An article in the New York Times Week in Review section about the city's growth offers an uninformed and contradictory reference to Atlantic Yards. The article, headlined New York, Where the Dreamers Are Asleep, states in part:
But the bills came due, bankruptcy loomed, President Gerald R. Ford threatened to leave the city in the lurch and the place turned practical. Today’s New Yorkers want to know what something costs and who will pay. Turning landfill into a park, or building a new basketball arena and apartment-retail complex in Brooklyn if private dollars foot a healthy part of the bill — fine. Risking citywide gridlock to impress the world by playing host to the Olympics? Not so fine.
(Emphases added)
First, how many New Yorkers have endorsed the project? There's been no official vote. The recent poll touting 60% public support was deeply flawed. And the three local community boards closest to the project site have either opposed the project or raised serious questions about it.
More importantly, if we truly were practical, then we'd try to tote up what something costs and who will pay.
We don't have an accurate sense of the net new tax revenues. And we don't know how much Atlantic Yards would cost the public. That information has been elusive and hidden. But we do know we're risking costly gridlock in Brooklyn and beyond, as transportation engineer Brian Ketcham points out.
Sunday, December 31, 2006
Cognitive dissonance from the tabs on Albany & AY
For a prime example of cognitive dissonance, consider the enthusiastic editorial support for Atlantic Yards (and the state machinations and opacity behind it) from the New York Post and New York Daily News and the contrast with their harsh other editorials on Albany.
In an editorial Friday headlined THE BIG GOV WHO WOULDN'T, the Post editorialized regarding the 12-year stint of Governor George Pataki:
To put it bluntly, Ol' George let New York down.
Ran off, in pursuit of his own interests.
Even as taxes across the state squeezed out residents and businesses.
And political corruption mushroomed.
…Pataki vowed reform - term limits, public debate of the budget, spending growth held to inflation, big tax cuts.
But, almost from the start, it became obvious that he had little interest in shaking things up. His chief goal: to promote himself and his friends.
Patronage became a priority. Contracts got steered to those with political ties. Back-room deals replaced sunlit debate.
…* Confidence in state politics has been shattered. The state's legislative process ranks as the nation's most dysfunctional. Pols seem to be indicted almost daily.
…Sleazy politics and corruption are at crisis levels in Albany - thanks in no small part to the example Pataki himself set.
Daily News
Today's Daily News, in an editorial assessing Pataki's mixed record, headlined By George, it's bye, George, offers these somewhat contradictory sentences:
Pataki's Empire State Development Corp. fostered the city's building boom, notably rejuvenating Times Square.
...Pataki succumbed to back-room dealmaking with legislative leaders and broke a promise to limit himself to two terms.
The Daily News, in 12/13/06 editorial headlined The good, the bad & the stinky, commented:
That rotten-egg whiff in the air this morning emanates from Albany, where the Legislature convenes for a special session, perhaps to be bribed into action with pay raises.
The pols were summoned by Gov. Pataki to consider a much-needed law to keep the worst sex predators confined in mental hospitals after their prison terms. Otherwise, Assembly Speaker Sheldon Silver and Senate Majority Leader Joe Bruno have refused to clue in the public about their agendas, which may or may not include okaying more charter schools (good), hiking their own salaries substantially (bad) and ratifying Pataki's last-minute list of crony appointments (ugly).
What the lawmakers definitely will not do is operate in an aboveboard fashion. They won't air their proposals in advance. They won't vet bills in committee or debate them on the floor. They won't wait the three days mandated in the state Constitution before voting on legislation. Instead, they'll do what they always do - let Pataki, Silver and Bruno cut a back-room deal, have the governor waive the three-day rule and rubber-stamp the good, the bad and the ugly before the ink dries. And these people want a hefty raise?
And the Times
Given the inconsistency expressed by the tabloids, maybe the New York Times's editorial silence on Atlantic Yards should be seen not as an abdication of public responsibility but rather as a recognition that it's better to be silent than to be inconsistent. Because the Times criticized Albany too, stating in a 12/16/06 editorial:
But we always need our legislators to take the time to do their work carefully — and, we hope, more openly.
Today, in an editorial, the Times offers a mixed verdict on Pataki's governorship, criticizing his record on governmental reform and budget issues. There's nothing, of course, about Atlantic Yards.
In an editorial Friday headlined THE BIG GOV WHO WOULDN'T, the Post editorialized regarding the 12-year stint of Governor George Pataki:
To put it bluntly, Ol' George let New York down.
Ran off, in pursuit of his own interests.
Even as taxes across the state squeezed out residents and businesses.
And political corruption mushroomed.
…Pataki vowed reform - term limits, public debate of the budget, spending growth held to inflation, big tax cuts.
But, almost from the start, it became obvious that he had little interest in shaking things up. His chief goal: to promote himself and his friends.
Patronage became a priority. Contracts got steered to those with political ties. Back-room deals replaced sunlit debate.
…* Confidence in state politics has been shattered. The state's legislative process ranks as the nation's most dysfunctional. Pols seem to be indicted almost daily.
…Sleazy politics and corruption are at crisis levels in Albany - thanks in no small part to the example Pataki himself set.
Daily News
Today's Daily News, in an editorial assessing Pataki's mixed record, headlined By George, it's bye, George, offers these somewhat contradictory sentences:
Pataki's Empire State Development Corp. fostered the city's building boom, notably rejuvenating Times Square.
...Pataki succumbed to back-room dealmaking with legislative leaders and broke a promise to limit himself to two terms.
The Daily News, in 12/13/06 editorial headlined The good, the bad & the stinky, commented:
That rotten-egg whiff in the air this morning emanates from Albany, where the Legislature convenes for a special session, perhaps to be bribed into action with pay raises.
The pols were summoned by Gov. Pataki to consider a much-needed law to keep the worst sex predators confined in mental hospitals after their prison terms. Otherwise, Assembly Speaker Sheldon Silver and Senate Majority Leader Joe Bruno have refused to clue in the public about their agendas, which may or may not include okaying more charter schools (good), hiking their own salaries substantially (bad) and ratifying Pataki's last-minute list of crony appointments (ugly).
What the lawmakers definitely will not do is operate in an aboveboard fashion. They won't air their proposals in advance. They won't vet bills in committee or debate them on the floor. They won't wait the three days mandated in the state Constitution before voting on legislation. Instead, they'll do what they always do - let Pataki, Silver and Bruno cut a back-room deal, have the governor waive the three-day rule and rubber-stamp the good, the bad and the ugly before the ink dries. And these people want a hefty raise?
And the Times
Given the inconsistency expressed by the tabloids, maybe the New York Times's editorial silence on Atlantic Yards should be seen not as an abdication of public responsibility but rather as a recognition that it's better to be silent than to be inconsistent. Because the Times criticized Albany too, stating in a 12/16/06 editorial:
But we always need our legislators to take the time to do their work carefully — and, we hope, more openly.
Today, in an editorial, the Times offers a mixed verdict on Pataki's governorship, criticizing his record on governmental reform and budget issues. There's nothing, of course, about Atlantic Yards.
Forest City Ratner and the Courier-Life chain: payback time?
The two weekly chain newspapers in Brooklyn have distinct identities. The broadsheet Brooklyn Papers, family-owned, is based in DUMBO and focuses on the neighborhoods of Brownstone Brooklyn. The tabloid Courier-Life chain, based in Sheepshead Bay, is a major supporter of the Chamber of Commerce (its publisher chairs the group, and the chain publishes the Chamber's newspaper) and was recently purchased by the New York Post.
The Brooklyn Papers has editorialized against Forest City Ratner's Atlantic Yards plan and covered it critically, while the Courier-Life has endorsed it and covered it more gently. In fact, the December 15 issue contained the double-whammy of an editorial and an op-ed by Assemblyman Steven Cymbrowitz, which sounded like a press release from the developer.
Actually, it was a triple-whammy. That week's paper included another boost for the plan, a two-page centerfold of project renderings from architect Frank Gehry and landscape architect Laurie Olin. Given that there was no text other than "The Future of Atlantic Yards," it sure didn't look like a piece crafted by the editorial department. Then again, it wasn't labeled an advertisement.
Saying thanks
In this week's issues of the Courier-Life, we get an advertisement from the developer, labeled "Thank You New York." That's a bit odd, given that the project web site, which presumably reaches a broader constituency, banners "Thank You Brooklyn."
Notable is the citation of $1 billion in "net tax revenue." (Actually, the state now estimates $944 million, which omits many subsidies and public costs.) Two weeks ago, Cymbrowitz wrote $1.3 billion. And the Atlantic Yards web site still uses a misrepresentative cumulative total that ignores costs, $5.6 billion.
There's no ad in the Brooklyn Papers this week. But there is that revealing interview with Borough President Marty Markowitz.
The Brooklyn Papers has editorialized against Forest City Ratner's Atlantic Yards plan and covered it critically, while the Courier-Life has endorsed it and covered it more gently. In fact, the December 15 issue contained the double-whammy of an editorial and an op-ed by Assemblyman Steven Cymbrowitz, which sounded like a press release from the developer.
Actually, it was a triple-whammy. That week's paper included another boost for the plan, a two-page centerfold of project renderings from architect Frank Gehry and landscape architect Laurie Olin. Given that there was no text other than "The Future of Atlantic Yards," it sure didn't look like a piece crafted by the editorial department. Then again, it wasn't labeled an advertisement.
Saying thanks
In this week's issues of the Courier-Life, we get an advertisement from the developer, labeled "Thank You New York." That's a bit odd, given that the project web site, which presumably reaches a broader constituency, banners "Thank You Brooklyn." Notable is the citation of $1 billion in "net tax revenue." (Actually, the state now estimates $944 million, which omits many subsidies and public costs.) Two weeks ago, Cymbrowitz wrote $1.3 billion. And the Atlantic Yards web site still uses a misrepresentative cumulative total that ignores costs, $5.6 billion.
There's no ad in the Brooklyn Papers this week. But there is that revealing interview with Borough President Marty Markowitz.
The NY Observer features 29 power families, but not the Ratners
The December 18 issue of the New York Observer, the cheeky weekly that specializes in insider coverage of the city’s professions, featured 29 power families in a number of arenas, including sports, the arts, politics, journalism, and law.
Under the rubric of real estate, there were deft profiles of the Trump, Zeckendorf, Rose, and Walentas families. David Walentas, as we know, is the man who invested in DUMBO decades ago and now reaps the rewards of the revival he steered.
But Brooklyn's biggest real estate empire, Forest City Ratner, didn’t make the list of 29. Sure, it’s a judgment call. There’s no younger Ratner joining CEO Bruce as his designated heir, as Jed Walentas will succeed his father David.
And Forest City Ratner has been subsumed into its Cleveland-based parent, the family-controlled Forest City Enterprises. However, Bruce still runs the show in New York, and there’s a most intriguing relationship between him and his brother Michael, the eminent international human rights lawyer.
Michael and the Ratners
Michael Ratner has a little-used office at Forest City headquarters in Brooklyn’s MetroTech. He and his wife, both based in Greenwich Village, make political contributions from that office to Brooklyn machine pols. He’s an investor in the Nets. And he hasn’t said a word about eminent domain or gag orders associated with the Atlantic Yards plan.
The Observer’s editorial introduction suggested that the Bruce/Michael relationship could be rich fodder for scrutiny:
And New York is a town that is defined by families. We have chosen 29 of them, and the power of family defines each, a power that supersedes any other consideration, and that is at once the clearest thing in life, and the most mysterious.
Zone defense
The again, the Observer likely was hamstrung in any attempt to probe into Ratnerian mysteries. Matthew Schuerman, the paper’s commercial real estate reporter, has done a generally incisive job covering Forest City Ratner.
However, it would have been pushing it to ask an Observer staffer to profile the family that includes a colleague, the capable Observer reporter Lizzy Ratner, a daughter of Bruce Ratner and also an investor in the Nets.
Under the rubric of real estate, there were deft profiles of the Trump, Zeckendorf, Rose, and Walentas families. David Walentas, as we know, is the man who invested in DUMBO decades ago and now reaps the rewards of the revival he steered.
But Brooklyn's biggest real estate empire, Forest City Ratner, didn’t make the list of 29. Sure, it’s a judgment call. There’s no younger Ratner joining CEO Bruce as his designated heir, as Jed Walentas will succeed his father David.
And Forest City Ratner has been subsumed into its Cleveland-based parent, the family-controlled Forest City Enterprises. However, Bruce still runs the show in New York, and there’s a most intriguing relationship between him and his brother Michael, the eminent international human rights lawyer.
Michael and the Ratners
Michael Ratner has a little-used office at Forest City headquarters in Brooklyn’s MetroTech. He and his wife, both based in Greenwich Village, make political contributions from that office to Brooklyn machine pols. He’s an investor in the Nets. And he hasn’t said a word about eminent domain or gag orders associated with the Atlantic Yards plan.
The Observer’s editorial introduction suggested that the Bruce/Michael relationship could be rich fodder for scrutiny:
And New York is a town that is defined by families. We have chosen 29 of them, and the power of family defines each, a power that supersedes any other consideration, and that is at once the clearest thing in life, and the most mysterious.
Zone defense
The again, the Observer likely was hamstrung in any attempt to probe into Ratnerian mysteries. Matthew Schuerman, the paper’s commercial real estate reporter, has done a generally incisive job covering Forest City Ratner.
However, it would have been pushing it to ask an Observer staffer to profile the family that includes a colleague, the capable Observer reporter Lizzy Ratner, a daughter of Bruce Ratner and also an investor in the Nets.
Saturday, December 30, 2006
The Marty outtakes: AY & terrorism, density, and traffic
Borough President Marty Markowitz sat down for a year-end interview with Brooklyn Papers’ editor Gersh Kuntzman, and while the newspaper’s excerpts capture the major issues--Markowitz's criticism of the Papers and his forceful defense of AY--the unedited audio linked from the article is worth a listen, both for some tidbits unavailable in print as well as a flavor of our feisty Borough President.(Photos: The Brooklyn Papers / Julie Rosenberg)
While the discussion ranged over Brooklyn issues from health to the Parachute Jump, it regularly returned to Atlantic Yards, about which Markowitz was sometimes pensive and prideful but more frequently combative and strident.
He dismissed opponents and critics by suggesting they should turn their attention to more important things, argued for greater density without defining limits, and flatly lied (or misspoke) about the traffic impacts of the project.
One word that came up several times was “hateful,” and Markowitz used it to describe the Papers’ coverage as well as some of the comments and emails directed toward him. He didn't mention that project supporters might be contributing to polarization, too.
AY & OBL
Probably the most memorable passage that didn’t make it to print was this bizarre Markowitz slam at Atlantic Yards critics:
I’ve been the recipient, more than anyone else on this project, I think maybe even more than Bruce Ratner, but certainly as far as any elected official going, a reciptient of more [inaudible] and hate, from those that feel that Atlantic Yards is more important than the issue of Osama Bin Laden and terrorism. There’s no question that there’s an element of people that truly believe that the greatest challenge facing America is the Atlantic Yards Project rather than terrorism and Osama Bin Laden and Al-Qaeda.
Does he really believe that politically engaged people can’t keep local and national issues straight? Atlantic Yards is a local issue—probably the biggest local issue in Brooklyn—and Markowitz was elected to be Borough President. That’s why his office filed an extensive response to the AY Draft Environmental Impact Statement.
Markowitz has no role in fighting terrorism and searching for Osama Bin Laden (unless he’s conducting reconnaissance missions in Junior’s). Still, it turns out, terrorism is an Atlantic Yards issue. Despite calls from community groups for the state review of Atlantic Yards to include post-9/11 security considerations, the state took a pass—and Markowitz said nothing.
Dismissing opponents and critics
Markowitz, as noted in print, dismissed opponents thusly:
Listen to me, their arguments come down to the following: the heights of the building, the shadows they cast and the traffic issues. If you had to shake it down, that’s really what it all is.
Kuntzman didn’t raise the additional point: the core of the pending eminent domain lawsuit is one about democracy. Was there a planning process? Is this the right way to develop on publicly-owned land? What’s the role of the public here?
[That above passage was in print; those cited below are a mix of passages in the Brooklyn Papers article and in the unedited audio file. Addendum: Let's acknowledge that Kuntzman wasn't there to cross-examine Markowitz but to cover a broad set of questions; had he tried to do the former, the interview would've been two hours and/or Markowitz would've left the room.]
No morning traffic jams?
Markowitz minimized the traffic issue:
But, yes, it may take a minute or two minutes longer to transverse Atlantic Avenue..so my question is: what is the balance between the public good and our own private little tunnel? I say, listen, I’m on Atlantic Avenue as much as anybody, I think it’s going to take me, on game nights, if it’s going to take me a minute or two longer, to go up Flatbush Avenue, or go across Atlantic Avenue.
But Markowitz, who said at the August 23 Atlantic Yards public hearing that it was time to “get real on traffic and parking,” remains optimistic:
And I’m convinced that there will be enormous steps taken to mitigate the traffic issues. It’s important for the city and the developer for this project to work… We’re all pulling together to mitigate the traffic on game nights. You know, in the mornings, it’s not going to impact at all. During rush hours, if you’re driving, perhaps right before the games, perhaps there will be additional traffic issues.
Actually, Chapter 12 of the Final Environmental Impact Statement (p. 3) identifies 46 intersections (of 93 analyzed) that would have “significant adverse impacts” in the weekday morning peak hours by project completion in 2016; even after the recommended mitigation measures, 11 intersections with significant impacts would remain. And that’s from the Empire State Development Corporation; transportation analysts Brian Ketcham and Carolyn Konheim have blasted the state analysis.
Appropriate density?
Markowitz said that the site is certainly a prime area to be able to build housing of greater density… because it works here, because not everybody lives in a brownstone. Not everybody lives in a brownstone! There is large housing--there is a public housing in that neighborhood, high rise housing in that area.Indeed, that’s been Forest City Ratner’s argument. Where do we take our cues? The 12- and 15-story subsidized buildings across Atlantic Avenue? The 512-foot Williamsburgh Savings Bank? The row houses that are being replaced? The single tall public housing tower across Atlantic? (Remember, each Atlantic Yards building would be more dense than that 31-story tower.) Shouldn’t the density issue be derived through some sort of planning process?
All newcomers?
Markowitz suggested that the opponents and critics are newcomers, even though many are not:
They’ve accelerated the renaissance of Brooklyn, by the very fact of their being here and investing in their community and growing their families, I don’t feel any hatred for them. But what they don’t see, in my opinion, is what I see, the transition of Brooklyn not being a backwater to Manhattan. “We’re not a backwater, we’re not. We’re not only single family homes, we’re not.
But the debate isn’t over row houses versus towers; it is what would be appropriately dense development at the site.
Affordable units
Markowitz also described the the project as containing “thousands of affordable units for people of very low income.”
(Emphasis added)
As a former tenant advocate, Markowitz knows the difference between “low-income” and “very low income;” one criticism of the Atlantic Yards project from some housing groups is that very low-income households, with the incomes of some who currently occupy rent-controlled apartments in the footprint, would not be part of the project.
Open space
Markowitz cited open space as a benefit:
The benefits — the creation of eight acres of open green space, parks, which will provide a tapestry that will knit together Prospect Heights and Fort Greene, as opposed to a moat that we’ve had for 100 years — overwhelm those who say the buildings are too high.
Kuntzman didn’t point it out, but the space would not be a park, since it would be privately-managed, and critics believe that it would serve more as backyards of enormous buildings rather than a tapestry.
Subsidies
When Kuntzman brought up “[b]illions of our money” in subsidies and public costs, Markowitz’s response was forceful:
The public subsidies are appropriate. Every project in this city, the government does provide infrastructure. That’s a given. [The Atlantic Yards subsidy] goes above that to assist the affordable housing component. If we didn’t have the affordable housing, this wouldn’t be necessary.
As I’ve pointed out, that's not the whole story. New York City's Independent Budget Office stated, in a September 2005 report:
Special Benefits for the Atlantic Yards Project. Under the MOU, Atlantic Yards would receive several special benefits not available as-of-right to development projects: capital contributions from the city and state, low-cost financing for the arena, extra property tax savings, a low-cost lease, and property obtained using the state’s power of eminent domain.
Downtown Brooklyn
Markowitz derided critics—and, implicitly, the New York Times, which published a mega-correction—for saying the project wouldn’t be in Downtown Brooklyn:
It’s all part of a vibrant, exciting downtown, which is what this is. The opponents even argue that Atlantic [Avenue] isn’t Downtown. I don’t know what they think is Downtown. DeKalb Avenue? What’s Downtown? Downtown is definitely Atlantic Avenue going north. It’s Downtown. There’s no question about it. I think they think the corner of Junior’s and the Manhattan Bridge is Downtown.
Except Atlantic Avenue is the northern border of the project. It’s safe to say that the western edge of the project borders or is part of Downtown Brooklyn, but most of the site would be in Prospect Heights.
Cameras
Markowitz brought up, unprompted, the idea that it would be a nonstory for a journalist to write that Forest City Ratner put surveillance cameras up on his buildings. (The Papers’ didn’t write about this issue, raised by Develop Don’t Destroy Brooklyn, but the New York Post did.)
Markowitz has a point that a property owner has a right to protect his buildings, but is the number of cameras typical or excessive? That’s worth some context.
Blight
Markowitz echoed the state line about blight:
We’re taking a space that was blighted, no question! Blighted, deteriorated, ugly, in terms of Atlantic Yards itself. And some of the buildings that abut Atlantic Yards that have been vacant for years.
Well, it’s a little more complicated, as Develop Don’t Destroy Brooklyn would argue.
Prices rising
Markowitz makes a strong point that the real estate market backs up his optimism about Atlantic Yards:
Instead of prices going down, they’re going up. People are buying right around it, knowing! Anyone that bought, in the last year or two, certainly knows that an arena is going to built in this project…. They’re buying because this project is going to be a benefit…. You have to understand that land is at a premium.
Indeed, if buyers thought that Atlantic Yards would be a detriment, they’d be slower to buy. But that perhaps depends on how close people would be. How well is the conversion of the Williamsburgh Savings Bank into One Hanson going?
Miss Brooklyn
Markowitz cited the news last week, upon approval of the project by the Public Authorities Control Board, that the developer agreed to reduce Frank Gehry’s flagship tower to 511 feet, just below the iconic bank:
I’m delighted by the way, that my idea about reducing the height of Miss Brooklyn... It was something I suggested, publicly and privately. It’s a celebration of the Williamsburgh building. I don’t know what the days will bring to Downtown Brooklyn… but for the immediate future it appears the Williamsburgh building will remain the tallest building, it’s really a representation to me of the past, the best of the past.
Kuntzman didn’t point out that the developer reneged on a longstanding promise not to block the view corridor of the bank.
Brooklyn!!
Markowitz declared great pride in his Brooklyn!! publication:I’m able to share characters, character, and the development of Brooklyn in… a feature paper, sharing the story of Brooklyn together.
Still, it's notable that the topic which took up most of his year-end interview, Atlantic Yards, barely appears in Brooklyn!!, if at all.
What next?
When the term-limited Borough President was asked for what office he was busy fund-raising, Markowitz got quiet and, at least publicly, seemed noncommittal: “I don’t know. I’d like to stay in public service,” he said, indicating it was still under advisement. Many believe he’ll run for Mayor in 2009.
Final words
If you listen to the interview as it winds down informally, you’ll hear Markowitz says that he passes on all constructive Atlantic Yards suggestions to the developer and responsible officials:
The only ones that I dismiss are the ones that call me schmuck, garbage, traitor.
Then Markowitz and Kuntzman get into a discussion about whether rent-stabilized tenants in the footprint are adequately protected. Markowitz says they’ll get a place in the new development.
“If it’s built,” responds Kuntzman. The discussion trails off, but Markowitz seems to be saying that the tenants should trust Ratner. The legal agreements, at last report, still leave the developer an out.
Friday, December 29, 2006
Affordable housing, AY, & 421-a: the solution that came too late
A telling pairing of lead articles appeared on the front page of the 12/21/06 New York Times. The passage of the Atlantic Yards project was deemed the day's second most important story. The lead was the City Council's reform of 421-a legislation, which is expected to lead to some 20,000 affordable apartments over the next decade.(Graphic from New York Magazine's Daily Intelligencer.)
Seen together, it's clear how much backers of the Atlantic Yards project benefited from the city's failure to reform 421-a any sooner, much less rezone the 22-acre site designated for the project.
Each action could have guaranteed a significant number of affordable low-income apartments, rather than leaving it to a private deal between developer Forest City Ratner and the advocacy group ACORN, which gave crucial cover to a development of unprecedented residential density.
In other words, in part because of the inclusion of affordable housing--which, it was infrequently mentioned, would be funded by taxpayers--the developer got the state to override zoning and build at a scale that otherwise would not be permitted.
It wasn't Atlantic Yards vs. nothing. It was Atlantic Yards vs. a smaller development that would yield somewhat less affordable housing but also fewer environmental impacts. And more affordable housing, thanks to the 421-a reform, would be created elsewhere.
Marty vs. zoning
In an interview in this week's Brooklyn Papers, Borough President Marty Markowitz suggests, contra previous statements about "neighborhood preservation in the face of unbounded, unplanned development," that in the case of Atlantic Yards, there should be no zoning, that if a project includes affordable housing it could be an unlimited size.
He tells Gersh Kuntzman:
Some, including some elected officials, said, “If he’d cut down the affordable housing, we could cut down the size of the buildings.” I don’t buy into that argument. Some people would rather see the affordable housing cut significantly [to] cut the size of the buildings. And I call that selfish!
Q: I think you’re putting words in the opponents’ mouths. I don’t think anyone called for less affordable housing.
A: If you spoke to them privately and said, “If we reduce the buildings size in half, but have to cut the affordable housing, how do you feel?” it would be interesting to see what they’d say. They won’t be honest! …
The subsidized housing would be a percentage of the project. The first question that should have been asked was this: what size project could this site, or some segment of it, support? Instead the planning has been backwards.
A closer look
Let's look at the numbers. Atlantic Yards, we're told, would bring 2250 affordable rentals and 600 to 1000 affordable homeowner units (200 of them onsite), over a decade, if it goes as planned. (Many think it would take 15-20 years.)
That sounds like a healthy chunk on top of the 20,000 total generated by reform. At best, one project would mean 2850 to 3250 additional units.
Except not all affordable housing is the same. Only a fraction of the affordable housing defined in the Atlantic Yards project would serve the same constituency as the affordable housing as defined in the City Council's bill. (Note that the Council bill is advisory rather than binding, because the state legislature must renew 421-a by the end of 2007.)
The 421-a program, launched to jump-start housing construction in slow-go 1971, has long been in need of renewal. In 1985, an "exclusion zone" areas in Manhattan was added. Developers who build there, in order to get the tax break, must build or fund affordable housing. They typically buy certificates used to build such housing in the low-cost Bronx--a practice that will be phased out in favor of a new trust fund.
Expanding the zoneLast year, during the rezoning of the Greenpoint-Williamsburg waterfront, the exclusion zone was extended to Brooklyn. This year, Mayor Michael Bloomberg advocated a marginal increase in the exclusion zone. More than a third of City Council wanted it to encompass the entire city.
The City Council achieved a compromise that included large chunks of gentrified West Central Brooklyn, including the blocks that would encompass the Atlantic Yards project. In these neighborhoods, taxpayers have subsidized market-rate construction with nothing in return. Advocates estimate $320 million this year in subsidies citywide. (Graphic from New York Times. Click to enlarge.)
The big outcry last week, after the bill passed 44-5, came from Queens, where the exclusion zone was extended to only a sliver of the waterfront rather than hot neighborhoods like Forest Hills and Flushing. (The bill also sensibly capped tax breaks only on the first $650,000 of an apartment, so as not to excessively benefit luxury units. For more detail see my Brooklyn Downtown Star article.)
It's all about AMI
The distinction between affordable housing as defined by the City Council versus that in the AY project comes down to Area Median Income, or AMI. Here's the definition:
Under current law, developers building within the Exclusion Zone must make 20% of total units affordable to families making less than 80% of the Area Median Income (AMI). This revised legislation sets a cap on the number of affordable units for families making between 60% and 80% of AMI ($42,540 to $56,720 for a family of four). All other affordable units would be for families earning less than 60% of the AMI.
