Brooklyn Space January 24, 2024

January 24, 2024 Brooklyn Eagle Staff

Current Condition of 962 Pacific Street.
Photo: Brooklyn Space staff

Community-Inspired Mixed-Use Affordable Housing Project in Limbo at City Council

Community Residents Urge Subcommittee on Zoning and Franchises to Green Light Proposed Crown Heights Development Featuring Affordable Housing, Light Manufacturing Use and Early Childhood Education Center

We need affordable housing, and we need it now. Why wait?

Such was the refrain emphasized by a range of Crown Heights residents at yesterday’s City Council’s hearing held by the Subcommittee on Zoning and Franchises as it considered a handful of proposed rezonings that make their way to the final step of the City’s standardized Uniform Land Use Review Procedure, culminating in a vote before the full Council.

Nearly a dozen community members turned out to testify in favor of a proposed mixed-use development at 962 Pacific Street, which has sat as a vacant lot for years because its zoning remains restricted to low-rise industrial uses that prohibit residential – an outdated designation last updated more than 60 years ago – despite being surrounded by lots that have already been converted to residential.

Meanwhile, the decade-long effort led by the community to modernize zoning for the entire neighborhood, originally known as M-CROWN and more recently designated as the Atlantic Avenue Mixed-Use Plan (AAMUP) by the Department of City Planning (DCP), is still a long way away from becoming reality as the area-wide rezoning effort to support it inches forward through the rezoning process.

Those who advocated for the approval of 962 Pacific noted that it would provide more deeply affordable housing, as championed by Community Board 8, than is called for in the DCP plan and should be viewed as a model as the broader rezoning process continues in collaboration with Council Member Crystal Hudson, who represents the district. In fact, according to land use counsel representing the project, 25 of the 26 lots surrounding the empty site have already been rezoned to an R-7 equivalent — the zoning designation that the application seeks. All but ensuring that the final AAMUP rezoning will match the 962 Pacific proposal.

Yet, while the merits of the project seem to be receiving near-universal praise, concerns around the timing of the application continue to be raised by Councilmember Hudson. Despite 962 Pacific already having been in the rezoning process for nearly four years and including many neighborhood priorities like affordable housing, daycare facility and light manufacturing uses, Hudson continues to voice concern that allowing the application to proceed could slow down the AAMUP initiative.

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Around Kings County

Flatbush African Burial Ground Coalition Fights to Stop Development at Historic Site

A chain-link fence on Church Avenue in Flatbush is covered in art, trespassing warnings, and homemade signs. The fence surrounds a block of dirt and grass that sits parallel to a gas station and catty-corner to a church. According to historians, beneath this block of dirt is an historic African burial ground.

Facing years of proposed development on the site, a group of community activists, the Flatbush African Burial Ground Coalition, has been fighting every step of the way to make sure the site is preserved and honored.

Read more.

Ossé, Can You See? Council Member Preps for High-Stakes Housing Fight

Brooklyn pol’s clever video makes case for thousands more homes. The real estate industry was wrong about Chi Ossé. Last summer, the industry feuded with the Brooklyn Council member about his broker fee bill. Real estate pros called him clueless. But now Ossé has posted a brilliant video that explains — better than real estate people ever could — why a crucial area of Brooklyn must be redeveloped. That’s a bigger issue because unlike the broker fee bill, it will almost certainly be voted on by the City Council.

Read more.

Bed-Stuy Landlords Propose 560 New Apartments

Plan would require rezoning of 5 blocks along Park Avenue. At 12 development sites in Bedford-Stuyvesant, a group of property owners aims to build 560 apartments and three yeshivas to meet what it calls growing demand. For once, getting the necessary rezoning might be the easy part. “We are broadly supportive of expanded residential and community facility space in this area to meet the needs of our rapidly growing community,” a representative of City Council member Lincoln Restler said without discussing the project specifically. Under the Council’s custom of member deference, Restler, as the local member, controls the rezoning’s fate.

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Brookfield’s One Pierrepont Plaza Debt Goes to Special Servicing

Brookfield’s office woes have surfaced in Brooklyn. Brookfield Property Partners, the real estate arm of the Canadian conglomerate, failed to pay off a $148 million loan backed in part by One Pierrepont Plaza in Brooklyn Heights when it came due last month. The securitized debt, which is also secured by a mixed-use building in Pittsburgh, is headed to special servicing, according to Trepp, as the Firm failed to repay the office building’s $148M loan at maturity. The transfer comes after One Pierrepont landed the borough’s biggest lease of 2023, with the MTA signing for 192,000 square feet or about a quarter of the 19-story building.

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The Real Estate Families Who Run New York

In New York, real estate runs in the family. At a level that appears unmatched in the rest of the country and perhaps also overseas, huge swaths of the landscape in the city are under the control of a web of fathers and daughters, grandpas and grandsons, second cousins and ex-wives. Mirroring New York’s rise as a destination for immigrants and a hub of an easy-debt lending culture, family real estate dynasties have surged in stature and influence since the early 20th century after starting out, in some cases, with a single storefront. In fact, as some firms embrace their fourth generation of leadership — the LeFraks, Rudins and Dursts— the families rival longtime players like Trinity Church and Columbia University. As well as Brooklyn’s own Walentas Clan.

