New York state’s economic authority is again waiving millions of dollars in penalties against the developer behind Brooklyn’s stalled Atlantic Yards project after it failed to meet yet another deadline for delivering hundreds of affordably priced apartments at the site.
The companies that control the development just east of the Barclays Center faced more than $1.75 million in fines for failing to construct 876 units of affordable housing by May of this year, under the terms of a 2014 legal agreement. But as the previous deadline approached, New York’s Empire State Development instead opted to lift the fines — which would by now total more than $5.25 million — as long as the controlling company transferred development rights by Aug. 1.
Under its legal agreement, Empire State Development was supposed to deposit that money in a fund overseen by the Department of Housing Preservation and Development and earmarked for new affordable housing elsewhere in Brooklyn.
Now that latest deadline has also come and gone without a new developer in place. Officials from the state-controlled authority said they have yet to approve a new developer and will again waive the penalties.
“Progress has been made toward the transfer, and ESD continues to work closely with the parties involved to finalize the process,” Empire State Development spokesperson Emily Mijatovic said in an email. “Our focus remains on ensuring the project moves forward, meets its obligations and delivers on its commitments to the community.”
Mijatovic said the agency still reserves the right to collect the fines, but did not respond when asked about what circumstances would lead authorities to do so.
The state’s decision to waive the fines sparked outrage among members of the community groups that negotiated the 2014 legal agreement, which included the May 2025 affordable housing deadline. Several local elected officials, including three members of Congress, have urged Gov. Kathy Hochul and Empire State Development to collect the cash.
At least two New York City mayoral candidates have also demanded that the state collect the fines of $2,000 per month for each incomplete apartment, while two others stopped short of pressing the state for the money. Independent candidate Andrew Cuomo, who oversaw the project and the 2014 agreement as governor, did not respond to questions about the deal-gone-bad.
Republican candidate Curtis Sliwa said the state “should collect every dollar owed,” while independent candidate Jim Walden, a former federal prosecutor, called the decision to halt the fines a “rot on public trust.”
Two other leading candidates declined to weigh in on when or if the state should collect the fines.
Dora Pekec, a spokesperson for Democratic nominee Zohran Mamdani, said Mamdani “believes developers should be held accountable for their commitments and will use every tool at his disposal to build the affordable housing our city desperately needs.”
Mayor Eric Adams’ spokesperson, William Fowler, said city officials are “hopeful” that Empire State Development and new developers are closing in on a deal for the site.
“We look forward to seeing more progress as the state and development team work towards ultimately delivering the affordable housing that New Yorkers want and expect from Atlantic Yards,” Fowler said.
The Department of Housing Preservation and Development, which is losing out on millions for the affordable housing trust fund outlined in the legal agreement, referred comment to City Hall.
Asked about the stalled affordable housing during an appearance on “The Brian Lehrer Show” last Friday, Deputy Mayor Adolfo Carrion clarified it was a state problem.
“It was a New York state government action and I think that’s obviously different from the city,” Carrion said.
The delay is the latest twist in a saga that stretches back over two decades, and the lack of accountability for the failed commitments to build affordable housing continues to cast a shadow over more recent state-led development plans.
The Chinese development firm Greenland Holdings controls the rights to build the mandatory housing above the Vanderbilt trainyard but has defaulted on tens of millions of dollars in loans to its investors. Additional companies and investors, including the company Cirrus Real Estate Partners, have acquired stakes in the proposed project. Cirrus is now attempting to partner with the developer LCOR to take over, the Real Deal reported. Cirrus and its managing partner Joseph McDonnell did not respond to requests for comment.
The plan first depends on building a platform over the active rail yard running between Atlantic Avenue and Pacific Street, a project rebranded as “Pacific Park.” After years of delay, Greenland said it would begin constructing the platform in 2020. That didn’t happen.
Greenland took control of the project in 2014 and was bound by the legal agreement between the state-run economic development authority, local community groups and the previous site developer, Forest City Ratner.
Empire State Development will meet Wednesday afternoon with a group of local residents and community leaders tasked with making recommendations for the Atlantic Yards project. Empire State Development officials told Gothamist they will not be making any announcements at the meeting.
But community leaders involved in the original 11-year-old agreement to construct affordable housing by May of this year said they want answers about the latest holdup.
The local residents, who organized more than a decade ago as BrooklynSpeaks, say they are considering legal action to compel the state to impose the penalties. BrooklynSpeaks has not yet filed a lawsuit.
Gib Veconi, a member of BrooklynSpeaks and the taskforce meeting with Empire State Development Wednesday, said he hopes to learn “something substantive.”
“As more time has gone by, I am hopeful there will be clarity,” Veconi said. “What progress has been made?”
(Except for the headline, this story has not been edited by PostX News and is published from a syndicated feed.)
