Skip to main content

Did the Community Benefits Agreement survive the Greenland deal? Yes, but only two organizational contracts

I was recently asked if the Atlantic Yards Community Benefits Agreement (CBA) continued under the new ownership of Atlantic Yards, the Greenland Forest City Partners joint venture.

The answer is yes, formally, but in practice--as I've written--most of the groups and activities are moribund. Obligations to only two specific groups remain, mainly Downtown Brooklyn Neighborhood Alliance (DBNA), led by the Rev. Herbert Daughtry, and those have been transferred, in significant part if not in full, to the new arena operating company.

In June 2015, I wrote about "Assignment and Assumption Agreement" signed 6/30/14 between Forest City Ratner's Atlantic Yards Development Company (AYDC) and the new Atlantic Yards Venture jointly owned by Forest City (30%) and the new majority owner, Greenland Group (70%). But I did so regarding architecture, not the CBA.

The agreement (bottom) includes various city, state, and private contracts. Notably on page 11, item #32, it indicates that the 6/27/05 Community Benefits Agreement has been transferred to the new joint venture.

It does not, interestingly enough, note that several of the signatories changed their names years ago--All-Faith Council of Brooklyn to Faith in Action; Downtown Brooklyn Educational Consortium to Brooklyn Voices for Children; First Atlantic Terminal Housing Committee to Brooklyn Endeavor Experience--or that ACORN is defunct. That suggests the CBA was never updated/amended.

However, most of those eight CBA signatories are inactive. Only two are mentioned in the Forest City/Greenland agreement as extending contracts with the developer.

The DBNA

Clearly, the most active signatory is the DBNA, which regularly distributes free tickets to Barclays Center events, and also operates a foundation that distributes funds to non-profit groups. (The program for low-cost use of the arena, however, has not gotten off the ground.)

There are three documents regarding Daughtry and/or the DBNA. Upon the late 2015 announcement of the arena operating company to a company owned by Nets owner Mikhail Prokhorov, which was after the document cited here, the parties said:
It will also continue to implement the portions of the Community Benefits Agreement and other community programs applicable to Barclays Center that were established as part of the development.
Regarding the DBNA, the nonprofit database Guidestar cites IRS Form 990s through 2015, posted as of 2016, which indicates an ongoing organization. (Presumably the latest Form 990 will appear soon.)

Caldwell and BUILD

Separately, the 6/30/14 document signed by Greenland indicates a consulting agreement with James E. Caldwell, the former head of the now-defunct Brooklyn United for Innovative Local Development (BUILD), which according to the document was extended 5/1/14. After BUILD closed and was sued by trainees who said they were promised union construction jobs, Forest City's lawyers agreed to defend Caldwell.

The case was settled in late 2015, and we don't know if the agreement with Caldwell was renewed after that.

Public Housing Communities

The document indicates a Budget Renewal Contract 1/1/13 with Public Housing Communities, an organization aimed to represent the interest of public housing tenants. Charlene Nimmons of PHC co-authored a 4/1/17 New York Daily News op-ed criticizing mandatory construction apprenticeships as hampering diversity.

Here's some previous coverage of PHC, including its questionable financial reporting. Regarding PHC, the nonprofit database Guidestar cites IRS Form 990 reports only for 2007 and 2008, presumably the years when it had the most significant funding.

Previous commitments for funding partners

In July 2009, as I wrote, Forest City was asked at a public meeting about funding of its CBA partners.

“Forest City has funding obligations and commitments to each of the organizations, and they’re reviewed on an annual basis,” stated executive (and now CEO) MaryAnne Gilmartin. “We’re happy to provide an accounting, generally, of that, but I don’t have that information with me. Again, it depends on what they’re doing, presently, and what the expectations they’re going to be doing in the going-forward year, and it’s done on a very regular basis, in close consultation with each of the CBA members.”

They never provided an accounting. After all, given that the CBA--unlike CBAs in some other cities--does not involve any public agencies, the parties are not obligated to disclose it. As the 2014 document indicates, most were not still being pad by then.

