- Brooklyn’s Pacific Park project, stalled since late 2023, may resume construction under a new plan led by Related Cos. in partnership with the U.S. Immigration Fund and Fortress.
- The $300M in debt tied to the project is set to be foreclosed on by Fall 2024, with Related potentially taking over as a joint venture partner.
- Challenges remain, including penalties for overdue affordable units and concerns from community members about public accountability and the project’s long-term commitments.
One of New York City’s most ambitious and challenging real estate projects may soon get a second chance, according to WSJ.
Stuck in Limbo
The Pacific Park development in Brooklyn, originally envisioned as a sprawling complex with 16 high-rise buildings and thousands of affordable housing units, has been stalled since 2023.
In fact, only eight buildings and the Barclays Arena, home to the Brooklyn Nets, have been completed on the 22-acre site, which sits above the Long Island Rail Road yard.
New Rescue Plan
Work on the project has been stalled since Chinese developer Greenland defaulted on two construction loans. Now, New York developer Related is closing in on a deal that could rescue the troubled development.
According to Nick Mastroianni, president of the U.S. Immigration Fund, a key stakeholder in the project, negotiations are underway for Related to join as a joint venture partner after a foreclosure process transfers ownership of the site.
The U.S. Immigration Fund, which holds $300M in debt on the project along with investment firm Fortress, is expected to foreclose on the property by Fall 2024.
If the deal proceeds, Related could restart construction by the end of 2025, pending approval from the Metropolitan Transportation Authority (MTA), which owns the rail yard.
Affordable Focus
Related’s potential involvement brings hope for Pacific Park’s long-delayed completion. The developer is best known for its work on Manhattan’s Hudson Yards, an upscale office, retail, and residential complex.
Related also has a strong track record in affordable housing, managing over 50K affordable units across the country. This expertise is critical for Pacific Park, where 43% of the more than 3K units already built are designated as affordable housing.
Given its experience building over rail yards, as seen at Hudson Yards, Related is well-positioned to navigate the complexities of Pacific Park, which requires coordination with the MTA and Empire State Development, New York’s economic development agency.
Community Concerns
The Pacific Park project has been plagued by delays since it was first approved in 2006, and its expected completion date has been pushed back to 2035.
Related will also have to contend with steep financial penalties tied to overdue affordable housing units. Under a 10-year-old agreement, 2.25K affordable units were supposed to be completed by May 2025, with a $2K monthly penalty for each unfinished unit. These funds are earmarked for additional affordable housing in the area.
Community members have expressed concerns about handing the entire project over to a single developer. Gib Veconi, chair of the Prospect Heights Neighborhood Development Council, argues that multiple developers could ensure greater accountability and make the project more responsive to public needs.
Some fear the state might waive penalties on overdue affordable units as an incentive to attract new developers. “Negotiating it away could draw ire and even a lawsuit,” warned Michelle de la Uz, executive director of the Brooklyn nonprofit Fifth Avenue Committee.
A Path Forward
Despite these obstacles, the revival of Pacific Park represents a critical opportunity to deliver much-needed affordable housing in Brooklyn. With Related’s expertise and the support of key stakeholders, the project could finally move forward after years of delays and setbacks.
However, maintaining transparency, public engagement, and adherence to affordable housing commitments will be crucial for ensuring the project lives up to its original promises.
As Veconi noted, Pacific Park “was supposed to be a safety valve for housing in the neighborhood. It’s important that the project lives up to those commitments.”
