Gotham Gazette Sun, 31 May 2020 11:40:11 +0000 Joomla! - Open Source Content Management en-gb (Webmaster) Special Flushing Waterfront District: A Massive Giveaway? as cuomo proposes

Flushing Special Waterfront District protestors

Most Flushing community stakeholders, including at least one Community Board 7 member, learned from a December YIMBY article that a massive waterfront rezoning and special district application had been certified by the City Planning Commission, initiating the seven-month Uniform Land Use Review Procedure that could make it a reality.

Eager to learn the details of the proposed rezoning and new development, the January 7 CB 7 land use committee meeting was attended by so many unfamiliar faces such that the committee chair asked everyone for a brief self-introduction.

While Flushing resident and activist Bobby Nathan was among a handful of attendees who expressed their opposition to the Special Flushing Waterfront District rezoning that evening, many others in subsequent meetings joined him. Initially protestors were dismissed for being “rude and inconsiderate,” then five NYPD officers were called to the January 21 meeting due to a group of protesters holding signs stating sentiments such as “We don’t want your -ty luxury condos.”

The Special Flushing Waterfront District proposal would add nine buildings for a total of 13 towers (four buildings provide a base for two towers each) in a 29-acre site bounded by 36th Avenue to the north, College Point Blvd to the east, 40th Road to the south, and the Flushing Creek to the west. All the proposed towers except for two will exceed the FAA height restrictions in the primary approach path to LaGuardia Airport, which is less than two miles away.

These towers would add 3 million square feet in luxury hotels, residential condos, retail, and office space. The addition of 1,725 luxury residential condos represents more than half of the total volume of luxury condos added to the Flushing market in the past decade. To facilitate pedestrian and vehicular circulation, a network of “publicly accessible” private streets and private extensions of existing mapped streets will connect the cluster of mixed-use towers. 

The development team’s presentations emphasize the introduction of an urban scale and improvements in the public realm as primary community benefits. However, the architectural renderings underscore the utility of the open space, which largely serves to provide relief from the massive building bases lined with ground-level retail storefronts rather than accommodate passive or active recreational use.

The public realm includes a pedestrian path that will connect the new blocks along the Flushing Creek (which remains polluted by combined sewage and stormwater overflows). The other community benefit is a miniscule 61 units of affordable housing at 80% of Area Median Income (AMI) equal to $85,360 for a family of four, while the median household income in downtown Flushing is closer to $41,000.

Despite the massive scale, complicated and layered environmental matters including the remediation of brownfields and the Flushing Creek, construction in a coastal flood hazard area and hurricane evacuation high-risk zone, and outstanding public safety concerns due to the proposed building heights that potentially obstruct airplane navigation, the Department of City Planning issued a negative declaration on the Environmental Assessment Statement, meaning that the agency found “no significant effect on the quality of the environment.”

The negative declaration eliminates two pre-ULURP opportunities for public review and comment on the socioeconomic, environmental, and neighborhood impacts of this complicated and transformative special district and rezoning application.  Because of the negative declaration, Flushing stakeholders were denied an opportunity for a public scoping hearing to comment on topics that should be part of an Environmental Impact Statement, and another opportunity to review and comment on a comprehensive Draft Environmental Impact Statement

The Department of City Planning explained the negative declaration is merited because the development area is a commercial (C4-2) zone and the proposed new density and uses are as-of-right.  Only a small portion of the development site will be rezoned from a manufacturing (M3-1) zone to a mixed manufacturing-residential (M1-2/R7-1) zone.

Department of City Planning’s explanation, however, is deceptively simplistic.  Since the development site is comprised of numerous lots, several that are large (in the range of 100,000 square feet) and deep (as they are bounded by College Point Blvd and the waterfront, reaching 582 feet in depth) and varied in topography and grade (downward slope to the Flushing Creek), the as-of-right zoning is “fairly restrictive.”  Moreover, the 1998 Waterfront Access Plan applies to the site and requires provision of “a shared public walkway, upland connections to the public walkway, and visual corridors.” Given these significant site constraints, a special district designation is essential for the developer-owners to maximize the commercial (C4-2) zoning bulk and density parameters.