As I wrote in June 2006, the Atlantic Yards CBA departed significantly from best practices. In model CBAs, signatories agree to support the project but don't themselves benefit. “As a matter of principle, groups in our network don’t take money from developers. We want to avoid any appearance of a conflict of interest,” said John Goldstein, National Program Director of The Partnership for Working Families. “We have advocated in CBAs that developers give to the communities they’re developing in."

The relevant clauses

Clauses relative to specific CBA signatories include three under the section Contracts:
32. Community Benefits Agreement (the "CBA"), dated June 27, 2005, by and among Assignor, Arena LLC, All-Faith Council of Brooklyn (AFCB), Association of Community Organizations for Reform Now (ACORN), Brooklyn United for Innovative Local Development (BUILD), Downtown Brooklyn Neighborhood Alliance (DBNA), Downtown Brooklyn Educational Consortium (DBEC), First Atlantic Terminal Housing Committee (FATHC), New York State Association of Minority Contractors (NYSAMC), and Public Housing Communities (PHC).
33. Letter Agreement dated May 10, 2013 from Assignor to Rev. Herbert Daughtry of Downtown Brooklyn Neighborhood Alliance, as amended by that First Amendment to the Funding Letter Agreement dated August 29, 2013
34. Letter Agreement with Downtown Brooklyn Neighborhood Alliance c/o House of Lord Church, relating to the CBA, dated December 11, 2013.
Also, clauses under the section Consulting Agreements:
1. Public Housing Communities Budget Renewal Contract dated as of January 1, 2013 by and between Assignor and Public Housing Communities.
11. Letter Agreement between Assignor and James E. Caldwell, dated January 15, 2013, as extended pursuant to that Letter Agreement dated May 1, 2014.
Also, a clause under Miscellaneous Contracts:
1. Agreement between Assignor and Downtown Brooklyn Neighborhood Alliance, dated April 4, 2014.

Comments

Popular posts from this blog

Forest City acknowledges unspecified delays in Pacific Park, cites $300 million "impairment" in project value; what about affordable housing pledge?

Updated Monday Nov. 7 am: Note follow-up coverage of stock price drop and investor conference call and pending questions.

Pacific Park Brooklyn is seriously delayed, Forest City Realty Trust said yesterday in a news release, which further acknowledged that the project has caused a $300 million impairment, or write-down of the asset, as the expected revenues no longer exceed the carrying cost.

The Cleveland-based developer, parent of Brooklyn-based Forest City Ratner, which is a 30% investor in Pacific Park along with 70% partner/overseer Greenland USA, blamed the "significant impairment" on an oversupply of market-rate apartments, the uncertain fate of the 421-a tax break, and a continued increase in construction costs.

While the delay essentially confirms the obvious, given that two major buildings have not launched despite plans to do so, it raises significant questions about the future of the project, including:
if market-rate construction is delayed, will the affordable h…

Revising official figures, new report reveals Nets averaged just 11,622 home fans last season, Islanders drew 11,200 (and have option to leave in 2018)

The Brooklyn Nets drew an average of only 11,622 fans per home game in their most recent (and lousy) season, more than 23% below the announced official attendance figure, and little more than 65% of the Barclays Center's capacity.

The New York Islanders also drew some 19.4% below announced attendance, or 11,200 fans per home game.

The surprising numbers were disclosed in a consultant's report attached to the Preliminary Official Statement for the refinancing of some $462 million in tax-exempt bonds for the Barclays Center (plus another $20 million in taxable bonds). The refinancing should lower costs to Mikhail Prokhorov, owner of the arena operating company, by and average of $3.4 million a year through 2044 in paying off arena construction.

According to official figures, the Brooklyn Nets attendance averaged 17,187 in the debut season, 2012-13, 17,251 in 2013-14, 17,037 in 2014-15, and 15,125 in the most recent season, 2015-16. For hoops, the arena holds 17,732.

