The Real Deal New York

Greenland boss says Pacific Park likely to break ground on new buildings in 2017

Hu Gang’s comments mark departure from Forest City’s cautious stance
By Konrad Putzier | June 08, 2017 05:50PM

From left: Greenland’s Hu Gang, Forest City’s David LaRue and Vanderbilt railyard and the Barclays Center (credit: Getty Images)

Pacific Park’s developers will likely break ground on one or two new buildings by the end of the year, Greenland USA’s CEO Hu Gang said Thursday.

Gang added that the next building will likely be a rental building under the Affordable New York tax incentive program, with 25 percent of units set aside as affordable. He did not specify which site the developers plan to build on.

Gang’s comments are a departure from Forest City Realty Trust CEO David LaRue’s more cautious public stance. Speaking at REITWeek Monday, LaRue said there is no immediate timetable for further construction at the megaproject and that the partners will wait and see how the market responds to 30,000 new development residential units hitting the market across Brooklyn and Queens.

“As we go forward we’re going to be able to evaluate whether or not those 30,000 units impact the market to such a degree that we should pause,” LaRue said.

“We really don’t have to do anything,” he later added.

A spokesperson for the partnership said “Forest City and Greenland USA continue to work in lockstep on Pacific Park Brooklyn – we both are committed to completion of the project and will move forward together with each individual building considering all critical factors like market conditions and 421a implications.”

In 2014, Greenland USA bought a 70-percent stake in the mixed-use project, formerly known as Atlantic Yards, and formed a joint venture with Forest City Realty Trust’s New York subsidiary Forest City Ratner. The partners have completed or are close to completing three buildings: a condominium project at 550 Vanderbilt and two rentals at 535 Carlton Avenue and 38 6th Avenue. But further development was delayed amid the expiration of the 421a tax abatement program in early 2016 and a slowing Brooklyn residential market.

The partners originally planned to break ground on a condo building at 615 Dean Street and a rental building with a public school at 664 Pacific Street in late 2015. That didn’t happen and construction has yet to begin on either site. Sources close to the company say plans for the two sites are likely to change to take into account the new tax incentive program.

In November 2016, LaRue announced unspecified delays to the project, citing an uncertain market.

“There is new supply coming into Brooklyn,” he said during an earnings call. “The market will end up absorbing it but it will have the normal effect that supply has on any given market.”

Forest City, former a publicly listed C-Corp, became a real estate investment trust in early 2016 and has since announced plans to sell its retail and government-assisted housing portfolios.