffles and a sound concierge and now by a green roof over the arena. The green roof was supposed have been in process by now, but is just beginning, with the installation this weekend of a crane.

So I'm not sure if, according to the original schedule, additional roof-reated sound blocking properties were already supposed to have been in place. 

Either way, the move of the concert saves the arena operators conflict with the event promoters, who might balk at turning down the sound, and/or the neighbors, who should not be hearing or feeling the show in their residences.

From the latest Atlantic Yards/Pacific Park Construction Alert: crane work may close intersection; steel deliveries to be staged on sidewalks

The latest Atlantic Yards/Pacific Park Construction Update (botton), for the weeks beginning October 27 and November 3, was released yesterday by Empire State Development, after preparation by Greenland Forest City Partners.

Notably, while the Atlantic Avenue crane has been installed, additional electrical wiring is required that may require the temporary closure of the 6th and Atlantic Avenue intersection. The update says that notification will be given to the community.

Arena Green Roof

Installation of the sidewalk bridge along Atlantic Avenue is supposed to commence during this reporting period, but it was supposed to start during the previous reporting period, according to the previous update.

Steel deliveries for the roof construction were supposed to begin yesterday to the cranes at both the B3 and Atlantic Avenue crane locations. The previous alert said the steel deliveries were supposed to begin October 22.

This new alert discloses, for the first time, that deliveries to the B3 crane location will be staged on the Dean Street and 6th Avenue sidewalks.

LIRR Yard Activities - Block 1120 & 1121

Pacific Street between 6th Avenue and Carlton Avenue has been restored to two-way traffic and drilling of SOE [support of excavation] minipiles under the east side of the 6th Avenue Bridge has been completed.

Block 1129

Additional soil characterization borings required to facilitate soil disposal related to future building construction at the B14 site within Block 1129 will be completed during this reporting period. It was supposed to be completed during the previous period.

 Interior demolition of 752 Pacific Street will be completed during this reporting period and full demolition of the building will commence immediately after. A construction fence will be installed around the demolition site prior to commencement of full demolition

While the parking lot will remain open, its operation will be shifted to the eastern end of the lot so as not to conflict with the demolition.

How to Reach Pacific Park Brooklyn Community Liaison Office (CLO)

The Community Liaison Office has been relocated to Atlantic Center, 625 Atlantic Avenue. Located on the 3rd floor, visitors seeking the office should enter through the mall entrance located at the corner of Atlantic Avenue and So. Portland Avenue. The CLO’s hours are M-F from 9am – 4pm and the phone number, 866-923-5315 and email, communityliaison@pacificparkbrooklyn.com remains the same.

If you have any questions please contact Nicole Jordan ESD’s Manager, Pacific Park Brooklyn Project Community/Government Relations at 212-803-3736 or AtlanticYards@esd.ny.gov


Monday, October 27, 2014

In effort to reopen modular factory, Forest City modular affiliate asks judge to intervene in dispute with Skanska

Two months since the factory producing modules for the stalled B2 tower shut down, FCRC Modular, the affiliate of developer Forest City Ratner, has asked a judge to intervene to allow it to reopen the factory without its former partner Skanska Modular.

The ill-fated partnership, known as FCS Modular, had signed a contract to produce modules for Skanska USA Building, which was hired by the B2 Owner, an affiliate of Forest City, to construct the tower. 

But Skanska has canceled both contracts, while claiming $50 million in damages from cost overruns. Skanska blames Forest City for defective intellectual property, while Forest City says Skanska agreed that the project was buildable without an increase in cost. The two parties filed dueling lawsuits, and B2 owner filed a separate lawsuit aiming to reopen the factory.

At a hearing 9/23/14 on that suit, Forest City unsuccessfully asked state Supreme Court Justice Saliann Scarpulla to order the reopening of the factory. She did not, but did order the parties to have a board meeting that, presumably, could hasten resolution of the dispute. It did not, so the court battle continues. (Also see Wall Street Journal article on whether Forest City's modular plan is feasible.)