To resolve these challenges, the three property owners formed FRWA LLC to work with the Department of City Planning and a small army of master planners, architects, engineers, and lawyers to divide the 29-acre area into buildable sites that facilitate visual corridors connected by privately owned and managed streets.

In order to maximize the commercial (C4-2) as-of-right buildable floor area, the special district requires a waiver to permit 11 towers to exceed the FAA’s strict height restrictions. Moreover, the special district lowers the parking to a commercial (C4-4) zoning that requires one parking space per 1,000 sq. ft. rather than per 300 sq. ft. in a C4-2.

In contrast to City Planning’s position that the proposed density is as-of-right, a Special Flushing Waterfront District to waive FAA restrictions, modify WAP zoning controls, and stipulate additional state and federal environmental approvals is necessary for FRWA LLC to maximize their C4-2 development rights.  In order words, the proposed waterfront district is not truly as-of-right because the development scheme is dependent on numerous waivers and modifications of land use rules.

The planning for the Special Flushing Waterfront District dates back to 2010, when former Queens Borough President Claire Shulman’s Flushing Willets Point Corona Local Development Corporation (FWC LDC) secured a $1.5 million New York State Brownfields Opportunity Areas (BOA) planning grant.

FWC LDC hired ARKF to conduct baseline land use, zoning, and environmental studies of a larger 60-acre study area. In 2014, FWC LDC transferred the remaining $800,000 of the BOA grant to the Department of City Planning to complete these studies and prepare a zoning proposal. During this stage of planning, City Planning dubbed an 11-block portion of the waterfront area (approximately 47 acres) Flushing West, and expanded the scope of the zoning study to include new affordable housing production as part of Mayor de Blasio’s Housing New York plan. Crain’s New York Business reported on this highly unusual arrangement:

“The role of the (FWC LDC) in the planning process and the money it will be paying the department raise questions about who is actually running the show in this part of Queens and how much real estate interests who support the initiative— including members of the development corporation's board—stand to gain.”

flushing creek

Described as “under the radar,” Flushing West joined Brooklyn’s East New York and Jerome Avenue in the Bronx as the first neighborhood rezonings eyed for implementing the mayor’s mandatory inclusionary housing policy.

The Flushing Rezoning Community Alliance led by the MinKwon Center for Community Action, Faith in New York, and St. George's Church was formed in July 2015 to advocate for an inclusive planning process and deeper housing affordability.  It prepared a report highlighting substandard neighborhood conditions and detailing recommendations for an equitable rezoning. Less than a year later on May 27, 2016, City Council Member Peter Koo wrote a letter to then City Planning Commission Chair Carl Weisbrod detailing outstanding infrastructure constraints and pressed the point that the Flushing West rezoning would be equivalent to "stuffing 10 pounds of potatoes into a five pound bag." ​The city ceded to Koo’s request and ended the Flushing West Neighborhood Planning Study.

While Flushing West ceased to be a city-led rezoning, the Department of City Planning continued to work with FWC LDC on a smaller area comprised of the lots owned by the three major developers that formed FRWA LLC. They are F and T Group, United Construction & Development Group, and Young Nian Group LLC, a Chinese transnational development group that purchased the former Korean supermarket Assi Plaza, after several speculative flip sales, for $115 million. In consultation with Community Board 7’s executive committee, this public-private collaboration completed the Flushing waterfront special district and rezoning application.

Department of City Planning served an integral role in preparing a Special Flushing Waterfront District plan that maximizes private development rights and profits. In response to the 2015 Crain’s article that questioned DCP’s consultant role to the FWC LDC, Queens Department of City Planning Director John Young wrote, “In short, the LDC has no veto power over our work. Rather, the public does - via the city's transparent and multilayered public land-use review procedure.”

However, the Department of City Planning’s negative declaration on the EAS has eliminated pre-ULURP opportunities for public review and comment on a complex special district and rezoning application.  In response to my request for clarification on the EAS, the Queens City Planning office suggested I contact an associate at Stroock, the law firm that represents FRWA LLC.

