Atlantic Yards Project Recharged

Mayor Bill de Blasio joined developers and representatives of the Chinese government Monday to break ground on a residential building at the development site formerly known as Atlantic Yards. The units, when completed, will be 100% affordable, although most will be available to families earning well above the median income for the area.

The building would be the first under the modified schedule reached earlier this year for Pacific Park (the development’s new name) by the mayor and Greenland Forest City Partners, a joint development company between Forest City Ratner and Chinese government-owned Greenland. The deal called for the fast-tracked construction of 2,250 below-market-rate apartments by 2025, a decade sooner than under the previous deal. The developer would lose control of the site if the dwellings are not built by the deadline.

The 298 apartments at 535 Carlton will be available to tenants from five different income tiers: half for tenants who earn up to 165% of the area median income for a family of four, which is $83,900 a year; 15% for tenants earning up to 145% of the AMI; 5% for those earning up to 100%; 25% for those earning up to 60%; and 5% for those earning up to 40%. More than half the tenants in the new building will pay rent of about $3,500 a month for a two-bedroom apartment.

According to the mayor, the total will amount to 100% affordable housing and count toward his effort to create and preserve 200,000 affordable units in 10 years, as well as his goal of financing 16,000 new affordable units by the end of 2014.

“There are few phrases I like more than ‘100% affordable,'” Mr. de Blasio said.

The city is paying $11.7 million in subsidies for 535 Carlton, including $73 million for a 30-year mortgage.

Nearly a year ago, Beijing-based Greenland Holdings, which is partially owned by the Chinese government, acquired a 70% stake in the development and formed a joint venture with Forest City Ratner Cos., pledging to cut the timeline for the project by half. Today, representatives from the Chinese government hailed the project and promised to be involved in future real estate developments in New York City.

“Confidence is more precious than gold,” Cheng Lei, deputy consul general for the Chinese Consulate, said of the New York real estate market.

Critics have complained that the administration’s 50-30-20 definition of affordability—under which half of apartments in a project are market-rate, 30% for middle-income tenants and 20% for low-income—does not do enough for those at the bottom of the economic ladder. But Mr. de Blasio defended the tiered scale as practical for today’s market.

“As you see the plan progress, neighborhood by neighborhood, you’re going to see buildings that are 100% affordable, you’re going to see buildings that are a lower percentage, you’re going to see buildings that are primarily for folks at the lowest side of the income scale, you’re going to see buildings that are mixed,” he said.

He added, “I’m certainly looking forward to the next building being started in June.”

The mayor also dismissed concerns about the pace of construction, given the recent cancellation of the contract between Forest City and Skanska USA for the nearby 363-unit building known as B2 BKLYN, adjacent to the Barclays Center. And when asked about the groundbreaking for another Pacific Park building by Greenland Forest City Partners on Vanderbilt Avenue that is mostly luxury apartments, Mr. de Blasio said that building would create jobs and have a “positive impact on our tax base,” despite not having any affordable units.

“We need all types of housing,” he said.

In the 11 years since the Atlantic Yards project was first announced, no housing has been completed, a source of consternation for state and city officials, who have pumped in millions of dollars in subsidies and used eminent domain to condemn housing to make room for Barclays Center, which opened in 2012.

– Crain’s New York