The more aggressive City Council bill would've set the ceiling at 50% of AMI and required 30% of the development to be affordable. Still, Brad Lander of the Pratt Center for Community Development told me that, in practice, it's likely that most 80/20 projects built under the 421-a reform would be aimed at families earning 50% of AMI.
At Atlantic Yards, of the 2250 affordable rentals, some 1125 would go to households earning under 80% of AMI, including 900 that would go to those earning under 60% of AMI. There are no specifics yet on the homeowner units, but it's likely they would go to families earning over 100% of AMI. The May 2005 Housing Memorandum of Understanding states:
Developer and ACORN will work on a program to develop affordable for-sale units,which are intended to be in the range of 600 to 1000 units, over the course of ten (10) years and can be on or off site. It is currently contemplated that a majority of the affordable for-sale units will be sold to families in the upper affordable income tiers.
Let's speculate and say that 50 units might be available to households below 80% AMI. So that might make 1175 units resulting from the Atlantic Yards plan that would conform to the City Council's plan. (At right, panels from an Atlantic Yards promotional flier sent out this fall.)
And without AY?
What if there were no Atlantic Yards project? How many affordable units might be built if the railyard--and even adjacent blocks--were rezoned? Well, Extell, which bid for the railyard alone, planned 1940 apartments in a rather dense project.
Under the 80/20 plan, that would generate 388 apartments affordable to those up to 80% AMI. But Extell's plan would occupy only about 40% of the Atlantic Yards site. Let's be conservative and estimate that, given a smaller scale development, only one-third as many affordable units (130) would be generated on the rest of the 22-acres. That would lead to about 520 units affordable to those earning under 60% of AMI.
If we take those rough numbers, it seems that Forest City Ratner put its public relations might, as shown in the accompanying brochure, behind fewer than 700 additional low-income affordable units--70/year over ten years, or 50/year over 14 years, or 35/year over 20 years.Oh, but what about the other affordable rental units at Atlantic Yards? Those come out of the city's 50/30/20 program, which offers subsidies for middle- and moderate-income housing as well. Depending on a developer's plans, those could also be built into the blocks slated for Atlantic Yards, including the Extell plan.
Supporting affordable housing for those income groups may be good public policy. But ACORN, which signed the affordable housing agreement and whose members largely earn under 50% of AMI, wasn't negotiating for them, was it?
Atlantic Yards is supposed to be about affordable housing, but Forest City Ratner never inserted itself in the debate about reform of 421-a nor tried to inform those at its affordable housing information session in July or in its mailings.
Rather, affordable housing, along with the arena, were used to justify and get political support behind a development unhindered by zoning because it's a state project.Alternate view
Separate from my estimates, I asked Lander to speculate on what might happen to the Atlantic Yards site, given the situation of emerging 421-a reform and no Forest City Ratner plan. He didn't put any numbers on it, but the results would be a significant fraction of affordable housing.
Lander noted that the vast majority of the affordable units would be for households earning under 50% of AMI. Partly that's because the reform would permit only a small fraction of units in the 60% to 80% band. But mostly that's because tax-exempt bonds and low-income housing tax credits make it more attractive to build units for people under 50% of AMI.
With no inclusionary zoning for the area, as at the Greenpoint/Williamsburg waterfront, Lander speculated that a developer in the current market seeking the highest profit would build all market-rate condos and forego the tax benefits. But that assumes a developer not encumbered by the political need to include affordable housing--not very likely.
However, he observed, as the condo market cools, a developer building rental units likely would choose the 80/20 mix on many or most of the buildings, yielding 20% of the units at or below 50% of AMI. For that, the developer would get 25 years of 421-a 25-year benefits, plus tax-exempt bonds, plus 4% low-income housing tax credits.
If, as at the waterfront, the site were to be rezoned through the city's Uniform Land Use Review Procedure, it "would almost certainly be mapped with inclusionary zoning," Lander said. That means a developer would get a 33% density bonus if the project included 20% affordable units below 80% of AMI.
"If this happened," Lander observed, "then the developer would have a stronger incentive than 421-a alone to include affordable housing. If there were to happen, then I suspect:
A. All rental buildings built on site would be 80/20s, with the 20% at/below 50% of AMI.
B. Condo buildings would likely be: (1) 80/20, but with the 20% at/below 80% of AMI; or (2) all-market, but paired with a new all-affordable rental building, with 20% of the market-rate condo units, probably at/below 60% of AMI."
That doesn't generate a total to compare with 1175 or 2250, nor does it encompass the possibility of a 50/30/20 program. What it does show is that the city moved faster in pushing Atlantic Yards than it did to reform housing subsidies or extend inclusionary zoning--both more wide-ranging and democratic solutions to our housing dilemma.
Thursday, December 28, 2006
At Gargano’s valedictory, transparency on AY still hard to find
As valedictories go, it was rather subdued, lasting less than 40 minutes, with only a bit of real news. But Charles Gargano, for 12 years the chairman of the Empire State Development Corporation (ESDC), the man who led fundraising for Governor George Pataki, is still canny after all these years.
With the advent of a new gubernatorial administration next week, Gargano has already left his job, but he visited the ESDC’s 633 Third Avenue office yesterday for a press conference his agency organized. Gargano neither tried to settle scores (remember, Assembly Speaker Sheldon Silver, no ethical paragon, called him “corrupt”) nor catalog his challenges and achievements, such as the struggle to rebuild Ground Zero.
Rather, Gargano made himself available to the media, as he has long done, declared his desire to continue to help “this great city and state,” and took the opportunity to urge his successors to move ahead with the expansion of the Javits Convention Center and especially Moynihan Station. (Most questions concerned the latter project, which the Pataki administration is still trying to push, as the Sun, Daily News, Post , and Metro reported.)
When asked some tough Atlantic Yards questions, Gargano, for the most part, deflected them. Perhaps a cross-examination might have drilled down farther, but his answers spoke for themselves, depicting an agency for which transparency has not been a high priority.
Cordial and dapper, Gargano sat calmly at the head of the boardroom table. (His hair is snowier than in this photo and he seems thinner--older but more fit.) The seats at the table, usually occupied by ESDC board members and staff, this time were taken by scruffier folk scribbling in notebooks. Four staffers sat quietly in chairs flanking a side wall. A battery of three cameras faced Gargano from the end of the long table.
“Great news” on AY
Gargano brought up Atlantic Yards in his opening remarks:
Recently, we had great news that Atlantic Yards was approved. I know there were many issues that we were dealing with. One thing we did know, that it was a great project for the city of New York. We tried to address all of the concerns of the public, and those living in the community. And I hope we did a good job with that. I think we did. You can’t satisfy everyone, but we try to satisfy most of the concerns—the people, I should say, and address the concerns that were brought to our attention.
The PACB vote
I cited the flurry of activity last week, as Assembly Speaker Sheldon Silver, according to the Times, was delivered numerous ESDC documents in the days before the December 20 approval by the Public Authorities Control Board (PACB).
Q. I know there were some documents delivered to Silver in the last couple of days before the PACB vote. Can you describe what those documents were, and when they will be made public?
A: Well, generally, what we do is, any questions that are asked by the Assembly staffers who are working with Mr. Silver, we provide answers to all of those questions—that’s an ongoing process. And that’s exactly what we want the process to be, so we can clear up any lack of understanding of the project, or problems with understanding the project. So I don’t know which docs you’re referring to specifically, there have been many.
Q: My understanding, from reading one press account, is that there is a more full account of the net new revenues. I know that there was a five or six page memo that was released in the week after the December 8 meeting, but I’m told that there’s a more full analysis of the net new revenues.
A: Well, we do provide full analysis of the financial part of the project—there’s no question about it. If there were was some additional information required, that’s what we forward—
Q: When would that be made public?
Eileen Mildenberger, the ESDC’s Chief Operating Officer, responded from the wings:
We gave that to them on the basis of a confidentiality agreement, so we’re not sure that it is going to be made public.
Gargano picked up the thread:
This is a confidentiality agreement that we have with the developer itself. Naturally, the members of the PACB need that information for them to make a decision, but we are under a confidentiality agreement with the developer.
Tax revenue drop
Later I brought up the curious twist in the Atlantic Yards review.
Q. I’m thinking back on the December 8 meeting when the ESDC board approved Atlantic Yards, and later we figured out that the net new tax revenue had gone down by about half a billion dollars. Why did the board not discuss that, as an issue, in terms of its deliberations? Or did it, and not do it in public?
A: Well, the board members receive all of this information in advance of our meeting. Usually, we try to give the information to them one week before to give them as much time as possible to review all of this information and call into the agency for clarification or any kind of information they need about it. So the board members don’t necessarily have to discuss it at the board meetings unless they have additional questions, because a lot of this goes on—I get many calls before our board meetings and many of our senior staff people and our general counsel and our finance people get questions from our board members about what’s going to be on the agenda.
Q: So can you characterize the discussion of that issue before the meeting?
Gargano stumbled a bit, though not as much as he had on the Brian Lehrer Show earlier this month when asked about eminent domain.
A: Uh, yes, there were—there were—there were questions, about it and obviously, it was explained that there was a reduction in the project size, there was a reduction, specifically in the commercial part of it, which yielded more revenue than residential. All of these things were explained to the, uh, those who might have had questions, members of the board.
Given that one board member had trouble identifying Pacific Street, it’s hard to imagine they drilled down to this issue, which was hardly flagged in ESDC documents. And no one at the ESDC has explained publicly how an 8% percent reduction in the size of the project leads to an 18% reduction in construction employment.
FEIS responses?
After the press conference had officially concluded, Gargano stood up to shake some hands and take a few more questions. I brought up one more Atlantic Yards issue, and Gargano played it well.
Q: So, on December 8, a bunch of press went back into your office and we asked you some questions. And I had asked about the nine letters that were received after the Final Environmental Impact Statement, that were apparently included in that package, and there was an internal response to those letters, and, I have on tape—I’m not playing it for you now—I said, “Can I get a copy of those letters” and you said, “Of course.” And I asked [spokeswoman] Jessica [Copen], and she said, file a Freedom of Information Law request.
A: That’s what I mean by “of course,” file the—
Q: I like that.
A: Sometimes things come out, y’know, we all make little mistakes here and there.
Q: The impression I got was, yeah, I’d get it, not I’d have to file--
A: As far I’m concerned, whatever is the legal way of doing it, do it.
Q: Thank you for your time. See you in Brooklyn.
(Gargano often mentions that he grew up in Park Slope and, of course, our colloquy concerned Brooklyn's biggest construction project.)
A: Okay, yes.
Reconfiguring the ESDC
Gargano has been careful about not offering many public comments about the incoming administration but, when prompted, did offer some observations about the agency.
Q: My understanding is that the governor-elect plans to reconfigure the ESDC, with a downstate/upstate directorship and perhaps other changes. Do you have any thoughts on how that would work, whether it’s a good idea, general advice for them?
A: I believe that, in any organization such as this, there has to be one chairman… Number two, we have regional offices in all parts of the state, and we strengthened those regional offices 12 years ago to give them greater autonomy…. It really is a decision by the new administration on how they want to handle upstate-downstate. I will say that, thanks to the Governor’s policies, upstate is doing quite well, as you move from downstate to upstate here on the east coast. But when you move west, there are some difficulties, in the western part of upstate, because of manufacturing jobs that were lost. But I think, with the new centers of excellence, it’s amazing to me no one’s focused on it, but you will, I guarantee you… The centers of excellence are attracting a lot of high-tech industries, not only in Buffalo, in bioinformatics, but in Rochester, in photonics, and of course in Schenectady/Albany with nanotechnology. So there is a lot of high-tech interest in upstate New York and hopefully that will create new jobs.
With the advent of a new gubernatorial administration next week, Gargano has already left his job, but he visited the ESDC’s 633 Third Avenue office yesterday for a press conference his agency organized. Gargano neither tried to settle scores (remember, Assembly Speaker Sheldon Silver, no ethical paragon, called him “corrupt”) nor catalog his challenges and achievements, such as the struggle to rebuild Ground Zero.
Rather, Gargano made himself available to the media, as he has long done, declared his desire to continue to help “this great city and state,” and took the opportunity to urge his successors to move ahead with the expansion of the Javits Convention Center and especially Moynihan Station. (Most questions concerned the latter project, which the Pataki administration is still trying to push, as the Sun, Daily News, Post , and Metro reported.)
When asked some tough Atlantic Yards questions, Gargano, for the most part, deflected them. Perhaps a cross-examination might have drilled down farther, but his answers spoke for themselves, depicting an agency for which transparency has not been a high priority.
Cordial and dapper, Gargano sat calmly at the head of the boardroom table. (His hair is snowier than in this photo and he seems thinner--older but more fit.) The seats at the table, usually occupied by ESDC board members and staff, this time were taken by scruffier folk scribbling in notebooks. Four staffers sat quietly in chairs flanking a side wall. A battery of three cameras faced Gargano from the end of the long table.“Great news” on AY
Gargano brought up Atlantic Yards in his opening remarks:
Recently, we had great news that Atlantic Yards was approved. I know there were many issues that we were dealing with. One thing we did know, that it was a great project for the city of New York. We tried to address all of the concerns of the public, and those living in the community. And I hope we did a good job with that. I think we did. You can’t satisfy everyone, but we try to satisfy most of the concerns—the people, I should say, and address the concerns that were brought to our attention.
The PACB vote
I cited the flurry of activity last week, as Assembly Speaker Sheldon Silver, according to the Times, was delivered numerous ESDC documents in the days before the December 20 approval by the Public Authorities Control Board (PACB).
Q. I know there were some documents delivered to Silver in the last couple of days before the PACB vote. Can you describe what those documents were, and when they will be made public?
A: Well, generally, what we do is, any questions that are asked by the Assembly staffers who are working with Mr. Silver, we provide answers to all of those questions—that’s an ongoing process. And that’s exactly what we want the process to be, so we can clear up any lack of understanding of the project, or problems with understanding the project. So I don’t know which docs you’re referring to specifically, there have been many.
Q: My understanding, from reading one press account, is that there is a more full account of the net new revenues. I know that there was a five or six page memo that was released in the week after the December 8 meeting, but I’m told that there’s a more full analysis of the net new revenues.
A: Well, we do provide full analysis of the financial part of the project—there’s no question about it. If there were was some additional information required, that’s what we forward—
Q: When would that be made public?
Eileen Mildenberger, the ESDC’s Chief Operating Officer, responded from the wings:
We gave that to them on the basis of a confidentiality agreement, so we’re not sure that it is going to be made public.
Gargano picked up the thread:
This is a confidentiality agreement that we have with the developer itself. Naturally, the members of the PACB need that information for them to make a decision, but we are under a confidentiality agreement with the developer.
Tax revenue drop
Later I brought up the curious twist in the Atlantic Yards review.
Q. I’m thinking back on the December 8 meeting when the ESDC board approved Atlantic Yards, and later we figured out that the net new tax revenue had gone down by about half a billion dollars. Why did the board not discuss that, as an issue, in terms of its deliberations? Or did it, and not do it in public?
A: Well, the board members receive all of this information in advance of our meeting. Usually, we try to give the information to them one week before to give them as much time as possible to review all of this information and call into the agency for clarification or any kind of information they need about it. So the board members don’t necessarily have to discuss it at the board meetings unless they have additional questions, because a lot of this goes on—I get many calls before our board meetings and many of our senior staff people and our general counsel and our finance people get questions from our board members about what’s going to be on the agenda.
Q: So can you characterize the discussion of that issue before the meeting?
Gargano stumbled a bit, though not as much as he had on the Brian Lehrer Show earlier this month when asked about eminent domain.
A: Uh, yes, there were—there were—there were questions, about it and obviously, it was explained that there was a reduction in the project size, there was a reduction, specifically in the commercial part of it, which yielded more revenue than residential. All of these things were explained to the, uh, those who might have had questions, members of the board.
Given that one board member had trouble identifying Pacific Street, it’s hard to imagine they drilled down to this issue, which was hardly flagged in ESDC documents. And no one at the ESDC has explained publicly how an 8% percent reduction in the size of the project leads to an 18% reduction in construction employment.
FEIS responses?
After the press conference had officially concluded, Gargano stood up to shake some hands and take a few more questions. I brought up one more Atlantic Yards issue, and Gargano played it well.
Q: So, on December 8, a bunch of press went back into your office and we asked you some questions. And I had asked about the nine letters that were received after the Final Environmental Impact Statement, that were apparently included in that package, and there was an internal response to those letters, and, I have on tape—I’m not playing it for you now—I said, “Can I get a copy of those letters” and you said, “Of course.” And I asked [spokeswoman] Jessica [Copen], and she said, file a Freedom of Information Law request.
A: That’s what I mean by “of course,” file the—
Q: I like that.
A: Sometimes things come out, y’know, we all make little mistakes here and there.
Q: The impression I got was, yeah, I’d get it, not I’d have to file--
A: As far I’m concerned, whatever is the legal way of doing it, do it.
Q: Thank you for your time. See you in Brooklyn.
(Gargano often mentions that he grew up in Park Slope and, of course, our colloquy concerned Brooklyn's biggest construction project.)
A: Okay, yes.
Reconfiguring the ESDC
Gargano has been careful about not offering many public comments about the incoming administration but, when prompted, did offer some observations about the agency.
Q: My understanding is that the governor-elect plans to reconfigure the ESDC, with a downstate/upstate directorship and perhaps other changes. Do you have any thoughts on how that would work, whether it’s a good idea, general advice for them?
A: I believe that, in any organization such as this, there has to be one chairman… Number two, we have regional offices in all parts of the state, and we strengthened those regional offices 12 years ago to give them greater autonomy…. It really is a decision by the new administration on how they want to handle upstate-downstate. I will say that, thanks to the Governor’s policies, upstate is doing quite well, as you move from downstate to upstate here on the east coast. But when you move west, there are some difficulties, in the western part of upstate, because of manufacturing jobs that were lost. But I think, with the new centers of excellence, it’s amazing to me no one’s focused on it, but you will, I guarantee you… The centers of excellence are attracting a lot of high-tech industries, not only in Buffalo, in bioinformatics, but in Rochester, in photonics, and of course in Schenectady/Albany with nanotechnology. So there is a lot of high-tech interest in upstate New York and hopefully that will create new jobs.
Wednesday, December 27, 2006
Ratner's profit likely would exceed IRR, but the public's still in the dark
So how much profit would Forest City Ratner make? Remember, a real estate expert consulted by New York Magazine estimated 25 percent, though he didn't have enough figures to be certain.
Two things are clear, however. First, the "internal rate of return" (or IRR) figures in the KPMG audit commissioned by the Empire State Development Corporation don't tell us anything about Ratner's profit.
Second, the public still doesn't know whether this is a good deal or not.
Overall rate of return?
In covering the approval last week of the Atlantic Yards plan, the Times reported:
The developer has yet to divulge precisely how much money it will make on the project. But Mr. Silver yesterday played down concerns that the developers were using public subsidies to generate excessive private profits, noting that the board’s official review powers were limited to vetting the state’s contribution to the infrastructure costs.
“Our role is not to measure the profits that the private investors will make,” Mr. Silver said yesterday. “Our role is to make sure that state liability on the project will be limited to what they say it will be. And we were satisfied about that, plain and simple.”
According to a KPMG audit commissioned by the Empire State Development Corporation, a copy of which was provided to The New York Times, Forest City estimated that the overall rate of return on the $4 billion project, excluding the arena, at about 10 percent over 30 years. The accounting firm estimated the return at about 7 percent.
That confused a technical term, IRR, with a more colloquial "overall rate of return." And Silver's quote dismissed the requirement, in a 2/18/05 Memorandum of Understanding, that the developer was required to provide a 30-year pro forma income and cash flow statement regarding the Atlantic Yards project. (Was that just for internal consumption?)
As I noted, somewhat more cautiously:
So what really would be the developer's profit? How do the tax breaks and grants factor in? A sentence in an earlier version of the Times article raised a question:
But because Forest City is using grants and tax-exempt bonds to finance the bulk of the project, critics cautioned, the project’s investors will likely earn a much higher rate of return on their direct investments.
(Why was that sentence eliminated? Possibly because the financing is still unclear.)
The missing context
Indeed, crucial context was absent. I ran the report past David A. Smith, founder of Recapitalization Advisors, Inc., a Boston-based affordable housing consulting firm.
IRR, Smith explained, is typically used as a way of harmonizing an estimated return from various kinds of investments, including equity (cash) and debt. But the transaction includes both outside investors and the developer, or sponsor. Sponsors like Forest City Ratner, Smith said, "use other people's money as much as you can. They are entitled to a development profit for their services in assembling the resources. So the sponsor is trying to minimize cash outflow and maximize development fee."
That development fee would cover overhead, supervision of construction, supervision of architects, and a profit allowance. And some of that is buried beneath the numbers of the document.
Unanswered questions
Simply assessing an IRR on the equity sources, not the debt, doesn’t answer two important questions, Smith noted:
1) What fees to the sponsor are included in uses of funds?
2) Among the equity sources, what percentage is coming from the sponsors and what percentage is coming from outside investors?
"I find it very surprising that a full 'sources and uses' on the transaction is not publicly available, given the significant amount of public resources going in," said Smith, who noted that affordable housing transactions typically offer a transparent document explaining where the money is coming from and where it will go.
"The goal is for the allocating agency to see that their contribution gets the absolute highest bang for buck," Smith said, because different projects compete for scarce subsidies. "In Atlantic Yards, it’s within the realm of possibility that the problem is they have a moving target, with sources and uses in flux even as the individual phases are also in flux."
"I don’t fundamentally have a problem with the idea that some aspects they might not choose to publish in the paper, but you’d like to have confidence that a review was being done of the public contribution, and whether the public contribution is getting an adequate return on its public investment," he said.
Does report give guidance?
What should legislators think about the KPMG document? "As far as I can tell, KPMG thinks it can work, but raises the related question of whether the state is getting the best value for the resources it is providing," he said.
How could one do that? "You could bid it," he said. "But if it’s not bid, you first obtain from the sponsor a complete 'sources and uses'. Secondly, you drill through it to understand the projected and anticipate profits to the sponsor. You quiz them on it."
Smith said that, with "a massive and highly complex undertaking" like Atlantic Yards, "your complications and volatility and risk go up, and then likewise the compensation for that risk goes up. I wouldn’t have problem defending a large development fee, because there’s a lot of exposure."
Still, he noted, the questions remain. "One, have public resources been adequately protected in the sense of public officials or administration officials getting good value for money going in? Two, even assuming they have relative to this transaction, is this a good use of money relative to other things those public resources could be used for?"
Two things are clear, however. First, the "internal rate of return" (or IRR) figures in the KPMG audit commissioned by the Empire State Development Corporation don't tell us anything about Ratner's profit.
Second, the public still doesn't know whether this is a good deal or not.
Overall rate of return?
In covering the approval last week of the Atlantic Yards plan, the Times reported:
The developer has yet to divulge precisely how much money it will make on the project. But Mr. Silver yesterday played down concerns that the developers were using public subsidies to generate excessive private profits, noting that the board’s official review powers were limited to vetting the state’s contribution to the infrastructure costs.
“Our role is not to measure the profits that the private investors will make,” Mr. Silver said yesterday. “Our role is to make sure that state liability on the project will be limited to what they say it will be. And we were satisfied about that, plain and simple.”
According to a KPMG audit commissioned by the Empire State Development Corporation, a copy of which was provided to The New York Times, Forest City estimated that the overall rate of return on the $4 billion project, excluding the arena, at about 10 percent over 30 years. The accounting firm estimated the return at about 7 percent.
That confused a technical term, IRR, with a more colloquial "overall rate of return." And Silver's quote dismissed the requirement, in a 2/18/05 Memorandum of Understanding, that the developer was required to provide a 30-year pro forma income and cash flow statement regarding the Atlantic Yards project. (Was that just for internal consumption?)
As I noted, somewhat more cautiously:
So what really would be the developer's profit? How do the tax breaks and grants factor in? A sentence in an earlier version of the Times article raised a question:
But because Forest City is using grants and tax-exempt bonds to finance the bulk of the project, critics cautioned, the project’s investors will likely earn a much higher rate of return on their direct investments.
(Why was that sentence eliminated? Possibly because the financing is still unclear.)
The missing context
Indeed, crucial context was absent. I ran the report past David A. Smith, founder of Recapitalization Advisors, Inc., a Boston-based affordable housing consulting firm.
IRR, Smith explained, is typically used as a way of harmonizing an estimated return from various kinds of investments, including equity (cash) and debt. But the transaction includes both outside investors and the developer, or sponsor. Sponsors like Forest City Ratner, Smith said, "use other people's money as much as you can. They are entitled to a development profit for their services in assembling the resources. So the sponsor is trying to minimize cash outflow and maximize development fee."
That development fee would cover overhead, supervision of construction, supervision of architects, and a profit allowance. And some of that is buried beneath the numbers of the document.
Unanswered questions
Simply assessing an IRR on the equity sources, not the debt, doesn’t answer two important questions, Smith noted:
1) What fees to the sponsor are included in uses of funds?
2) Among the equity sources, what percentage is coming from the sponsors and what percentage is coming from outside investors?
"I find it very surprising that a full 'sources and uses' on the transaction is not publicly available, given the significant amount of public resources going in," said Smith, who noted that affordable housing transactions typically offer a transparent document explaining where the money is coming from and where it will go.
"The goal is for the allocating agency to see that their contribution gets the absolute highest bang for buck," Smith said, because different projects compete for scarce subsidies. "In Atlantic Yards, it’s within the realm of possibility that the problem is they have a moving target, with sources and uses in flux even as the individual phases are also in flux."
"I don’t fundamentally have a problem with the idea that some aspects they might not choose to publish in the paper, but you’d like to have confidence that a review was being done of the public contribution, and whether the public contribution is getting an adequate return on its public investment," he said.
Does report give guidance?
What should legislators think about the KPMG document? "As far as I can tell, KPMG thinks it can work, but raises the related question of whether the state is getting the best value for the resources it is providing," he said.
How could one do that? "You could bid it," he said. "But if it’s not bid, you first obtain from the sponsor a complete 'sources and uses'. Secondly, you drill through it to understand the projected and anticipate profits to the sponsor. You quiz them on it."
Smith said that, with "a massive and highly complex undertaking" like Atlantic Yards, "your complications and volatility and risk go up, and then likewise the compensation for that risk goes up. I wouldn’t have problem defending a large development fee, because there’s a lot of exposure."
Still, he noted, the questions remain. "One, have public resources been adequately protected in the sense of public officials or administration officials getting good value for money going in? Two, even assuming they have relative to this transaction, is this a good use of money relative to other things those public resources could be used for?"
Tuesday, December 26, 2006
The Times defends the front-page scaleback story, but then practices "rowback"
A month ago, on 11/29/06, I wrote an open letter to New York Times Pubic Editor Byron Calame, contending that the Times had failed to report on new information that essentially demolished the premise of the lead story about a "six to eight percent" Atlantic Yards cutback published September 5.
Calame wrote back, saying I should first complain directly to the newspaper. I did so, and got a response the next day from Deputy Metro Editor Patrick LaForge. I challenged the response and sent it to the Public Editor. Calame, responding five days later, found LaForge's response sufficient.
That was no surprise. Calame practices his own version of judicial deference, seeming to reflexively back the newspaper when I've questioned Atlantic Yards coverage. Could it be because he spent his career at the Wall Street Journal, where there's no metro desk? Or that he's too busy covering national news?
The Times's own coverage, however, suggests that they acknowledge the criticisms I made. Unlike in that front-page article, they've been careful to explain that the scaleback would only bring the size of the Atlantic Yards project back to square one.
But the damage had long been done.
The criticism
As I wrote on September 29, on Sept. 5, the lead story—the most important piece of news in the world for a day—was headlined “Developer Is Said To Plan Cutback In Yards Project.” The deck said: “A Response To Criticism.”
The article, which suggested that developer Forest City Ratner would cut the proposed Atlantic Yards project by six to eight percent, was irresponsible in its execution and thus in its placement.
