Could the Hochul administration have collected fines for the missed Pacific Park deadline without destroying all hope that six planned towers will be built?
The Brooklyn community group Brooklyn Speaks, whose 2014 settlement established the penalty schedule, believes the administration should have found out. That sounds like a high-stakes game of chicken, but let’s hear the activists’ case.
The group’s Gib Veconi noted that Greenland USA, the Chinese developer that failed to build 876 affordable units by May 31 as promised, has not declared bankruptcy.
Veconi also pointed out that lenders on the project made an $11 million installment payment to the Metropolitan Transportation Authority last year on Greenland’s behalf to maintain development rights over the Vanderbilt Yard. The MTA is expecting this year’s payment, too.
That doesn’t mean the lenders would have covered Greenland’s fines as well. But Veconi thinks Empire State Development (led by Hope Knight) should be as demanding as the MTA (led by Janno Lieber). Both answer to Gov. Kathy Hochul.
That $11 million may now be considered money thrown away, but the lenders must have believed they could salvage something from the project. It’s unclear whether that same logic would inspire them to pay $1.75 million a month ($21 million a year) in fines for the developer who defaulted on them.
Empire State Development is clearly more interested in getting something built than collecting fines. Given that Related Companies chose not to develop Pacific Park, ESD may have figured that demanding fines now would scare off the few remaining developers willing to take on the massive project. So ESD extended the deadline for the next team of builders.
Brooklyn Speaks, for its part, is considering suing again, after the fine schedule in its last settlement was ignored.
I asked the group if it has a better idea for getting high-rises with affordable units built over the rail yard. Veconi said, tellingly, that the state should first get an independent determination of whether it is even financially viable. It’s rare to get such a reality-based answer from activists.
If viability is established, Veconi said, “the state should create a robust oversight authority with the ability to manage development at a challenging site, potentially with multiple sites being built at the same time by separate teams. The authority can then evaluate prospective developers to confirm their capacity.”
In other words, don’t use the same model that led to the Greenland USA fiasco.
What we’re thinking about: Have you noticed that when politicians want to portray capitalists as evil, they call them “investors,” but when the same politicians tout a new business or factory, they cheer the “investment”? How are investors bad, but investment good? Send your thoughts to eengquist@therealdeal.com.
A thing we’ve learned: New York is the only state that forces motorists to keep squeezing the nozzle when they pump gas. A pending state bill from an Oneida County Republican and a Rotterdam Democrat would amend laws and fire codes to finally allow hands-free clips at self-service stations, the Times Union reported.
Elsewhere…
Shortly before a judge ruled that the FARE Act can take effect, Openigloo asked its users:
“Are you postponing your apartment hunt until the FARE Act takes effect?”
Openigloo, a startup marketplace and review platform for New York City tenants, reported that 71 percent said yes and 29 percent said no.
Does that mean far more tenants than usual have been renewing their leases since the bill passed in November? No, because most of them — even those thinking about moving — probably have no idea that the broker-fee bill passed, or didn’t take effect until mid-2025, or was being challenged in court.
You really cannot draw any conclusions from surveys unless you know who got the survey, who answered it and the context for the questions.
In this case, the survey was conducted via Openigloo’s Instagram account, following a series of videos and posts about what the FARE Act entails and how it might affect renters.
Most New Yorkers are not going to be so clued in, so, despite the 71 percent who answered yes, I suspect the new law will not have an immediate impact on tenants’ inclination to move.
It could have an immediate impact on the number of listings, though. That’s a story we will be following closely.
Closing time
Residential: The top residential deal recorded Tuesday was $12 million for a 4,300-square-foot co-op at 730 Park Avenue in Lenox Hill. Scott Stewart from The Corcoran Group had the listing.
Commercial: The top commercial deal recorded was $23 million for three properties in Sheepshead Bay. The deals include 1865 Burnett Street for $8.28 million, 3001 Avenue R for $7.36 million and 3004 Avenue R for $7.36 million. The Related Companies sold the properties to an LLC tied to AmTrustRE. Combined, the properties have 144 residential units.
New to the Market: The highest price for a residential property hitting the market was $4.7 million for a 3,594-square-foot co-op unit at 35 East 12th Street in Greenwich Village. Geoffrey Gottlieb and Morgan Pollack of Christie’s International Real Estate Group have the listing.
— Matthew Elo
