While Jeff Baker, attorney for Develop Don’t Destroy Brooklyn (DDDB), and Jim Stuckey, president of Forest City Ratner's Atlantic Yards Development Group, didn't address each other directly, and there wasn't enough time for all the questions that needed to be asked, both had a chance to get their talking points on the table.
Most notably, Stuckey would not reveal the company's expected profit--a required element in the company's bid for the Metropolitan Transportation Authority's (MTA) Vanderbilt Yard--but said that such numbers would emerge after the project is completed. FCR's investment in infrastructure is considerable, he said, and deserves to turn a profit. "It is, after all, America," he added.
While it's hard to dispute that investment shouldn't have the opportunity to generate profit, the question of whether it "is... America" will be at the heart of the eminent domain lawsuit DDDB is expected to file. The Supreme Court's decision last year in the Kelo eminent domain case emphasized the importance of a redevelopment plan, and Justice Anthony Kennedy's concurrence looked askance on eminent domain deriving from what might appear to be a sweetheart deal.
And there's evidence of such a deal in Brooklyn. The developer devised the project, and city and state officials endorsed it, without any RFP (request for proposals), and 18 months before the Metropolitan Transportation Authority (MTA) solicited bids for the railyard, which would be more than one-third of the project footprint.
Baker on blight
Baker disputed the ESDC's determination of blight at the site:
It’s obviously flawed. They’re counting as an element of blight, the Vanderbilt Yard railyard. I’m not sure it qualifies as blight; it’s an active use by the MTA and LIRR… There’s been no effort by any state or city authority for at least the last 30 years to develop it. It could also be considered an asset.
He added that the deterioration of some buildings within the footprint could be "considered developer’s blight," since the decayed under Forest City Ratner's ownership.
Lehrer noted that the state cited “a diversity of ownership that hindered site assemblage" necessary for the project. Baker responded:
That’s sort of a Catch-22, because they’re saying, "We want to create a big project, because we have this vision for an arena, but we can’t do it, because unfortunately a lot of people own it and they may not want to sell it to us." That’s not blight, that just means that there’s not enough properties there that Mr. Ratner can acquire on his own so he needs the state to help him.
Change in administration?
Governor George Pataki has endorsed the project, and Lehrer asked what Eliot Spitzer, the Democratic frontrunner to succeed Pataki, might do. Baker said:
He’s been generally supportive of the project, but he’s going to be more honest about the subsidies. If he’s a man of his word in terms of clearing up the corruption of the current administration and the cronyism that’s involved, while everybody is in favor of redeveloping the area and providing affordable housing, it’s all an issue of scale.
What we don’t have here, and the document is completely silent on, what’s driving the overall scale of the project, what is the total amount of subsidies coming from the government, and what’s the profit element that Ratner is getting, which determines the enormous scale of this project, which creates all the impacts.
Well, the document isn't completely silent on the subsidies, the numbers can be heard to tease out. Expect more analysis in the future.
Why the scale
The scale is driven not just by the profit, but by the interplay between profit and politics. Forest City Ratner could make more of a profit by building only market-rate housing, but now plans 2250 market-rate rentals, 2250 affordable rentals, and 2360 market-rate condos.
However, the presence of the affordable units, which make the project bulkier, has allowed Forest City Ratner to gain political and public support for the project, and to argue that their goal is to provide affordable housing.
Scoffing at the DEIS
Lehrer noted that the DEIS said the project would bring "over $1 billion in net tax revenue," to which Baker responded, “We think it’s probably highly inflated.” He said the document minimized some of the environmental impacts:
They make the frankly ridiculous statement that adding 15,000 or so residents will not be an increased demand on police or fire services. That defies credibility.
Actually, the DEIS said there would be "no significant adverse impact," a murkier phrase, since it doesn't discuss increased costs.
"Grossly inadequate" timetable
Baker closed with some pointed comments about the timing of the document and the scheduling of a public hearing on August 23:
It’s a grossly inadequate public comment period…The community boards are on recess.
The 60-day comment period is, considering the scale of this project and how long the ESDC has been working on this, is an insult. Sixty days is ridiculously short. By comparison, there’s a project that you may be aware of up in the Catskills, in the New York City watershed, that is proposing to build hotels and golf courses, the Belleayre project. That project had a 140-day public comment period on the DEIS, and New York City DEP was one of the agencies urging an extended public comment period.
Stuckey defends DEIS
Stuckey had a lot more time to read the DEIS and familiarize himself with its contents, since, as he said, "It’s a disclosure document and a planning document." Regarding traffic, he pointed out that only 8 percent of the turns analyzed at 93 intersections showed significant adverse impacts and can’t be mitigated.
Then he went on offense:
More importantly, we put together a 15-point transportation plan that’s more progressive and more aggressive than has been done for any major project.
The EIS found that, you could substantially reduce the amount of residential development, and it wouldn’t have a an impact on traffic… already in the system or because of commercial uses.
He added that one of the alternatives examined by the DEIS, the Pacific Plan--which came not from the community-planning process but local architect Doug Hamilton--showed as many impacts on traffic. Stuckey cited the developer's innovations aimed at reducing traffic to arena events, including remote parking, a 400-bike parking station, an agreement to subsidize MetroCard use, and high occupancy vehicle parking lots. Those are steps forward--after all, the arena won't work if people can't get there--but transportation engineer Brian Ketcham has said the problem of traffic goes far beyond the arena.
What about schools?
Lehrer asked about new schools for the large population that would arrive by 2016. Stuckey responded: The EIS says it could be done in a number of ways… That’s a discussion and decision that has to be ultimately made by DOE [Department of Education], but we have agreed at Building 5, at 6th and Atlantic, would make space available, should the city decide to put a school at that location.