The article omitted a salient piece of information: the reduction contemplated would bring the project’s size, in square footage, back to the amount announced in December 2003. In other words, the developer increased the size of the project only to reduce it and to appear to be making concessions.
Had that context been included, editors and reporters might have thought twice about the news value of the article. And they might have been reluctant to suggest that the move was a “response to criticism.” An appropriately analytical deck might have read: “Response or Tactic?” [Update: I originally suggested "Criticism or Tactic?"]
Day-after context
Indeed, coverage in other media the next day demolished the premise, offering context for the cutback. The Times reported that the cutback might be considered a tactic, quoting planner Ron Shiffman, who said, “With practically every large development project, people ask for far more than they need.”
Other publications, such as Metro, pointed out that the cutback would only bring the project back to square one.
City Planning's "recommendations"
The story continued. On September 25, the City Planning Commission “recommended” that rumored eight percent scaleback; the next day, the dailies, including the Times, failed to explain that the reduction would restore the project to square one. The Times headlined its story "City Planners Recommend 8% Reduction in Atlantic Yards."
Only in coverage September 28, after the developer “accepted” the recommendation did the Times offer the crucial context: “Moreover, the new reduction only brings the project back to the original size proposed in 2003.”
"Precooked"
The Times's September 26 coverage of the City Planning Commission suggested some of the tactics:
As one executive who works with Forest City put it, “A lot of this was precooked.” Critics and supporters had long anticipated that Forest City would make cuts in the project in order to make it more politically palatable.
But were those actual cuts? The fact that they would restore the project only to its original size was one red flag.
Damning evidence
I found another red flag. A document I obtained via a Freedom of Information Law request from the Department of City Planning shows that most of the proposed cuts had been on the table since January, in an option (20B) presented by the developer and architect Frank Gehry.
Now that we know the developer had already prepared for such cuts, the front-page story on September 5 could not have been describing a “response to criticism.” Nor did city planners, as the September 26 headline suggests, actually "recommend" much that the developer was not prepared to accept.
This new information deserves follow-up coverage. (The New York Observer and two Brooklyn weeklies have cited it.) The Times has failed, however, to offer it. As former Public Editor Daniel Okrent wrote (All the News That's Fit to Print? Or Just Our News? 2/1/04):
If the goal of newspapering is to inform the readers and create a historical record, shouldn't the editors be telling us about everything they think is important, no matter where they find it?
Enshrining myth
In the Final Environmental Impact Statement (FEIS) issued November 15 and reissued November 27, the Empire State Development Corporation told (p. 42) citizens who complained that the project was too big that “the project has been modified in response to recommendations by the City Planning Commission."
It’s the job of the press, including the Times, to tell the public that those recommendations were in large part preordained by Forest City Ratner rather than developed by the City Planning Commission in response to criticism.
The Times's response
I got a timely but evasive response from LaForge, which I reprint in italics, followed by my verbatim rebuttal in my follow-up to Calame.
The public editor has forwarded your complaints about the Sept. 5 article on the Atlantic Yards project, which cited various sources who said that Forest City Ratner intended to respond to critics by scaling back the plan on the table, including a reduction in the height of "Miss Brooklyn." Those were newsworthy developments.
You questioned the front-page lead placement of the article, suggesting that the editors viewed this as "the most important piece of news in the world for a day." Actually, while this was important news, the article was not on the front page in editions distributed outside the metropolitan region.
I question its placement on the front-page locally, as well. And I question its placement as the lead story locally. (Several other people I spoke to, including people strenuously independent on the issue, questioned it as well.)
Other local news organizations agreed about its importance and followed up the next day, as you note.
That doesn't justify its placement. And, as even the Times's own coverage showed, they collectively undermined it. But the lead story placement suggested to the public that the cut was significant, and the article included insufficient context and skepticism.
The phrase in the headline that concerns you -- "A Response to Criticism" -- was accurate and appropriately neutral. Your suggestion -- "Criticism or Tactic" -- seems to reflect an opinion and would not have passed muster for style reasons not worth discussing.
"A Response to Criticism" was conclusory. Had the context been included, an alternate deck might have been devised. My suggestion was "Criticism or Tactic?", with a question mark. I recognize on reflection that that would've been syntactically and stylistically inappropriate, so "Response or Tactic?" would have been better--and no more of an opinion than "A Response to Criticism." Rather, it would have left open two interpretations of the move.
As for the suggestion that the article needed more context, it is always a judgment call how much background to include, given space constraints and the interest level of the general reader. Even so, this article explicitly reported that critics felt the developer's response was inadequate and took note of speculation that this was part of a long-planned public relations strategy. The article also said that "the size of the project swelled" over two years before the developer moved to scale it back.
Still, the headline(s) and the absence of precise context combine to suggest that the cut was significant, rather than a tactic. The story deserved far more modest placement and additional context.
Regarding the document that you mention, the editors and reporters have reviewed it and disagree that it "essentially demolishes the premise"of the article. Indeed, the project then on the table was later scaled back, as reported.
It demolishes the premise that it was a "response to criticism." Rather, the document shows that the developer had put the option on the table in January. But the Times and other news outlets reported that it was "recommended" by City Planning and "accepted" by the developer. Rather, it was orchestrated.
Over on our political blog, The Empire Zone, I did invite Atlantic Yards critics to post links, and you posted one about your commentary on this document, which I am sure was of interest to some readers.
My commentary included reporting of information of importance to this story. The information belongs in Times print coverage. My original criticisms stand.
The Public Editor responds
Calame wrote to me on 12/5/06:
I have reviewed your complaint about the response provided to you by Patrick LaForge regarding The Times's coverage of Atlantic Yards. I believe his answers to the questions you raised were responsive and reflected a fair consideration of the points you had made.
Calame's use of the term "complaint"--I used "criticism"--suggests that he may be helping deflect agitated readers rather than respond thoughtfully to a reporter who may have studied this topic more than anyone at the Times.
A bias toward scoops
Had Calame and LaForge been more candid, they could have acknowledged some other factors. First, given the dearth of big news on the Labor Day weekend, the threshold for front page placement was much lower.
Second, that a bias toward scoops--and the scaleback plan was one thanks to a leak from someone in City Planning and/or, more likely, Forest City Ratner--might lead to an emphasis on the scoop rather than an acknowledgment of counter-evidence that could move the story off the front page.
Indeed, Calame's 12/3/06 column, headlined Scoops, Impact or Glory: What Motivates Reporters?, almost contained an explanation for the article that I'd criticized.
Calame concluded that, while reporters are not motivated by bias, they are competitive:
The drive to be first with the basic facts of a newsworthy development remains embedded in the culture of newsrooms and in the minds of reporters.
That might explain why the reporters seized on the news that a reduction might be coming.
But there's more. Calame continued:
But “intellectual scoops” — stories with new insights that are lauded on a regular basis by Bill Keller, the executive editor — are what reporters increasingly view as a more vital way to be first. As one editor told me in an interview, “When you can look at all the dots everyone can look at, and be the first to connect them in a meaningful and convincing way, that’s something.”
Had the reporters on that story, Charles V. Bagli and Diane Cardwell, actually connected all the dots, it wouldn't have been a front-page story. Indeed, Calame continued:
The dangers to readers of a rush to be first are obvious. Accuracy can suffer, and a fresh insight can be left without the convincing example that another day of reporting could have produced.
That second day of reporting is what Nicholas Confessore offered in the follow-up, buried inside the Metro section, not on the front page. Indeed, Bagli and Cardwell had covered the Atlantic Yards issue rarely since Confessore was assigned to the Brooklyn bureau in October 2005.
Near the end of his essay, Calame concluded:
While it’s no longer a dominant motivation, the hope of turning up a really big story that will make it to the front page never seems that far from the minds of many reporters.
So perhaps the drive to get on the front page, along with the slow news day and the absence of the reporter closest to the story, contributed to poor judgment by reporters and editors.
Judgment calls
So let's take another look. Regarding that 9/5/06 article, LaForge noted that it is always a judgment call how much background to include, given space constraints and the interest level of the general reader. Even so, this article explicitly reported that critics felt the developer's response was inadequate and took note of speculation that this was part of a long-planned public relations strategy. The article also said that "the size of the project swelled" over two years before the developer moved to scale it back.
However, the article never spelled out the size of the cutbacks. Here are the paragraphs:
Whatever happens, the planned cutbacks are unlikely to satisfy the most severe critics.
''I don't think the bottom-line community concern is really about aesthetics, which is what shaving a few stories off the heights of the buildings is about,'' said James F. Brennan, a Brooklyn assemblyman. ''I don't think this flies.''
Daniel Goldstein, a spokesman for Develop Don't Destroy Brooklyn... said he suspects that the developer has had this proposal ''in their closet for a long time.''
None of that addresses whether the planned cutbacks would satisfy even mild critics, as the follow-up story, which quoted some random Brooklynites, showed.
Six paragraphs later, after quoting some politicians and citing some history, the 9/5/06 article nudged toward specifics:
But over the following two years, the size of the project swelled to 7,300 apartments and the high-rise towers -- 19 to 58 stories -- took shape, looming over the four- to six-story buildings in the adjoining neighborhoods. In March, Forest City reduced the project by 475,000 square feet by cutting 440 market-rate condominiums, but that went largely unnoticed.
Here's where the Times could have added the context, such as "It remained larger than originally announced, and the newly hinted cutback would bring it back to square one."
The follow-up
Confessore's 9/6/06 follow-up undermined the lead placement of the previous story simply by its headline, Developer’s Plan for a Smaller Yards Project Matters Little, More or Less, in Brooklyn. The article hinted at, but did not specify that the project would return to square one. But most quoted were skeptical. This article, however, was on page B3.
Later in the month, he spelled it out, in a 9/29/06 article headlined Atlantic Yards Developer Accepts 8% Reduction in Project:
The company's agreement was to some extent preordained: yesterday's formal recommendations followed months of discussion. Moreover, the new reduction only brings the project back to the original size proposed in 2003.
This article also appeared on B3.
Front-page news, finally
Last week, in the 12/21/06 front-page Times article about approval of the project, headlined, State Approves Major Complex For Brooklyn, Confessore crafted a careful description:
On paper, the project grew to a peak of more than nine million square feet, before shrinking back to the roughly eight million square feet originally planned -- a decrease that did little to mollify those residents and officials who said that the project had been far too big and dense from the beginning.
That, again, is called "rowback"--a change without an official acknowledgement that previous coverage was wanting.
The Times has practiced "rowback" on several aspects of the Atlantic Yards story: the location of the project in "Downtown Brooklyn," the description of the state's actions as a rezoning, and the description of the project as being located "on the railyards."
I'm sure such a practice isn't limited to the Atlantic Yards story. But it's still disappointing and part of the pattern that led to New York Magazine's Chris Smith conclusion that "the Times screwed up."
Calame wrote back, saying I should first complain directly to the newspaper. I did so, and got a response the next day from Deputy Metro Editor Patrick LaForge. I challenged the response and sent it to the Public Editor. Calame, responding five days later, found LaForge's response sufficient.
That was no surprise. Calame practices his own version of judicial deference, seeming to reflexively back the newspaper when I've questioned Atlantic Yards coverage. Could it be because he spent his career at the Wall Street Journal, where there's no metro desk? Or that he's too busy covering national news?
The Times's own coverage, however, suggests that they acknowledge the criticisms I made. Unlike in that front-page article, they've been careful to explain that the scaleback would only bring the size of the Atlantic Yards project back to square one.
But the damage had long been done.
The criticism
As I wrote on September 29, on Sept. 5, the lead story—the most important piece of news in the world for a day—was headlined “Developer Is Said To Plan Cutback In Yards Project.” The deck said: “A Response To Criticism.”The article, which suggested that developer Forest City Ratner would cut the proposed Atlantic Yards project by six to eight percent, was irresponsible in its execution and thus in its placement.
The article omitted a salient piece of information: the reduction contemplated would bring the project’s size, in square footage, back to the amount announced in December 2003. In other words, the developer increased the size of the project only to reduce it and to appear to be making concessions.
Had that context been included, editors and reporters might have thought twice about the news value of the article. And they might have been reluctant to suggest that the move was a “response to criticism.” An appropriately analytical deck might have read: “Response or Tactic?” [Update: I originally suggested "Criticism or Tactic?"]
Day-after context
Indeed, coverage in other media the next day demolished the premise, offering context for the cutback. The Times reported that the cutback might be considered a tactic, quoting planner Ron Shiffman, who said, “With practically every large development project, people ask for far more than they need.”
Other publications, such as Metro, pointed out that the cutback would only bring the project back to square one.
City Planning's "recommendations"
The story continued. On September 25, the City Planning Commission “recommended” that rumored eight percent scaleback; the next day, the dailies, including the Times, failed to explain that the reduction would restore the project to square one. The Times headlined its story "City Planners Recommend 8% Reduction in Atlantic Yards."
Only in coverage September 28, after the developer “accepted” the recommendation did the Times offer the crucial context: “Moreover, the new reduction only brings the project back to the original size proposed in 2003.”
"Precooked"
The Times's September 26 coverage of the City Planning Commission suggested some of the tactics:
As one executive who works with Forest City put it, “A lot of this was precooked.” Critics and supporters had long anticipated that Forest City would make cuts in the project in order to make it more politically palatable.
But were those actual cuts? The fact that they would restore the project only to its original size was one red flag.
Damning evidence
I found another red flag. A document I obtained via a Freedom of Information Law request from the Department of City Planning shows that most of the proposed cuts had been on the table since January, in an option (20B) presented by the developer and architect Frank Gehry.Now that we know the developer had already prepared for such cuts, the front-page story on September 5 could not have been describing a “response to criticism.” Nor did city planners, as the September 26 headline suggests, actually "recommend" much that the developer was not prepared to accept.
This new information deserves follow-up coverage. (The New York Observer and two Brooklyn weeklies have cited it.) The Times has failed, however, to offer it. As former Public Editor Daniel Okrent wrote (All the News That's Fit to Print? Or Just Our News? 2/1/04):
If the goal of newspapering is to inform the readers and create a historical record, shouldn't the editors be telling us about everything they think is important, no matter where they find it?
Enshrining myth
In the Final Environmental Impact Statement (FEIS) issued November 15 and reissued November 27, the Empire State Development Corporation told (p. 42) citizens who complained that the project was too big that “the project has been modified in response to recommendations by the City Planning Commission."
It’s the job of the press, including the Times, to tell the public that those recommendations were in large part preordained by Forest City Ratner rather than developed by the City Planning Commission in response to criticism.
The Times's response
I got a timely but evasive response from LaForge, which I reprint in italics, followed by my verbatim rebuttal in my follow-up to Calame.
The public editor has forwarded your complaints about the Sept. 5 article on the Atlantic Yards project, which cited various sources who said that Forest City Ratner intended to respond to critics by scaling back the plan on the table, including a reduction in the height of "Miss Brooklyn." Those were newsworthy developments.
You questioned the front-page lead placement of the article, suggesting that the editors viewed this as "the most important piece of news in the world for a day." Actually, while this was important news, the article was not on the front page in editions distributed outside the metropolitan region.
I question its placement on the front-page locally, as well. And I question its placement as the lead story locally. (Several other people I spoke to, including people strenuously independent on the issue, questioned it as well.)
Other local news organizations agreed about its importance and followed up the next day, as you note.
That doesn't justify its placement. And, as even the Times's own coverage showed, they collectively undermined it. But the lead story placement suggested to the public that the cut was significant, and the article included insufficient context and skepticism.
The phrase in the headline that concerns you -- "A Response to Criticism" -- was accurate and appropriately neutral. Your suggestion -- "Criticism or Tactic" -- seems to reflect an opinion and would not have passed muster for style reasons not worth discussing.
"A Response to Criticism" was conclusory. Had the context been included, an alternate deck might have been devised. My suggestion was "Criticism or Tactic?", with a question mark. I recognize on reflection that that would've been syntactically and stylistically inappropriate, so "Response or Tactic?" would have been better--and no more of an opinion than "A Response to Criticism." Rather, it would have left open two interpretations of the move.
As for the suggestion that the article needed more context, it is always a judgment call how much background to include, given space constraints and the interest level of the general reader. Even so, this article explicitly reported that critics felt the developer's response was inadequate and took note of speculation that this was part of a long-planned public relations strategy. The article also said that "the size of the project swelled" over two years before the developer moved to scale it back.
Still, the headline(s) and the absence of precise context combine to suggest that the cut was significant, rather than a tactic. The story deserved far more modest placement and additional context.
Regarding the document that you mention, the editors and reporters have reviewed it and disagree that it "essentially demolishes the premise"of the article. Indeed, the project then on the table was later scaled back, as reported.
It demolishes the premise that it was a "response to criticism." Rather, the document shows that the developer had put the option on the table in January. But the Times and other news outlets reported that it was "recommended" by City Planning and "accepted" by the developer. Rather, it was orchestrated.
Over on our political blog, The Empire Zone, I did invite Atlantic Yards critics to post links, and you posted one about your commentary on this document, which I am sure was of interest to some readers.
My commentary included reporting of information of importance to this story. The information belongs in Times print coverage. My original criticisms stand.
The Public Editor responds
Calame wrote to me on 12/5/06:
I have reviewed your complaint about the response provided to you by Patrick LaForge regarding The Times's coverage of Atlantic Yards. I believe his answers to the questions you raised were responsive and reflected a fair consideration of the points you had made.
Calame's use of the term "complaint"--I used "criticism"--suggests that he may be helping deflect agitated readers rather than respond thoughtfully to a reporter who may have studied this topic more than anyone at the Times.
A bias toward scoops
Had Calame and LaForge been more candid, they could have acknowledged some other factors. First, given the dearth of big news on the Labor Day weekend, the threshold for front page placement was much lower.
Second, that a bias toward scoops--and the scaleback plan was one thanks to a leak from someone in City Planning and/or, more likely, Forest City Ratner--might lead to an emphasis on the scoop rather than an acknowledgment of counter-evidence that could move the story off the front page.
Indeed, Calame's 12/3/06 column, headlined Scoops, Impact or Glory: What Motivates Reporters?, almost contained an explanation for the article that I'd criticized.
Calame concluded that, while reporters are not motivated by bias, they are competitive:
The drive to be first with the basic facts of a newsworthy development remains embedded in the culture of newsrooms and in the minds of reporters.
That might explain why the reporters seized on the news that a reduction might be coming.
But there's more. Calame continued:
But “intellectual scoops” — stories with new insights that are lauded on a regular basis by Bill Keller, the executive editor — are what reporters increasingly view as a more vital way to be first. As one editor told me in an interview, “When you can look at all the dots everyone can look at, and be the first to connect them in a meaningful and convincing way, that’s something.”
Had the reporters on that story, Charles V. Bagli and Diane Cardwell, actually connected all the dots, it wouldn't have been a front-page story. Indeed, Calame continued:
The dangers to readers of a rush to be first are obvious. Accuracy can suffer, and a fresh insight can be left without the convincing example that another day of reporting could have produced.
That second day of reporting is what Nicholas Confessore offered in the follow-up, buried inside the Metro section, not on the front page. Indeed, Bagli and Cardwell had covered the Atlantic Yards issue rarely since Confessore was assigned to the Brooklyn bureau in October 2005.
Near the end of his essay, Calame concluded:
While it’s no longer a dominant motivation, the hope of turning up a really big story that will make it to the front page never seems that far from the minds of many reporters.
So perhaps the drive to get on the front page, along with the slow news day and the absence of the reporter closest to the story, contributed to poor judgment by reporters and editors.
Judgment calls
So let's take another look. Regarding that 9/5/06 article, LaForge noted that it is always a judgment call how much background to include, given space constraints and the interest level of the general reader. Even so, this article explicitly reported that critics felt the developer's response was inadequate and took note of speculation that this was part of a long-planned public relations strategy. The article also said that "the size of the project swelled" over two years before the developer moved to scale it back.
However, the article never spelled out the size of the cutbacks. Here are the paragraphs:
Whatever happens, the planned cutbacks are unlikely to satisfy the most severe critics.
''I don't think the bottom-line community concern is really about aesthetics, which is what shaving a few stories off the heights of the buildings is about,'' said James F. Brennan, a Brooklyn assemblyman. ''I don't think this flies.''
Daniel Goldstein, a spokesman for Develop Don't Destroy Brooklyn... said he suspects that the developer has had this proposal ''in their closet for a long time.''
None of that addresses whether the planned cutbacks would satisfy even mild critics, as the follow-up story, which quoted some random Brooklynites, showed.
Six paragraphs later, after quoting some politicians and citing some history, the 9/5/06 article nudged toward specifics:
But over the following two years, the size of the project swelled to 7,300 apartments and the high-rise towers -- 19 to 58 stories -- took shape, looming over the four- to six-story buildings in the adjoining neighborhoods. In March, Forest City reduced the project by 475,000 square feet by cutting 440 market-rate condominiums, but that went largely unnoticed.
Here's where the Times could have added the context, such as "It remained larger than originally announced, and the newly hinted cutback would bring it back to square one."
The follow-up
Confessore's 9/6/06 follow-up undermined the lead placement of the previous story simply by its headline, Developer’s Plan for a Smaller Yards Project Matters Little, More or Less, in Brooklyn. The article hinted at, but did not specify that the project would return to square one. But most quoted were skeptical. This article, however, was on page B3.
Later in the month, he spelled it out, in a 9/29/06 article headlined Atlantic Yards Developer Accepts 8% Reduction in Project:
The company's agreement was to some extent preordained: yesterday's formal recommendations followed months of discussion. Moreover, the new reduction only brings the project back to the original size proposed in 2003.
This article also appeared on B3.
Front-page news, finally
Last week, in the 12/21/06 front-page Times article about approval of the project, headlined, State Approves Major Complex For Brooklyn, Confessore crafted a careful description:
On paper, the project grew to a peak of more than nine million square feet, before shrinking back to the roughly eight million square feet originally planned -- a decrease that did little to mollify those residents and officials who said that the project had been far too big and dense from the beginning.
That, again, is called "rowback"--a change without an official acknowledgement that previous coverage was wanting.
The Times has practiced "rowback" on several aspects of the Atlantic Yards story: the location of the project in "Downtown Brooklyn," the description of the state's actions as a rezoning, and the description of the project as being located "on the railyards."
I'm sure such a practice isn't limited to the Atlantic Yards story. But it's still disappointing and part of the pattern that led to New York Magazine's Chris Smith conclusion that "the Times screwed up."
Monday, December 25, 2006
Eminent domain attorney: look to federal court
Eminent domain attorney Michael Rikon, speaking on the Brian Lehrer Show last Thursday, offered both cautionary and encouraging words to those hoping to challenge the Atlantic Yards project in court.
On the one hand, Rikon said that eminent domain law offered a lot of leeway to government agencies making determinations of blight. "Our courts will allow the taking for anything that has the slightest incidental public benefit," said Rikon, who represents parties threatened with condemnation. "In this case, they allege the area is blighted and the project will clear the blight up. Blight is a standard that is in the eyes of the beholder. I’ve seen blighting studies that were totally absurd. If it wasn’t blighted, it will soon be blighted by the cloud of condemnation."
Chimed in Brooklyn Papers editor Gersh Kuntzman, "It’s funny to think of a area that’s blighted where brownstones neighboring this supposedly blighted area sell for $1.5 million."
Rikon again said that blight represented a difficult legal challenge. "When you try to attack that in court, judges will say, well, that’s a legislative determination which we won’t get involved in…. It’s a real problem," he said. "The most fruitful grounds for reversing a determination is on the environmental issue. That is the failure to comply with Article 8 of New York’s environmental conservation law.
Federal court option
Rikon added support for the eminent domain cases filed in federal court: "That, as well as the federal ligitation—federal judges are not that narrow in their review of these projects. And across the country, various federal judges have stopped projects which they thought were unfair and improper..."
Rikon said he didn't anticipate successful results in state court. (The main eminent domain challenge has been filed in federal court, while several renters have filed a case in state court.)
"The challenges I've made, which had really good merit as far as I'm concerned, have never been successful," Rikon said. "It's extremely difficult to stop a condemnation proceeding in New York State. In federal court, there's a much better chance. I think the judges who hear those cases are more open to the arguments being made by opponents of the project."
On the one hand, Rikon said that eminent domain law offered a lot of leeway to government agencies making determinations of blight. "Our courts will allow the taking for anything that has the slightest incidental public benefit," said Rikon, who represents parties threatened with condemnation. "In this case, they allege the area is blighted and the project will clear the blight up. Blight is a standard that is in the eyes of the beholder. I’ve seen blighting studies that were totally absurd. If it wasn’t blighted, it will soon be blighted by the cloud of condemnation."
Chimed in Brooklyn Papers editor Gersh Kuntzman, "It’s funny to think of a area that’s blighted where brownstones neighboring this supposedly blighted area sell for $1.5 million."
Rikon again said that blight represented a difficult legal challenge. "When you try to attack that in court, judges will say, well, that’s a legislative determination which we won’t get involved in…. It’s a real problem," he said. "The most fruitful grounds for reversing a determination is on the environmental issue. That is the failure to comply with Article 8 of New York’s environmental conservation law.
Federal court option
Rikon added support for the eminent domain cases filed in federal court: "That, as well as the federal ligitation—federal judges are not that narrow in their review of these projects. And across the country, various federal judges have stopped projects which they thought were unfair and improper..."
Rikon said he didn't anticipate successful results in state court. (The main eminent domain challenge has been filed in federal court, while several renters have filed a case in state court.)
"The challenges I've made, which had really good merit as far as I'm concerned, have never been successful," Rikon said. "It's extremely difficult to stop a condemnation proceeding in New York State. In federal court, there's a much better chance. I think the judges who hear those cases are more open to the arguments being made by opponents of the project."
Sunday, December 24, 2006
Forest City press release emphasizes Nets, downplays subsidies
The press release from Forest City Enterprises, dated December 21, a day after the approval vote, and headlined Forest City’s Atlantic Yards Project Approved By State Board:
CLEVELAND--(BUSINESS WIRE)--Forest City Enterprises, Inc. (NYSE:FCEA) and (NYSE:FCEB) today announced that New York’s Public Authorities Control Board (PACB) unanimously approved the Company’s Atlantic Yards project, a mixed-use development in downtown Brooklyn whose main attraction is expected to be a new sports and entertainment arena for the Nets NBA basketball team.
Note the use of "downtown Brooklyn."
Special benefits
The three voting members of PACB, representing the governor, Senate and Assembly, unanimously authorized public financing for the project. Based on the Board’s vote, government agencies are expected to provide tax-exempt bonds and subsidies to help finance the project, thus completing the public review process for Atlantic Yards.
Note the acknowledgement of tax-exempt bonds along with subsidies. But that's not the whole story. The Atlantic Yards web site acknowledges subsidies for infrastructure development and "[c]ertain as-of-right tax benefits may also be available to FCRC as they would be for any other developer."
That's still not the whole story. New York City's Independent Budget Office stated, in a September 2005 report:
Special Benefits for the Atlantic Yards Project. Under the MOU, Atlantic Yards would receive several special benefits not available as-of-right to development projects: capital contributions from the city and state, low-cost financing for the arena, extra property tax savings, a low-cost lease, and property obtained using the state’s power of eminent domain.
What about the condos?
The Forest City press release continued:
Charles A. Ratner, president and chief executive officer of Forest City Enterprises, said, “The Public Authorities Control Board’s action enables the Atlantic Yards project to move forward in a mutually beneficial public/private partnership. Our goal is to create a dynamic commercial and recreational destination complementing vibrant residential neighborhoods. This project will create jobs and help make Brooklyn an even greater place to live, work and play.”
Atlantic Yards is a long-term development project that is expected to include an arena to be developed by Forest City and designed by world-renowned architect Frank Gehry. Other uses are anticipated to include retail, office, apartments, and parks and open space. The arena would become an integral part of the local community, hosting local sporting events, concerts, family entertainment, and corporate and special events, in addition to serving as a professional sports complex and an international entertainment destination. Forest City is the principal owner of the Nets.
Maybe this is reading too much into it, but isn't the developer downplaying Gehry's role in designing the rest of the project?
And how can there be both parks and open space--does the developer plan to turn over some open space to the city's Department of Parks and Recreation?
