Rendering of the approved Domino Development proposed by Two Trees Management. Image credit: SHoP Architects.
Local Williamsburg Council Members Antonio Reynoso and Stephen Levin led questioning of Two Trees Management on Domino Project. On April 1, 2014, the City Council Land Use Subcommittee on Zoning and Franchises heard Two Tree Management’s application for special permits and a zoning text amendment to transform the Domino Sugar Refinery into a mixed-use development. The City Planning Commission voted unanimously in favor of the application on March 5, 2014 following Mayor Bill de Blasio’s announcement of Two Trees’ commitment to significantly increase the square footage of affordable housing.
The four-hour-plus hearing began with a statement by Council Member Antonio Reynoso who represents the Domino site. Noting what he characterized as the catastrophic impacts of developments this size, Council Member Reynoso pointed out the need to preserve communities through affordable housing, and through the preservation of long standing local organizations within South Williamsburg.
Council Member Stephen Levin, who represents parts of Williamsburg, echoed Council Member Reynoso’s remarks his remarks directed at the many constituents in the Chamber: “We need real affordable housing, good jobs, quality open space, and we need to make sure that whatever we do in the halls here in City Hall are in the service of your families, of your children, and of your children’s children.”
Of the 2,928,429 sq. ft. development, approximately 2.2 million sq. ft. is proposed to be developed into residential space, with only 537,000 sq. ft. allocated for permanently affordable and integrated units. Jed Walentas, of Two Trees, estimated that there will be approximately 2,300 total units of residential housing based on the SEQR technical guidelines. Although Two Trees is not required to pursue either State Housing Finance Agency (HFA) financing or participate in the inclusionary housing program, Walentas stated that Two Trees intends to follow the 80/20 inclusionary housing program by default. Two Trees stated that it applied for State HFA financing under the 80/20 New Construction Housing program, which provides financing for rental projects where at least 20% of the units are set aside for low-income tenants. Project loans under this program are generally for at least $50 million.
Walentas stated that if it is successful in obtaining HFA financing, of the 20% of affordable units, 15% of the units will be at 40% of the Area Median Income (AMI) and 85% of the units will be at 60% of AMI. Affordable units beyond the 20% requirement will be priced at 80% of AMI. Based on the agreement with the City, 50,000 sq. ft. of the affordable units are permitted to be built at 125% of AMI. Walentas stated that the project-wide average will be 66% of AMI. In 2013, the New York City Housing Development Corporation set the Area Median Income for 2013 at $85,900 for a family of four. The maximum incomes are adjusted for family size.
Council Member Reynoso stressed the need for AMIs that are reflective of the local community. Council Member Reynoso stated, “65% of my district cannot afford 80-percent of AMI” and “the majority of these people would not be able to live in this development.” Council Member Reynoso also stressed the need for Two Trees to work alongside the residents and organizations within the community to address and mitigate the impacts of displacement, as well as the need for better marketing practices for advertising affordable housing. Reynoso requested that Two Trees consider committing 65% of the affordable units to be two and three bedroom units in exchange for opting out of mirroring the affordable units to the market rate units in the development. Walentas stated that Two Trees was committed to reaching out to the community, marketing in a manner that reflects the needs of the bilingual community, and ensuring that much of the affordable units will be targeted for the neighborhood residents. Council Member Reynoso, however, requested greater commitments from Two Trees in the form of contracts, which were the only types of commitments that he, as a council member, could rely on.
The first residential building that will be developed is Site E. Prior to the agreement with Mayor de Blasio, Two Trees had committed to developing 50% of the units in Site E as affordable in exchange for a $40 million subsidy from city agencies. However, Walentas revealed that pursuant to negotiations with Mayor de Blasio, Two Trees would no longer commit to “front loading” affordable housing in the first development, but would, instead, develop affordable housing over the development period.
Walentas stated that the market-rate units will be both for rent and for for-sale. Two Trees stated that it intends “to be long term owners of real estate and… build as many rental units as possible.” Walentas stated, however, that “the economic challenges of building rental units are significant,” particularly as Two Trees will no longer be receiving a subsidy from the City. Walentas stated that Two Trees, therefore, does not envision any “for-sale products” that will be affordable, but noted that that could “certainly change.”
Council Member Levin questioned Walentas about what Two Trees would be able to build as-of-right, as well as without an inclusionary housing bonus. Walentas was unable to provide exact figures for what Two Trees could develop as-of-right, but stated that it would be a “much, much smaller development. Council Member Levin further questioned whether there were finalized numbers of market-rate apartments and affordable units in the proposed development. Walentas stated that he does not have a definite figure, but his best guess would be between 660 and 700 affordable units depending on size and configuration.
Council Member Levin said that he had analyzed the sizes of Two Trees’ other residential developments and calculated up to 3,000 total units—not 2,300 units—of housing that could be developed in the proposed development. Walentas respectfully disagreed, stating that the size of the units in Two Trees’ other developments had been dictated by the infrastructure of existing developments. The residential buildings of the Domino development would be built under different circumstances.
In response, Council Member Levin commented, “I’m concerned that the opportunity is there, and the math bears it out, for a development that is much closer to 3,000 units than 2,000 units, and that’s a major source of concern for me.” Council Member Levin stated that the higher number of total units calls into question whether a sufficient portion of the project is affordable to provide a true benefit to the community, while also adding to the stress of the neighborhood’s already over-taxed infrastructure.
Zoning and Franchises Subcommittee Chair Mark Weprin closed the hearing after listening to testimony from numerous residents and organization representatives in support and in opposition to Two Trees’ application. Council Member Weprin noted that the Council would not vote on the application until a later date.
(CIT): City Council: Domino Sugar Refinery (C 140131 ZRK–Zoning Text Amendment); (C 140132 ZSK–Special Permit); (C 140133 ZSK– Special Permit); (C 140134 ZSK–Special Permit); (C 140135 ZSK– Special Permit); (C 140133 ZSK– Special Permit)(April 2, 2014).
By: Jennifer Baek (Jennifer is a CityLaw Fellow and New York Law School Graduate, Class of 2013).