ULURP ends with the New York City Council, and Council Member Koo’s vote will determine the fate of the Special Flushing Waterfront District. In addition to detailing the challenges due to overdevelopment and the outstanding need for affordable housing, Koo’s May 2016 letter noted that developers informed him the Flushing West rezoning represented a downzoning and since "the numbers didn't add up," “it is actually more financially feasible for them to have an empty lot.”

Apparently, City Planning, FWC LDC, and the FRWA LLC’s army of experts figured out how to make the numbers work to move ahead with the waterfront district plan. The question now is, will Council Member Koo maintain a principled position and reject a rezoning that augments environmental risks and socioeconomic burdens, and supercharges the gentrification of Flushing? 

Tarry Hum is Professor and Chair of the Urban Studies Department, Queens College, City University of New York. On Twitter @TarryHum.

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Special Flushing Waterfront District: A Massive Giveaway? Thu, 30 Jan 2020 05:00:00 +0000
Protecting the Soul of Flushing, and Beyond soul flushing 

132-40 Sanford Ave in Flushing, a Treetop Development-owned rent-stabilized building

After more than a year of intensive community engagement, Flushing’s "under the radar" rezoning study of an 11-block waterfront area dubbed Flushing West was suddenly withdrawn by the Department of City Planning (DCP). The decision was prompted by a letter from City Council Member Peter Koo, who outlined a comprehensive list of outstanding concerns including “that the numbers don’t add up” for developers who perceive that the rezoning amounts to a “downzoning.”

DCP’s decision to pause the study elicited mixed reactions, in part because the rezoning study did spotlight the heavy infrastructural strain of Flushing’s white hot real estate market and unified multiple community stakeholders to protect the neighborhood’s rapidly diminishing affordable housing and advocate for equitable community development.

Mayor Bill de Blasio recently penned a Huffington Post column proposing that in the current market climate of hyper-gentrification, the city’s existential identity is defined by residents of public housing and rent-stabilized apartments. As the mayor opines, “It’s in protecting these people that we protect the soul of our neighborhoods.” I dare say the soul of Flushing has been under attack and protecting its diverse, working-class residents is long overdue.

Like many neighborhoods of color, affordable housing in Flushing is threatened by predatory equity investment. Investors target “underperforming” and “undervalued” multi-family residential buildings in strategic markets (i.e., “up and coming” and gentrifying areas). They count on capturing unrealized market value through replacing current tenants with those that can afford to pay higher rents or reselling properties at huge profits after making nominal capital improvements. Treetop Development LLC, one of the largest real estate companies in the New York City area, has a business model based on these “multi-faceted” strategies, to the detriment of communities.

Treetop’s online profile notes, “We actively acquire and transform existing rental properties in the region by modernizing living spaces, common areas and building systems before returning them to market. We are well-known for creating cutting-edge projects in neighborhoods coming up as desirable new addresses.” Since its establishment in 2005, Treetop Development LLC has been one of the region’s most active investors in multi-family properties including federally subsidized, project-based Section 8 developments and rent-regulated buildings.

In the past few years, Treetop has acquired and flipped numerous rent-stabilized buildings, generating huge profits. In July 2013, Treetop purchased 17-27 West 125th Street, a 50-unit rent-stabilized building in Harlem for $13.6 million. According to Treetop’s website, “17-27 West 125th Street boasts large apartments, which will be renovated upon vacancy to include new wide plank hardwood flooring, modern and chic kitchens and bathrooms, and stainless steel appliances.” After spending only $1.5 million on “signature” capital improvements, Treetop sold the building to Thor Equities for a whopping $30.6 million in August 2015 (a $17 million gross profit after 25 months of ownership).

Similarly in 2014, Treetop acquired a portfolio of six rent-stabilized buildings with a total of 139 rental and seven retail units in Washington Heights for $23 million. These properties, referred to as the "Columbia Audubon" portfolio due to their proximity to Columbia University Hospital and Audubon Avenue, were sold a little over a year later, in December 2015, for $36 million to a group of private investors.