Lehrer: You’d offer space for a school?
Stuckey: We’ve designed space to be available. Ultimately how it gets paid for is a discussion between us and the city based on where they choose to put that location.
Lehrer pointed out that shadows would fall significantly on the Atlantic Terminal 4B housing project across Atlantic Avenue, the tallest building in the city's public housing system. Stuckey responded:
We worked for months to design a shadowless building, and we weren’t able to do it.
But he pointed out that alternatives would have a worse effect.
Lehrer was skeptical, asking whether lower buildings would cast more intrusive shadows. Stuckey responded:
Lower wider buildings cast shadows that would cover areas for a greater period of time.
Stuckey added that new landscaping at the housing project could mitigate the impact of shadows.
Back to affordable housing
Stuckey took the opportunity to return to the developer's strongest argument:
What can’t be lost, though, is that, in the course of doing this project, at the end of it, in a city that’s growing by a million people between now and 2020, where you have tremendous lack of affordability and affordable housing, at the end of this we will be creating a significant amount of affordable and middle income housing and in order to do that we obviously have to construct this project.
He added that the project would be "incredibly sustainable," with several environmental innovations, including the "first LEED-certified arena in the country
What about profit?
Daniel Goldstein of DDDB called in to challenge Stuckey:
This project would be the densest residential community in the United Stases by almost twice the existing densest community. What is Forest City Ratner's profit on this project? That has never been released publicly, and I don’t know if it has been privately to government. Can we have his answer?
Stuckey: I know the profit question is asked many time. We’re not going to discuss the profit on a project that hasn’t gone through a public approval process yet. We’re a public company. We have annual reports…In order to get whatever profit we ultimately do make, we also have to spend a tremendous amount of money on infrastructure that the government isn’t paying for, and no one else has stepped up to the table to pay for for many many years.
Goldstein asked Stuckey how the scale could be justified, but Lehrer intervened to ask why the profit issue was relevant.
Goldstein: The MTA’s RFP required a 20-year profit-loss statement from the developers. Extell gave one, Forest City Ratner did not give one. We can’t understand the justification for such a dense project unless we know what the profit margins are to defend this immense density.
Stuckey: Number one, we’re a private company but we do have public statements that people will be able to read. We are in the very early stages of a project that has not gone through a public approval process yet…At the end of the day, until this project is approved, until we see what the ultimate cost of the infrastructure will be, it’s very hard to make these determinations. But when we are through this project, the information will be available through our annual reports.
Infrastructure driving density
Lehrer: That’s afterwards. Maybe the point doesn’t have to be so dense for the company to make a reasonable profit.
Stuckey said it was an issue of infrastructure: It’s not a complicated question on density. You don’t really need to go to our profit. The one thing I think that was interestingly and suspiciously missing from the so-called alternative plans was the cost of how they did those projects and how any developer could make money. There are $650 million worth of public infrastructure that has to be built before the first shovel goes into the ground to build a single affordable housing apartment or the arena or any other part of this project. There’s another $350 million of cost, of money that we would have spent on acquiring land to avoid condemnation. A billion dollars before you start. I think that’s a very significant investment. That does deserve to make a profit. It is, after all, America.
That statement deserves some footnoting. Stuckey cited $600 million in infrastructure two months ago. He estimated at $500 million 19 months ago.
Would the cost have been less had the scale of the 22-acre project not upset some community groups and delayed approval? And do Stuckey's numbers apply to other plans? The Extell project would be built over the 8.3-acre railyard alone, so the costs of infrastructure would be somewhat less, and the cost of acquisition limited to the railyard, not all the properties around it.
Lehrer asked Stuckey if eminent domain is "a bullying tactic."
Stuckey: This area has been considered blighted since 1968 when the first Atlantic Terminal Urban Renewal Plan was adopted. About 60, 65% of the area fell within that urban renewal area and was considered to be a blighted area. Those findings when the Downtown Brooklyn plan was approved two years ago were reaffirmed. These are not new. The crime in these areas is substantially higher than areas around it. There are many deteriorated and vacant lots. I know some people will say, "Gee, Forest City purchased buildings and then they became deteriorated and fell down." You can’t buy a building a year ago that’s brick and stone and have it fall down in a year. These buildings had been vacant, deteriorated and eyesores going back for many many years.
Note that the blocks where Forest City Ratner must acquire most of the properties for the project are in solid blue--blocks not within ATURA, which is designated in red (including the grayish red) The rest of the project would encompass the blocks crosshatched in blue and red.
The purpose of eminent domain
Stuckey said the developer had acquired over 90 percent of the site. Lehrer seized on an apparent contradiction:
You’re saying you won’t release your projected profits because you’re a private company, but then you’re saying you can use eminent domain because the project is for the public good.
Stuckey: The use of eminent domain is because the state has found this is a blighted area in need of redevelopment, and this has been a finding that’s existed going back close to 40 years.
Again, however, the part of the footprint housing most of the properties subject to eminent domain is not part of ATURA.
What about Spitzer?
Lehrer asked the same question about a future Spitzer administration. Stuckey responded: I really have no knowledge of what the next governor would say about our project, although I do believe that most of the candidates feel very strongly that the need to take care of affordable housing is a critical agenda item…There are 240,000 people who are on Section 8 waiting lists for as long as eight years trying to get housing. It is a real serious problem… In areas all over the city, housing is critical.
The project, if completed on schedule, would deliver the full complement of affordable housing by 2016, ten years from now.