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Housing Solutions From
Across The Globe

A house in Newport, RI.<br>Photo: Beth Fitzpatrick/Pexels — A house in Newport, RI.
Photo: Beth Fitzpatrick/Pexels

Researchers will Look at how RI could Create a State Housing Developer

Rhode Island has chosen New York University researchers to study whether to create a state housing development arm and, if so, how best to do it. NYU’s Furman Center for Real Estate and Urban Policy was hired over two other bidders to do the six-month study, which will examine different public-sector models used across the country and world to build new affordable housing. Among the places the Furman Center is expected to study are Montgomery County, Maryland, Singapore and Finland, Housing Secretary Stefan Pryor told The Journal last week. “We’re asking [the Furman Center] to analyze the efficacy of these models and the applicability of such models to Rhode Island,” Pryor said.

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Chart 1: Rental Housing Inventory & Median Citywide Rents by Apartment Size.<br>Photo courtesy of Comptroller Brad Lander — Chart 1: Rental Housing Inventory & Median Citywide Rents by Apartment Size.
Photo courtesy of Comptroller Brad Lander

Perspectives From Brooklyn
And Beyond

► Spotlight: New York City’s Rental Housing Market

City Comptroller Lander released the office’s Spotlight on the New York City rental housing market. This Spotlight provides insight and data on the economic stability of the rental housing market in New York City and changes year over year. The core of this Spotlight examines the always-challenging and high-priority issue of housing affordability. Our findings indicate that a majority of renter households are rent-burdened, with rental costs consuming more than 30% of their income—in fact, nearly 30% of low-income renters across the five boroughs are severely rent-burdened, spending more than 50% of their pre-tax income on housing. Read more.

► Blackstone’s loan at Midtown office tower for sale at 50% discount

The $308 million mortgage on a Manhattan office tower owned by Blackstone is up for sale again after the private equity giant defaulted on the debt more than a year ago. Midland Loan Services, the special servicer, hired brokerage Jones Lang LaSalle to sell the loan backed by 1740 Broadway, according to people familiar with the matter. The debt, which is packaged into a commercial mortgage-backed security, is being marketed at roughly $150 million — a 50% discount — said the people, who asked not to be named because the process is private. Read more.

► Bank of America Inks 550K-SF Lease at BGO’s Jersey City Office Tower

The new tenant is banking on Jersey City with the record-breaking lease. There’s plenty of gloomy news out there at the moment, but an extra large lease signing rounded out 2023 on a positive note and broke a leasing record in the process. Bank of America has signed a 15-year lease to take 550,000 square feet at BGO’s Newport Tower in Jersey City, the companies told Commercial Observer. Read more.

► CHIP Proposes a Property Tax Break for Existing Affordable Housing

The majority of rent-stabilized buildings do not receive any subsidy or tax breaks despite being older and more expensive to maintain. A tax break for existing affordable housing would significantly and dramatically reduce the burden on rent-stabilized properties and tenants. The Community Housing Improvement Program (CHIP) is proposing a property tax break for existing affordable housing as part of its comprehensive property tax reform. Lawmakers have long acknowledged that affordable housing has to be subsidized, yet they focus property tax abatements almost exclusively on the construction of new housing that can charge market-rate rents. Meanwhile, the tax burden for older rent-stabilized housing that provides the majority of the affordable homes in New York City continues to increase and negatively impacts renters in those properties. Read more.

► Big Developer Launches $1bn Fund to Buy Distressed New York Offices

RXR and Ares Management are betting on a thaw in the commercial real estate market. One of New York’s biggest property developers is launching a $1bn fund to invest in the city’s distressed office buildings, potentially heralding a new phase in the commercial real estate crisis. We have clarity as to where rates are, we have clarity about the future of offices, and which buildings are going to be competitive, and we have a capitulation, I think, to a recognition that values aren’t just bouncing back like they did in ‘08,” said Rechler. “There’s a reset, and that this is more permanent.” Read more.

► The Bill Is Coming Due on a Record Amount of Commercial Real Estate Debt

More than $2.2 trillion in debt is maturing before 2028, and much of that will have to be refinanced at higher rates. The troubled commercial real estate market is bracing for a record amount of maturing loans, boosting the prospect of a surge in defaults as property owners are forced to refinance at higher rates. In 2023, $541 billion in debt backed by office buildings, hotels, apartments and other types of commercial real estate came due, the highest amount ever for a single year, according to the data firm Trepp. Commercial debt maturities are expected to continue rising, with more than $2.2 trillion coming due between now and the end of 2027, Trepp said. Read more.

► Hochul Proposes Four-Year Extension to 421a, $650M ‘Pro-Housing’ Fund in State Budget

Mayor Eric Adams released a $109.4 billion budget proposal for New York City on the same day. New York Gov. Kathy Hochul wants the state to budget in a few carrots, and not many sticks, to encourage housing construction this year, according to the $233 billion budget proposal the governor released Tuesday, according to Commercial Observer. Hochul will once again ask state lawmakers to extend the deadline for developers with ongoing projects to take advantage of the expired 421a tax abatement program, this time by four years to 2031. She also wants to create a $650 million “pro-housing” fund to award communities that increase their housing supply and proposed putting an initial $250 million toward repurposing former correctional facilities and other state properties into affordable housing. New York’s housing shortage is “inexcusable,” Hochul said in a speech unveiling her $233 billion budget proposal and chastised the New York State Legislature for not working to fix the problem. Read more.