In describing Treetop’s strategy to purchase and flip a multi-family portfolio in Central Harlem, co-principal Adam Mermelstein explained, “This portfolio is the perfect example of how picking the neighborhoods, identifying underutilized properties, effective management and recognizing the right time to buy and sell can pay tremendous dividends.” The portfolio purchased by Treetop for $22 million in 2013 was comprised of 12 five-story walk-up apartments and included rent-stabilized buildings on St. Nicholas Ave and Frederick Douglass Blvd. Two years later, Treetop sold the portfolio to a newly formed investment firm for $35 million, generating a profit equal to 59% of Treetop’s original purchase price.

Treetop Development LLC was featured in Crain’s New York Business for its enormous $138.8 million acquisition of eight rent-stabilized buildings in Queens representing the county’s largest multi-family transaction in 2015. Seven of the rent-stabilized buildings (totaling 489 apartments) are clustered in a three-block area near downtown Flushing and one building is in Elmhurst. Treetop wasted no time in making cosmetic upgrades to common areas such as lobbies and hallways, and renovating vacated apartments. A recent visit and conversation with a long-time, rent-stabilized tenant in one of Treetop’s Flushing buildings indicated that the common areas had already undergone capital improvements which permitted the prior landlord to increase rents.

Since Treetop’s acquisition, tenants have reported construction-related disruption and dust, spotty heat and hot water, and a sudden increase in vacant apartments. City Council Member Koo’s office has submitted a list of complaints pertaining to these buildings to 311.

This past year has been very busy for Treetop as it expands its extensive portfolio of rent-stabilized buildings in Harlem and Flushing, sold “select holdings at high profit margins,” and refinanced some properties through mortgage consolidation, as in the case of four Brooklyn properties including 188 South 3rd St., a rent-stabilized building in Southside Williamsburg. Among its early acquisitions in New York City’s multi-family market, Treetop paid a little over $5 million in August 2006 for the 41-unit building, intending to convert the apartments into upscale rentals. A few months later, various publications including the Metropolitan Council for Housing’s newsletter detailed the reasons why Treetop’s Mermelstein was named the city’s “most abusive landlord” by a group of tenant advocacy organizations.

Treetop’s 188 South 3rd St. was in the news again in July 2013 when a three-alarm fire erupted between the ceiling of the top floor and the roof. Over one hundred firefighters responded to the early morning blaze that took approximately two hours to extinguish. Several tenants were interviewed noting long-standing electrical problems and non-professional repairs. Charlin Ramos said to Brooklyn News 12, “I knew this was going to happen, I predicted it was going to happen.” Jacqueline Jimenez claimed Treetop ignored numerous calls from tenants. Extensive damage required many tenants to vacate and according to the Department of Buildings, the current status of 188 South 3rd St. is that a partial vacate order remains in effect as well as civil penalties and an outstanding Class 1 violation defined as “immediately hazardous.”

The same weekend that Mayor de Blasio’s column was published by Huffington Post, the New York Times published an opinion piece titled, How to Force Out Rent-Controlled Tenants. The timing and message of these articles underscore the precarity of rent-regulated housing that has been affordable to working-class New Yorkers. Key forces destabilizing the city’s neighborhoods, especially its communities of color, are the tactics deployed by predatory equity investors such as Treetop Development LLC. While the Flushing West rezoning study provided an opportunity to highlight the outstanding need for affordable housing, the current state of the neighborhood’s rent-stabilized housing requires immediate action to protect long-time tenants, or as the mayor would describe them, the soul of Flushing.

In early May, the Flushing West Community Alliance (FRCA) released a comprehensive research report that includes anti-harassment and anti-displacement measures. Based on numerous discussions with rent-stabilized tenants, FRCA recommends that landlords with a history of tenant harassment should not be able to receive permits necessary for renovations that will enable them to increase rents. At minimum, the four bills introduced to the New York City Council earlier this year, including Brad Lander’s “Certificate of No Harassment,” should be acted on immediately. Although the Flushing West rezoning process is temporarily on hold, speculative real estate market conditions have not abated which means rent stabilized tenants need strengthened protections now.

Tarry Hum is a professor at the City University of New York and author of Making a Global Immigrant Neighborhood: Brooklyn's Sunset Park.

