New state-Ratner deal has ‘clause’ for concern

New state-Ratner deal has ‘clause’ for concern

State development officials are drafting a new deal with Bruce Ratner that will give the Atlantic Yards developer a loophole out of the project’s main selling point: thousands of units of affordable housing.

New language quietly inserted into a Sept. 17 lease proposal between the Empire State Development Corporation and the Downtown-based developer now make the construction of the long-promised 2,250 units of below-market-rate housing “subject to governmental authorities making available … affordable housing subsidies.”

None of the prior agreements — including two approved general project plans — made the affordable housing conditional on any state or local support. Ratner was required to build the units whether subsidies were available or not.

And such subsidies are in very short supply.

Last year, before the worst of the recession even hit, local experts were sounding the alarm about a coming shortage of affordable-housing money. At the time, there weren’t even enough bonds to meet existing demand.

“It’s highly unlikely Forest City Ratner will be able to get the amount of subsidies that [it needs for the] affordable housing,” said Councilman David Yassky (D–Brooklyn Heights).

Prior agreements between the state and Ratner did refer to taxpayer subsidies — the latest project plan approved in June, for example, said that “the affordable units are expected to be built as part of the mayor’s ‘New Housing Marketplace Plan’ and … financed through tax-exempt bonds provided under existing and proposed city and state housing programs” — but the subtle change in language from “expected” to “subject to” not only had critics howling this week, but also rushing off to court.

“ESDC has quietly made the ‘affordable’ housing conditioned upon public subsidies, in contradiction with [the project’s] approval document,” said Candace Carponter, a lawyer who advises the main opposition group, Develop Don’t Destroy Brooklyn, which is one of the parties on this week’s lawsuit (see chart).

Carponter expressed a certain irony that Develop Don’t Destroy Brooklyn is in the position of “holding Ratner accountable” on affordable housing considering that the project’s main booster, ACORN, signed onto a Community Benefits Agreement with Ratner specifically because of the affordable housing component.

If anyone should be upset about the change in language, it should be Bertha Lewis, ACORN’s chief organizer, Carponter suggested.

But under the agreement, ACORN and Lewis are contractually barred from saying anything negative about the project, and, as such, both maintained their optimism this week.

“We are, of course, disappointed by the delays brought about by endless litigation, [but] we remain confident that, at the end of the day, Atlantic Yards will mean thousands of new units of affordable rent regulated housing and new home ownership opportunities for working families,” Lewis said in a statement.

A spokesman for the ESDC questioned Carponter and her legal team’s reading of the new development agreement.

“The referenced language does not absolve the developer’s obligation to develop affordable housing,” said ESDC spokesman Warner Johnston.

“It has always been envisioned that there will be affordable housing subsidies. If housing subsidies are not made available … then the developer will be permitted additional time to develop the housing.

“Upon completion of the project, there will be no less than 2,250 units of affordable housing and the project documents will mandate that,” Johnston added.

Johnston said that the entire project — all 16 skyscrapers, the basketball arena, eight acres of publicly accessible open space, thousands of units of housing, office space and retail stores spanning from Fifth Avenue in Park Slope to Vanderbilt Avenue in Prospect Heights — would be completed by 2019.

That date seems impossible, especially in light of a June agreement between Ratner and the Metropolitan Transportation Authority that allows the developer to buy the development rights from the transit agency over the 22 years, or until 2031.

That extended timetable was also challenged in court this week by opponents.

“As a Land Use Improvement Project under [state law], ESDC [must show] that it has a plan to alleviate blight,” said DDDB lawyer Jeff Baker.

“But they only considered a plan completing in 2019, when they know it won’t be completed until at least 2031.

“If the project [takes that long], might there be a more effective blight removal plan?” Baker asked.

“Will it have the same economic and social benefits if it goes that long? ESDC willfully stuck its head in the sand regarding the new Ratner deal with the MTA [which] guarantees that the project, contrary to the legal requirement to remove alleged ‘blight,’ will exacerbate the ‘blight’ and make it permanent.”