But official…

At 550 Vanderbilt, big chunk of apartments pitched to Chinese buyers as "international units"

One key to sales at the 550 Vanderbilt condo is the connection to China, thanks to Shanghai-based developer Greenland Holdings.

It's the parent of Greenland USA, which as part of Greenland Forest City Partners owns 70% of Pacific Park (except 461 Dean and the arena).

And sales in China may help explain how the developer was able to claim early momentum.
"Since 550 Vanderbilt launched pre-sales in June [2015], more than 80 residences have gone into contract, representing over 30% of the building’s 278 total residences," the developer said in a 9/25/15 press release announcing the opening of a sales gallery in Brooklyn. "The strong response from the marketplace indicates the high level of demand for well-designed new luxury homes in Brooklyn..."

Maybe. Or maybe it just meant a decent initial pipeline to Chinese buyers.

As lawyer Jay Neveloff, who represents Forest City, told the Real Deal in 2015, a project involving a Chinese firm "creates a huge market for…

Is Barclays Center dumping the Islanders, or are they renegotiating? Evidence varies (bond doc, cash receipts); NHL attendance biggest variable

The Internet has been abuzz since Bloomberg's Scott Soshnick reported 1/30/17, using an overly conclusory headline, that Brooklyn’s Barclays Center Is Dumping the Islanders.

That would end an unusual arrangement in which the arena agrees to pay the team a fixed sum (minus certain expenses), in exchange for keeping tickets, suite, and sponsorship revenue.

The arena would earn more without the hockey team, according to Bloomberg, which cited “a financial projection shared with potential investors showed the Islanders won’t contribute any revenue after the 2018-19 season--a clear signal that the team won’t play there, the people said."

That "signal," however, is hardly definitive, as are the media leaks about a prospective new arena in Queens, as shown in the screenshot below from Newsday. Both sides are surely pushing for advantage, if not bluffing.

Consider: the arena and the Islanders can't even formally begin their opt-out talks until after this season. The disc…

Skanska says it "expected to assemble a properly designed modular building, not engage in an iterative R&D experiment"

On 12/10/16, I noted that FastCo.Design's Prefab's Moment of Reckoning article dialed back the gush on the 461 Dean modular tower compared to the publication's previous coverage.

Still, I noted that the article relied on developer Forest City Ratner and architect SHoP to put the best possible spin on what was clearly a failure. From the article: At the project's outset, it took the factory (managed by Skanska at the time) two to three weeks to build a module. By the end, under FCRC's management, the builders cut that down to six days. "The project took a little longer than expected and cost a little bit more than expected because we started the project with the wrong contractor," [Forest City's Adam] Greene says.Skanska jabs back
Well, Forest City's estranged partner Skanska later weighed in--not sure whether they weren't asked or just missed a deadline--and their article was updated 12/13/16. Here's Skanska's statement, which shows th…

Not just logistics: bypassing Brooklyn for DNC 2016 also saved on optics (role of Russian oligarch, Shanghai government)

Surely the logistical challenges of holding a national presidential nominating convention in Brooklyn were the main (and stated) reasons for the Democratic National Committee's choice of Philadelphia.

And, as I wrote in NY Slant, the huge security cordon in Philadelphia would have been impossible in Brooklyn.

But consider also the optics. As I wrote in my 1/21/15 op-ed in the Times arguing that the choice of Brooklyn was a bad idea:
The arena also raises ethically sticky questions for the Democrats. While the Barclays Center is owned primarily by Forest City Ratner, 45 percent of it is owned by the Russian billionaire Mikhail D. Prokhorov (who also owns 80 percent of the Brooklyn Nets). Mr. Prokhorov has a necessarily cordial relationship with Russia’s president, Vladimir V. Putin — though he has been critical of Mr. Putin in the past, last year, at the Russian president’s request, he tried to transfer ownership of the Nets to one of his Moscow-based companies. An oligarch-owned a…