Sunday, June 25, 2006

Crain's editor Greg David gets it wrong: chronology, housing, density, and "status quo"

Crain's New York Business editor Greg David, in a column dated 6/26/06 headlined Atlantic Yards is not about sports (subscribers only), repeats some Forest City Ratner talking points, forgets the eminent domain issue that he's previously addressed, and adds some other misreadings.

David writes:
As Bruce Ratner tells the tale, the Atlantic Yards project took off in 2003 following a phone call from the Brooklyn borough president. The New Jersey Nets basketball team was for sale, and Marty Markowitz pleaded with Mr. Ratner to buy it and return a professional sports team to Brooklyn.
Sports and the borough's psyche had been linked decades earlier, and just as the Dodgers' departure in 1958 seemed to start years of decline, so bringing the Nets to Brooklyn would put an exclamation point on its economic revival.
Three years later, sports are merely a footnote to the project.


But sports were always a footnote. The arena was always a small fraction--little more then ten percent--of the project's total square footage. It was billed as the centerpiece of the project to gain political and public support.

David continues:
Atlantic Yards now concerns making choices about the city's future. Mr. Ratner knew nothing about professional basketball when Mr. Markowitz called. What he did understand was Brooklyn, where he had built Metrotech in the 1980s. The office complex saved the borough's downtown and the city 10,000 jobs that had been headed to New Jersey. Mr. Ratner had long believed that a site nearby, where the Long Island Rail Road parked its trains, was suitable for the next major development.

But the railyard site is little more than one-third of the 22-acre project footprint. That's a key error that persists in the press.

Wrong chronology

David continues:
But he couldn't figure out how to get the public money or political support needed to proceed--until the Nets came along. His original concept envisioned a sports arena, 2 million square feet of office space and 4,000 apartments. Sept. 11 sent Mr. Ratner back to the drawing board. Demand for office space weakened, and Atlantic Yards could be seen as a threat to Lower Manhattan, which would split the politicians he needed in his camp.

September 11 (2001) sent Ratner back to the drawing board? The original concept was unveiled in December 2003. The switch from office space to housing was, indeed, a reaction to the threat to Lower Manhattan (and possible opposition from Assembly Speaker Sheldon Silver, who represents the area), as well as the need for higher revenue from housing. David, however, misses the switch from the promise of 10,000 jobs (and the "Jobs, Housing, and Hoops" slogan, now put aside) to many fewer jobs.

The housing switch

David continues:
Escalating apartment prices rescued Mr. Ratner. Adding residential units would produce the revenue needed to pay for the arena and for about $1 billion in infrastructure. One of the top priorities of the Bloomberg administration was more housing, so it would be supportive. Mr. Ratner slashed Atlantic Yards' commercial space and turned it into a residential neighborhood with 6,800 units. Mr. Ratner, always a politically astute developer, added an important twist. The condos would be so lucrative that he would use some of the profits to set aside almost a third of the units as affordable housing--more than any developer had ever done in a similar project. Such a move would be popular not only with the mayor but with advocates for the poor. The developer signed them on as supporters; the most notable was the outspoken group Acorn.

The original promise was 50 percent of all housing in the project. Then, when the housing Memorandum of Understanding with ACORN was signed in May 2005, the switch had been made to 50 percent of the rental housing. (Still, Marty Markowitz was on script for the previous version.) So the one-third figure, however impressive compared to some developments, is less than what was promised.

Also, 30 percent affordable housing was recently negotiated by the City Council for the rezoning of Williamsburg and Greenpoint. There's been no rezoning for the Atlantic Yards project. In essence, the affordable housing is a privately-negotiated zoning bonus. That means Forest City Ratner can build at a density more than twice that of other major developments. So, in this case, affordable housing would be achieved by overbuilding.

Misreading opponents

But his opponents aren't giving up. They claim that Atlantic Yards will destroy Brooklyn's character. Their hope is to preserve the status quo, even as tens of thousands of people come to New York because of its vibrant economy. If the city is to thrive, it will need to build places for them to live by Manhattanizing some sections of Brooklyn and Queens. With residential housing prices so high, developers can subsidize substantial numbers of less expensive units for the endangered middle class. Mr. Ratner has worked out the economics of this game plan for the future. The fate of his project is a test of whether the rest of New York will embrace it.

There's certainly an argument for building at an increased density over the railyard site and even over adjacent streets. But that doesn't mean Ratner, supervised by the Empire State Development Corporation, should have carte blanche to build at the density decided in the boardroom. What happened to zoning and community oversight?

Also, saying that opponents hope to preserve the status quo ignores the community-developed UNITY plan and the bid for the railyards by Extell, a high-rise project at a somewhat lower density than the Ratner plan. It's disappointing that David, who surely knows Brooklyn and development better than Los Angeles-based architect Frank Gehry, sounds in this case like he's echoing Gehry's dismissal of critics.

As for the economics of the plan, why does David trust Ratner's claims, given that the developer has been unwilling to produce his economic projections for the project? Is Ratner's claim of $6 billion in revenue from the project credible? Are the subsidies and public costs deserved? And does David remember that, last December, he wrote, regarding eminent domain: What makes the issue so compelling in New York is that eminent domain is exercised here by undemocratic and politically motivated agencies like the Empire State Development Corp.

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