Board deadlock

In a letter filed 10/23/14 with the court, FCRC Modular seeks a conference "to discuss defendant Skanska Modular's continued efforts to prevent the reopening" of the modular factory.

FCRC attorney Harold Weinberger noted that Skanska Modular had argued in court that FCRC Modular could reopen the factory immediately by presenting an opportunity to FCS Modular board--three directors from each partner--and if the board said no, the presenting member could go alone, licensing and using the company’s intellectual property and resources, including the factory.

Scarpulla last month did order a board meeting, which would trigger a “Buy-Sell” procedure so that one member could buy out the other. As expected the board deadlocked.

New opportunity must be equivalent?

FCRC Modular, according to Weinberger's letter, then informed the board of the new opportunity. Skanska Modular refused to consider it, according to FCRC Modular, "unjustifiably" claiming the financial aspects of the proposal had to be identical to the previous one. Skanska also said the parties had to agree with a license agreement regarding intellectual property and the factory.

After a phone conference, Skanska Modular’s counsel said the proposal only needed to be “functionally equivalent.”

FCRC Modular, in a 10/15/14 letter, said it would functionally equivalent, given that the B2 Owner would enter into a fixed price purchase order with FCRC Modular, and B2 Owner would pay cost overruns previously proposed to be borne by Skanska Modular and guaranteed by Skanska USA.

But B2 Owner would have the right to claim cost overruns against Skanska USA "as damages arising from the termination of their prior contract"--surely a major sticking point.

Mediation not enough

Skanska Modular, which FCRC Modular said "failed to respond to FCRC Modular’s letter for a week" (six days, to be precise), said it disagreed, because the proposal was "materially different," and said the issue should be addressed at the first scheduled mediation session between Skanska and Forest City, which also concerns the dueling lawsuits filed over cost overruns and breach of contract.

That session is set for November 3--a week from today.

FCRC Modular, according to Weinberger, said that was neither adequate nor appropriate, and has asked Judge Scarpulla to set a conference to address the dispute as soon as possible.

Earlier this month, Forest City, a minority owner of B2, bought out the majority owner, the Arizona State Retirement System. B2 is the only Atlantic Yards/Pacific Park tower not owned in partnership with the Greenland Group, which owns 70% of the project (sans arena) going forward, and--who knows--may well own a share of B2 when the legal battle is resolved.

In ESPN's Ultimate Standings, Nets nudge back but still lead Knicks by large margin

Among the 30 teams in the National Basketball Association, the Brooklyn Nets are ranked 20th in the Ultimate Standings, the ESPN compilation that ranks such elements as Ownership, Fan relations,
Affordability, and Stadium experience.

That's not great, and it represents a step back from 17 in 2013 (but up from 21 in 2012). But the New York Knicks are last, at 30, sliding from 24 in 2013 and 27 in 2012. (The San Antonio Spurs are tops.) 

In fact, among the 122 teams in the four major leagues, the Nets rank 76, while the Knicks are 121, with both teams falling in the rankings but the Knicks falling further.

That means the Knicks--though they reliably fill Madison Square Garden--leave opportunities to poach their fan base.

For the record, the New York Islanders rank, as antiquated Nassau Coliseum is judged absolutely last in the category of Stadium experience. 

The Barclays Center, ranking 37 in Stadium experience for the Nets, will surely offer a bump up when the Islanders move to Brooklyn in 2015, but the configuration is somewhat awkward for hockey in a basketball-centric arena, so I suspect the Islanders' score on that measure will be lower.