And why exactly does "apartments" come third in the list since the project would be, in terms of square footage, some 80% residential, and the market-rate units would be the main source of the corporation's revenues?
CLEVELAND--(BUSINESS WIRE)--Forest City Enterprises, Inc. (NYSE:FCEA) and (NYSE:FCEB) today announced that New York’s Public Authorities Control Board (PACB) unanimously approved the Company’s Atlantic Yards project, a mixed-use development in downtown Brooklyn whose main attraction is expected to be a new sports and entertainment arena for the Nets NBA basketball team.
Note the use of "downtown Brooklyn."
Special benefits
The three voting members of PACB, representing the governor, Senate and Assembly, unanimously authorized public financing for the project. Based on the Board’s vote, government agencies are expected to provide tax-exempt bonds and subsidies to help finance the project, thus completing the public review process for Atlantic Yards.
Note the acknowledgement of tax-exempt bonds along with subsidies. But that's not the whole story. The Atlantic Yards web site acknowledges subsidies for infrastructure development and "[c]ertain as-of-right tax benefits may also be available to FCRC as they would be for any other developer."
That's still not the whole story. New York City's Independent Budget Office stated, in a September 2005 report:
Special Benefits for the Atlantic Yards Project. Under the MOU, Atlantic Yards would receive several special benefits not available as-of-right to development projects: capital contributions from the city and state, low-cost financing for the arena, extra property tax savings, a low-cost lease, and property obtained using the state’s power of eminent domain.
What about the condos?
The Forest City press release continued:
Charles A. Ratner, president and chief executive officer of Forest City Enterprises, said, “The Public Authorities Control Board’s action enables the Atlantic Yards project to move forward in a mutually beneficial public/private partnership. Our goal is to create a dynamic commercial and recreational destination complementing vibrant residential neighborhoods. This project will create jobs and help make Brooklyn an even greater place to live, work and play.”
Atlantic Yards is a long-term development project that is expected to include an arena to be developed by Forest City and designed by world-renowned architect Frank Gehry. Other uses are anticipated to include retail, office, apartments, and parks and open space. The arena would become an integral part of the local community, hosting local sporting events, concerts, family entertainment, and corporate and special events, in addition to serving as a professional sports complex and an international entertainment destination. Forest City is the principal owner of the Nets.
Maybe this is reading too much into it, but isn't the developer downplaying Gehry's role in designing the rest of the project?
And how can there be both parks and open space--does the developer plan to turn over some open space to the city's Department of Parks and Recreation?
And why exactly does "apartments" come third in the list since the project would be, in terms of square footage, some 80% residential, and the market-rate units would be the main source of the corporation's revenues?
The Times Magazine correction comes too late
From today's New York Times Magazine:
An item in the Year in Ideas issue on Dec. 10 about the increasing size and scale of urban planning referred imprecisely to the Atlantic Yards project in Brooklyn. The New York City Planning Commission endorsed it but did not approve it; approval can be given only by state officials.
Now they tell us.
As I wrote the day the item was published, a correction was required in the daily paper, since it might be too late to correct it in the Magazine before the scheduled vote December 20 by the Public Authorities Control Board.
Senior editor Greg Brock wrote back and seemed to concur:
I have passed this query on to the magazine editors. As a rule, we run magazine corrections in the magazine, not in the daily newspaper. But the magazines have early closes, so if the magazine cannot print a correction before the vote, then a daily correction -- or more likely a correction next Sunday on Page A2, so magazine readers will see it -- would be an option.
Option avoided
There was no correction Sunday, December 17, so on the next day I wrote to Brock:
I'm following up on your 12/10 response. I recognize the appropriateness of correcting the error in the Magazine, but, as noted, the record also should be corrected *before* the vote of the Public Authorities Control Board, which is scheduled for Wednesday.
The Magazine has not published a correction. Time is running out. I trust your expeditious attention to this matter.
The board approved the project, but I never got a reply.
The answer came in today's Magazine.
Not the only way
In the past, the Sunday Times, on the usual A2 corrections page, has published corrections of articles appearing in the accompanying Magazine (which closes nearly a week earlier).
In other words, had anyone on Saturday December 9 noticed the error in that article early in the day--as opposed to my evening phone call to the Times--a correction would've appeared in the Sunday paper.
Instead, the Times fell back on following a procedure that, however internally consistent, shortchanged the readers.
It likely wouldn't have made a difference in the vote on December 20. However, it would've provided one more reminder to the Times's editorial writers about their silence on the Atlantic Yards issue.
An item in the Year in Ideas issue on Dec. 10 about the increasing size and scale of urban planning referred imprecisely to the Atlantic Yards project in Brooklyn. The New York City Planning Commission endorsed it but did not approve it; approval can be given only by state officials.
Now they tell us.
As I wrote the day the item was published, a correction was required in the daily paper, since it might be too late to correct it in the Magazine before the scheduled vote December 20 by the Public Authorities Control Board.
Senior editor Greg Brock wrote back and seemed to concur:
I have passed this query on to the magazine editors. As a rule, we run magazine corrections in the magazine, not in the daily newspaper. But the magazines have early closes, so if the magazine cannot print a correction before the vote, then a daily correction -- or more likely a correction next Sunday on Page A2, so magazine readers will see it -- would be an option.
Option avoided
There was no correction Sunday, December 17, so on the next day I wrote to Brock:
I'm following up on your 12/10 response. I recognize the appropriateness of correcting the error in the Magazine, but, as noted, the record also should be corrected *before* the vote of the Public Authorities Control Board, which is scheduled for Wednesday.
The Magazine has not published a correction. Time is running out. I trust your expeditious attention to this matter.
The board approved the project, but I never got a reply.
The answer came in today's Magazine.
Not the only way
In the past, the Sunday Times, on the usual A2 corrections page, has published corrections of articles appearing in the accompanying Magazine (which closes nearly a week earlier).
In other words, had anyone on Saturday December 9 noticed the error in that article early in the day--as opposed to my evening phone call to the Times--a correction would've appeared in the Sunday paper.
Instead, the Times fell back on following a procedure that, however internally consistent, shortchanged the readers.
It likely wouldn't have made a difference in the vote on December 20. However, it would've provided one more reminder to the Times's editorial writers about their silence on the Atlantic Yards issue.
Saturday, December 23, 2006
The Gehry contradiction
From an interview (reg. required) with architect Frank Gehry in today's Wall Street Journal:
Frank Gehry is 77, white haired, paunchy, and when we talked one afternoon in late autumn the topics of age and death never seemed far off. Mr. Gehry is, of course, one of the world's great architects, creator of the Guggenheim museum in Bilbao and enough of an icon to have been among the personalities featured in Apple's "Think Different" campaign.
Describing what it takes for him to accept a commission, Mr. Gehry says, "The determining factor is: Can I get it done while I am still alive?" Explaining why he doesn't build houses any more, Mr. Gehry says, "They involve a lot of personal hand holding. I guess at my age I don't have the patience."
(Emphasis added)
The Atlantic Yards project, unmentioned in the interview, would take ten years to build, at best, and even supporters and cordial critics believe it more likely would take 15-20 years.
Last January, I reported on a Gehry public appearance:
Gehry, who had previously said that he had asked Ratner to let other architects design parts of the project, didn’t complain yesterday but simply related that "there are some 20 buildings to be built, and the client insisted that I do them all. When he came to me, he said, 'I know you're going to try and bring all your friends in to do all the buildings, cause that's a cop-out.'... And he didn't want me to do that, he wanted me to really solve the problem, and put me on the hot seat."
Let's assume that Gehry most readily warmed to the challenge of building his first sports arena. If the project proceeds on or close to schedule (the arena's due in the fall of 2009, two years later than originally announced) and Gehry remains healthy, then he'll have gotten it done during his remaining years.
But the potential for delay combined with actuarial calculations suggests that it's highly unlikely that Gehry will oversee the entire project from start to finish. But having Gehry's name on the buildings would indeed be a selling point.
Frank Gehry is 77, white haired, paunchy, and when we talked one afternoon in late autumn the topics of age and death never seemed far off. Mr. Gehry is, of course, one of the world's great architects, creator of the Guggenheim museum in Bilbao and enough of an icon to have been among the personalities featured in Apple's "Think Different" campaign.
Describing what it takes for him to accept a commission, Mr. Gehry says, "The determining factor is: Can I get it done while I am still alive?" Explaining why he doesn't build houses any more, Mr. Gehry says, "They involve a lot of personal hand holding. I guess at my age I don't have the patience."
(Emphasis added)
The Atlantic Yards project, unmentioned in the interview, would take ten years to build, at best, and even supporters and cordial critics believe it more likely would take 15-20 years.
Last January, I reported on a Gehry public appearance:
Gehry, who had previously said that he had asked Ratner to let other architects design parts of the project, didn’t complain yesterday but simply related that "there are some 20 buildings to be built, and the client insisted that I do them all. When he came to me, he said, 'I know you're going to try and bring all your friends in to do all the buildings, cause that's a cop-out.'... And he didn't want me to do that, he wanted me to really solve the problem, and put me on the hot seat."
Let's assume that Gehry most readily warmed to the challenge of building his first sports arena. If the project proceeds on or close to schedule (the arena's due in the fall of 2009, two years later than originally announced) and Gehry remains healthy, then he'll have gotten it done during his remaining years.
But the potential for delay combined with actuarial calculations suggests that it's highly unlikely that Gehry will oversee the entire project from start to finish. But having Gehry's name on the buildings would indeed be a selling point.
Is the Daily News in the tank when it comes to AY?
In my press criticism, I've focused much of my attention on the New York Times, because it's the city's most important newspaper and because the Times has a special obligation to exactingly cover Forest City Ratner, which is in business with the parent New York Times Company.
But the Daily News, owned by real estate mogul Mort Zuckerman, deserves scrutiny as well. Let's acknowledge that the newspaper has the right to run numerous masthead editorials and Errol Louis columns cheerleading for the Atlantic Yards project. (I've dissected them regularly.) Still, the rate of such editorials far outpaced any other daily.
Also, let's acknowledge that the paper has published a point-counterpoint and, of course, let sports columnist Mike Lupica challenge Bruce Ratner's plan.
Don't believe the hype
But the Daily News has a problem, and it goes way beyond the practice of a tabloid editorializing on its front page.
Inside the news pages, the newspaper has truly embarrassed itself, in both overhyping and underplaying stories. Take yesterday's slight and speculative story, following up on news announced Wednesday, headlined Nets go High Tech: Ratner throws in new home for elite Brooklyn HS in arena deal.
First, Ratner has made no such promises stated in the headline. As the article stated:
Ratner agreed in a statement to "work with the city, state and the United Federation of Teachers on the creation of a new, 21st century Brooklyn Tech High School, at a yet to be determined location in the borough."
Ratner spokeswoman Joyce Baumgarten said yesterday plans were "still in the formative stages."
What does "work with" mean? Contribute space in a new Ratner development? Sell space at a certain rate? I couldn't get any answers this week. There's no story beyond the vague statement.
If the developer had pledged to build a new school, we would've been told. Similarly, the developer has allocated space in one planned Atlantic Yards building for a school, but the city is paying.
That Brooklyn Tech story, hyping a phantom, appeared on page 2 of the main news section.
Only for Brooklynites?
Two days earlier, on Wednesday, the News ran an article headlined Price of Yards too high? State opens books before key vote. On the day of the Atlantic Yards vote by the Public Authorities Control Board, this article appeared in the center section of the edition that circulates only in Brooklyn.
In other words, Daily News readers from elsewhere in the city and state were not informed that:
The Empire State Development Corp. revealed recently that projected tax revenues from the project had dropped from about $1.4 billion to $944 million.
The number of jobs and personal income created by the project were also estimated to be dramatically lower than expected, according to the projections.
There's something wrong here.
Eminent domain distraction
The same thing happened when the Daily News covered the eminent domain lawsuit that could not only derail the Atlantic Yards plan but establish a new legal doctrine. The 10/27/06 article, headlined Ratner plan hit with suit: Eviction targets seek to stop Yards, appeared only in Brooklyn.
This leads to the question: is the Daily News in the tank? Are the editors deliberately underplaying stories of civic importance and hyping the ephemeral?
The evidence is troubling.
But the Daily News, owned by real estate mogul Mort Zuckerman, deserves scrutiny as well. Let's acknowledge that the newspaper has the right to run numerous masthead editorials and Errol Louis columns cheerleading for the Atlantic Yards project. (I've dissected them regularly.) Still, the rate of such editorials far outpaced any other daily.Also, let's acknowledge that the paper has published a point-counterpoint and, of course, let sports columnist Mike Lupica challenge Bruce Ratner's plan.
Don't believe the hype
But the Daily News has a problem, and it goes way beyond the practice of a tabloid editorializing on its front page.
Inside the news pages, the newspaper has truly embarrassed itself, in both overhyping and underplaying stories. Take yesterday's slight and speculative story, following up on news announced Wednesday, headlined Nets go High Tech: Ratner throws in new home for elite Brooklyn HS in arena deal.
First, Ratner has made no such promises stated in the headline. As the article stated:
Ratner agreed in a statement to "work with the city, state and the United Federation of Teachers on the creation of a new, 21st century Brooklyn Tech High School, at a yet to be determined location in the borough."
Ratner spokeswoman Joyce Baumgarten said yesterday plans were "still in the formative stages."
What does "work with" mean? Contribute space in a new Ratner development? Sell space at a certain rate? I couldn't get any answers this week. There's no story beyond the vague statement.
If the developer had pledged to build a new school, we would've been told. Similarly, the developer has allocated space in one planned Atlantic Yards building for a school, but the city is paying.
That Brooklyn Tech story, hyping a phantom, appeared on page 2 of the main news section.
Only for Brooklynites?
Two days earlier, on Wednesday, the News ran an article headlined Price of Yards too high? State opens books before key vote. On the day of the Atlantic Yards vote by the Public Authorities Control Board, this article appeared in the center section of the edition that circulates only in Brooklyn.
In other words, Daily News readers from elsewhere in the city and state were not informed that:
The Empire State Development Corp. revealed recently that projected tax revenues from the project had dropped from about $1.4 billion to $944 million.
The number of jobs and personal income created by the project were also estimated to be dramatically lower than expected, according to the projections.
There's something wrong here.
Eminent domain distraction
The same thing happened when the Daily News covered the eminent domain lawsuit that could not only derail the Atlantic Yards plan but establish a new legal doctrine. The 10/27/06 article, headlined Ratner plan hit with suit: Eviction targets seek to stop Yards, appeared only in Brooklyn.
This leads to the question: is the Daily News in the tank? Are the editors deliberately underplaying stories of civic importance and hyping the ephemeral?
The evidence is troubling.
Friday, December 22, 2006
Miss Brooklyn, though shorter, would still block the clock
It was a concession, right? Among several relatively minor changes announced Wednesday, Forest City Ratner agreed to lower the announced 620-foot Miss Brooklyn tower a sliver below that of the iconic 512-foot Williamsburgh Savings Bank nearby.
Or was it?
Yes, it met the request of Borough President Marty Markowitz, who in his August 23 oral testimony on the Atlantic Yards plan had called for the bank to remain the borough's tallest building.
But many residents also asked that architect Frank Gehry's self-described "ego trip" not block the bank's signature clock tower. To achieve that, the developer would have had to make a much greater sacrifice: make the tower even smaller and/or move its footprint.
Indeed, Jasper Goldman, who studied the plan for the Municipal Art Society (MAS), confirmed to me: "The Williamsburgh Savings Bank is blocked by Miss Brooklyn from Grand Army Plaza because of its location, not its height. To retain this view corridor, the developer would need to move Miss Brooklyn to the east."
(Graphic of 620-foot Miss Brooklyn from Final Environmental Impact Statement. Click to enlarge.)
Initial pledge unfulfilled
And moving Miss Brooklyn, apparently, was not on the table, even though Forest City Ratner in its initial project announcement on 12/10/03, promised to do just that: The northernmost building on the site, an office building, will be set back slightly from the intersection of Atlantic and Flatbush Avenues, to maintain the view corridor to the Williamsburg Bank building.
The defense came from Empire State Development Corporation (ESDC), in the Final Environmental Impact Statement (FEIS), which observed that moving the building east wouldn't be feasible from an engineering point of view and, anyhow, any private owner on that plot could build at that height. (Of course, the private owner is Forest City, so they could follow their own pledge.)
(Bank view from the Environmental Simulation Center, which provided models for the Council of Brooklyn Neighborhoods.)
Official cover
More cover came from city officials. The FEIS explained:
The bulk and height of Building 1 have been developed in consultation with City Planning. Building 1, designed in large part to relate to the Williamsburgh Savings Bank Building in form, would alter views of the Bank Building on the Brooklyn skyline...
The City Planning Commission did ask for the building to be narrower in places. But the city explicitly endorsed a 620-foot tower. Said Regina Myer, then director of the Department of City Planning's Brooklyn office in September, “We really do believe the height it’s proposed at is really appropriate."
I wrote: Really? Or does that leave Miss Brooklyn for a negotiated trim at a later date?
(View of 620-foot Miss Brooklyn from the Environmental Simulation Center.)
Markowitz didn't ask that the clock not be blocked. MAS and others, including City Council Member Letitia James, did so.
Rather, in his written testimony, Markowitz merely said:
The FEIS [Final Environmental Impact Statement] should acknowledge that in becoming a new visual element and wayfinder, Building 1 may diminish views of the Williamsburg Bank Building from many locations. Moreover, Building 1 should not be taller than 512 feet.
Blame Frank?
The resistance to reducing the height of the tower might, in retrospect, be seen as part of a strategy, first floated in a 9/5/06 New York Times article on talk of a scaleback:
Officials say that Forest City has not settled on the final numbers for the project, but that it plans to reduce the size by 500,000 to 700,000 square feet by eliminating hundreds of market-rate apartments. That would enable the developer to cut the height of some of the towers, including a 350-foot building on what is known as Site 5, on the west side of Flatbush Avenue, and possibly at Miss Brooklyn.
But according to executives briefed by the developer, Mr. Gehry has objected to any changes in his design for Miss Brooklyn.
(Emphasis added)
That sounded a bit fishy then and even fishier now. Was Gehry truly throwing an artistic fit? After all, the architect doesn't call the shots. Last January, Gehry had expressed interest in meeting with Brooklynites who live near the site footprint, but said he had to get clearance from his client. He never did.
But by blaming the resistance on a temperamental architect--a quote sourced ultimately to his client--Forest City Ratner could buy time and make it seem like the final scaleback was a true concession.
Quiet Marty
So the City Planning Commission and the ESDC provided crucial cover, loyally backing the decision not to trim the height of Miss Brooklyn. So, apparently, did Markowitz. Given the ESDC's slap at the Borough President's request to maintain the bank as the borough's tallest building, you'd think the Borough President might have complained publicly.
He didn't. Then again, it's likely he knew what was coming. (Here's what he said Wednesday: I am very encouraged as well that the PACB acted on our suggestion that the project’s “Miss Brooklyn” building not be taller than Brooklyn’s Williamsburg Savings Bank building.)
Things to remember
How significant is the change? Well, we don't know, in square footage, the dimensions of the reduction. But consider that Miss Brooklyn was planned until recently to be three times the bulk of the bank building. Even some 110 feet shorter, Gehry's tower undoubtedly would be well more than double the size of the bank.
Because the size of the tower has been understood by many as the impediment to the view of the bank, some people must think that Forest City's announcement Wednesday meant that the clock wouldn't be blocked.
Indeed, Jo Anne Simon, 52nd A.D. District Leader, issued a press release yesterday, stating:
I could not be more disappointed with the vote in favor of the Atlantic Yards proposal in return for some concessions that the developer has neither the authority nor the means to effectuate. While I am pleased that the Williamsburg Bank tower will remain visible to Brooklynites, the proposal’s serious failures do as well. This proposal should have gone back to the drawing board.
Well, the bank tower may wind up somewhat more visible near a 511-foot Gehry tower than a 620-foot version. However, the fundamental change--moving Miss Brooklyn to maintain the view corridor--was not on the table.
Or was it?
Yes, it met the request of Borough President Marty Markowitz, who in his August 23 oral testimony on the Atlantic Yards plan had called for the bank to remain the borough's tallest building.
But many residents also asked that architect Frank Gehry's self-described "ego trip" not block the bank's signature clock tower. To achieve that, the developer would have had to make a much greater sacrifice: make the tower even smaller and/or move its footprint.Indeed, Jasper Goldman, who studied the plan for the Municipal Art Society (MAS), confirmed to me: "The Williamsburgh Savings Bank is blocked by Miss Brooklyn from Grand Army Plaza because of its location, not its height. To retain this view corridor, the developer would need to move Miss Brooklyn to the east."
(Graphic of 620-foot Miss Brooklyn from Final Environmental Impact Statement. Click to enlarge.)
Initial pledge unfulfilled
And moving Miss Brooklyn, apparently, was not on the table, even though Forest City Ratner in its initial project announcement on 12/10/03, promised to do just that: The northernmost building on the site, an office building, will be set back slightly from the intersection of Atlantic and Flatbush Avenues, to maintain the view corridor to the Williamsburg Bank building.
The defense came from Empire State Development Corporation (ESDC), in the Final Environmental Impact Statement (FEIS), which observed that moving the building east wouldn't be feasible from an engineering point of view and, anyhow, any private owner on that plot could build at that height. (Of course, the private owner is Forest City, so they could follow their own pledge.)(Bank view from the Environmental Simulation Center, which provided models for the Council of Brooklyn Neighborhoods.)
Official cover
More cover came from city officials. The FEIS explained:
The bulk and height of Building 1 have been developed in consultation with City Planning. Building 1, designed in large part to relate to the Williamsburgh Savings Bank Building in form, would alter views of the Bank Building on the Brooklyn skyline...
The City Planning Commission did ask for the building to be narrower in places. But the city explicitly endorsed a 620-foot tower. Said Regina Myer, then director of the Department of City Planning's Brooklyn office in September, “We really do believe the height it’s proposed at is really appropriate." I wrote: Really? Or does that leave Miss Brooklyn for a negotiated trim at a later date?
(View of 620-foot Miss Brooklyn from the Environmental Simulation Center.)
Markowitz didn't ask that the clock not be blocked. MAS and others, including City Council Member Letitia James, did so.
Rather, in his written testimony, Markowitz merely said:
The FEIS [Final Environmental Impact Statement] should acknowledge that in becoming a new visual element and wayfinder, Building 1 may diminish views of the Williamsburg Bank Building from many locations. Moreover, Building 1 should not be taller than 512 feet.
Blame Frank?
The resistance to reducing the height of the tower might, in retrospect, be seen as part of a strategy, first floated in a 9/5/06 New York Times article on talk of a scaleback:
Officials say that Forest City has not settled on the final numbers for the project, but that it plans to reduce the size by 500,000 to 700,000 square feet by eliminating hundreds of market-rate apartments. That would enable the developer to cut the height of some of the towers, including a 350-foot building on what is known as Site 5, on the west side of Flatbush Avenue, and possibly at Miss Brooklyn.
But according to executives briefed by the developer, Mr. Gehry has objected to any changes in his design for Miss Brooklyn.
(Emphasis added)
That sounded a bit fishy then and even fishier now. Was Gehry truly throwing an artistic fit? After all, the architect doesn't call the shots. Last January, Gehry had expressed interest in meeting with Brooklynites who live near the site footprint, but said he had to get clearance from his client. He never did.
But by blaming the resistance on a temperamental architect--a quote sourced ultimately to his client--Forest City Ratner could buy time and make it seem like the final scaleback was a true concession.
Quiet Marty
So the City Planning Commission and the ESDC provided crucial cover, loyally backing the decision not to trim the height of Miss Brooklyn. So, apparently, did Markowitz. Given the ESDC's slap at the Borough President's request to maintain the bank as the borough's tallest building, you'd think the Borough President might have complained publicly.
He didn't. Then again, it's likely he knew what was coming. (Here's what he said Wednesday: I am very encouraged as well that the PACB acted on our suggestion that the project’s “Miss Brooklyn” building not be taller than Brooklyn’s Williamsburg Savings Bank building.)
Things to remember
How significant is the change? Well, we don't know, in square footage, the dimensions of the reduction. But consider that Miss Brooklyn was planned until recently to be three times the bulk of the bank building. Even some 110 feet shorter, Gehry's tower undoubtedly would be well more than double the size of the bank.
Because the size of the tower has been understood by many as the impediment to the view of the bank, some people must think that Forest City's announcement Wednesday meant that the clock wouldn't be blocked.
Indeed, Jo Anne Simon, 52nd A.D. District Leader, issued a press release yesterday, stating:
I could not be more disappointed with the vote in favor of the Atlantic Yards proposal in return for some concessions that the developer has neither the authority nor the means to effectuate. While I am pleased that the Williamsburg Bank tower will remain visible to Brooklynites, the proposal’s serious failures do as well. This proposal should have gone back to the drawing board.
Well, the bank tower may wind up somewhat more visible near a 511-foot Gehry tower than a 620-foot version. However, the fundamental change--moving Miss Brooklyn to maintain the view corridor--was not on the table.
The Errol Louis wrap-up: an all-star collection of misreadings
Let's take a close look at Daily News columnist Errol Louis's column today, headlined A groundbreaking coalition, with the subtitle "When it comes to adding jobs & housing, majority rules with a winning plan." It's an all-star collection of misreadings.
He writes:
The most interesting and least-reported story behind the final state approval of the $4 billion Atlantic Yards project this week is the emergence in Brooklyn of a pro-development coalition of private-sector builders and black working-class residents who are leading a tenacious fight to bring jobs and housing to the borough.
Standing in the path of progress are middle-class civic groups whose mostly white leaders profess concern for low-income New Yorkers - and even claim to speak for them - but shed the illusion of liberal compassion the minute the poor folk get uppity and start negotiating their own deals for the future of their families and communities.
Um, which private-sector builders are anti-development? And haven't civic groups like BrooklynSpeaks actually endorsed more rather than less affordable housing in the Atlantic Yards plan?
And what about the hundreds of millions of dollars--billions?--in subsidies and bonds that will support the housing, figures that government agencies won't reveal?
CB 8's sentiment
After touching on the Fairway and Ikea debates in Red Hook, Louis returns to Atlantic Yards:
News accounts of the three-year, hard-fought battle for approval have ignored the reality that the project was always favored by a solid majority of residents in Community Board 8, where the project will rise.
[Updated] Actually, the project site is divided between Community Boards 2 , 6, and 8, though CB 8 would have a much larger segment. (The project would be at the far west end of CB 8. See Map from Department of City Planning.)
While the opinions among residents of CB 8 vary, members of the community board who studied the project closely delivered a stack of concerns to the Empire State Development Corporation. And remember how all three CBs said that Forest City had overstated their participation in the Community Benefits Agreement (CBA)?
Trusting Forest City
Louis writes:
This year, when I asked the project's sponsor, Forest City, for the names of the community groups backing the project, I was sent a list of more than 200 block associations and other organizations. These are mostly the kinds of groups that don't have the money to create fancy Web sites, daily blogs or press conferences to push their views, but their support for the project has been rock-solid.
As noted in August 2005 in the New York Observer's blog The Real Estate:
...the coalition claimed that "more than 200 organizations have affirmed" the agreement since its signing in June--”meaning they supported the idea even if they were not involved in negotiating the agreement or will be a part of enforcing it. The Real Estate asked for the list and counted fewer than 175; and that's only if "organizations" include elected officials, restaurants and real-estate agencies, as well as block associations and the like. But we were nonetheless surprised it had traveled so far, so fast. Why, there are groups from as far away as Queens and Manhattan on this list! (Are they part of the "community" in downtown Brooklyn?)
Does Louis know how much it costs to create a daily blog? (Answer: free.)
[Update 12/27/06: A reader points out that the cost of a computer and Internet are costs to maintain a blog. I was thinking first of the software, which can be free. It would be more difficult, though still possible, to maintain a blog via free access at various libraries.]
About those polls
Louis writes:
Every reasonably objective indicator of neighborhood sentiment demonstrated local approval. Opinion polls sponsored by the New York Observer and Crain's showed local residents favoring the project, and candidates for local offices who ran on a platform of halting or slowing the project this year went down in flames at the polls.
