The leaner, meaner real-estate market has forced one of the city’s major developers to eliminate more than 200 affordable housing units from his 660-apartment complex in Downtown Brooklyn.
John Catsimatidis, the billionaire owner of the Gristedes supermarket chain and possible mayoral candidate, told The Brooklyn Paper that he is moving ahead with his project, which was halted in February, and that it is now no longer the mixed-income community he originally proposed.
The result will yield “about the same number” of apartments, but instead of two towers, the grocery magnate will build four smaller, all luxury apartment buildings, he said.
Construction of the first, 12-story, 100-unit building will begin imminently on Myrtle Avenue east of Flatbush Avenue Extension, said Catsimatidis.
“It’s a $500-million project, except that no bank has $500 million to loan, so we decided to break it up into four buildings,” he said.
He also couldn’t scrounge up the city and state affordable housing bonds, so he cast off those politically popular below-market-rate units.
The loss of those subsidized apartments provides a cautionary tale for other mega-developments, like Bruce Ratner’s Atlantic Yards, where thousands of affordable units have been indefinitely delayed, that promises of below-market-rate housing are only as strong as the availability of taxpayer subsidies.
As a result, planners are treading cautiously.
“We hope that [developers] will make every effort to work with housing agencies to maximize affordability,” said Joe Chan, president of the Downtown Brooklyn Partnership, the quasi-governmental agency guiding development in the neighborhood.
Housing experts voiced fresh concerns about the prospects for affordable housing.
“It’s true that there is more demand for housing bonds than there used to be,” said Brad Lander, director of the Pratt Center for Community Development, but “there are many resources to developing affordable housing.
“I have not heard about other projects except for the [Catsimatidis and Atlantic Yards] projects where developers’ promises for affordable housing were in jeopardy,” added Lander, an affordable housing advocate.
That doesn’t help Catsimatidis.
“It’s a two way affordability,” he said. “Affordable to build and affordable to live in. You can’t have one without the other.”
Catsimatidis’s setbacks at his Myrtle Avenue project are being watched closely in the area bounded by Tillary, Jay and Fulton streets and Flatbush Avenue Extension — a neighborhood that was upzoned in 2004 to encourage commercial and office space development.
The market shifted towards residential uses, and developers are currently building thousands of mostly luxury units and several hotels.