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Protecting the Soul of Flushing, and Beyond Wed, 22 Jun 2016 04:00:00 +0000
Flushing’s Affordable Housing at Risk Flushing town hall

Last week, the New York City Council approved the contested East New York rezoning - the first of 15 proposed neighborhood rezonings through which Mayor de Blasio intends to advance his goal of preserving 120,000 units of affordable housing and producing 80,000 new units at below-market rents. Described by some as a rezoning taking place “under the radar,” the Department of City Planning (DCP) has been conducting a planning study and holding numerous community town halls on a ten-block area of Queens dubbed “Flushing West.”

This proposed rezoning would have a transformative impact on Flushing, a densely populated, pan-Asian immigrant neighborhood with a sizable Latino population and a small but historic African-American community. Although DCP recently postponed the April certification of the Flushing West rezoning plan (which would have initiated the uniform land use review procedure (ULURP), the plan continues to move forward and remains a key piece of the mayor’s controversial housing program.

As the rezoning of Flushing West moves forward, the existing affordable housing stock there is at risk.

After much public debate and protest, Mayor de Blasio’s mandatory inclusionary housing (MIH) plan was approved by the New York City Council in March. MIH is a citywide policy that requires residential developers in newly upzoned areas to provide some below market-rate housing, either inside a new development or somewhere off site. As MIH (and the related Zoning for Quality and Affordability (ZQA) plan) moved through ULURP, communities contested the plan on numerous grounds: it would not build enough affordable housing; the affordable housing that would be built would be too expensive for those most in need; increased density would exacerbate transportation, education, and infrastructure problems; large new buildings would alter local streetscapes; and, most importantly, the plan would spur luxury development and hasten gentrification.

Relative to the vigorous and sustained public debate on these issues, there has been little public discussion on the ways that the city’s proposed rezonings are already impacting New York City’s largest form of affordable housing: rent regulation through rent control and rent stabilization.

Rent regulation accounts for nearly all of Flushing’s affordable housing. The neighborhood’s white-hot real estate market, however, increasingly threatens these rent-stabilized apartments.  DCP’s proposed rezoning - which links the production of affordable housing with the construction of thousands of luxury units - has only increased land speculation and, therefore, landlords’ imperative to deregulate their holdings. Though the rezoning has been paired with an increase in funding for anti-eviction legal services, it has already catalyzed a number of hyper-speculative real estate transactions in downtown Flushing, including within the rezoning area.

Based on the 2014 state Division of Housing and Community Renewal (DHCR) list of rent-regulated buildings, there are 388 rent-stabilized buildings in Flushing. This list, however, includes buildings that have partially converted to co-ops, meaning some units are owned by residents. Conversion of rental buildings to cooperatives requires a minimum of 15 percent of tenants opting to purchase their apartments. DHCR lists properties as rent stabilized as long as there is at least one rent-stabilized unit in the building.

Based on a review of city Department of Finance sales data, 81 buildings, including five that converted to cooperative in the past year or so, recorded 1,198 apartment sales since 2010. In addition to the hundreds of co-op sales in rent-stabilized buildings, 42 buildings (with a combined total of 1,800 rent-stabilized apartments) were also sold during the study period of 2010 to January 2016. The sold buildings represent a sizable 11 percent of all of Flushing’s rent-stabilized buildings.

In December 2015, a massive sale of eight rent-stabilized buildings, all but one located a few blocks from Flushing’s waterfront, was covered by Crain’s New York Business. These rent-stabilized buildings, comprising 488 apartments, are clustered on Flushing’s Sanford Avenue and were sold to an investor group represented by New Jersey-based Treetop Development LLC. ACORE, a California-based investment fund established in May 2015 - only a few months before the Sanford Avenue purchases - financed the hefty $138.8 million purchase. ACORE is capitalized by a $1.6 billion commitment from Delphi Financial Group Inc., a wholly-owned subsidiary of the Tokio Marine Group, Japan’s largest publicly traded insurer.  The purchase of seven Sanford Avenue rent-stabilized buildings, financed by transnational private equity investors, illustrates how multi-family, rental properties in the outer boroughs are treated as global investment vehicles with tremendous potential profits.