I dissected the Observer's poll, and the Crain's one. As for the political races, Louis is typically sloppy here, choosing to ignore the victory of incumbent state Senator Velmanette Montgomery. I pointed out that while the election results certainly weren't an anti-Atlantic Yards referendum, it would be hard to call them a win for Atlantic Yards.
"Complacent reporters"
Louis writes:
But complacent reporters often ignore these clear signs of support in favor of endlessly quoting a handful of self-appointed individuals and civic groups who have claimed, falsely, to speak for all of Brooklyn.
As for complacent reporters, Louis is missing the whole rest of the story, as New York Magazine's Chris Smith wrote yesterday. Louis apparently can't take a look at his own paper, cheerleading not only on the editorial page but on the front page.
Note that the cover proclaims a $4.2 billion project, though the total was reduced to $4 billion, and the caption suggests that the arena represents the whole project.
Louis continues:
A coalition called Brooklyn Speaks, for example, assembled and led by the Manhattan-based Municipal Art Society, has proclaimed on its Web site that the three-year debate over Atlantic Yards that led to this week's approval "reflected a process that simply did not allow New Yorkers to shape the project, and the result is a plan that will not work for Brooklyn."
Like many other homeowners and longtime residents of the area, I find that attitude insulting. Kent Barwick, the head of the Municipal Art Society, really ought to spend more time connecting with people in my neighborhood - where residents are grappling with a rising tide of arson, homicide and homelessness - before firing off memos from Madison Ave. about what will or won't work for Brooklyn.
All over Brooklyn, communities are making new alliances in a life-and-death battle to rescue their children and neighborhoods from homelessness, street violence and despair. Civic groups and others who refuse to recognize the new reality are missing an important and inspiring change in how New York does business.
Does Louis actually think New Yorkers were able to shape the project? How exactly do concerns about arson and homicide connect with this development?
While Louis apparently thinks that development of this site will help solve some neighborhood problems--and yes, it might bring employment to some--it's also likely that development pressures in Crown Heights and Prospect Heights, thought to be linked to arson, will accelerate once the Atlantic Yards plan proceeds.
BrooklynSpeaks criticized the project's design (does Louis think the proposed publicly accessible open space will work?), the lack of an effective transportation plan (is Louis pro-gridlock?), and the affordability of the subsidized apartments.
(Fun fact: according to a search of the Daily News archive, Louis's column is the first time Barwick has been mentioned regarding the Atlantic Yards plan. The most frequent Atlantic Yards commentator in the Daily News, of course, has been.... Errol Louis.)
Getting paid
As for some of the community groups that have most vociferously endorsed the plan, Louis omits the most salient fact: they've been paid. They avoid scrutiny. And even the city realizes that the Atlantic Yards CBA is not a model, since it's sponsoring a much more inclusionary effort in West Harlem.
He writes:
The most interesting and least-reported story behind the final state approval of the $4 billion Atlantic Yards project this week is the emergence in Brooklyn of a pro-development coalition of private-sector builders and black working-class residents who are leading a tenacious fight to bring jobs and housing to the borough.
Standing in the path of progress are middle-class civic groups whose mostly white leaders profess concern for low-income New Yorkers - and even claim to speak for them - but shed the illusion of liberal compassion the minute the poor folk get uppity and start negotiating their own deals for the future of their families and communities.
Um, which private-sector builders are anti-development? And haven't civic groups like BrooklynSpeaks actually endorsed more rather than less affordable housing in the Atlantic Yards plan?
And what about the hundreds of millions of dollars--billions?--in subsidies and bonds that will support the housing, figures that government agencies won't reveal?
CB 8's sentiment
After touching on the Fairway and Ikea debates in Red Hook, Louis returns to Atlantic Yards:
News accounts of the three-year, hard-fought battle for approval have ignored the reality that the project was always favored by a solid majority of residents in Community Board 8, where the project will rise.
[Updated] Actually, the project site is divided between Community Boards 2 , 6, and 8, though CB 8 would have a much larger segment. (The project would be at the far west end of CB 8. See Map from Department of City Planning.)
While the opinions among residents of CB 8 vary, members of the community board who studied the project closely delivered a stack of concerns to the Empire State Development Corporation. And remember how all three CBs said that Forest City had overstated their participation in the Community Benefits Agreement (CBA)?
Trusting Forest City
Louis writes:
This year, when I asked the project's sponsor, Forest City, for the names of the community groups backing the project, I was sent a list of more than 200 block associations and other organizations. These are mostly the kinds of groups that don't have the money to create fancy Web sites, daily blogs or press conferences to push their views, but their support for the project has been rock-solid.
As noted in August 2005 in the New York Observer's blog The Real Estate:
...the coalition claimed that "more than 200 organizations have affirmed" the agreement since its signing in June--”meaning they supported the idea even if they were not involved in negotiating the agreement or will be a part of enforcing it. The Real Estate asked for the list and counted fewer than 175; and that's only if "organizations" include elected officials, restaurants and real-estate agencies, as well as block associations and the like. But we were nonetheless surprised it had traveled so far, so fast. Why, there are groups from as far away as Queens and Manhattan on this list! (Are they part of the "community" in downtown Brooklyn?)
Does Louis know how much it costs to create a daily blog? (Answer: free.)
[Update 12/27/06: A reader points out that the cost of a computer and Internet are costs to maintain a blog. I was thinking first of the software, which can be free. It would be more difficult, though still possible, to maintain a blog via free access at various libraries.]
About those polls
Louis writes:
Every reasonably objective indicator of neighborhood sentiment demonstrated local approval. Opinion polls sponsored by the New York Observer and Crain's showed local residents favoring the project, and candidates for local offices who ran on a platform of halting or slowing the project this year went down in flames at the polls.
I dissected the Observer's poll, and the Crain's one. As for the political races, Louis is typically sloppy here, choosing to ignore the victory of incumbent state Senator Velmanette Montgomery. I pointed out that while the election results certainly weren't an anti-Atlantic Yards referendum, it would be hard to call them a win for Atlantic Yards.
"Complacent reporters"
Louis writes:
But complacent reporters often ignore these clear signs of support in favor of endlessly quoting a handful of self-appointed individuals and civic groups who have claimed, falsely, to speak for all of Brooklyn.
As for complacent reporters, Louis is missing the whole rest of the story, as New York Magazine's Chris Smith wrote yesterday. Louis apparently can't take a look at his own paper, cheerleading not only on the editorial page but on the front page.Note that the cover proclaims a $4.2 billion project, though the total was reduced to $4 billion, and the caption suggests that the arena represents the whole project.
Louis continues:
A coalition called Brooklyn Speaks, for example, assembled and led by the Manhattan-based Municipal Art Society, has proclaimed on its Web site that the three-year debate over Atlantic Yards that led to this week's approval "reflected a process that simply did not allow New Yorkers to shape the project, and the result is a plan that will not work for Brooklyn."
Like many other homeowners and longtime residents of the area, I find that attitude insulting. Kent Barwick, the head of the Municipal Art Society, really ought to spend more time connecting with people in my neighborhood - where residents are grappling with a rising tide of arson, homicide and homelessness - before firing off memos from Madison Ave. about what will or won't work for Brooklyn.
All over Brooklyn, communities are making new alliances in a life-and-death battle to rescue their children and neighborhoods from homelessness, street violence and despair. Civic groups and others who refuse to recognize the new reality are missing an important and inspiring change in how New York does business.
Does Louis actually think New Yorkers were able to shape the project? How exactly do concerns about arson and homicide connect with this development?
While Louis apparently thinks that development of this site will help solve some neighborhood problems--and yes, it might bring employment to some--it's also likely that development pressures in Crown Heights and Prospect Heights, thought to be linked to arson, will accelerate once the Atlantic Yards plan proceeds.
BrooklynSpeaks criticized the project's design (does Louis think the proposed publicly accessible open space will work?), the lack of an effective transportation plan (is Louis pro-gridlock?), and the affordability of the subsidized apartments.
(Fun fact: according to a search of the Daily News archive, Louis's column is the first time Barwick has been mentioned regarding the Atlantic Yards plan. The most frequent Atlantic Yards commentator in the Daily News, of course, has been.... Errol Louis.)
Getting paid
As for some of the community groups that have most vociferously endorsed the plan, Louis omits the most salient fact: they've been paid. They avoid scrutiny. And even the city realizes that the Atlantic Yards CBA is not a model, since it's sponsoring a much more inclusionary effort in West Harlem.
Why can't the Times say AY might take 15-20 years?
A Times article today, headlined Atlantic Yards Enters New Phase, and Faces Next Hurdle: Lawsuits, begins:
If all goes according to plan, work will begin within weeks on the $4 billion Atlantic Yards project near Downtown Brooklyn, which won final approval from a state oversight board on Wednesday after three years of furious debate.
But large development projects rarely go according to plan — even when they do not face multiple lawsuits, which the project, one of the biggest in the city’s history, already does. And months or years may pass before anyone will be able to divine the precise gap between the plan for Atlantic Yards and the reality of it.
While lawsuits and other impediments could slow the plan, the article repeats the official claim that the project is scheduled to be finished in ten years, by 2016.
Unmentioned, however, is that even supporters and cordial critics doubt the announced project timetable. Earlier this month, Kathryn Wylde of the Partnership for NYC predicted that it would take 15 to 20 years. Kent Barwick of the Municipal Art Society spoke similarly on Monday.
Why shouldn't Times readers know this?
If all goes according to plan, work will begin within weeks on the $4 billion Atlantic Yards project near Downtown Brooklyn, which won final approval from a state oversight board on Wednesday after three years of furious debate.
But large development projects rarely go according to plan — even when they do not face multiple lawsuits, which the project, one of the biggest in the city’s history, already does. And months or years may pass before anyone will be able to divine the precise gap between the plan for Atlantic Yards and the reality of it.
While lawsuits and other impediments could slow the plan, the article repeats the official claim that the project is scheduled to be finished in ten years, by 2016.
Unmentioned, however, is that even supporters and cordial critics doubt the announced project timetable. Earlier this month, Kathryn Wylde of the Partnership for NYC predicted that it would take 15 to 20 years. Kent Barwick of the Municipal Art Society spoke similarly on Monday.
Why shouldn't Times readers know this?
Thursday, December 21, 2006
So someone else finds the Times coverage wanting
Chris Smith of New York Magazine, who wrote the August cover story (The Battle for the Soul of Brooklyn) on Atlantic Yards, takes aim on the magazine's blog (The ‘Times’ Screwed Up) at the failure of the New York Times, despite some episodically good coverage, to thoroughly look into the AY issue.
He writes: But the Times, collectively, has never demonstrated the will or interest to examine Atlantic Yards in anything close to the proportion demanded by one of the biggest real-estate schemes in the history of the city. Maybe it's because Ratner is the Times' partner in building the paper's new Eighth Avenue headquarters. Maybe it's because Times editors think Atlantic Yards is an objectively good idea. Maybe it's because the Times, along with the rest of the city's mainstream media, does a lousy job of covering anything outside our midtown backyard. Whatever the reasons, the effect has been an abdication of the Times' civic and journalistic responsibility.
His prime example is the newspaper's unwillingness to explore the question of the developer's profit. He could just as easily have cited the distorted coverage of the six to eight percent "cut" or the Times's curious editorial silence as a vote approached this week.
He writes: But the Times, collectively, has never demonstrated the will or interest to examine Atlantic Yards in anything close to the proportion demanded by one of the biggest real-estate schemes in the history of the city. Maybe it's because Ratner is the Times' partner in building the paper's new Eighth Avenue headquarters. Maybe it's because Times editors think Atlantic Yards is an objectively good idea. Maybe it's because the Times, along with the rest of the city's mainstream media, does a lousy job of covering anything outside our midtown backyard. Whatever the reasons, the effect has been an abdication of the Times' civic and journalistic responsibility.
His prime example is the newspaper's unwillingness to explore the question of the developer's profit. He could just as easily have cited the distorted coverage of the six to eight percent "cut" or the Times's curious editorial silence as a vote approached this week.
"Shoot Hoops, Not Guns": the transformation of Flatbush begins
Call it a sign of the times. On the south side of Flatbush Avenue just north of Bergen Street, where a dignified but none-too-special coffee shop called The Silver Spoon operated since 1980, the successor in that space is more brash, bringing orange neon--quite bright at night--and pointing to change in a neighborhood-y retail stretch.With its nod to basketball, High Stakes Cheese Steaks, which opens on Friday (according to a sign I saw last night) may seem early, but the owners can't be the first to consider the advantages of being situated both on the border of a dense row-house neighborhood (Park Slope), and half a block from the planned Atlantic Yards site.
A couple of health clinics occupying street frontage just north on Flatbush, even closer to the arena block. Those clinics, well-situated for access via public transit, may have long-term rental deals arranged when that stretch of Flatbush was moribund. But it's likely that someone will make them an offer they can't refuse, and that their valuable space will go to an establishment that aims to capitalize, at least in part, on the planned arena and the towers around it. See that Mobil sign? That's where one tower would begin. One arena entrance would be just around the corner.
The sign chosen by the cheese steak purveyors may have seemed premature, especially when it went up a week or two ago, but maybe the sign makers knew something about the vote yesterday in favor of Atlantic Yards by the Public Authorities Control Board. The "Shoot Hoops, Not Guns" sign seems a little bit in-your-face for that stretch of Flatbush right now. Guns are a far smaller problem than traffic--and that might prove true if the arena opens in 2009 as planned. (Then again, it's just a slogan, right?) But the "high stakes" level of neon likely isn't the first, years before Atlantic Yards, even on schedule, becomes a reality.
Wednesday, December 20, 2006
Would Forest City earn just a pittance? Confusing numbers in the AY audit
How much will Forest City Ratner earn on the project? The KPMG audit gives some hints.
From coverage in the Times:
“Our role is not to measure the profits that the private investors will make,” Mr. Silver said yesterday. “Our role is to make sure that state liability on the project will be limited to what they say it will be. And we were satisfied about that, plain and simple.”
According to a KPMG audit commissioned by the Empire State Development Corporation, a copy of which was provided to The New York Times, Forest City estimated that the overall rate of return on the $4 billion project, excluding the arena, at about 10 percent over 30 years. The accounting firm estimated the return at about 7 percent.
Indeed, Forest City's estimates are considered optimistic, according to KPMG's Review of Certain Cash Flows and Assumptions in Connection with Forest City Ratner Companies Development of the Atlantic Yards.
Arena estimates
KPMG aimed to reconstruct the models that Forest City has but would not make available. For the arena, KPMG's reconstructed model reflected an internal rate of return (IRR) of 7.64 percent. (Forest City's IRR was 7.66%). After KPMG looked at the assumptions and adjusted them, it came up with an IRR of 5.09%.
Does that mean that the arena would earn Forest City about what it could get with a certificate of deposit? If so, then it would be virtually a loss leader.
The larger project
For the mixed-use development, KPMG's reconstructed model reflected an IRR of 9.86 percent. (Forest City's IRR was 9.6%). After KPMG looked at the assumptions and adjusted them, it came up with an IRR of 7.28%.
Does that mean that the developer would earn a little more than 7%? Again, investments with relatively small risk could earn a similar return.
So what really would be the developer's profit? How do the tax breaks and grants factor in? A sentence in an earlier version of the Times article raised a question:
But because Forest City is using grants and tax-exempt bonds to finance the bulk of the project, critics cautioned, the project’s investors will likely earn a much higher rate of return on their direct investments.
Apparently, no public agency is responsible for fully analyzing those issues, just as the net tax revenue to the public remains murky.
From coverage in the Times:
“Our role is not to measure the profits that the private investors will make,” Mr. Silver said yesterday. “Our role is to make sure that state liability on the project will be limited to what they say it will be. And we were satisfied about that, plain and simple.”
According to a KPMG audit commissioned by the Empire State Development Corporation, a copy of which was provided to The New York Times, Forest City estimated that the overall rate of return on the $4 billion project, excluding the arena, at about 10 percent over 30 years. The accounting firm estimated the return at about 7 percent.
Indeed, Forest City's estimates are considered optimistic, according to KPMG's Review of Certain Cash Flows and Assumptions in Connection with Forest City Ratner Companies Development of the Atlantic Yards.
Arena estimates
KPMG aimed to reconstruct the models that Forest City has but would not make available. For the arena, KPMG's reconstructed model reflected an internal rate of return (IRR) of 7.64 percent. (Forest City's IRR was 7.66%). After KPMG looked at the assumptions and adjusted them, it came up with an IRR of 5.09%.
Does that mean that the arena would earn Forest City about what it could get with a certificate of deposit? If so, then it would be virtually a loss leader.
The larger project
For the mixed-use development, KPMG's reconstructed model reflected an IRR of 9.86 percent. (Forest City's IRR was 9.6%). After KPMG looked at the assumptions and adjusted them, it came up with an IRR of 7.28%.
Does that mean that the developer would earn a little more than 7%? Again, investments with relatively small risk could earn a similar return.
So what really would be the developer's profit? How do the tax breaks and grants factor in? A sentence in an earlier version of the Times article raised a question:
But because Forest City is using grants and tax-exempt bonds to finance the bulk of the project, critics cautioned, the project’s investors will likely earn a much higher rate of return on their direct investments.
Apparently, no public agency is responsible for fully analyzing those issues, just as the net tax revenue to the public remains murky.
Last minute Ratner goodies: $3m for parks, help on a high school, more
"Thank you Brooklyn," came the message from Forest City Ratner, announcing some additional programs to support the Atlantic Yards project, as well as a reduction to the height of the proposed “Ms. Brooklyn” building, ensuring that no building at the site will be taller than the 512-foot Williamsburg Savings Bank.The additions include:
In addition to the commitment to eight acres of open space within the Atlantic Yards footprint, FCRC will invest $3 million to improve existing parks in and around the project.
(Does that include the $1.25 million+ for the Dean Street Playground comfort station?)
As part of the affordable housing program, FCRC has already agreed to build 600 to 1,000 affordable home ownership units on or off site.
(When exactly is unclear, depending on subsidies, as the developer's Jim Stuckey said in July.)
Today, FCRC announced that it will seek to build at least 200 of these affordable home-owner units on site (they will be part of the proposed 6,430 units of housing already approved as part of the Atlantic Yards FEIS/GPP).
(This was a response to a request from Assemblymember-elect Hakeem Jeffries. Was this in the cards all along?)
FCRC will also seek to build the remaining affordable home-owner units as close to Atlantic Yards as possible.
(The developer has been said to be eyeing a site in Crown Heights. That may be "as close... as possible.")
Forest City Ratner will also open a community affairs office on the project site that will be operated and staffed during all phases of the construction project.
(As opposed to the very sporadically open Atlantic Yards Information Center, in the Atlantic Center mall.)
In addition to these project specific elements, FCRC will also work with the City, State and the United Federation of Teachers on the creation of a new 21st Century Brooklyn Tech High School, at a yet to be determined location in the borough.(What does "work with" mean? How much might the developer actually contribute?)
Major concessions missing
The housing change, reported earlier today, represents some substance, but the rest of the announcement about building affordable homeowner units isn't new. The agreement to reduce the height of Miss Brooklyn, also reported earlier today, may seem to be a concession to Borough President Marty Markowitz; then again, the developer when the project was announced three years ago promised not to block the bank.
The other changes are relatively small.
Larger changes were not addressed, including issues like traffic mitigation, interim surface parking, and the design of open space.
Assembly Speaker Sheldon Silver gave a statement, reported by Bloomberg News, that didn't address those issues:
Silver, in a statement, said "I am pleased the developer is committed to addressing numerous community concerns through several specific actions that will result in significant neighborhood improvements.'' Those include affordable housing, open space, park upgrades and "conforming building heights to those of existing structures in the surrounding area,'' he said.
AY approved by PACB in five minutes; DDDB, James, Jeffries respond
Ignoring the calls for delay from the four Assemblymembers closest to the Atlantic Yards site, as well as several civic groups, Assembly Speaker Sheldon Silver, a Democrat, joined the other two controlling members of the Public Authorities Control Board (PACB) and approved Forest City Ratner's Atlantic Yards project this afternoon.
That leaves the courts as the remaining barriers to project; lawsuits have been filed in state and federal court challenging the use of eminent domain for the project, and another is expected to be filed challenging the legitimacy of the environmental review conducted by the Empire State Development Corporation (ESDC). "Fortunately, we still have three branches of government,” said Develop Don't Destroy Brooklyn (DDDB) spokesman Daniel Goldstein in a press release.
City Council Member Letitia James, a staunch opponent of the project, offered a list of unanswered questions and commented, "I hope Governor-elect [Eliot] Spitzer will be in a position to further amend this project. The project now lies in the hands of the judicial system. I trust that the courts will give the constitutionality, legality and the merit of this project a thorough review, something that has not happened in any legislativebody up to this point. Until the courts rule on pending and upcoming cases, Atlantic Yards, as we know it, cannot be built. Today is a sad day for democracy and the community I represent. But, our fight is far from over."
Assemblymember-elect Hakeem Jeffries, who had called for delay, was diplomatic, as he got a portion of what he'd requested: "The inclusion of affordable home ownership in the Atlantic Yards project is a significant step forward for our community, and will provide hundreds of working families in Central Brooklyn with a piece of the American dream. I hope and expect to work closely with the Spitzer administration to address the quality of life and density concerns that many in the community, including myself, continue to have.”
His statement today did not reference his request that the project be delayed until the eminent domain case was resolved.
BrooklynSpeaks, a coalition that said the plan should be changed substantially or rejected, stated: "We believe the incoming Spitzer administration must seize the opportunity in the new year to fix the project. The plan, particularly its second phase, must be changed to address its overwhelming scale, superblock design, lack of a transportation plan, and public process that has alienated rather than involved New Yorkers. "
Less than five minutes
The PACB's public consideration of Atlantic Yards took less than five minutes, according to Jeff Baker, attorney for DDDB, who was in the conference room for the PACB meeting, which began at 4:30 p.m. (Other issues were on the agenda, as well.)
Baker noted that the PACB did not approve the project financing, because that comes from a $100 million legislative authorization to the budget of the ESDC. "They did not approve any bond financing through ESDC, because they're going to set up an LDC [Local Development Corporation]. It's a way of avoiding PACB approval. A lot of the questions of financing we raised were not addressed. Our position is that the PACB has overriding authority to make sure the project makes sense."
There was no discussion of new tax revenue, a contentious issue raised in the press and at an Assembly oversight hearing on Monday.
Two months til groundbreaking?
Steve Matlin, an ESDC attorney, told the PACB that the developer was not expected to break ground for at least two months, according to Baker. As for taking title by eminent domain of properties the state must acquire, that could take at least four months.
Baker said that there was no public discussion that indicated, as had been reported by Crain's New York Business, that the flagship Miss Brooklyn tower had been reduced and that on-site for-sale affordable co-ops had been added to the project.
Unanswered questions
"It was not a pretty sight," Baker told me of the PACB meeting in general, "because when you look at the amount of indebtedness and the scope of projects approved, and how little care and discussion occurs, it raises a question as to whether there is any meaningful oversight."
DDDB pointed out that "the PACB still has not received a full accounting of the true public cost of the project or a realistic projection of the project’s new net revenue for the city and state," as well as details about enforceability of the affordable housing agreement.
Challenges remain
"The approvals by ESDC represent egregious violations of multiple state laws and the public trust. While [ESDC Chairman Charles] Gargano may claim there has been extensive public review, the facts show otherwise,” Baker charged in the press release. “The New Yorkers whose trust was betrayed by the Governor, Mayor and Mr. Gargano will now place their trust in the courts to assure that the laws are followed and this project is sent back for the review that was required.”
The role of incoming Gov. Spitzer, like Silver a Democrat, was unclear, since Spitzer, an Atlantic Yards project supporter who nonetheless may face headaches regarding the project, remained silent. DDDB's Goldstein said, "'Day one’ is just around the corner, and we look to incoming Governor Spitzer to make sure that everything truly will be different.”
For now, however, Spitzer--who could have lobbied Silver--apparently passed on the chance to stall or change Atlantic Yards.
That leaves the courts as the remaining barriers to project; lawsuits have been filed in state and federal court challenging the use of eminent domain for the project, and another is expected to be filed challenging the legitimacy of the environmental review conducted by the Empire State Development Corporation (ESDC). "Fortunately, we still have three branches of government,” said Develop Don't Destroy Brooklyn (DDDB) spokesman Daniel Goldstein in a press release.
City Council Member Letitia James, a staunch opponent of the project, offered a list of unanswered questions and commented, "I hope Governor-elect [Eliot] Spitzer will be in a position to further amend this project. The project now lies in the hands of the judicial system. I trust that the courts will give the constitutionality, legality and the merit of this project a thorough review, something that has not happened in any legislativebody up to this point. Until the courts rule on pending and upcoming cases, Atlantic Yards, as we know it, cannot be built. Today is a sad day for democracy and the community I represent. But, our fight is far from over."
Assemblymember-elect Hakeem Jeffries, who had called for delay, was diplomatic, as he got a portion of what he'd requested: "The inclusion of affordable home ownership in the Atlantic Yards project is a significant step forward for our community, and will provide hundreds of working families in Central Brooklyn with a piece of the American dream. I hope and expect to work closely with the Spitzer administration to address the quality of life and density concerns that many in the community, including myself, continue to have.”
His statement today did not reference his request that the project be delayed until the eminent domain case was resolved.
BrooklynSpeaks, a coalition that said the plan should be changed substantially or rejected, stated: "We believe the incoming Spitzer administration must seize the opportunity in the new year to fix the project. The plan, particularly its second phase, must be changed to address its overwhelming scale, superblock design, lack of a transportation plan, and public process that has alienated rather than involved New Yorkers. "
Less than five minutes
The PACB's public consideration of Atlantic Yards took less than five minutes, according to Jeff Baker, attorney for DDDB, who was in the conference room for the PACB meeting, which began at 4:30 p.m. (Other issues were on the agenda, as well.)
Baker noted that the PACB did not approve the project financing, because that comes from a $100 million legislative authorization to the budget of the ESDC. "They did not approve any bond financing through ESDC, because they're going to set up an LDC [Local Development Corporation]. It's a way of avoiding PACB approval. A lot of the questions of financing we raised were not addressed. Our position is that the PACB has overriding authority to make sure the project makes sense."
There was no discussion of new tax revenue, a contentious issue raised in the press and at an Assembly oversight hearing on Monday.
Two months til groundbreaking?
Steve Matlin, an ESDC attorney, told the PACB that the developer was not expected to break ground for at least two months, according to Baker. As for taking title by eminent domain of properties the state must acquire, that could take at least four months.
Baker said that there was no public discussion that indicated, as had been reported by Crain's New York Business, that the flagship Miss Brooklyn tower had been reduced and that on-site for-sale affordable co-ops had been added to the project.
Unanswered questions
"It was not a pretty sight," Baker told me of the PACB meeting in general, "because when you look at the amount of indebtedness and the scope of projects approved, and how little care and discussion occurs, it raises a question as to whether there is any meaningful oversight."
DDDB pointed out that "the PACB still has not received a full accounting of the true public cost of the project or a realistic projection of the project’s new net revenue for the city and state," as well as details about enforceability of the affordable housing agreement.
Challenges remain
"The approvals by ESDC represent egregious violations of multiple state laws and the public trust. While [ESDC Chairman Charles] Gargano may claim there has been extensive public review, the facts show otherwise,” Baker charged in the press release. “The New Yorkers whose trust was betrayed by the Governor, Mayor and Mr. Gargano will now place their trust in the courts to assure that the laws are followed and this project is sent back for the review that was required.”
The role of incoming Gov. Spitzer, like Silver a Democrat, was unclear, since Spitzer, an Atlantic Yards project supporter who nonetheless may face headaches regarding the project, remained silent. DDDB's Goldstein said, "'Day one’ is just around the corner, and we look to incoming Governor Spitzer to make sure that everything truly will be different.”
For now, however, Spitzer--who could have lobbied Silver--apparently passed on the chance to stall or change Atlantic Yards.
Condo cuts were in the cards since October
Last month I wrote how most of the cuts in the size of the Atlantic Yards project announced in March and September were actually in a plan presented to the Department of City Planning back in January.