ESPN on the Nets: No. 76

Nets rise as New York's team
Last year's ranking: 71
Title track: 86
Ownership: 70
Coaching: 55
Players: 90
Fan relations: 66
Affordability: 101
Stadium experience: 37
Bang for the buck: 66
The Nets are the basketball kings of New York! Granted, Mikhail Prokhorov and a team of four other random Russian oligarchs could have beaten the Knicks last year, but it was quite the statement when the Nets' billionaire owner hung a 22-story, 21,375-square-foot Nets billboard near Madison Square Garden, featuring his own cheeky grin. Knicks owner James Dolan felt so bullied that he ran to the commish to broker some kindergarten justice.
The Nets shelled out a record $90-plus million in luxury tax last season, managed to procure Busta Rhymes and Mike D for pregame intros, and even signed Andrei Kirilenko to a deal that had NBA execs crying conspiracy. Unfortunately that kind of dough -- or really, any type of dough -- didn't trickle down to the fans. The Nets have some of the most expensive cheap seats in the league, and the sixth-priciest tickets overall (only the Knicks, Heat, Bulls, Celtics and L.A. teams are more expensive). And while Brooklyn advanced to the conference semifinals, the Toronto series left the Nets exposed. A headline on the back of the Toronto Sun tabloid read: Raptors vs. Dinosaurs (pictured: Paul Pierce and KG), and beneath it the line, "Garnett & Pierce are so old the Raptor had to ask his dad about them." And Deron Williams' face was popping up on Have You Seen This Person fliers outside the Barclays Center. The reward: $63,128,400. Although the biggest dis was reserved for Brooklyn's fans. Sparked by Toronto's crowd, the Nets' official Twitter account proclaimed: "#Nets fans take note -- this is what a playoff crowd sounds like ... set your DVD and take notes." (An apology soon followed).
The Nets may be Kings of New York, but it wouldn't hurt if they set their sights a little higher
ESPN on the Knicks: No. 121

Zen Master Phil Jackson is reinventing more than the Knicks' roster
Last year's ranking: 102
Title track: 112
Ownership: 118
Coaching: 108
Players: 122
Fan relations: 122
Affordability: 121
Stadium experience: 91
Bang for the buck: 115
The Knicks need a new outlook -- a dose of Eastern Conference philosophy from newly hired team president Phil Jackson; the Zen Master has been tasked with turning around the franchise's fortunes in his front-office debut. But can a man with more rings than fingers still point at the moon? Whoa. Deep. If glory is truly found in rising after a fall, last year's 37-win flop (after 54 wins in 2012-13) presents nothing but opportunity. And seeming to believe that only the hand that erases can write the true thing, Jackson fired much-maligned coach Mike Woodson and overhauled the roster.
Across the board, our rankings provide Jackson with a wealth of opportunity: The Knicks fell in each of the eight categories and by at least 20 spots in six of them. First on Jackson's to-do list should be teaching star forward Carmelo Anthony that the most important thing is to know what is the most important thing, after Melo took a lucrative deal to continue jacking 39 shots a game. But the one-man show needs help; the Knicks rank dead last in players, as Jackson waits for roughly $20 million in cap space that's due to open up next summer.
The Knicks must also remember that if they take care of fans, fans will take care of them. The team came in last in fan relations and second to last in affordability (a ticket 2.5 times the league average doesn't help) and rank in the bottom eight in bang for the buck and ownership. Yeah, that ownership. The meddlesome James Dolan has promised to stay out of Jackson's way when it comes to basketball decisions, because just as Jackson will rely on his time-proven method, Dolan must give it time to work. After all, only the wisest and most dull-witted are unchangeable.

Sunday, October 26, 2014

Now there are three cranes: Atlantic Avenue crane for arena's green roof installed, almost three months late

On Saturday, a large crane (right) was installed along Atlantic Avenue outside the Barclays Center to allow for the installation of the planned green roof.

It joins the large crane at the B3 site, at the southeast corner of the arena block, which was installed two weeks earlier, along with the huge crane outside the stall B2 modular tower.

Left unmentioned by the developers of Atlantic Yards/Pacific Park is that both cranes for the green roof installation were supposed to be installed in August, as shown in the Project Timeline below, from this presentation.

The Atlantic Avenue crane was supposed to be removed by the end of October, after three months--and, presumably, before the Brooklyn Nets season began.

