A ‘Domino’ Effect?

What a difference a new administration makes. At the end of last year developer Jed Walentas had a deal in place to turn the waterfront Domino Sugar Refinery into high-end Williamsburg apartments, including 660 units of affordable housing— roughly 30 percent of the building’s capacity. 

Walentas’ company, Two Trees, had already played an integral role in transforming formerly down-and-out Brooklyn neighborhoods like DUMBO into glossy, expensive new locales for the rich and hip—and the Domino project appeared set to be the next outpost in Walentas’ empire. 

Then Mayor Bill de Blasio coasted into office in January touting his campaign promise to create or preserve 200,000 units of affordable housing. Rather than abiding by the deal Walentas had struck with the Bloomberg administration, de Blasio let the developer know that Two Trees’ plans for Domino were in jeopardy because its affordable housing allocation was insufficient. 

In March the de Blasio administration announced that Two Trees had essentially bowed to its demands, agreeing to add 110,000 square feet of affordable housing to reach a total of 537,000 square feet. The revised Domino project is slated to create 700 affordable apartments covering a range of incomes, and there will be a significant number of two-and three-bedroom units sized for families. The affordable apartments will be integrated throughout the complex with the aim of creating a dynamic mixed-income community— and unlike in prior proposals, all of those units will remain at affordable rates in perpetuity. 

In return, Two Trees was allowed to increase the height of the project to 55 stories, which, according to The New York Times is “20 stories higher than the current regulations permit.” 

Despite the new agreement, at a City Council hearing on April 1 focusing on the latest version of the Domino project, some advocates and elected officials expressed concerns. 

“Many times these kinds of [inclusionary zoning] deals [have been] done on negotiated understandings with developers that were not necessarily legally binding. It’s important to have it actually legally codified,” said Moses Gates of the Association for Neighborhood and Housing Development (ANHD). “To Two Trees’ credit, they were always open to that paradigm. The next step is to really write these affordability restrictions into the zoning code across the board, and not have to rely on ad hoc negotiations on affordability for each new development.” 

The fungibility of affordable housing requirements was reinforced when Steve Levin, one of two Council members who represent Williamsburg, pressed Walentas about the specific number of affordable housing units the project would ultimately include. Walentas admitted that the number might actually end up being fewer than the 700 units agreed to with the de Blasio administration. 

“We’ll be building a guaranteed minimum … As a developer with a billion and a half [dollar] project over many years before us, there’s a good chance that we build fewer than we build more,” Walentas said. “My best guess would be somewhere between 660 and 700 affordable units.” 

The vagueness of that number highlights a deficiency in what has become one of the city’s chief tools to create new affordable housing: “inclusionary zoning”—the requirement that a developer include a certain percentage of affordable housing units in exchange for being allowed to build. The percentage of affordable housing is measured in square feet, not by the number of units, meaning that housing advocates’ push for larger apartments could wind up bringing about a diminution in the total number of units ultimately made available when the project is completed. 

In his testimony before the Council, Walentas made clear his displeasure about the sudden left turn the Domino deal had taken after the de Blasio administration got involved. 

“We have spent the better part of one and a half years listening to our and your community and their concerns, and until six weeks ago, we believed that we were headed down a road where on that first building there would be a significant amount of city subsidy made available, and when we got to this point in the process … there would be a three-party agreement that would lock in the amount of city subsidy, the specific AMIs [Area Median Incomes] on that project, and it would be benchmarked to certain unit size,” Walentas said. “It made economic sense to us, or at least made for a project that we know we could finance … The administration went in a different direction, so we had a whole economic framework in place for this entire project that basically went out of the window. Our internal financial assumptions have been reeling since then.” 

Developers like Walentas should expect that the de Blasio administration and City Council’s increased demands for affordable housing will constitute a new normal for the industry. At the Domino hearing Councilwoman Elizabeth Crowley, addressing Walentas, seemed to sum up the general feeling among her Council colleagues. 

“This is a different Council today than it was a few months back. We have much more progressive leaders that care about workers and families. And your project is going to set a precedent for the rest of the city,” said Crowley. “You’re going to receive a significant amount of funding through tax abatements and government bonds … and overall it looks like it could be a gain for our city, [but] we need to be sure. So us acting for an MOU [Memorandum of Understanding], even though it may not be binding, we’re going to trust that agreement, because you’re going to be back here asking for zoning changes in the future.” 

If the affordable housing goals promised by Two Trees are met— and met in a timely fashion—the Domino project could provide a shot at redemption for de Blasio, who has endured criticism for his support as public advocate of the Atlantic Yards project, where the agreed-upon units of affordable housing have been built at a much slower pace than promised. 

After talking tough about enforcing the affordable housing agreement struck between ACORN and Forest City Ratner, the developer of the project, de Blasio’s commitment to holding Forest City’s feet to the fire came into question when Bruce Ratner, the company’s CEO, co-chaired the mayor’s 50th birthday fundraiser. 

When she was still the City Council member representing Atlantic Yards, Public Advocate Letitia James said of Forest City’s failure to meet the affordable housing goal on schedule, “New Yorkers and taxpayers were basically duped.” 

To guard against a scenario like the one playing out at Atlantic Yards, Benjamin Dulchin, the executive director of the ANHD, suggested in his testimony before the Council that the city mandate inclusionary zoning to give it better leverage in the future. 

“Domino is a good start, but just a start,” Dulchin said. “The last administration gave away the store. This administration should do better. That probably starts with a baseline of a strong and mandatory inclusionary zoning policy so the city starts from a strong position in every negotiation like Domino.” 

 

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.