Now, it seems that the latest cut, apparently reducing the size of the Miss Brooklyn tower and cutting 322 market-rate condominiums, was likely in the cards since October. The KPMG memo dated December 19 is based on a “model date” of October 1. As of that “model date,” the developer was planning only 1608 condominiums, not 1930 units as announced to the public later in October.
(Update and correction 7/23/07: Apparently the document just left out a building.)
That 1930 figure is also consistent with the square footage as announced by the Empire State Development Corporation in the Final Environmental Impact Statement released in November and the General Project Plan released December 8.
It's possible that reduction of 322 market-rate condos includes the conversion of some of that space to the 200 on-site affordable co-ops apparently part of the final Atlantic Yards deal.
Now, it seems that the latest cut, apparently reducing the size of the Miss Brooklyn tower and cutting 322 market-rate condominiums, was likely in the cards since October. The KPMG memo dated December 19 is based on a “model date” of October 1. As of that “model date,” the developer was planning only 1608 condominiums, not 1930 units as announced to the public later in October.
(Update and correction 7/23/07: Apparently the document just left out a building.)
That 1930 figure is also consistent with the square footage as announced by the Empire State Development Corporation in the Final Environmental Impact Statement released in November and the General Project Plan released December 8.
It's possible that reduction of 322 market-rate condos includes the conversion of some of that space to the 200 on-site affordable co-ops apparently part of the final Atlantic Yards deal.
The $100,000 arena graduation ceremony?
The Atlantic Yards web site promotes the arena:
The arena will be a community centerpiece for the borough. FCRC has worked with local organizations to ensure the arena is an integral part of the community, where local college and high school athletes will have a new stage to showcase their skills. The arena will also host thousands of proud families and friends for college and high school graduations.
(Emphasis added)
However, the KPMG report for the Empire State Development Corporation issued Tuesday offers a caution:
The average ticket prices assumed by FCRC for concerts, family shows, and other sporting events and the percentage split to the facility appear reasonable. However, the base rental rate for other events (e.g., graduations) of $62,000 plus the estimated $41,000 in event-related expenses appears to be high. Although these rates could change subject to actual negotiation with prospective users, it is likely that these rates need to be further reduced to accommodate various civic groups that cannot afford "market" rental rates, particularly given the competitiveness of the market.
(Emphasis added)
Or would those graduations be considered among the ten events noted on the Atlantic Yards web site:
At least ten events a year will be set aside for multicultural, recreational and nonprofit uses, with proceeds from those days going to benefit local nonprofit community groups.
The arena will be a community centerpiece for the borough. FCRC has worked with local organizations to ensure the arena is an integral part of the community, where local college and high school athletes will have a new stage to showcase their skills. The arena will also host thousands of proud families and friends for college and high school graduations.
(Emphasis added)
However, the KPMG report for the Empire State Development Corporation issued Tuesday offers a caution:
The average ticket prices assumed by FCRC for concerts, family shows, and other sporting events and the percentage split to the facility appear reasonable. However, the base rental rate for other events (e.g., graduations) of $62,000 plus the estimated $41,000 in event-related expenses appears to be high. Although these rates could change subject to actual negotiation with prospective users, it is likely that these rates need to be further reduced to accommodate various civic groups that cannot afford "market" rental rates, particularly given the competitiveness of the market.
(Emphasis added)
Or would those graduations be considered among the ten events noted on the Atlantic Yards web site:
At least ten events a year will be set aside for multicultural, recreational and nonprofit uses, with proceeds from those days going to benefit local nonprofit community groups.
Some 225 arena events? KPMG ignores developer's own analyst
The Empire State Development Corporation stated that the Brooklyn arena would host approximately 225 events per year. The KPMG analysis done for the Empire State Development Corporation and released yesterday cites 223 events, including 44 Nets games (three of them preseason games) and 179 other events.
Is that number credible? KPMG states:
In general, the utilization estimates prepared by FCRC appear reasonable assuming experienced and efficient arena management.
Reasonable? There's no mention that the developer's own analyst stated:
The Nets project that the arena will not host an NHL team and that it will host 226 events during the year (assuming the eventual closing of CAA, no new arena in Newark, no NHL and no minor league hockey events at the Atlantic Yards arena.)
And there is already a new arena under construction in Newark.
Is that number credible? KPMG states:
In general, the utilization estimates prepared by FCRC appear reasonable assuming experienced and efficient arena management.
Reasonable? There's no mention that the developer's own analyst stated:
The Nets project that the arena will not host an NHL team and that it will host 226 events during the year (assuming the eventual closing of CAA, no new arena in Newark, no NHL and no minor league hockey events at the Atlantic Yards arena.)
And there is already a new arena under construction in Newark.
KPMG report to ESDC... says nothing about net revenue to city and state
[Update: While those watching the Brodsky hearing Monday may have concluded that the KPMG report was the basis for the fiscal impact study, the KPMG document only assesses the project's financial viability.
Apparently another report, which has not yet emerged to scrutiny, was the basis for the memo released by the Empire State Development Corporation and offers a more complete analysis of new tax revenue to the city and state. Perhaps it can explain some confounding changes between documents released in October and December.]
I got a look at a copy of the "independent economic analysis" of Atlantic Yards conducted by KPMG for the Empire State Development Corporation (ESDC).
Though the ESDC could not provide it to Assemblymember Richard Brodsky on Monday, yesterday, a new version of the analysis was prepared and released to Assembly Speaker Sheldon Silver, the key vote on the Public Authorities Control Board (PACB).
The document concerns cash flow assumptions regarding Forest City Ratner's revenue for the arena and mixed-use development. It says nothing about new revenue to the city and state. And while it discusses the developer's internal rate of return, it doesn't specify the developer's expected profit.
It does suggest that Forest City has further trimmed the project, cutting the number of condominiums from 1930 to 1608, or more than 300,000 square feet. (Update 7/23/07: Apparently the document just left out a building.)
(Indeed, Crain's reports that the height of Miss Brooklyn, planned at 620 feet, will now be shorter than the 512-foot Williamsburgh Savings Bank, and that there will be 200 on-site affordable for-sale units. One of Assemblymember-elect Hakeem Jeffries's requests has been for on-site affordable for-sale units.)
New public revenue?
The new public revenue is the subject of an internal memo from ESDC, and ESDC staffers on Monday were unable to fully explain reasons for the nearly one-third drop in expected city and state revenue.
So, at 2 pm, will Silver and the PACB vote on Atlantic Yards without looking at the rationale for such changes in new tax revenue? Or is their only role to see whether Forest City's project will be successful enough to make the state's $100 million contribution a sound investment? If so, even this memo doesn't address the full public costs involved.
Incentives review
While it doesn't address public costs, it does include an analysis of government "economic incentives," or tax breaks and subsidies. Listed are:
--federal low income tax credits
--421-a real property tax abatement
--50/30/20 program tax exempt benefits
--property tax abatements for commercial space
--commercial rent subsidy
--$200 million for city and state infrastructure support.
Missing is anything about "extraordinary infrastructure" costs. Or anything about what this means to the public's bottom line.
Apparently another report, which has not yet emerged to scrutiny, was the basis for the memo released by the Empire State Development Corporation and offers a more complete analysis of new tax revenue to the city and state. Perhaps it can explain some confounding changes between documents released in October and December.]
I got a look at a copy of the "independent economic analysis" of Atlantic Yards conducted by KPMG for the Empire State Development Corporation (ESDC).
Though the ESDC could not provide it to Assemblymember Richard Brodsky on Monday, yesterday, a new version of the analysis was prepared and released to Assembly Speaker Sheldon Silver, the key vote on the Public Authorities Control Board (PACB).
The document concerns cash flow assumptions regarding Forest City Ratner's revenue for the arena and mixed-use development. It says nothing about new revenue to the city and state. And while it discusses the developer's internal rate of return, it doesn't specify the developer's expected profit.
It does suggest that Forest City has further trimmed the project, cutting the number of condominiums from 1930 to 1608, or more than 300,000 square feet. (Update 7/23/07: Apparently the document just left out a building.)
(Indeed, Crain's reports that the height of Miss Brooklyn, planned at 620 feet, will now be shorter than the 512-foot Williamsburgh Savings Bank, and that there will be 200 on-site affordable for-sale units. One of Assemblymember-elect Hakeem Jeffries's requests has been for on-site affordable for-sale units.)
New public revenue?
The new public revenue is the subject of an internal memo from ESDC, and ESDC staffers on Monday were unable to fully explain reasons for the nearly one-third drop in expected city and state revenue.
So, at 2 pm, will Silver and the PACB vote on Atlantic Yards without looking at the rationale for such changes in new tax revenue? Or is their only role to see whether Forest City's project will be successful enough to make the state's $100 million contribution a sound investment? If so, even this memo doesn't address the full public costs involved.
Incentives review
While it doesn't address public costs, it does include an analysis of government "economic incentives," or tax breaks and subsidies. Listed are:
--federal low income tax credits
--421-a real property tax abatement
--50/30/20 program tax exempt benefits
--property tax abatements for commercial space
--commercial rent subsidy
--$200 million for city and state infrastructure support.
Missing is anything about "extraordinary infrastructure" costs. Or anything about what this means to the public's bottom line.
More from the Brodsky hearing: $1B in housing bonds, housing MOUs coming
More questions about the Atlantic Yards project were raised at and after the hearing Monday held by Democratic Assemblymember Richard Brodsky, whose committee oversees public authorities.
For the first time, however, officials acknowledged that $1 billion in tax-exempt bonds would be issued to support the housing component. They also said that Memoranda of Understanding with developer Forest City Ratner regarding the housing were still being negotiated, but that the fiscal aspects of the project were ready to go before the Public Authorities Control Board (PACB) today.
Also, Empire State Development Corporation’s (ESDC) Chairman Charles Gargano said that developer Forest City Ratner would earn a “reasonable” rate of return, even as the potential return to the public had just plummeted by about a third.
As reported, Brodsky found the ESDC unwilling to provide full disclosure about the project, notably a project financial analysis commissioned by the firm KPMG.
(The ESDC had cited confidentiality issues, but yesterday, according to the New York Observer, the authority provided the document to Assembly Speaker Sheldon Silver, who was considering the project from his perch as a controlling member of the PACB. Silver’s posture on Atlantic Yards remained unclear yesterday, despite reports that he was ready to kick it over to the term of incoming Governor Eliot Spitzer.)
$1B for bonds
“How much tax-free financing is going to be issued?” Brodsky asked.
Ann Hulka, a senior VP for real estate at the ESDC, responded that there would be $100 million in bonds on behalf of New York State.
However, “with regards to housing bonds, we’re anticipating… almost a billion dollars” through the city housing program, she said.
The actual cost of such bonds to the public is unclear. However, there is a finite pool of bonding available, and it’s possible that Atlantic Yards could represent a disproportionate amount, thus squeezing out other potential projects.
On Monday, Michelle de la Uz of the Fifth Avenue Committee, a housing group in Brooklyn that has called for a delay in the PACB vote, suggested that the city’s Housing Development Corporation (HDC) is contemplating the issue of $1.9 billion in bonds, basing her estimate on preliminary documents released by HDC.
To put it in perspective, she said, this year HDC issued $1.8 billion in bonds. Much more information is needed on the affordable housing finances, she said.
(It’s not clear whether the bonds for Atlantic Yards would be issued in one year or over several years.)
Value of Vanderbilt Yard?
Has an appraisal, including the air rights, been done on the state property included in the project, Brodsky asked. He was referring to the Metropolitan Transportation Authority’s (MTA) Vanderbilt Yard, which would occupy nearly nine acres of the 22-acre Atlantic Yards site.
ESDC counsel Steve Matlin responded that the MTA had done an appraisal, which he’d seen. He didn’t mention that the appraisal was $214.5 million, and that the MTA had awarded the rights to Forest City Ratner for $100 million, while another developer, Extell, bid $150 million.
(Forest City contends that the value of railyard improvements ups the value of its bid. Develop Don't Destroy Brookyn disagrees.)
“Is the price to be paid to the MTA the measure of the value that appears in the appraisal?” Brodsky asked.
“That was a determination made by the MTA,” Matlin responded.
‘Extraordinary infrastructure’
“What’s the total cost of what’s called ‘extraordinary infrastructure costs’?” Brodsky asked, a reference to a line in the 2/18/05 Memorandum of Understanding that said (p. 5) that “the Public Parties will consider making additional contributions for extraordinary infrastructure costs related to the mixed-use development on the Project Site (excluding the Arena Building Site).”
Gargano said, “We are providing $100 million… for work over the railyards.” (Develop Don’t Destroy Brooklyn points to $163 million in such ‘extraordinary infrastructure costs’ in FCR’s bid (p. 47 of PDF) to the MTA.)
“Is it essentially the MTA portion?” Brodsky asked.
The answer was yes. The question apparently had not been fully answered.
Enforceability, Part 1
“How do you enforce the affordable housing component?” Brodsky asked. He referred to the plan for 2250 affordable rentals, 2250 market-rate rentals, and some 1930 market-rate condos.
“We have MOUs,” Gargano responded, saying that language in the MOUs and funding agreements would provide the enforceability.
“And if by some reason, the housing is not developed, what’s the remedy?” Brodsky asked.
Gargano replied that the developer would not get the funding. It wasn’t clear what funding he was referring to—the $100 million from the state, or city housing bonds and subsidies.
ESDC Chief Operating Officer Eileen Mildenberger followed up by saying that the fiscal cost to the city and state would be about $450 million. (That calculation includes $200 million in direct funding plus sales tax and mortgage recording tax breaks, but not affordable housing costs nor public costs for schools, sanitation, and public safety.)
Enforceability, Part 2
After the hearing, reporters followed up with Gargano. “In our agreement with the developer, we have an MOU that gives us the ability to enforce what we require them to do in terms of affordable housing," he said.
Is the MOU public?
Gargano said he’d have to check.
Would it typically be made public?
“It depends on where we are in the process,” Gargano replied.
“We’re still negotiating final terms,” Mildenberger said.
“We’re still negotiating,” Gargano chimed in. “But obviously when the negotiations are complete, all of those will be public documents.”
How could they be negotiating, Gargano was asked, given that the project was going to be put before the PACB on Wednesday.
“No, we’re not negotiating. We have an MOU,” Gargano said.
Mildenberger explained further why the MOU wasn’t public. “The final terms of the agreement” have not been reached, she said, adding that there would be MOUs between the developer and the city and the developer and the state.
So why is this going to the PACB?
“I think the fiscal terms of the project are already negotiated, and that’s what PACB would be most concerned about,” she responded.
A reasonable return
Gargano was asked about the developer’s return. “I have been told by my financial people that—I don’t have the numbers—but it’s a reasonable return on their investment,” he said. (In an August article in New York Magazine, a real estate expert estimated about a 25 percent return.)
So why did the ESDC let Forest City, in the 8% cut in project size, eliminate a disproportionate amount of commercial space, which, if filled, would generate more spinoff jobs and public revenue than would housing? (The ESDC attributed the nearly one-third cut in projected revenues to the 8% reduction.)
“The developer is the sponsor of this project,” Gargano replied. “The city is the one that has looked at the project in terms of the makeup of the project, the size of the project and they have approved, the office of--”
“City Planning,” his interlocutor offered.
“They’re the ones that approved it,” Gargano continued.
But didn't City Planning simply address scale rather than the housing/office mix? The ESDC, Gargano declared, is not the project sponsor, and a developer has to “look at the market.”
Hint of changes
As for the project before the PACB for a possible vote today, Gargano said that it was was “basically the project that we put out for bid, with the possibility of doing some review for the Phase 2.”
Well, there was no bid, but his comment about Phase 2 raised some questions. What issues might be up for discussion? The mix of housing? The interim surface parking? The design of open space? We should know soon.
For the first time, however, officials acknowledged that $1 billion in tax-exempt bonds would be issued to support the housing component. They also said that Memoranda of Understanding with developer Forest City Ratner regarding the housing were still being negotiated, but that the fiscal aspects of the project were ready to go before the Public Authorities Control Board (PACB) today.
Also, Empire State Development Corporation’s (ESDC) Chairman Charles Gargano said that developer Forest City Ratner would earn a “reasonable” rate of return, even as the potential return to the public had just plummeted by about a third.
As reported, Brodsky found the ESDC unwilling to provide full disclosure about the project, notably a project financial analysis commissioned by the firm KPMG.
(The ESDC had cited confidentiality issues, but yesterday, according to the New York Observer, the authority provided the document to Assembly Speaker Sheldon Silver, who was considering the project from his perch as a controlling member of the PACB. Silver’s posture on Atlantic Yards remained unclear yesterday, despite reports that he was ready to kick it over to the term of incoming Governor Eliot Spitzer.)
$1B for bonds
“How much tax-free financing is going to be issued?” Brodsky asked.
Ann Hulka, a senior VP for real estate at the ESDC, responded that there would be $100 million in bonds on behalf of New York State.
However, “with regards to housing bonds, we’re anticipating… almost a billion dollars” through the city housing program, she said.
The actual cost of such bonds to the public is unclear. However, there is a finite pool of bonding available, and it’s possible that Atlantic Yards could represent a disproportionate amount, thus squeezing out other potential projects.
On Monday, Michelle de la Uz of the Fifth Avenue Committee, a housing group in Brooklyn that has called for a delay in the PACB vote, suggested that the city’s Housing Development Corporation (HDC) is contemplating the issue of $1.9 billion in bonds, basing her estimate on preliminary documents released by HDC.
To put it in perspective, she said, this year HDC issued $1.8 billion in bonds. Much more information is needed on the affordable housing finances, she said.
(It’s not clear whether the bonds for Atlantic Yards would be issued in one year or over several years.)
Value of Vanderbilt Yard?
Has an appraisal, including the air rights, been done on the state property included in the project, Brodsky asked. He was referring to the Metropolitan Transportation Authority’s (MTA) Vanderbilt Yard, which would occupy nearly nine acres of the 22-acre Atlantic Yards site.
ESDC counsel Steve Matlin responded that the MTA had done an appraisal, which he’d seen. He didn’t mention that the appraisal was $214.5 million, and that the MTA had awarded the rights to Forest City Ratner for $100 million, while another developer, Extell, bid $150 million.
(Forest City contends that the value of railyard improvements ups the value of its bid. Develop Don't Destroy Brookyn disagrees.)
“Is the price to be paid to the MTA the measure of the value that appears in the appraisal?” Brodsky asked.
“That was a determination made by the MTA,” Matlin responded.
‘Extraordinary infrastructure’
“What’s the total cost of what’s called ‘extraordinary infrastructure costs’?” Brodsky asked, a reference to a line in the 2/18/05 Memorandum of Understanding that said (p. 5) that “the Public Parties will consider making additional contributions for extraordinary infrastructure costs related to the mixed-use development on the Project Site (excluding the Arena Building Site).”
Gargano said, “We are providing $100 million… for work over the railyards.” (Develop Don’t Destroy Brooklyn points to $163 million in such ‘extraordinary infrastructure costs’ in FCR’s bid (p. 47 of PDF) to the MTA.)“Is it essentially the MTA portion?” Brodsky asked.
The answer was yes. The question apparently had not been fully answered.
Enforceability, Part 1
“How do you enforce the affordable housing component?” Brodsky asked. He referred to the plan for 2250 affordable rentals, 2250 market-rate rentals, and some 1930 market-rate condos.
“We have MOUs,” Gargano responded, saying that language in the MOUs and funding agreements would provide the enforceability.
“And if by some reason, the housing is not developed, what’s the remedy?” Brodsky asked.
Gargano replied that the developer would not get the funding. It wasn’t clear what funding he was referring to—the $100 million from the state, or city housing bonds and subsidies.
ESDC Chief Operating Officer Eileen Mildenberger followed up by saying that the fiscal cost to the city and state would be about $450 million. (That calculation includes $200 million in direct funding plus sales tax and mortgage recording tax breaks, but not affordable housing costs nor public costs for schools, sanitation, and public safety.)
Enforceability, Part 2
After the hearing, reporters followed up with Gargano. “In our agreement with the developer, we have an MOU that gives us the ability to enforce what we require them to do in terms of affordable housing," he said.
Is the MOU public?
Gargano said he’d have to check.
Would it typically be made public?
“It depends on where we are in the process,” Gargano replied.
“We’re still negotiating final terms,” Mildenberger said.
“We’re still negotiating,” Gargano chimed in. “But obviously when the negotiations are complete, all of those will be public documents.”
How could they be negotiating, Gargano was asked, given that the project was going to be put before the PACB on Wednesday.
“No, we’re not negotiating. We have an MOU,” Gargano said.
Mildenberger explained further why the MOU wasn’t public. “The final terms of the agreement” have not been reached, she said, adding that there would be MOUs between the developer and the city and the developer and the state.
So why is this going to the PACB?
“I think the fiscal terms of the project are already negotiated, and that’s what PACB would be most concerned about,” she responded.
A reasonable return
Gargano was asked about the developer’s return. “I have been told by my financial people that—I don’t have the numbers—but it’s a reasonable return on their investment,” he said. (In an August article in New York Magazine, a real estate expert estimated about a 25 percent return.)
So why did the ESDC let Forest City, in the 8% cut in project size, eliminate a disproportionate amount of commercial space, which, if filled, would generate more spinoff jobs and public revenue than would housing? (The ESDC attributed the nearly one-third cut in projected revenues to the 8% reduction.)
“The developer is the sponsor of this project,” Gargano replied. “The city is the one that has looked at the project in terms of the makeup of the project, the size of the project and they have approved, the office of--”
“City Planning,” his interlocutor offered.
“They’re the ones that approved it,” Gargano continued.
But didn't City Planning simply address scale rather than the housing/office mix? The ESDC, Gargano declared, is not the project sponsor, and a developer has to “look at the market.”
Hint of changes
As for the project before the PACB for a possible vote today, Gargano said that it was was “basically the project that we put out for bid, with the possibility of doing some review for the Phase 2.”
Well, there was no bid, but his comment about Phase 2 raised some questions. What issues might be up for discussion? The mix of housing? The interim surface parking? The design of open space? We should know soon.
MIA: the New York Times editorial page on PACB vote
You’d think that, in the run-up to an expected Atlantic Yards vote today by the state Public Authorities Control Board (PACB), the city’s newspapers would have weighed in. Indeed, most have done so.
The Post and Daily News endorsed the project. (The Post did so again today.) The conservative Sun opposed Atlantic Yards and published an additional op-ed. The Courier-Life chain cheered on the project and published an op-ed likely ghostwritten by developer Forest City Ratner. The oft-critical Brooklyn Papers chain expressed opposition.
The city’s leading daily, the New York Times, has been silent.
Times in a bind?
I can only speculate about the reasons, but the Times may have been in a deadlock of sorts. The editorial page has generally supported the Atlantic Yards project, though it called, ineffectively and inconsistently, for the city and state not to provide direct subsidies for the project.
Most recently, in August, the page gently advised a possible 15 percent reduction in the project size and called for a longer period in review.
But it hasn’t questioned eminent domain—indeed, the Times is a beneficiary of eminent domain for the new headquarters the parent Times Company is building in partnership with Atlantic Yards developer Forest City Ratner.
The publisher offers both explicit and indirect influence on the editorial page (though not on the newsroom). So, given that the Times Company agreed to guarantee a loan to the developer, it's not unreasonable to think that the publisher Arthur Sulzberger is rooting for Forest City Ratner’s general success, and that has filtered through to the editorial writers.
Facing reality
At the same time, the editorial writers must have read the recent news coverage, including beat reporter Nicholas Confessore’s tough questioning of Empire State Development Corporation Chairman Charles Gargano, whose pattern of misspeaking about eminent domain has undermined his credibility.
And they must have read coverage of the nearly half-billion dollar fall in the projected net revenues from the Atlantic Yards project, a nearly one-third decline that neither Gargano nor fellow board members saw fit to mention publicly.
Opinion options
So the Times could have added its voice to the chorus urging the PACB, notably Assembly Speaker Sheldon Silver, to vote a certain way. It could have acknowledged the qualms but said that the project deserved to proceed.
It could have joined some civic groups, good government bedfellows like the Citizens Union, in concluding that enough questions had been raised that the project should be stalled until the incoming administration of Governor Eliot Spitzer. (Let’s assume that the Times wouldn’t opine that enough questions have been raised to kill the project.)
Indeed, the Times could have echoed its editorial published Saturday, headlined When Doing Nothing Is Better, urging that other items on "lame duck" Governor George Pataki's "parting wish list" be denied:
It will certainly be a different political mix starting Jan. 1. But we always need our legislators to take the time to do their work carefully — and, we hope, more openly. So at this point, this do-nothing session in Albany turned out to be the right thing to do.
Absent from that editorial was Atlantic Yards. And absent from any editorial prior to the PACB vote was Atlantic Yards.
On a pressing issue of the day, the Times was silent.
Often a failure to cover a Brooklyn issue might be blamed on a limited newshole and a limited attention span in a newspaper that must cover a region, state, nation, and world.
In this case, there's likely much more to the story.
The Post and Daily News endorsed the project. (The Post did so again today.) The conservative Sun opposed Atlantic Yards and published an additional op-ed. The Courier-Life chain cheered on the project and published an op-ed likely ghostwritten by developer Forest City Ratner. The oft-critical Brooklyn Papers chain expressed opposition.
The city’s leading daily, the New York Times, has been silent.
Times in a bind?
I can only speculate about the reasons, but the Times may have been in a deadlock of sorts. The editorial page has generally supported the Atlantic Yards project, though it called, ineffectively and inconsistently, for the city and state not to provide direct subsidies for the project.
Most recently, in August, the page gently advised a possible 15 percent reduction in the project size and called for a longer period in review.
But it hasn’t questioned eminent domain—indeed, the Times is a beneficiary of eminent domain for the new headquarters the parent Times Company is building in partnership with Atlantic Yards developer Forest City Ratner.
The publisher offers both explicit and indirect influence on the editorial page (though not on the newsroom). So, given that the Times Company agreed to guarantee a loan to the developer, it's not unreasonable to think that the publisher Arthur Sulzberger is rooting for Forest City Ratner’s general success, and that has filtered through to the editorial writers.
Facing reality
At the same time, the editorial writers must have read the recent news coverage, including beat reporter Nicholas Confessore’s tough questioning of Empire State Development Corporation Chairman Charles Gargano, whose pattern of misspeaking about eminent domain has undermined his credibility.
And they must have read coverage of the nearly half-billion dollar fall in the projected net revenues from the Atlantic Yards project, a nearly one-third decline that neither Gargano nor fellow board members saw fit to mention publicly.
Opinion options
So the Times could have added its voice to the chorus urging the PACB, notably Assembly Speaker Sheldon Silver, to vote a certain way. It could have acknowledged the qualms but said that the project deserved to proceed.
It could have joined some civic groups, good government bedfellows like the Citizens Union, in concluding that enough questions had been raised that the project should be stalled until the incoming administration of Governor Eliot Spitzer. (Let’s assume that the Times wouldn’t opine that enough questions have been raised to kill the project.)
Indeed, the Times could have echoed its editorial published Saturday, headlined When Doing Nothing Is Better, urging that other items on "lame duck" Governor George Pataki's "parting wish list" be denied:
It will certainly be a different political mix starting Jan. 1. But we always need our legislators to take the time to do their work carefully — and, we hope, more openly. So at this point, this do-nothing session in Albany turned out to be the right thing to do.
Absent from that editorial was Atlantic Yards. And absent from any editorial prior to the PACB vote was Atlantic Yards.
On a pressing issue of the day, the Times was silent.
Often a failure to cover a Brooklyn issue might be blamed on a limited newshole and a limited attention span in a newspaper that must cover a region, state, nation, and world.
In this case, there's likely much more to the story.
Tuesday, December 19, 2006
Brodsky: Atlantic Yards not ready for evaluation
An influential Democratic Assemblymember said yesterday said there was too little information extant about Atlantic Yards financials to make any evaluation of the project.
Richard Brodsky, a Democrat from Westchester, had just finished putting Empire State Development Corporation (ESDC) officials through the wringer on a number of issues, including a brief but intense foray into Atlantic Yards.
