Brooklyn leaders say NY can't suspend millions in affordable housing penalties for Atlantic Yards

Brooklyn community leaders and elected officials say the state’s economic development arm had no right to waive millions in monthly penalties over a developer’s failure to complete affordable housing at Brooklyn’s Atlantic Yards complex, and they say they may sue to force the state’s hand.

Several local lawmakers and the community coalition BrooklynSpeaks point to a 2014 agreement that they say prohibits New York’s Empire State Development Corporation from “unilaterally” suspending the $1.75 million-per-month fines they were supposed to collect from developers who failed to complete nearly 900 units of affordable housing by May 31, 2025.

That deadline came and went, with a reprieve from the state. Now, Fifth Avenue Committee Executive Director Michelle de la Uz, who signed the agreement more than a decade ago, said she wants to meet with Empire State Development to hear their rationale.

“If they have some endgame that is actually aligned with the public interest, it would be good to hear that now,” de la Uz said. “Because the longer they take to lay that out, the more likely we are to sue.”

De la Uz, told Gothamist last week that Empire State Development Corporation cannot act “unilaterally” to suspend the penalties without their consent.

Another signee of the agreeement, Prospect Heights Neighborhood Development Council Chair Gib Veconi, said on Tuesday that he and his fellow members may consider legal action if the state doesn’t meet their demands.

“We would prefer to work constructively with the state to bring about a result consistent with the promises,” Veconi said. “But we always keep our legal options open.”

The current and since-violated agreement came about after BrooklynSpeaks threatened to sue over potential fair housing violations in 2014.

Under the terms, Empire State Development had pledged to impose $2,000-a-month fines, known in legal parlance as “liquidated damages,” against the owner of the Atlantic Yards project — since rebranded as “Pacific Park” — if they failed to complete 876 units of affordable housing by a May 31, 2025 deadline. The fines would total more than $1.75 million per month.

Assemblymember Jo Anne Simon, a Brooklyn Democrat and a co-founder of the BrooklynSpeaks coalition, said the state can’t waive the penalties without consent from the community groups involved in the process for the past 11 years.

“I do understand they’re in the middle of trying to work something out with a new developer, but we have a signed settlement agreement. They can’t just decide not to do this,” Simon said. “What happened is exactly what we were concerned would happen.”

The apartments were supposed to be located in six new towers constructed atop a platform built over the railyards along Atlantic Avenue. But construction of the platform hasn’t begun and the project changed hands from the original developer, Forest City Ratner, to the China-based firm Greenland Holdings. Greenland faced financial peril and defaulted on project loans in the ensuing decade.

Greenland has not responded to multiple messages sent through its website, or to a phone call to its Los Angeles office. Two phone numbers listed on the company’s website for offices in Manhattan and Brooklyn are now disconnected.

Real estate developer Related Companies, which has experience decking over a rail yard to construct Hudson Yards, considered joining the project, but dropped out earlier this year.

The consortium in control of the sputtering project now includes the firm Cirrus Real Estate Partners.

Cirrus Real Estate Principal Joseph McDonnell did not respond when reached by text message.

Empire State Development spokesperson Emily Mijatovic told Gothamist the various companies involved have submitted an application to approve a new developer to take on the project.

"Empire State Development shares the community’s frustration with the pace of construction of affordable housing at Atlantic Yards,” Mijatovic said. “Let us be clear: The liquidated damages have not been waived and ESD retains the right to collect them.”

Mijatovic said Greenland and its debt holders have until August to transfer the development rights. The state will also require them to begin a new community engagement process to avoid paying the monthly fines by December.

“The state expects nothing less than progress to be made and milestones met once the lender has an approved qualified development team capable of moving this long overdue project forward,” she added.

This story has been updated with new information.