Brooklyn Botanic Backyard Shadow Casting Towers qualify for beneficiant Trump tax breaks

February 26, 2021

A proposed apartment complex that could overshadow the Brooklyn Botanic Garden may not include affordable housing under a new alternative envisioned by its developer – and yet qualify for a Trump-era tax break that some state lawmakers hope to contain.

The former factory premises at 960 Franklin Ave. in Crown Heights is part of an Opportunity Zone, an area designated by Governor Andrew Cuomo as 10 years of tax-free income for investors as part of the 2017 federal tax revision.

New York named more than 500 low-income census areas nationwide eligible for the Opportunity Zone break for both federal and state taxes.

This week, some lawmakers and government reform groups said it was time to pull the plug and revitalized a bill introduced last year by Senator Mike Gianaris (D-Queens) to remove the state component of the Opportunity Zone benefits .

“It was a poorly planned program that is predictably abused by wealthy developers who are experts at manipulating tax breaks,” Gianaris told THE CITY.

Among the two dozen groups and unions that Gianaris and eight co-sponsors of the Senate join Reinvent Albany, Make the Road New York and the 1199 SEIU Health Union are committed to eliminating the state tax break.

Opponents say the tax breaks are gifts to luxury developers.

“Here’s the problem with giveaways for the Opportunity Zone – developers see a financial opportunity that supposedly benefits the immediate community even if that community is strongly opposed to it,” said Sen. Zellnor Myrie (D-Brooklyn), co- Bill sponsor. .

“How do you sleep?”

The construction site on Franklin Avenue is in the Myries neighborhood. As suggested, the project would consist of two 34-story rental towers with 1,578 apartments, half of which are rated affordable.

The developer’s environmental impact assessment shows that the towers would cast shadows over the botanical garden. Opponents, including the gardener’s leaders, say it would damage the 52-acre Brooklyn oasis and threaten plant life.

This project requires approvals from the City Planning Commission, City Council and Mayor through a review process initiated earlier this month. In December, de Blasio called the plan “totally inconsistent with the neighborhood” and urged its developers to “get back to the drawing board”.

An alternative unveiled this week, which also requires city approval, would reduce the height of the building to 17 floors and reduce the number of affordable rental units.

Another version would be even shorter – but, according to developer Continuum Company, would only contain condominiums with no affordable housing. The all-condo proposal could be created without new permits, claims the developer.

Continuum presented its plans on Wednesday at a virtual meeting of the Brooklyn Community Board 9.

Community members urged Continuum representative William Wallace IV for details on shadows and other implications of the 17-story fallback concept.

A parishioner noticed the importance of sunlight for human and plant life and asked, “How do you sleep at night when you know what you are trying to cause?”

“To be honest, sometimes I don’t sleep at night, but it’s not about that. That’s not the reason,” Wallace replied.

“I don’t sleep at night because I know there are families in homeless shelters who have no shelter. I don’t sleep at night because I have neighbors and friends who are about to be evicted and have absolutely no affordable housing in this community.” ”

Wallace’s response was made laughing by some undimmed community members.

“Continuum has grossly underestimated the resolve of this community and willingness to fight for our neighbors,” said Michael Hollingsworth, a candidate for the permanent seat of Laurie Cumbo Council.

Under no circumstances did Myrie say the state should give a tax break.

“All of the key stakeholders in the process – community residents, Brooklyn Botanic Garden, city council representatives, community council, town planning committee, and mayor – have opposed repeating this plan,” he said. “If the state turns around and says, ‘We hear you, but we’re going to hand out this tax break anyway,’ it would be an affront to the community and taxpayers across the state.”

“A complete boondoggle”

The numerous Opportunity Zone accounts support luxury development.

In Florida, ProPublica reported, owners of a superyacht marina who were planning a luxury tower development there successfully appealed to the governor of that state to start their website.

At a national conference on Opportunity Zones this week, scientists from the Harvard and Brookings Institution questioned the effectiveness of the program based on preliminary data, writing, “The hope of this program is that it would revitalize the neighborhood, but we do find little evidence to support this view this early date. “

A large real estate company said it would be a mistake to ban the advantage in New York.

“We are in an economic downturn where, for example, city-wide construction activity has reached its lowest level in nearly a decade,” said James Whelan, president of New York’s Real Estate Board. “If the program needs to be changed, they should be considered. But why should we advise against investing in historically underserved neighborhoods?”

A 2019 study by the Citizens Budget Commission estimated the state would give up $ 63 million annually, on top of the city losing $ 31 million annually due to tax breaks.

In Brooklyn, the Continuum Company and its partners on Franklin Ave. 960 announced the proposal for twin towers shortly before the introduction of the tax law with opportunity zones by Congress. Then-President Donald Trump signed the measure in late 2017.

The point in time indicates that the project was already feasible before the tax break came into effect. It wasn’t until the following year that Cuomo’s authorities announced for Empire State Development and Homes and Community Renewal the locations eligible for tax breaks, including much of Crown Heights.

Empire State Development did not respond to a request for comment.

The AFL-CIO Housing Investment Trust is investing in the project, Wallace said at the meeting, using pension funds from union workers. Continuum is committed to using union work for the construction.

Gianaris’ bill would decouple city and state tax codes from the Federal Opportunity Zone program and allow taxation on more investment income.

“There will be individual projects that are more or less worthy of support,” said Gianaris. “But by and large, this is an abused program that was not a government initiative and would cost the state tens of millions of dollars that we don’t currently have.”

John Kaehny, executive director of Reinvent Albany, pointed out the number of opportunity zones in the city, which include prime properties like waterfronts near Hudson Yards and the United Nations.

“We think the Opportunity Zones are a terrible public order, a complete boondoggle that verges on fraud,” said Kaehny.

“What you see is a recurring pattern of luxury condominium development or large, large development projects that were already underway and then earmarked for further tax breaks, essentially a subsidy from federal and state taxpayers,” he added added.

This story was originally published by THE CITY on February 25th, 2021. Sign up here to receive the latest stories from THE CITY every morning.

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