What would he tell Assembly Speaker Sheldon Silver, who controls one of three votes on the Public Authorities Control Board (PACB) and could stall the project until the incoming administration of Governor Eliot Spitzer, a fellow Democrat?
Brodsky, who chairs the committee that oversees public authorities, said Silver addressed the issue on his own, since he doesn't sit on the PACB--which oversees financing for certain state projects--as a legislator.
But Brodsky offered his own opinion: “As of right now, I need to know more of the facts that we sought and didn't get today, and we’ll get those by the end of the year.” (Later yesterday, NY1 reported that Silver had stalled the project.)
Only one staffer knows?
Though Chairman Charles Gargano and more than a half-dozen top agency officials appeared yesterday to testify before Brodsky’s committee, none could answer certain questions about a fiscal impact analysis that the ESDC publicly released on Friday. The memo attempted to explain new calculations behind a nearly half-billion dollar decline in net new tax revenue, a cut of about one-third.
That’s because staffer Kathy Kazanas, who prepared the memo, was unable to attend the hearing, held yesterday afternoon at an auditorium at New York University.
Brodsky focused on financial issues, asking why the discount rate—the interest rate used to calculate the expected rate of return for the project—had been changed from 6% to 3% from the predecessor memo prepared in October. (The December memo offers no explanation as to why.)
“I thought it was 6% too,” acknowledged Ann Hulka, the senior VP for real estate development who was named as the recipient of the memo. “But I haven’t had a chance to talk to Kathy.”
Effect on cut?
Brodsky queried whether the change in the rate was a factor in potentially inflating the already truncated total of tax revenue.
Gargano shrugged it off. “Number one, I don’t know if it’s 6% to 3%,” he said, attributing the nearly one-third decline in revenues to an 8% cut in the project size that disproportionately affected office space, which, if filled, offers more of a fiscal bang for buck.
But that didn’t explain (and Brodsky didn’t ask) why such a decline caused a projected 18% decrease in construction workers--more than twice an 8% cut.
John Bacheller, another ESDC executive, assured Brodsky that the change in the discount rate wasn’t responsible for the fiscal impact.
Despite reference to a 3% discount rate in the memo, Hulka said, "I don't believe the discount rate changed," though she said she had to confirm that with Kazanas.
A bit later, Brodsky again got granular, asking questions about the relationship between construction jobs and tax revenues, and getting himself—and the ESDC staffers—confused. “We are clearly swimming in water that we don’t understand,” Brodsky observed.
He got a nod from ESDC Chief Operating Officer Eileen Mildenberger.
“We will get answers at an appropriate time,” Brodsky continued.
More to learn
One set of answers may regard a more stringent review of the project’s financials. While the agency has twice released brief memos summarizing the project’s fiscal impact, Hulka revealed that an outside consultant, the firm KPMG, conducted an independent financial analysis of the project.
“We had some issue with regard to confidentiality,” she said, alluding to the ESDC’s reluctance, as of yesterday, to provide Brodsky with the document. “Have they given us clearance?”
An ESDC lawyer responded that they were still “working on it.”
Brodsky opined later that, given the “remarkable changes” in the calculations regarding Atlantic Yards, there was “not enough to tell you: is this a good deal or a bad deal.”
As for the KPMG document, “they said there are confidentiality issues. I have agreed to listen to their claims.”
Grading ESDC
Brodsky, who spent most of the hearing questioning ESDC staffers about other issues, such as the sale of state office space and its record in minority contracting, was asked how he’d grade the authority’s record in transparency and accountability.
“Not well,” he declared. He has been critical of the performance of the ESDC, which has been led by appointees of departing Governor George Pataki, a Republican. "This final hearing, I think, gave us an opportunity to show where there are major problems."
Richard Brodsky, a Democrat from Westchester, had just finished putting Empire State Development Corporation (ESDC) officials through the wringer on a number of issues, including a brief but intense foray into Atlantic Yards.
What would he tell Assembly Speaker Sheldon Silver, who controls one of three votes on the Public Authorities Control Board (PACB) and could stall the project until the incoming administration of Governor Eliot Spitzer, a fellow Democrat?
Brodsky, who chairs the committee that oversees public authorities, said Silver addressed the issue on his own, since he doesn't sit on the PACB--which oversees financing for certain state projects--as a legislator.
But Brodsky offered his own opinion: “As of right now, I need to know more of the facts that we sought and didn't get today, and we’ll get those by the end of the year.” (Later yesterday, NY1 reported that Silver had stalled the project.)
Only one staffer knows?
Though Chairman Charles Gargano and more than a half-dozen top agency officials appeared yesterday to testify before Brodsky’s committee, none could answer certain questions about a fiscal impact analysis that the ESDC publicly released on Friday. The memo attempted to explain new calculations behind a nearly half-billion dollar decline in net new tax revenue, a cut of about one-third.
That’s because staffer Kathy Kazanas, who prepared the memo, was unable to attend the hearing, held yesterday afternoon at an auditorium at New York University.
Brodsky focused on financial issues, asking why the discount rate—the interest rate used to calculate the expected rate of return for the project—had been changed from 6% to 3% from the predecessor memo prepared in October. (The December memo offers no explanation as to why.)
“I thought it was 6% too,” acknowledged Ann Hulka, the senior VP for real estate development who was named as the recipient of the memo. “But I haven’t had a chance to talk to Kathy.”
Effect on cut?
Brodsky queried whether the change in the rate was a factor in potentially inflating the already truncated total of tax revenue.
Gargano shrugged it off. “Number one, I don’t know if it’s 6% to 3%,” he said, attributing the nearly one-third decline in revenues to an 8% cut in the project size that disproportionately affected office space, which, if filled, offers more of a fiscal bang for buck.
But that didn’t explain (and Brodsky didn’t ask) why such a decline caused a projected 18% decrease in construction workers--more than twice an 8% cut.
John Bacheller, another ESDC executive, assured Brodsky that the change in the discount rate wasn’t responsible for the fiscal impact.
Despite reference to a 3% discount rate in the memo, Hulka said, "I don't believe the discount rate changed," though she said she had to confirm that with Kazanas.
A bit later, Brodsky again got granular, asking questions about the relationship between construction jobs and tax revenues, and getting himself—and the ESDC staffers—confused. “We are clearly swimming in water that we don’t understand,” Brodsky observed.
He got a nod from ESDC Chief Operating Officer Eileen Mildenberger.
“We will get answers at an appropriate time,” Brodsky continued.
More to learn
One set of answers may regard a more stringent review of the project’s financials. While the agency has twice released brief memos summarizing the project’s fiscal impact, Hulka revealed that an outside consultant, the firm KPMG, conducted an independent financial analysis of the project.
“We had some issue with regard to confidentiality,” she said, alluding to the ESDC’s reluctance, as of yesterday, to provide Brodsky with the document. “Have they given us clearance?”
An ESDC lawyer responded that they were still “working on it.”
Brodsky opined later that, given the “remarkable changes” in the calculations regarding Atlantic Yards, there was “not enough to tell you: is this a good deal or a bad deal.”
As for the KPMG document, “they said there are confidentiality issues. I have agreed to listen to their claims.”
Grading ESDC
Brodsky, who spent most of the hearing questioning ESDC staffers about other issues, such as the sale of state office space and its record in minority contracting, was asked how he’d grade the authority’s record in transparency and accountability.
“Not well,” he declared. He has been critical of the performance of the ESDC, which has been led by appointees of departing Governor George Pataki, a Republican. "This final hearing, I think, gave us an opportunity to show where there are major problems."
Regional Plan Association, Citizens Union, more groups call for AY delay
The message got more backing yesterday: Atlantic Yards is not ready for prime time.
The forces seeking to slow consideration of the Atlantic Yards project grew in strength yesterday as the influential Regional Plan Association (RPA) and the Citizens Union, groups that, respectively, had offered cautious support for the project and had not weighed in, called for the Public Authorities Control Board (PACB) to delay its vote.
(Later, NY1 reported that the PACB would stall the project.)
The press conference on City Hall steps was organized by the Municipal Art Society (MAS), which has called for major changes before project approval, and the groups assembled took pains not to be portrayed as opponents of development. “We’re not here to kill the project,” declared MAS President Kent Barwick. “We’re here to resuscitate the role of the public.”
Exactly how that might occur remains a question, but the groups expressed hope that a new state administration under incoming Governor Eliot Spitzer—a project supporter—would take a fresh look at Atlantic Yards.
Yesterday the advocates said that not only does the environmental impact require additional scrutiny, but so do the finances. The latter message was driven in part by recent revelations that the Empire State Development Corporation (ESDC) had lowered its estimate of net new revenue for the project by nearly half a billion dollars.
Evolution of scrutiny
MAS last June limited itself to criticizing the design aspects of the project. Steering the launch of BrooklynSpeaks in September, MAS added the issues of affordable housing, effective transit/transportation improvements, and a better public process.
The PACB, controlled by three members (Governor George Pataki, Senate Majority Leader Joseph Bruno, and Assembly Speaker Sheldon Silver) had been expected to vote as soon as Wednesday to approve the project. However, unanimity is required, and there has been pressure on Silver, the only Democrat, to hold it until the administration of incoming Governor Eliot Spitzer.
RPA criticism
The RPA in August had endorsed Phase 1 of the project and called for changes in Phase 2, but said, essentially, that the project was too far ahead to start from scratch. Yesterday the organization amplified its criticism without fundamentally changing its stance.
"The Atlantic Yards project will bring substantial benefits to the region and the city, but it is also a major piece of city-making in the midst of successful residential neighborhoods,” said RPA VP Chris Jones. “A delay in PACB approval should be used to develop a more comprehensive transportation plan and improve the project's design.”
(RPA's support was cited by board member Kevin Corbett, a member of the ESDC board, in voting for the project on December 8.)
“Limited delay”
Citizens Union, a longstanding good government organization, called for a “limited delay” in the process and noted that it “does not align itself with those who oppose the project and wish to use the process of delay to kill the project, because we believe that economic development is needed so that the city can continue to be a dynamic place of business and meet the needs of a growing population.”
The group’s letter to the PACB raised questions about the environmental mitigations and the finances. “The fact that the Empire State Development Corporation, when it adopted the plan, failed to make any public mention of lowering significantly its estimate of how much tax revenue the project would generate is emblematic of our concerns,” said Citizens Union head Dick Dadey.
Finances and more
Brooklyn Assemblyman James Brennan reiterated that he has been unable to get the project financial plan, which would help ascertain whether sufficient returns to support development could be derived from a significantly smaller project.
Eric Goldstein of the Natural Resources Defense Council said the incoming Spitzer administration needed a chance to review the financial and environmental data. Andy Wiley-Schwartz of the Project for Public Spaces said that the proposed open space wouldn’t work, but that the problems “are all quite fixable.”
20 years?
Barwick described the project as taking 15 to 20 years to build, a span similar to that posited by Kathryn Wylde of the Partnership for New York City. However, the state and the developer say it would take ten years, with the project complete by 2016.
“There are very few examples of projects that have been completed at the schedule that’s been set out,” added Stuart Pertz, an architect who advises MAS and once worked for Forest City Ratner.
In this case, a delay is even more likely, he said, suggesting that the second stage—which would include all the publicly accessible open space and most of the affordable housing—may be “more of a foil” to get the first stage (the arena block) moving than “a project in fact.”
(ESDC representatives yesterday said that affordable housing would be guaranteed by a memorandum of understanding, but said such a document was still in process.)
Real planning?
Jon Orcutt of the Tri-State Transportation Campaign said the mass transit system was not up to snuff and suggested a “real planning process” to tackle the problems.
So why don’t the groups challenge the process by which Forest City Ratner became the developer? “I believe that the process probably will be challenged,” Barwick said, apparently speaking about ESDC processes in general rather than the selection of the Atlantic Yards developer.
“We’re looking forward to an administration with a completely different kind of management for the Empire State Development Corporation," Barwick continued. "This is a project which, as the next 15 to 20 years go by, ought to have a guiding hand. There ought to be a continuing subsidiary of the state, with citizens from Brooklyn guiding this project.”
“Nobody’s successfully challenged the UDC Act,” he said, referring to the law that established the ESDC’s parent agency and gives the state the power to override local zoning, among other things. “It was designed to provide affordable housing to communities that were closing their doors to low-income people.”
Looking at UDC Act
The UDC Act (Urban Development Corporation Act 174/68, Section 3) is even broader. While the UDC Act describes a "residential project" that would encompass affordable housing, Atlantic Yards is presented by the ESDC as a "land use improvement project" and a "civic project." (Does the UDC Act contemplate market-rate housing for such projects? Unclear.)
Here are the relevant excerpts from state law:
(a) "Residential project". A project or that portion of a multi-purpose project designed and intended for the purpose of providing housing accommodations for persons or families of low income and such facilities as may be incidental or appurtenant thereto.
(c) "Land Use Improvement project". A plan or undertaking for the clearance, replanning, reconstruction and rehabilitation or a combination of these and other methods, of a substandard and insanitary area, and for recreational or other facilities incidental or appurtenant thereto, pursuant to and in accordance with article eighteen of the constitution and this act. The terms "clearance, replanning, reconstruction and rehabilitation" shall include renewal, redevelopment, conservation, restoration or improvement or any combination thereof as well as the testing and reporting of methods and techniques for the arrest, prevention and elimination of slums and blight.
(d) "Civic project". A project or that portion of a multi-purpose project designed and intended for the purpose of providing facilities for educational, cultural, recreational, community, municipal, public service or other civic purposes.
FCR as developer?
What about starting from scratch? “You have to take a look at where you are in the project, and what type of project you’d end up with if you went through that process,” observed Jones. The RPA’s testimony suggested that a project on the scale of Atlantic Yards likely would have emerged.
What of Brennan’s speculation that financial disclosure might suggest that the project could be viable with significant cuts, perhaps as much as a half? “We doubt that it can go down that much,” Jones said. “But that’s why the finances are so important.”
Going to court?
The assembled representatives maintained a cautious distance from Develop Don't Destroy Brooklyn, the coalition that has filed an eminent domain lawsuit. Orcutt observed, “Our alternatives at this point are to sue over the EIS [environmental impact statement] or some other reason, and that doesn’t change the planning process.”
Barwick said, “Who are you going to punish--the guys who left office? You can’t. If this project can’t be made to fit into Brooklyn, can’t be made not to overwhelm that neighborhood, can’t be made to find a way that you’re not breathing the gas of 20,000 cars, then it should be turned down totally. But I think there’s a hope here that if the public was playing its role, the project could be shaped into something manageable.”
“It’s been a political process, not a planning process,” said Michelle de la Uz of the Fifth Avenue Committee. “And the reality is, all of us are asking for significant changes for anything to move forward. We may have different views on what those significant changes are, but the reality is, this project is not ready for a vote.”
Eminent domain?
The group was asked to comment on the relevance of the Supreme Court’s 2005 Kelo decision, which is being cited in the pending eminent domain case.
Jo Anne Simon, District Leader for the 52nd Assembly District and a representative of the Boerum Hill Association, commented, “Having read the decision and having been part of an organization that said we didn’t believe eminent domain is not appropriate at the site… the fact is that eminent domain is a tool and a technique and a part of this, but it’s not the overwhelming problem with this project, which is overwhelmingly flawed in so many other ways."
"Eminent domain would be less likely to occur were there adequate community planning," Simon continued. "But that process hasn’t occurred and there’s nothing that requires it to occur, and we’re all fighting the same battle here. We’re trying to call on elected officials and on the people who have the ability to change the way things are done to have those things changed, so there is a better role, and a meaningful role, for the public going forward in changing this project.”
(The plantiffs argue that Kelo requires, if not adequate community planning, a legislatively-derived planning process which fosters competition among developers rather than the process by which the city embraced Forest City Ratner's project.)
Barwick noted there’s been two years of “no planning process.” The choice here can be left to the courts, he said, calling it a “silver bullet” (no pun intended), “or it can be turned back to responsible government to be shaped.”
A Spitzer future?
What recommendations might be made? “They have a terrific new guy, head of the MTA,” Barwick said, referring to Spitzer’s choice of Lee Sander to run the Metropolitan Transportation Authority. “The governor’s office could say, ‘Make a plan for handling mass transit at Atlantic Yards.’”
“The public benefit goals of the project have never been fully articulated,” de la Uz said. “We backed into them. We backed into them by saying, ‘It’s affordable housing. It’s the creation of jobs.' If you start with the public benefit goals, then you can design a project that’s rational.”
“If the courts decide that the process has been defective,” Barwick said, again noting the lack of a successful challenge to the UDC Act, “while we’re waiting for the courts to decide that, we have an opportunity to let a new administration take hold of it and assess it, and if it can be repaired to the point where it makes sense for Brooklyn, then perhaps it should be approved.”
Changes easy or difficult?
“There’s one thing wrong with this project that’s so elementary,” Barwick said. “It’s just simply 1950s planning.”
As he continued, he indicated first-name familiarity with Forest City Ratner CEO Bruce Ratner. “It doesn’t injure Bruce, or the economics, or affordable housing, to see to it that the open space is public, that it’s not a barrier between communities, that the streets stay open,” Barwick said. “These are things that can be cured easily without significant economic penalties.”
But reducing the scale and thus the number of market-rate housing units would cost the developer. And so might broadening the affordable housing. However, the analysis of that depends on some of the disclosure that the groups yesterday continued to request.
The forces seeking to slow consideration of the Atlantic Yards project grew in strength yesterday as the influential Regional Plan Association (RPA) and the Citizens Union, groups that, respectively, had offered cautious support for the project and had not weighed in, called for the Public Authorities Control Board (PACB) to delay its vote.
(Later, NY1 reported that the PACB would stall the project.)
The press conference on City Hall steps was organized by the Municipal Art Society (MAS), which has called for major changes before project approval, and the groups assembled took pains not to be portrayed as opponents of development. “We’re not here to kill the project,” declared MAS President Kent Barwick. “We’re here to resuscitate the role of the public.”
Exactly how that might occur remains a question, but the groups expressed hope that a new state administration under incoming Governor Eliot Spitzer—a project supporter—would take a fresh look at Atlantic Yards.
Yesterday the advocates said that not only does the environmental impact require additional scrutiny, but so do the finances. The latter message was driven in part by recent revelations that the Empire State Development Corporation (ESDC) had lowered its estimate of net new revenue for the project by nearly half a billion dollars.
Evolution of scrutiny
MAS last June limited itself to criticizing the design aspects of the project. Steering the launch of BrooklynSpeaks in September, MAS added the issues of affordable housing, effective transit/transportation improvements, and a better public process.
The PACB, controlled by three members (Governor George Pataki, Senate Majority Leader Joseph Bruno, and Assembly Speaker Sheldon Silver) had been expected to vote as soon as Wednesday to approve the project. However, unanimity is required, and there has been pressure on Silver, the only Democrat, to hold it until the administration of incoming Governor Eliot Spitzer.
RPA criticism
The RPA in August had endorsed Phase 1 of the project and called for changes in Phase 2, but said, essentially, that the project was too far ahead to start from scratch. Yesterday the organization amplified its criticism without fundamentally changing its stance.
"The Atlantic Yards project will bring substantial benefits to the region and the city, but it is also a major piece of city-making in the midst of successful residential neighborhoods,” said RPA VP Chris Jones. “A delay in PACB approval should be used to develop a more comprehensive transportation plan and improve the project's design.”
(RPA's support was cited by board member Kevin Corbett, a member of the ESDC board, in voting for the project on December 8.)
“Limited delay”
Citizens Union, a longstanding good government organization, called for a “limited delay” in the process and noted that it “does not align itself with those who oppose the project and wish to use the process of delay to kill the project, because we believe that economic development is needed so that the city can continue to be a dynamic place of business and meet the needs of a growing population.”
The group’s letter to the PACB raised questions about the environmental mitigations and the finances. “The fact that the Empire State Development Corporation, when it adopted the plan, failed to make any public mention of lowering significantly its estimate of how much tax revenue the project would generate is emblematic of our concerns,” said Citizens Union head Dick Dadey.
Finances and more
Brooklyn Assemblyman James Brennan reiterated that he has been unable to get the project financial plan, which would help ascertain whether sufficient returns to support development could be derived from a significantly smaller project.
Eric Goldstein of the Natural Resources Defense Council said the incoming Spitzer administration needed a chance to review the financial and environmental data. Andy Wiley-Schwartz of the Project for Public Spaces said that the proposed open space wouldn’t work, but that the problems “are all quite fixable.”
20 years?
Barwick described the project as taking 15 to 20 years to build, a span similar to that posited by Kathryn Wylde of the Partnership for New York City. However, the state and the developer say it would take ten years, with the project complete by 2016.
“There are very few examples of projects that have been completed at the schedule that’s been set out,” added Stuart Pertz, an architect who advises MAS and once worked for Forest City Ratner.
In this case, a delay is even more likely, he said, suggesting that the second stage—which would include all the publicly accessible open space and most of the affordable housing—may be “more of a foil” to get the first stage (the arena block) moving than “a project in fact.”
(ESDC representatives yesterday said that affordable housing would be guaranteed by a memorandum of understanding, but said such a document was still in process.)
Real planning?
Jon Orcutt of the Tri-State Transportation Campaign said the mass transit system was not up to snuff and suggested a “real planning process” to tackle the problems.
So why don’t the groups challenge the process by which Forest City Ratner became the developer? “I believe that the process probably will be challenged,” Barwick said, apparently speaking about ESDC processes in general rather than the selection of the Atlantic Yards developer.
“We’re looking forward to an administration with a completely different kind of management for the Empire State Development Corporation," Barwick continued. "This is a project which, as the next 15 to 20 years go by, ought to have a guiding hand. There ought to be a continuing subsidiary of the state, with citizens from Brooklyn guiding this project.”
“Nobody’s successfully challenged the UDC Act,” he said, referring to the law that established the ESDC’s parent agency and gives the state the power to override local zoning, among other things. “It was designed to provide affordable housing to communities that were closing their doors to low-income people.”
Looking at UDC Act
The UDC Act (Urban Development Corporation Act 174/68, Section 3) is even broader. While the UDC Act describes a "residential project" that would encompass affordable housing, Atlantic Yards is presented by the ESDC as a "land use improvement project" and a "civic project." (Does the UDC Act contemplate market-rate housing for such projects? Unclear.)
Here are the relevant excerpts from state law:
(a) "Residential project". A project or that portion of a multi-purpose project designed and intended for the purpose of providing housing accommodations for persons or families of low income and such facilities as may be incidental or appurtenant thereto.
(c) "Land Use Improvement project". A plan or undertaking for the clearance, replanning, reconstruction and rehabilitation or a combination of these and other methods, of a substandard and insanitary area, and for recreational or other facilities incidental or appurtenant thereto, pursuant to and in accordance with article eighteen of the constitution and this act. The terms "clearance, replanning, reconstruction and rehabilitation" shall include renewal, redevelopment, conservation, restoration or improvement or any combination thereof as well as the testing and reporting of methods and techniques for the arrest, prevention and elimination of slums and blight.
(d) "Civic project". A project or that portion of a multi-purpose project designed and intended for the purpose of providing facilities for educational, cultural, recreational, community, municipal, public service or other civic purposes.
FCR as developer?
What about starting from scratch? “You have to take a look at where you are in the project, and what type of project you’d end up with if you went through that process,” observed Jones. The RPA’s testimony suggested that a project on the scale of Atlantic Yards likely would have emerged.
What of Brennan’s speculation that financial disclosure might suggest that the project could be viable with significant cuts, perhaps as much as a half? “We doubt that it can go down that much,” Jones said. “But that’s why the finances are so important.”
Going to court?
The assembled representatives maintained a cautious distance from Develop Don't Destroy Brooklyn, the coalition that has filed an eminent domain lawsuit. Orcutt observed, “Our alternatives at this point are to sue over the EIS [environmental impact statement] or some other reason, and that doesn’t change the planning process.”
Barwick said, “Who are you going to punish--the guys who left office? You can’t. If this project can’t be made to fit into Brooklyn, can’t be made not to overwhelm that neighborhood, can’t be made to find a way that you’re not breathing the gas of 20,000 cars, then it should be turned down totally. But I think there’s a hope here that if the public was playing its role, the project could be shaped into something manageable.”
“It’s been a political process, not a planning process,” said Michelle de la Uz of the Fifth Avenue Committee. “And the reality is, all of us are asking for significant changes for anything to move forward. We may have different views on what those significant changes are, but the reality is, this project is not ready for a vote.”
Eminent domain?
The group was asked to comment on the relevance of the Supreme Court’s 2005 Kelo decision, which is being cited in the pending eminent domain case.
Jo Anne Simon, District Leader for the 52nd Assembly District and a representative of the Boerum Hill Association, commented, “Having read the decision and having been part of an organization that said we didn’t believe eminent domain is not appropriate at the site… the fact is that eminent domain is a tool and a technique and a part of this, but it’s not the overwhelming problem with this project, which is overwhelmingly flawed in so many other ways."
"Eminent domain would be less likely to occur were there adequate community planning," Simon continued. "But that process hasn’t occurred and there’s nothing that requires it to occur, and we’re all fighting the same battle here. We’re trying to call on elected officials and on the people who have the ability to change the way things are done to have those things changed, so there is a better role, and a meaningful role, for the public going forward in changing this project.”
(The plantiffs argue that Kelo requires, if not adequate community planning, a legislatively-derived planning process which fosters competition among developers rather than the process by which the city embraced Forest City Ratner's project.)
Barwick noted there’s been two years of “no planning process.” The choice here can be left to the courts, he said, calling it a “silver bullet” (no pun intended), “or it can be turned back to responsible government to be shaped.”
A Spitzer future?
What recommendations might be made? “They have a terrific new guy, head of the MTA,” Barwick said, referring to Spitzer’s choice of Lee Sander to run the Metropolitan Transportation Authority. “The governor’s office could say, ‘Make a plan for handling mass transit at Atlantic Yards.’”
“The public benefit goals of the project have never been fully articulated,” de la Uz said. “We backed into them. We backed into them by saying, ‘It’s affordable housing. It’s the creation of jobs.' If you start with the public benefit goals, then you can design a project that’s rational.”
“If the courts decide that the process has been defective,” Barwick said, again noting the lack of a successful challenge to the UDC Act, “while we’re waiting for the courts to decide that, we have an opportunity to let a new administration take hold of it and assess it, and if it can be repaired to the point where it makes sense for Brooklyn, then perhaps it should be approved.”
Changes easy or difficult?
“There’s one thing wrong with this project that’s so elementary,” Barwick said. “It’s just simply 1950s planning.”
As he continued, he indicated first-name familiarity with Forest City Ratner CEO Bruce Ratner. “It doesn’t injure Bruce, or the economics, or affordable housing, to see to it that the open space is public, that it’s not a barrier between communities, that the streets stay open,” Barwick said. “These are things that can be cured easily without significant economic penalties.”
But reducing the scale and thus the number of market-rate housing units would cost the developer. And so might broadening the affordable housing. However, the analysis of that depends on some of the disclosure that the groups yesterday continued to request.
Senator-elect Adams calls for look at AY terrorism threat
Less than two days before an expected vote on the Atlantic Yards plan by the Public Authorities Control Board (PACB), Eric Adams, the State Senator-elect for the 20th District and a retired New York Police Department captain, said the project isn’t ready for public approval.
“I’m very concerned about the terrorism aspect,” Adams, co-Founder of 100 Blacks in Law Enforcement Who Care, said last night. “I’d hate for us to rush right through it.” (Indeed, NY1 reported later that the project has been stalled.)
While the adjacent transit hub was targeted for a terrorist attack in 1997, the Empire State Development Corporation says a terrorism/security review isn't required under the state environmental review, though the city police department has examined the project.
Adams has previously expressed a mix of concerns about Atlantic Yards.
Don’t get too hopeful?
Adams spoke at a meeting organized by the Prospect Heights Neighborhood Development Council (PHNDC), along with Hakeem Jeffries, Assemblymember-elect for the 57th District and City Council Member Letitia James.
About 80 people attended, asking a range of questions, with a few touching on Atlantic Yards. None among the diverse group seemed to welcome a project that would, if not double the neighborhood population (as one speaker said), increase it enormously and burden traffic and transit.