So it looks like the green roof installation process is three months delayed. We should know more at the next Atlantic Yards Quality of Life meeting, set for November 12.

It's not clear how the delays will affect the planned June 2015 start for the B3 tower.


All three cranes, though the Atlantic Avenue crane is not fully extended



Below, the Atlantic Avenue crane installation begins

Ratner's share of Barclays Center expected to sell at profit, and only in part

I wrote this past week that Sports Business Journal suggested that, upon Bruce Ratner's plan to sell his 55% share in the Barclays Center, the arena was worth only $750 million based on revenue flow, lower than the cost to build.

Two days ago, the Wall Street Journal reported that Forest City "is expecting any new investor will pay a price that values the arena substantially above its cost" and noted an expected increase in revenue.

That means they'll be selling the arena portion based on the expected revenue flow, not the current revenue flow. (I should have acknowledged that, as should Sports Business Journal.)

Indeed, arena operators expect $65 million in revenue by 2016, more than double the current $30 million. So that should be factored into the price--but it's an expectation, not a certainty.

Surely the advent of the New York Islanders, coming n 2015, will stabilize revenue flow at a higher figure, as should lower operating costs. But the concert business remains fluid. Indeed, the $65 million figure itself was dailed back from a long-promised $70 million.

Selling only a piece

Also, as Crain's reported, "A person familiar with Forest City Ratner’s plans said the company was only looking to sell a portion of its 55% stake." That's subject to negotiation.

The WSJ reported:
“Barclays Center is the most successful arena in the country because of how we built it and because of how we manage it,” said Ashley Cotton, a Forest City spokeswoman. “We are looking to make a transaction that is commensurate with that value and enhances the property even more.”

The Brooklyn Rebound: imagination, transportation, and some factors developers don't mention

So, how did Brooklyn bounce back? It's interesting to see how real estate developers explain it.

Brooklyn Rebound, a 10/13/14 article in Urban Land, the publication of the Urban Land Institute, describes the boom in DUMBO and Williamsburg, the former a "hub for more than 400 digital businesses" and the latter "a 21st-century urban village that is a magnet for young musicians, artists, and members of the creative class."

The article states:
But if the resurgence of DUMBO, Williamsburg, and other parts of the new Brooklyn offers a lesson for the rest of the world, it is about the importance of having the imagination to see nascent trends and opportunities and the agility to move quickly to capitalize on them.
Indeed, developer David Walentas sought to attract financial firms to DUMBO before converting old manufacturing and warehouse buildings into condos, while practicing a savvy strategy of leasing--often below market--to artists and unique retail.

The arrival of digital companies seeking affordable office space was unplanned, and Walentas's company allowed short-term leases, attractive to the start-up culture.

Williamsburg "underwent a parallel evolution," suggests the article, but that's not exactly true.

Yes, in Williamsburg, there was fallow industrial space coveted by artists as well, but there was also a longstanding residential community. (Unmentioned: the city's 2005 rezoning of Williamsburg and Greenpoint, the crucial change that led to new investment.)

Atlantic Yards gets a mention:
The arena is envisioned as an anchor of Atlantic Yards, a massive development project featuring modular construction that has been in the works for more than a decade and reportedly is now scheduled to begin construction in 2015.
Um, the B2 modular tower had a groundbreaking in December 2012. And while the Atlantic Yards site was not formally rezoned, the state agreed to override city zoning to give the developer the right to build much larger buildings than previously permitted. 

The discussion: was Brooklyn "written off"?

The Real Deal, in a 10/22/14 article headlined This is how Brooklyn got its cool, described a panel at the Urban Land Institute conference. But they got the summary wrong:
Between 1965 and 1985, Brooklyn suffered from the urban crisis, said Kathryn Wylde, president and CEO of the Partnership for New York City, during a discussion about Brooklyn’s renaissance during the Urban Land Institute’s fall meeting at the Jacob Javits Center on Wednesday afternoon. During that time, the borough’s “thriving manufacturing” industry was lost and residents left the area in droves.
“People had written off Brooklyn,” Wylde said.
Not exactly. As architectural critic and historian Francis Morrone noted in a speech I quoted in April 2011, that was an era of gentrification in the midst of crime, when several sturdy historic districts were established in the orbit of Downtown Brooklyn.

