Skip to main content

In lawsuit, Forest City claims arena, land around it worth far less than city assessments; can site for 32-story tower be worth just $6,000?

Could the lot for Forest City Ratner's planned 32-story, 363-unit first tower on the Atlantic Yards site be worth just $6,000?

That's what the developer is claiming, according to legal papers filed recently in state Supreme Court in Brooklyn. The city values the site at more than $400,000, calculating back from an ssessment, set at 45% of gross sales price, of $184,050.

(Documents filed with the Department of Buildings confirm that the site for the tower is Block 1127, Lot 56, or461 Dean Street.)

Could the Barclays Center and its land be worth just $111 million, while the city Department of Finance valued it at about $741 million, with an assessment (45% of value) at about $334 million, as reported by DNAinfo.com?

Remember, the Barclays Center is commonly called a $1 billion building but has been described by the developer as a $934 million project, involving "the cost of this building, the transit connection, the site work, etc."

In the 2009 Modified General Project Plan, Empire State Development, the state agency overseeing the project, said the arena would cost $772 million.

[Update] The New York Post reported:

A Forest City spokesman last night claimed the driving force behind the suit is that the city mistakenly included various properties near the arena on regular tax rolls when they should have been part of the arena’s tax-friendly PILOT program.

Lawsuit raises questions

In a scoop headlined Barclays Center Owners Say City Grossly Overvalued Arena, James Fanelli of DNAInfo reported yesterday on a series of suits (excerpts below) filed in state Supreme Court in Brooklyn, in which affiliates of Forest City Ratner are trying to get property assessments overturned:
The petition says Brooklyn Events asked the city's Tax Commission in the spring to have the property assessment lowered, but the appeal was denied. The petition calls the city's assessment "illegal" and "erroneous."
The whole enterprise is confounding on several counts, notably because Forest City doesn't pay taxes on the arena, only PILOTs (payments in lieu of taxes) to pay off arena construction via tax-exempt bonds.

And Forest City's justifications require a tax attorney to parse: the developer and its affiliates claim various exemptions and special provisions in the tax code beyond my expertise to assess. Forest City wouldn't offer any explanations for the lawsuit to DNAinfo, but the Observer followed up and got this quote:
“The city is still in the process of determining the assessment and until that is concluded we will not comment,” Forest City spokesman Joe DePlasco told The Observer when asked about the discrepancy.
Assessments out of whack, twice?

It is clear that the Department of Finance has both raised and lowered assessments significantly.

 For example, in the tax year ending this June, that Dean Street lot destined for the first tower was assessed by the city at $21,687 (45% of value), while Forest City claimed it was worth $6,000.

Now the assessment is $184,050, an increase of about 8.5 times.

Then again, as I reported in June 2009, the row house at 461 Dean was purchased by FCR on 6/2/04, along with a neighboring building, for $3.8 million, and demolished in the spring of 2006. In 2006, under classification C0 (three-family house), it had a market value of $1.148 million.

In the next year, the classification changed to V1, with a market value of $95,000; the land was assessed at $42,750. In 2008, those numbers rose to $143,000 and $64,350. In the third year, the numbers rose to $998,200 and $449,190.

Shouldn't the site for a 32-story tower be worth a heck of a lot more?

Ay Tax Petition

Comments

Popular posts from this blog

Barclays Center/Levy Restaurants hit with suit charging discrimination on disability, race; supervisors said to use vicious slurs, pursue retaliation

The Daily News has an article today, Barclays Center hit with $5M suit claiming discrimination against disabled, while the New York Post headlined its article Barclays Center sued over taunting disabled employees.

While that's part of the lawsuit, more prominent are claims of racial discrimination and retaliation, with black employees claiming repeated abuse by white supervisors, preferential treatment toward Hispanic colleagues, and retaliation in response to complaints.

Two individual supervisors, for example, are charged with  referring to black employees as “black motherfucker,” “dumb black bitch,” “black monkey,” “piece of shit” and “nigger.”

Two have referred to an employee blind in one eye as “cyclops,” and “the one-eyed guy,” and an employee with a nose disorder as “the nose guy.”