In order for those profits to be realized, however, rents will have to increase substantially, and in all likelihood, the apartments will be deregulated. Although Treetop Development LLC principal Adam Mermelstein reassured, “We’re not running after tenants like some landlords do, trying to induce turnover on the apartments to get them to market rate,” their $10 million investment in “an intensive capital expenditures program” portends displacement. Treetop Development LLC plans to renovate apartments and landscape gardens in order to “remake the Flushing Portfolio into one of the premier residential addresses in Flushing, Queens.” This rebranding language underscores that so-called “major capital improvements” in rent-stabilized buildings are a primary landlord strategy to permanently raise rents and facilitate tenant turnover.

This speculative activity is not confined to privately-owned buildings. Queens College students learned from a local resident that tenants were recently evicted from 132-30 Sanford Avenue. This building is listed on two real estate websites as for sale, with one site noting that the building is currently under contract. Further research indicated the building is owned by one of Asian Americans for Equality (AAFE)’s tax-exempt organizations - Community Homes Housing Development Fund Company Inc. According to the building’s deed, AAFE purchased the building in 2008 for $3.5 million. Online realtor descriptions highlight the gap in current and potential rent revenues as a key selling point: “The average monthly rent is $1,023 month, approx. 76% of the current market value, offering tremendous upside potential.” The building is now selling for $9.8 million - a 180 percent increase in just eight years.

In October 2015, DCP completed a Draft Scope of Work for an Environmental Impact Statement, which identified 13 projected development sites and included a breakdown of anticipated outcomes based on the proposed upzoning. On these 13 sites, DCP expects the production of 2,062 residential units (excluding 1,254 units of luxury housing currently under construction at Sky View Parc) of which 516 would be affordable to households earning 60 percent of AMI ($54,360 annual income for a family of four) or 619 units affordable to households earning 80 percent AMI ($69,040 annual income for a family of four).

DCP’s Draft Scope of Work was completed before the City Council added the option of 20 percent of units affordable at 40 percent AMI, which would mean the Flushing West rezoning may result in 412 units affordable to a family of four with an annual income of $36,240. The Flushing Rezoning Community Alliance, a coalition of nonprofits, unions, and churches, fought hard for this option because the median household income for downtown Flushing residents is just $34,428. The final Flushing plan may also include additional HPD subsidies toward deeper affordability, but the extent, quantity, and longevity of those subsidies is yet to be determined.

With Flushing’s remaining rent-regulated apartments at stake, it is important to look at the balance of what is being offered now: the proposed rezoning will produce thousands of market-rate, luxury housing units; a mere 412 apartments will be affordable to average Flushing residents (and then only if the local City Council member and developers choose the newly added option); and nothing at all will be built for families making below-median wages.

The neighborhood’s wholesale transformation, which has already begun in expectation of an upzoning, would sweep rent-regulated housing up in its wake and trigger even more harassment, rent hikes, and evictions than the neighborhood has already seen. This scenario demonstrates that Mayor de Blasio’s MIH program is less about preserving neighborhood affordability than turning working-class spaces into luxury enclaves, with small pockets for the middle class.

In Flushing’s overheated real estate market, where even nonprofits enrich themselves by selling rent-stabilized buildings for enormous profits, this planned rezoning is already adding fuel to fires of gentrification and displacement. The addition of a few hundred units of affordable housing could not possibly stem the transformative effects of global finance and commercial real estate speculation, and the preservation program the city is currently pursuing will do little to protect rent-regulated apartments.

City planners must stop acting as if the negative consequences of upzonings on rent-regulated housing will be mitigated by the paltry provision of new quasi-affordable units, or by increased investments in legal services (though the latter are, of course, important). Instead, we need to prioritize the preservation of rent-stabilized apartments and the production of truly affordable housing, decoupled from market-rate development and its attendant impacts on neighborhood land markets.

Tarry Hum is a Professor at the City University of New York and author of Making a Global Immigrant Neighborhood: Brooklyn's Sunset Park.

Samuel Stein is a PhD student in Geography at the Graduate Center, City University of New York.

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Flushing’s Affordable Housing at Risk Sun, 01 May 2016 04:00:00 +0000