Eminent Domain in Brooklyn. So what else is new you say? As we all know, there’s lots of demand for real estate in Brooklyn these days; and if all goes according to plan, Greenland Forest City, the builders of the $5 billion Pacific Park project, will be building a tower on a 1.5 million-square-foot site. The proposed tower at 590 Atlantic Ave. would be the largest ever-built in Brooklyn, and could bring a distinctly Manhattan-like aspect to the corner of Flatbush and Atlantic avenues.
The company is looking to use development rights from the Barclays Center Plaza, which is the triangular open space located directly in front of the Brooklyn Nets’ arena. It would complete an office building at the Atlantic Avenue location. Currently, there are P.C. Richard and Modell’s Sporting Goods stores located on the site. Originally, the office the tower site was approved in 2006 to be a maximum of 439,050 square feet, according to a report by the Atlantic Yards/Pacific Park Report regarding pending eminent domain proceedings for Modell’s and P.C. Richard & Son.
In January 2016, P.C. Richard filed a lawsuit against Forest City Ratner over the state’s eminent domain condemnation of the property. The retailer claims that the developer promised in 2006 to provide space at the new development if the state were to condemn the site for the Atlantic Yards project. The developer has subsequently countered that the 2006 agreement was non-binding.
The deal hinges on the success of this transfer of development rights, which we previously heard about in a Real Deal report. Forest City is looking into transferring 1.1 million square feet of development rights to the property to make way for the larger complex. According to the report, there is a joint-venture between Greenland Group and Forest City Ratner which may take over the site. Cleveland-based Forest City Realty Trust will likely transfer its interest in 590 Atlantic Avenue to the joint venture, according to journalist Norman Oder’s blog Atlantic/Pacific Report.
In November, Forest City announced that it would be delaying construction on the remaining Pacific Park buildings due to the weakening residential market. Greenland Group holds a 70 percent stake in the project, with Forest City Ratner holding the remaining 30 percent stake.
Two mixed-use towers are being considered for the site, which would be developed through the joint venture. A smaller 250-feet tall and 439,050 square feet tower is already approved at the site, known as Atlantic Center Site V or Site 5.
The plan for the office building will require an amendment to the General Project Plan for Atlantic Yards/Pacific Park, to be approved by the Empire State Development Corp., the state agency that oversees the project. Before construction can begin an environmental impact statement for the building will be needed.
In late 2016, Forest City Realty Trust executives announced a $307.6 million impairment — a drop in asset value — largely due to Pacific Park Brooklyn, citing high construction costs, a weakening residential market and uncertainty over 421a.