There's been no official response yet though arena spokesman Barry Baum told the Daily News they, but take “allegations of this kind very seriously” and have "a zero tolerance policy for…

Behind the "empty railyards": 40 years of ATURA, Baruch's plan, and the city's diffidence

To supporters of Forest City Ratner's Atlantic Yards project, it's a long-awaited plan for long-overlooked land. "The Atlantic Yards area has been available for any developer in America for over 100 years,” declared Borough President Marty Markowitz at a 5/26/05 City Council hearing.

Charles Gargano, chairman of the Empire State Development Corporation, mused on 11/15/05 to WNYC's Brian Lehrer, “Isn’t it interesting that these railyards have sat for decades and decades and decades, and no one has done a thing about them.” Forest City Ratner spokesman Joe DePlasco, in a 12/19/04 New York Times article ("In a War of Words, One Has the Power to Wound") described the railyards as "an empty scar dividing the community."

But why exactly has the Metropolitan Transportation Authority’s Vanderbilt Yard never been developed? Do public officials have some responsibility?

At a hearing yesterday of the Brooklyn Borough Board Atlantic Yards Committee, Kate Suisma…

Barclays Center event June 11 to protest plans to expand Israeli draft; questions about logistics

At right is a photo of a poster spotted in Hasidic Williamsburg right. Clearly there's an event scheduled at the Barclays Center aimed at the Haredi Jewish community (strict Orthodox Jews who reject secular culture), but the lack of English text makes it cryptic.

The website Matzav.com explains, Protest Against Israeli Draft of Bnei Yeshiva Rescheduled for Barclays Center:
A large asifa to protest the drafting of bnei yeshiva in Eretz Yisroel into the Israeli army that had been set to take place this month will instead be held on Sunday, 17 Sivan/June 11, at the Barclays Center in Downtown Brooklyn, NY. So attendees at a big gathering will protest an apparent change of policy that will make it much more difficult for traditional Orthodox Jewish students--both Hasidic (who follow a rebbe) and non-Hasidic (who don't)--to get deferments from the draft. Comments on the Yeshiva World website explain some of the debate.

The logistical questions

What's unclear is how large the ev…

Atlanta's Atlantic Yards moves ahead

First mentioned in April, the Atlantic Yards project in Atlanta is moving ahead--and has the potential to nudge Atlantic Yards in Brooklyn further down in Google searches.

According to a 5/30/17 press release, Hines and Invesco Real Estate Announce T3 West Midtown and Atlantic Yards:
Hines, the international real estate firm, and Invesco Real Estate, a global real estate investment manager, today announced a joint venture on behalf of one of Invesco Real Estate’s institutional clients to develop two progressive office projects in Atlanta totalling 700,000 square feet. T3 West Midtown will be a 200,000-square-foot heavy timber office development and Atlantic Yards will consist of 500,000 square feet of progressive office space in two buildings. Both projects are located on sites within Atlantic Station in the flourishing Midtown submarket.
Hines will work with Hartshorne Plunkard Architecture (HPA) as the design architect for both T3 West Midtown and Atlantic Yards. DLR Group will be t…

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…

So, Forest City has some property subject to the future Gowanus rezoning

Writing yesterday, MAP: Who Owns All the Property Along the Gowanus Canal, DNAinfo's Leslie Albrecht lays out the positioning of various real estate players along the Gowanus Canal, a Superfund site:
As the city considers whether to rezone Gowanus and, perhaps, morph the gritty low-rise industrial area into a hot new neighborhood of residential towers (albeit at a fraction of the height of Manhattan's supertall buildings), DNAinfo reviewed property records along the canal to find out who stands to benefit most from the changes.
Investors have poured at least $440 million into buying land on the polluted waterway and more than a third of the properties have changed hands in the past decade, according to an examination of records for the nearly 130 properties along the 1.8-mile canal. While the single largest landowner is developer Property Markets Group, other landowners include Kushner Companies, Alloy Development, Two Trees, and Forest City New York.

Forest City's plans unc…