MaryAnne Gilmartin, president and CEO of Forest City Ratner, credited the Brooklyn boom on the extensive transportation network, which helps fuel the Barclays Center.

I think that's a bit reductive, since the Bronx also has great transportation. I'd say the historic districts noted above, and the quality lifestyle available in them, was a template for the reinvestment in Brooklyn--as was the advent of immigrants starting in the mid-1960s. After all, the revival of Prospect Park came before the most furious waves of gentrification.

Andrew Kimball, chief executive officer at Industry City, cited "the opportunity of creating new affordable housing that can be planned and built close to where people work," in the Real Deal's paraphrase. I'm not sure how much of that is coming, but we'll see. 

He also cited, naturally, Industry City and the Brooklyn Navy Yard, which he currently runs and formerly ran, places now available to “new, creative industries.”

Former Borough President Marty Markowitz, now vice president for Borough Promotion at NYC & Co., apparently provided some typical shtick about how Brooklyn is not an “outer borough.”

Regina Myer, president of Brooklyn Bridge Park Corporation and former director of the city’s Department of City Planning Brooklyn office, cited the major improvement in the borough's safety, which I'd say is very significant but--as Morrone noted--actually not the catalyst.

No one, at least in this report, mentioned the rezoning of Downtown Brooklyn and the North Brooklyn neighborhoods of Greenpoint and Williamsburg, which created a tremendous boom in the value of land.

How Crown Heights changed

Brooklynian has a photo essay on how Crown Heights changed between 2007 and 2013. Surely the availability of transportation and the reduction in crime were crucial catalysts to the gentrification of Franklin Avenue.

But the cascading effect of wealth in Manhattan and other Brooklyn neighborhoods, including the international money and intergenerational assistance, also has bid up the price of real estate throughout the city, making Crown Heights an ever more expensive alternative.


All the new restaurants

And now, reports AM New York, this year's Zagat Survey "has 340 Brooklyn eateries in the 2015 New York City guide, 75 more than last year<" the largest jump in 20 years.which opened in July.

Tim Zagat, the guide's co-founder, said New Yorkers' tastes are changing and the influx of new Brooklyn residents, developments and amenities such as the Barclays Center led to the creation of great restaurants.

"When I was growing up, generally people went from Brooklyn to Manhattan to eat. Now it's the opposite," he said. "Everything in Brooklyn is becoming more fashionable."

Camp Brooklyn, back at the arena's 40/40 Club for a gala, honors Markowitz

Last year, on 3/13/13, the Camp Brooklyn Community Service Award Gala, which raised money for Borough President Marty Markowitz's summer camp program, was held at the Barclays Center's 40/40 Club, honoring, among other people, Bruce Ratner.

This past week, the Camp Brooklyn Fund gala was held again at the arena's 40/40 Club, this time honoring Markowitz, who continues the charity--and corporate sponsorship--while out of office. Of course it was not publicly announced by the arena.

It's impressive, on one level, that Markowitz can still raise money for a worthy cause while out of office. But a lot of people and companies owe him thanks for his help in making them money.

Saturday, October 25, 2014

Firm finally hired by Greenland Forest City as On-Site Environmental Monitor, will start six weeks late

Yesterday, Greenland Forest City Partners announced it has finally retained an outside engineering firm, Remedial Engineering, to serve as On-site Environmental Monitor (OEM), starting the first week of November, or six weeks after it was due.

The OEM, which will report to the developer, is supposed to monitor of construction activities to ensure that environmental requirements contained in the Memorandum of Environmental Commitments (MEC) for Atlantic Yards/Pacific Park Brooklyn are met.

Note that a 2012 report by an outside consultant concluded that the OEM was understaffed.  Empire State Development (ESD), the state agency overseeing/shepherding Atlantic Yards, in June disclosed that Forest City Ratner has agreed to hire an outside firm--rather than use an employee--to serve as OEM.

That's definitely progress, though the OEM does not report to the public. And we know that construction violations--heck, falsifications--can be covered up.

Remedial hired

According to the notice:
After a Request for Proposals was put out for the position, Remedial Engineering, whose core business is environmental engineering and compliance management, responded and was chosen as the OEM for the project. The firm has a proven track record of providing OEM-related services at high profile projects that require multiple agency coordination and interaction with surrounding communities.
Remedial Engineering, which was created in 1990 to provide engineering services to Roux Associates, shares office space and personnel with Roux but is a separate corporation with separate ownership. While you may know that Roux has been involved in this project from the beginning, as FCRC's owners representative, and specializes in the development of environmental plans to address contamination issues on development sites, Roux does not provide construction monitoring services.
Remedial's initial staffing at the site will include the OEM who will be assisted by two Mitigation Engineers. This number will grow as necessary to accommodate increases in construction activity.
It is anticipated that the OEM will be on-site beginning the first week of November. Until that time, the project will continue to be monitored as it has been since its inception.
Remedial and Roux are located in Islandia, NY. Roux has a web site; Remedial does not. As noted in the notice, Roux has long worked on the project.

September 15 goal

As I wrote 9/30/14, Forest City was required by the Second Amended Memorandum of Environmental Commitments for Atlantic Yards to "use commercially reasonable efforts to retain the engineering firm to serve as the OEM on or before September 15, 2014."

At the 9/4/14 Quality of Life meeting, Forest City acknowledged that timetable would not be met, but executive Ashley Cotton said that the delay would be "very short."

At the end of September, ESD told me the firm would be retained by mid-October. I'm not sure an Oct. 24 announcement precisely counts as mid-October.

ESD also that the "current OEM staffing is appropriate for the level of activity currently on the site and the new OEM will be in place in time for the anticipated increased activities."

As I wrote, Dean Street resident Peter Krashes, who at the earlier meeting had asked about the timetable, suggested the OEM be made available to the community for questions on a regular basis.

"At the end of the day, what the community impacted by construction deserves is transparency in real-time, meaningful recourse like penalties when things go wrong, and oversight during work that is impartial and motivated," he stated.

Crain's: as Nets increase All Access prices, ticket holders get resale insurance, free beer/wine for half-hour before game

Crain's New York Business reports, Nets to cover losses for ticket holders: The team, in a first, will offer All Access ticket holders 'loyalty insurance' to cover losses on tickets resold through Ticketmaster.

That means the 4,400 holders of premium tickets are getting some benefits, even as they pay more renewals in the team's third year:
The prices will range from $135 per seat up to $1,450, and will be on average 14% higher than they were when fans were first offered the deluxe, three-season package before the arena opened. But as the Barclays Center looks to boost profits, and as sports arenas in general face competition from bigger and better HD TV sets, the team is sweetening the package: This time the All Access tickets will come with "loyalty insurance."
Starting with the 2015-2016 season, the Nets will cover up to 15% of the total season-ticket purchase price for those tickets that the holder resells. A fan who spends $5,940 for the $135-per-seat package of 44 home games will be covered for losses on resold tickets up to $891 at the end of the season.
The only caveat is that the tickets must be resold via an authorized Ticketmaster site—not on StubHub, for instance.
So maybe the insurance can be seen as a sweetener for those increased prices.

Free beer and wine

Another sweetener:
In addition, All Access ticket holders will be entitled to free beer and wine for the half-hour before the game begins. That's on top of the all-the-concession-food-you-can-eat feature that has been included in the All Access ticket price from the beginning.
The Nets also recently gave All Access ticket holders a dedicated entrance on Atlantic Avenue.
OK, a half-hour isn't a long time, but that should get everyone a bit more boozed up.