“I don’t want to get your hopes up,” Adams cautioned, pointing out that incoming Governor Eliot Spitzer, whose administration would consider the project if the PACB stalls it, supports Atlantic Yards. Jeffries reiterated concerns he’d expressed in a December 8 letter to Assembly Speaker Sheldon Silver, who controls one of the three votes on the PACB, which must vote unanimously.
Spitzer stall?
James said she’d spoken to Spitzer’s transition team and gave a hint that Spitzer might be influencing Silver, a fellow Democrat, and currently the only Democrat with a controlling vote on the PACB. (The other two officials who control votes are departing Governor George Pataki and Senate Majority leader Joseph Bruno, both Republicans.)
“He supports the project, but he shares our concern,” James said of Spitzer. “He’d like an opportunity to review it.”
Adding a reference to Spitzer’s campaign slogan, “Day One, everything changes,” James declared, “If it’s kicked over, I’m hopeful it will change on Day One.”
Atlantic Center overbuild?
The officials were asked about apparent plans by Forest City Ratner to build three towers over the Atlantic Center mall, utilizing existing development rights, which would compound the environmental impact of the Atlantic Yards plan across the street. They said they didn't know about it.
“I’m very concerned about the terrorism aspect,” Adams, co-Founder of 100 Blacks in Law Enforcement Who Care, said last night. “I’d hate for us to rush right through it.” (Indeed, NY1 reported later that the project has been stalled.)
While the adjacent transit hub was targeted for a terrorist attack in 1997, the Empire State Development Corporation says a terrorism/security review isn't required under the state environmental review, though the city police department has examined the project.
Adams has previously expressed a mix of concerns about Atlantic Yards.
Don’t get too hopeful?
Adams spoke at a meeting organized by the Prospect Heights Neighborhood Development Council (PHNDC), along with Hakeem Jeffries, Assemblymember-elect for the 57th District and City Council Member Letitia James.
About 80 people attended, asking a range of questions, with a few touching on Atlantic Yards. None among the diverse group seemed to welcome a project that would, if not double the neighborhood population (as one speaker said), increase it enormously and burden traffic and transit.
“I don’t want to get your hopes up,” Adams cautioned, pointing out that incoming Governor Eliot Spitzer, whose administration would consider the project if the PACB stalls it, supports Atlantic Yards. Jeffries reiterated concerns he’d expressed in a December 8 letter to Assembly Speaker Sheldon Silver, who controls one of the three votes on the PACB, which must vote unanimously.
Spitzer stall?
James said she’d spoken to Spitzer’s transition team and gave a hint that Spitzer might be influencing Silver, a fellow Democrat, and currently the only Democrat with a controlling vote on the PACB. (The other two officials who control votes are departing Governor George Pataki and Senate Majority leader Joseph Bruno, both Republicans.)
“He supports the project, but he shares our concern,” James said of Spitzer. “He’d like an opportunity to review it.”
Adding a reference to Spitzer’s campaign slogan, “Day One, everything changes,” James declared, “If it’s kicked over, I’m hopeful it will change on Day One.”
Atlantic Center overbuild?
The officials were asked about apparent plans by Forest City Ratner to build three towers over the Atlantic Center mall, utilizing existing development rights, which would compound the environmental impact of the Atlantic Yards plan across the street. They said they didn't know about it.
Monday, December 18, 2006
Missing in ESDC presentation to PACB: housing subsidies
For the past week, questions have been raised about the adequacy of the Atlantic Yards fiscal impact analysis conducted by the Empire State Development Corporation (ESDC). First, the ESDC, without comment or explanation, revealed a drop of nearly a half-billion dollars in net fiscal impact.
Then the authority released a memo purporting to explain its new fiscal calculations, but the document raised more questions than it answered. (In fact, the inhouse memo is hardly the same thing as the "independent economic analysis" that the ESDC "has performed" but not released.)
Now questions have emerged about exactly how the ESDC accounts for affordable housing subsidies, which are necessary to the project but unspecified in available project documents.
Questions in PACB document
The project is pending before the Public Authorities Control Board (PACB), which must analyze the finances before approving $100 million in state funds. (The PACB is controlled by departing Gov. George Pataki, Senate Majority Leader Joseph Bruno, and Assembly Speaker Sheldon Silver, who is under pressure to delay consideration of the project until the administration of incoming Gov. Eliot Spitzer, a fellow Democrat.)
A project summary in the Atlantic Yards Affirmation Document--an overview presented by the ESDC to the PACB--describes "anticipated funding sources" and "funding uses," which both add up neatly to nearly $4 billion.
But there's nothing in there about affordable housing. The document states:
As part of the Project plan, Forest City has committed to develop not less than 2,250 units of affordable housing. It is expected that Forest City will receive customary housing subsidies that are in existence at the time of such development for the development of the affordable housing.
There is no accounting for the amount of those subsidies, which likely would exceed $100 million. But if the subsidies are "customary," can't the ESDC at least offer an estimate?
City resists FOIL, again
Last week, I was stymied again in an attempt to get the city Department of Housing Preservation & Development (HPD) to reveal the amount of the affordable housing subsidies. I had previously been told that such figures couldn't be revealed because of "interference with contracts" and "inter- or intra-agency material."
I filed an appeal to HPD, writing, in part:
My request for the records was denied, as noted on the attached copy, because the records are deemed “interference with contracts” or “inter- or intra-agency material.”
While I recognize that some documents might fall under that rubric, I find it surprising that no documents could be made available to explain to the public how much the city plans to spend to subsidize affordable housing in the Atlantic Yards project.
That is a matter of public policy and thus public discussion.
The response (right; click to enlarge) reiterated the reasoning and added to it. Oddly, however, it seemed superseded by events. On 12/8/06, the ESDC approved the project. In a letter dated four days later, HPD stated:
As you are aware, the proposed Atlantic Yards development is a contemplated development which is being negotiated between the Empire State Development Corporation (ESDC), a entity of the State of New York, and Forest City Ratner corporation, a non-governmental entity. ESDC has already determined that release of data not otherwise available on their website would impair the process of their negotiations with the potential developer...
Negotiations?
First, how can the ESDC still be negotiating? They just sent the project to the PACB. Would they want to have a project approved for which negotiations have yet to conclude?
Is HPD still negotiating? In September, HPD's Rafael Cestero told the City Planning Commission that a funding agreement regarding bonds and other subsidies was in process. Wouldn't that funding agreement be finished by the time the ESDC signed off on the project?
Or should the PACB assume that the sum of city subsidies for housing is a mystery?
Then the authority released a memo purporting to explain its new fiscal calculations, but the document raised more questions than it answered. (In fact, the inhouse memo is hardly the same thing as the "independent economic analysis" that the ESDC "has performed" but not released.)
Now questions have emerged about exactly how the ESDC accounts for affordable housing subsidies, which are necessary to the project but unspecified in available project documents.
Questions in PACB document
The project is pending before the Public Authorities Control Board (PACB), which must analyze the finances before approving $100 million in state funds. (The PACB is controlled by departing Gov. George Pataki, Senate Majority Leader Joseph Bruno, and Assembly Speaker Sheldon Silver, who is under pressure to delay consideration of the project until the administration of incoming Gov. Eliot Spitzer, a fellow Democrat.)
A project summary in the Atlantic Yards Affirmation Document--an overview presented by the ESDC to the PACB--describes "anticipated funding sources" and "funding uses," which both add up neatly to nearly $4 billion.But there's nothing in there about affordable housing. The document states:
As part of the Project plan, Forest City has committed to develop not less than 2,250 units of affordable housing. It is expected that Forest City will receive customary housing subsidies that are in existence at the time of such development for the development of the affordable housing.
There is no accounting for the amount of those subsidies, which likely would exceed $100 million. But if the subsidies are "customary," can't the ESDC at least offer an estimate?
City resists FOIL, again
Last week, I was stymied again in an attempt to get the city Department of Housing Preservation & Development (HPD) to reveal the amount of the affordable housing subsidies. I had previously been told that such figures couldn't be revealed because of "interference with contracts" and "inter- or intra-agency material."
I filed an appeal to HPD, writing, in part:My request for the records was denied, as noted on the attached copy, because the records are deemed “interference with contracts” or “inter- or intra-agency material.”
While I recognize that some documents might fall under that rubric, I find it surprising that no documents could be made available to explain to the public how much the city plans to spend to subsidize affordable housing in the Atlantic Yards project.
That is a matter of public policy and thus public discussion.
The response (right; click to enlarge) reiterated the reasoning and added to it. Oddly, however, it seemed superseded by events. On 12/8/06, the ESDC approved the project. In a letter dated four days later, HPD stated:
As you are aware, the proposed Atlantic Yards development is a contemplated development which is being negotiated between the Empire State Development Corporation (ESDC), a entity of the State of New York, and Forest City Ratner corporation, a non-governmental entity. ESDC has already determined that release of data not otherwise available on their website would impair the process of their negotiations with the potential developer...
Negotiations?
First, how can the ESDC still be negotiating? They just sent the project to the PACB. Would they want to have a project approved for which negotiations have yet to conclude?
Is HPD still negotiating? In September, HPD's Rafael Cestero told the City Planning Commission that a funding agreement regarding bonds and other subsidies was in process. Wouldn't that funding agreement be finished by the time the ESDC signed off on the project?
Or should the PACB assume that the sum of city subsidies for housing is a mystery?
Still waiting for Ratner's profit projections
According to the 2/18/05 Memorandum of Understanding that Forest City Ratner signed with the city and state, the developer was required to provide a 30-year pro forma income and cash flow statement regarding the Atlantic Yards project. Was it made public? No.
From the New York magazine cover story last August on Atlantic Yards:
Despite the Ratner team’s claims of transparency—“I don’t know, other than to have people sitting in my office, how you could make it any more transparent!” [Forest City Ratner's Jim] Stuckey says—FCR refuses to discuss how much it expects to clear, saying it’s a public company and can’t risk accusations it’s manipulating the stock price. The only public documentation of profit appears to be a nearly illegible one-page form filed with the MTA labeled pro-forma cash-flow statement. It seems to show Ratner with a profit of $1 billion. Real-estate expert Jeffrey Jackson ran all the available Atlantic Yards numbers and came to the same rough conclusion. “It’s difficult to quantify the profitability of the arena,” Jackson says, “and the return will be impacted by the final mix of financing. But Ratner should make around $700 million to $1 billion—about a 25 percent return. That’s pretty good.”
PACB disclosure?
Has it been presented to the Public Authorities Control Board (PACB), which may vote on the project Wednesday? No.
As the New York Times reports today, in an article on the murky politics of the PACB and the role of Assembly Speaker Sheldon Silver, headlined Fate of Project in Brooklyn Hinges on Nod of One Man:
Both Forest City Ratner and the development corporation have so far kept the project’s financial projections secret. No one else knows how much the developer expects to make from the Atlantic Yards, how big it needs to be to turn a profit, or how much profit will be needed to sustain its more popular elements, including about 2,250 units of moderately priced housing.
In recent days, the development corporation has turned over some financial information to Mr. Silver’s control board staff. But Eileen Larrabee, a spokeswoman for Mr. Silver, described it as “very cursory information, basically what’s available on the Web.”
She added, “We have asked for some detailed financial and economic information that has not yet been provided.”
Sunday, December 17, 2006
Ground shifting on Atlantic Yards?
There are hints that the ground may be shifting on attitudes toward the Atlantic Yards project, at least enough that the Public Authorities Control Board (PACB) might hesitate and fail to approve the project during the waning days of the administration of Governor George Pataki.
The New York Times, in an article today headlined Like-Minded Leaders Face Roles That Put Them at Odds, discusses the relationship between Mayor Mike Bloomberg and Governor-elect Eliot Spitzer:
Already there have been hints of coming clashes, with Mr. Spitzer working to slow down projects that Mr. Bloomberg has been trying to accelerate, like the rebuilding of ground zero and the development of the Atlantic Yards complex in Brooklyn.
There's been very little from Spitzer on Atlantic Yards other than general support from the project, though the Times reported on 12/7/06:
Aides to Mr. Spitzer have recently begun a more intensive review of the Yards project, among others, which they said was intended chiefly to bring Mr. Spitzer up to speed on the projects’ details. But a senior policy adviser to Mr. Spitzer said last week that an intervention was not out of the question.
PACB delay?
The PACB, which is controlled by the governor, Senate Majority Leader Joseph Bruno, and Assembly Speaker Sheldon Silver, is supposed to vote on Atlantic Yards on Wednesday, and unanimity is required. Silver, who's generally supported the project, is under pressure to stall consideration of it until the administration of fellow Democrat Spitzer, and new revelations of drastically reduced net tax revenue may provide new ammunition.
Meanwhile, a somewhat cryptic press release from the Municipal Art Society, which as part of BrooklynSpeaks has opposed the project as currently constituted, announces:
At 1:00 p.m. on Monday, December 18, citywide and national civic groups — joined by new voices and elected officials — will gather on the steps of New York’s City Hall to call on the state’s Public Authorities Control Board to vigorously scrutinize the financial details of Forest City Ratner’s Atlantic Yards project before voting on it.
Among those scheduled to attend Monday’s news conference are groups that have previously expressed support for the project or have not yet taken a public position.
Citing the absence of a full financial disclosure for the project and a failure to meaningfully address issues identified by the environmental impact statement, the groups will unite to urge the three PACB members to refrain from voting on the project at their next scheduled meeting on Wednesday, December 20.
Lupica hits had
Daily News sports columnist Mike Lupica, in his "Shooting from the Lip" column today, cites the story I broke:
Norman Oder, a tough journalist who has done the best reporting on Ratner in his blog, is the one who noticed that a third of the revenues that Ratner has been pitching simply disappeared in the last six months.
Oh, sure.
In July taxpayers were told that Ratner World was going to generate $1.4 billion in new revenue.
By the time the thing crossed Rubber Stamp Gargano's desk, the figure was $944 million.
Gargano, of course, didn't say a word, and neither did any of the major politicians who have shilled for this thing from the start.
Why?
Because they want to shove this project across the goal line while George Pataki is still governor, that's why.
You know what else was in the new plan approved by the ESDC?
Language that wasn't in there before about what happens to the project if Ratner sells the Nets.
According to Ratner and Markowitz of Brooklyn, head cheerleader for the project from the start, this was supposed to be all about sports.
Sports was just a way to get Ratner's foot in the door.
This was always about the real estate.
About the deal.
Which was always going to benefit Bruce Ratner more than it was ever going to benefit the borough of Brooklyn, N.Y.
So where is this incoming governor, Spitzer, on this shell game?
And how can Shelly Silver, one of three votes on the Public Authorities Control Board - which has to approve the project by law - possibly vote to approve before Spitzer gets a seat at the table?
The New York Times, in an article today headlined Like-Minded Leaders Face Roles That Put Them at Odds, discusses the relationship between Mayor Mike Bloomberg and Governor-elect Eliot Spitzer:
Already there have been hints of coming clashes, with Mr. Spitzer working to slow down projects that Mr. Bloomberg has been trying to accelerate, like the rebuilding of ground zero and the development of the Atlantic Yards complex in Brooklyn.
There's been very little from Spitzer on Atlantic Yards other than general support from the project, though the Times reported on 12/7/06:
Aides to Mr. Spitzer have recently begun a more intensive review of the Yards project, among others, which they said was intended chiefly to bring Mr. Spitzer up to speed on the projects’ details. But a senior policy adviser to Mr. Spitzer said last week that an intervention was not out of the question.
PACB delay?
The PACB, which is controlled by the governor, Senate Majority Leader Joseph Bruno, and Assembly Speaker Sheldon Silver, is supposed to vote on Atlantic Yards on Wednesday, and unanimity is required. Silver, who's generally supported the project, is under pressure to stall consideration of it until the administration of fellow Democrat Spitzer, and new revelations of drastically reduced net tax revenue may provide new ammunition.
Meanwhile, a somewhat cryptic press release from the Municipal Art Society, which as part of BrooklynSpeaks has opposed the project as currently constituted, announces:
At 1:00 p.m. on Monday, December 18, citywide and national civic groups — joined by new voices and elected officials — will gather on the steps of New York’s City Hall to call on the state’s Public Authorities Control Board to vigorously scrutinize the financial details of Forest City Ratner’s Atlantic Yards project before voting on it.
Among those scheduled to attend Monday’s news conference are groups that have previously expressed support for the project or have not yet taken a public position.
Citing the absence of a full financial disclosure for the project and a failure to meaningfully address issues identified by the environmental impact statement, the groups will unite to urge the three PACB members to refrain from voting on the project at their next scheduled meeting on Wednesday, December 20.
Lupica hits had
Daily News sports columnist Mike Lupica, in his "Shooting from the Lip" column today, cites the story I broke:
Norman Oder, a tough journalist who has done the best reporting on Ratner in his blog, is the one who noticed that a third of the revenues that Ratner has been pitching simply disappeared in the last six months.
Oh, sure.
In July taxpayers were told that Ratner World was going to generate $1.4 billion in new revenue.
By the time the thing crossed Rubber Stamp Gargano's desk, the figure was $944 million.
Gargano, of course, didn't say a word, and neither did any of the major politicians who have shilled for this thing from the start.
Why?
Because they want to shove this project across the goal line while George Pataki is still governor, that's why.
You know what else was in the new plan approved by the ESDC?
Language that wasn't in there before about what happens to the project if Ratner sells the Nets.
According to Ratner and Markowitz of Brooklyn, head cheerleader for the project from the start, this was supposed to be all about sports.
Sports was just a way to get Ratner's foot in the door.
This was always about the real estate.
About the deal.
Which was always going to benefit Bruce Ratner more than it was ever going to benefit the borough of Brooklyn, N.Y.
So where is this incoming governor, Spitzer, on this shell game?
And how can Shelly Silver, one of three votes on the Public Authorities Control Board - which has to approve the project by law - possibly vote to approve before Spitzer gets a seat at the table?
Saturday, December 16, 2006
New ESDC fiscal impact memo raises more questions than it answers
In a memorandum dated December 14 but released yesterday, the Empire State Development Corporation purports to offer “a more complete description” of the economic analysis that led to a drastic drop of $456 million in net projected Atlantic Yards revenue, but the agency leaves numerous questions unanswered.
Notably, the memo does not explain why the agency changed its methodology in projecting a more than fivefold leap in city tax revenues from construction (even as the total tax revenue plummeted) nor a significant discrepancy between the revenues in the memo and in the General Project Plan (GPP).
Also, it doesn't explain why the ESDC changed the discount rate--the interest rate used in calculating the present value of expected benefits and costs—from 6% to 3%. (Given that a higher discount rate means a smaller present value of future cash flows, lowering the discount rate would increase the present value, perhaps overinflating even the lowered revenue figures the ESDC released this week.)
Nor does the memo explain why the ESDC corrected some apparent errors in the previous memo, issued October 18, including an agency assertion that “25% of visiting team players salaries is earned in New York City.” (There are 30 teams in the National Basketball Association.)
[Note: the first graphic of each pair is from the October memo; the second graphic is from the December memo. Click to enlarge. Emphases in text are added.]
Inadequate transparency
I shared the document with Dan Steinberg, research analyst of Good Jobs New York, which monitors economic development subsidies. He called it “a flimsy, last-minute attempt to address the transparency concerns that have been raised by the public and many elected officials. I’ve always had trouble getting information out of ESDC in this administration. We still don’t really understand where many of these numbers come from."
Similar, but different
The memo mirrors the document issued 10/18/06 in response to pressure from the press, politicians, and community members. The new memo reflects an 8% reduction in the square footage of the project, including a 44.5% cut in office space.
Little is changed in the initial part of the memo, though Table 1, which describes the Atlantic Yards Revised GPP Plan (Residential Mixed-Use version) neglects, unlike in the October memo, to include an alternative plan with more office space.
(Why not? More office space would accommodate more jobs and return more taxes to the city and state. Does the ESDC no longer consider the alternate plan realistic? Or would the contrast in revenues--because office space generates more spinoff jobs and thus tax receipts--be even more dramatic?)
Construction impacts confusing
However, there are dramatic differences between the two versions of Table 2, which presents the estimated one-time construction economic and fiscal impacts of the overall project.
The new memo estimates 12,568 direct jobs—actually job-years—down from 15,344 in the October memo. There’s no explanation, however, about the reason for the 18% drop, which is not commensurate with the 8% reduction in the project’s size.
More confusingly, the ESDC in the memo estimates $291.9 million in city tax revenues, a distinct contrast with the $52.5 million figure in the October version. The latest memo adds that “the New York City tax revenue total from construction activity is inclusive of the MTA portion of tax revenues,” but it doesn’t explain how that changes the calculation. By contrast, the newly revised General Project Plan states that construction employment will generate $42.1 million in city tax revenues, which sounds like a commensurate reduction from the October figure.
The October memo states:
Total personal income earned by direct, indirect, and induced construction-related wage earners is estimated to be $1.1 billion in New York City and $1.5 billion in New York State (inclusive of New York City). Tax revenue collected by New York City as a result of construction-related activity and employment is estimated to be $50.5 million and $109.5 million for New York State.
The December memo states:
Total personal income earned by direct, indirect, and induced construction-related wage earners is estimated to be $903 million in New York City and $1.2 billion in New York State (inclusive of New York City). Tax revenue collected by New York City as a result of construction-related activity and employment is estimated to be $291.9 million and $169.4 million for New York State.
Steinberg observed, "The fact that there are discrepancies between this and the GPP (right; item iii) makes it difficult to understand what they’re saying at all.”
Impact from permanent jobs
In Table 3, the agency in the December memo estimates tax revenues from permanent jobs at the project. Again, the memo presents only the residential mixed-use version, rather than the alternative plan, with more office space.
In the October memo, by contrast, the agency presents both versions, with the alternative plan estimated to provide more than double the tax revenues.
Given the significant decline in projected tax revenues, the contrast between the two versions would be even more glaring. Again, the ESDC changed from a 6% discount rate to a 3% discount rate, which could boost estimated revenue, without explaining why.
Summary of assumptions
The ESDC explains that it has used the REMI model (Regional Economic Models, Inc.) of the New York City region: “REMI tax revenue estimates reported here reflect a broad set of state and local tax collections including personal income tax, corporate and business income tax, sales tax, property tax, and miscellaneous other taxes.”
Confoundingly, both versions of the memo, which skips from Table 3 to Table 5, neglect to explain where in the model the ESDC factors in taxes on” taxable ticket, concessions, and novelties sales at the arena” and effects from the players’ earnings and consumption spending.
Player salaries
The ESDC assumes, as did Forest City Ratner consultant Andrew Zimbalist, that “30% of Nets players live in New York City and pay both City and State personal income tax.” Still, it’s not clear whether that's a realistic assumption.
The October memo states:
25% of visiting team players’ salaries is earned in New York City and pay only New York State personal income tax. [sic] All spending from income earned in New York City by visiting team players happens outside of the City and State.
The December memo revises the estimate without providing a figure:
A portion of the visiting team players’ salaries is earned in Brooklyn and only New York State personal income tax is paid on such amount. All spending from income earned in New York City by visiting team players happens outside of the City and State.
(What percentage might that be? There would be 28 NBA teams based outside New York State, if the Nets move to Brooklyn from New Jersey. That suggests that the portion of salaries earned in Brooklyn, which of course does not collect its own taxes, would be 1/28, or less than 4%.)
Consumption spending
There's a distinct difference between earned income and post-tax disposable income, but the ESDC seems to have discovered that only since October.
The October memo states:
Taxable consumption expenditures are assumed to be 40% of earned income. Sales tax rate is 8.375% (both State and City Sales Tax is 4% and an additional 0.375% collected for the MTA).
The December memo makes a switch:
Taxable consumption expenditures are assumed to be 40% of disposable income. Sales tax rate is 8.375% (both State and City Sales Tax is 4% and an additional 0.375% collected for the MTA).
The reason for the change is not explained. Neither the effect of the switch on the revenue calculations.
What happened to arena jobs?
It's understandable that the number of jobs would go down, but there are fewer parallels between the memos than might be expected.
The October version estimates 3639 direct jobs, including 17 at the Urban Room, but ignores all jobs at the arena. The December memo estimates 3047 jobs, with 453 at the arena, but ignores the Urban Room. The ESDC offers no explanation for the changes. Did they just forget about the arena the first time?
What else is missing
Neither memo mentions the subsidies and tax exemptions that the ESDC has acknowledged in its calculations of net fiscal impact. The GPP issued in July (and subject of the October memo) assumes a public contribution of $545.5 million. The GPP issued December 8 (and subject of the most recent memo) assumes a public contribution of $453.4 million. In neither case, however, are those costs delineated.
Why did the public contribution go down? It's not explained, but a smaller project may lead to lesser sales and mortgage recording tax exemptions.
And the ESDC’s analysis has never included a significant number of other public costs and subsidies, including for affordable housing, schools, sanitation, and public safety.
The questions remain.
Notably, the memo does not explain why the agency changed its methodology in projecting a more than fivefold leap in city tax revenues from construction (even as the total tax revenue plummeted) nor a significant discrepancy between the revenues in the memo and in the General Project Plan (GPP).
Also, it doesn't explain why the ESDC changed the discount rate--the interest rate used in calculating the present value of expected benefits and costs—from 6% to 3%. (Given that a higher discount rate means a smaller present value of future cash flows, lowering the discount rate would increase the present value, perhaps overinflating even the lowered revenue figures the ESDC released this week.)
Nor does the memo explain why the ESDC corrected some apparent errors in the previous memo, issued October 18, including an agency assertion that “25% of visiting team players salaries is earned in New York City.” (There are 30 teams in the National Basketball Association.)[Note: the first graphic of each pair is from the October memo; the second graphic is from the December memo. Click to enlarge. Emphases in text are added.]
Inadequate transparency
I shared the document with Dan Steinberg, research analyst of Good Jobs New York, which monitors economic development subsidies. He called it “a flimsy, last-minute attempt to address the transparency concerns that have been raised by the public and many elected officials. I’ve always had trouble getting information out of ESDC in this administration. We still don’t really understand where many of these numbers come from."Similar, but different
The memo mirrors the document issued 10/18/06 in response to pressure from the press, politicians, and community members. The new memo reflects an 8% reduction in the square footage of the project, including a 44.5% cut in office space.
Little is changed in the initial part of the memo, though Table 1, which describes the Atlantic Yards Revised GPP Plan (Residential Mixed-Use version) neglects, unlike in the October memo, to include an alternative plan with more office space.(Why not? More office space would accommodate more jobs and return more taxes to the city and state. Does the ESDC no longer consider the alternate plan realistic? Or would the contrast in revenues--because office space generates more spinoff jobs and thus tax receipts--be even more dramatic?)
Construction impacts confusing
However, there are dramatic differences between the two versions of Table 2, which presents the estimated one-time construction economic and fiscal impacts of the overall project.
The new memo estimates 12,568 direct jobs—actually job-years—down from 15,344 in the October memo. There’s no explanation, however, about the reason for the 18% drop, which is not commensurate with the 8% reduction in the project’s size.
More confusingly, the ESDC in the memo estimates $291.9 million in city tax revenues, a distinct contrast with the $52.5 million figure in the October version. The latest memo adds that “the New York City tax revenue total from construction activity is inclusive of the MTA portion of tax revenues,” but it doesn’t explain how that changes the calculation. By contrast, the newly revised General Project Plan states that construction employment will generate $42.1 million in city tax revenues, which sounds like a commensurate reduction from the October figure.The October memo states:
Total personal income earned by direct, indirect, and induced construction-related wage earners is estimated to be $1.1 billion in New York City and $1.5 billion in New York State (inclusive of New York City). Tax revenue collected by New York City as a result of construction-related activity and employment is estimated to be $50.5 million and $109.5 million for New York State.
The December memo states:
Total personal income earned by direct, indirect, and induced construction-related wage earners is estimated to be $903 million in New York City and $1.2 billion in New York State (inclusive of New York City). Tax revenue collected by New York City as a result of construction-related activity and employment is estimated to be $291.9 million and $169.4 million for New York State.
Steinberg observed, "The fact that there are discrepancies between this and the GPP (right; item iii) makes it difficult to understand what they’re saying at all.”Impact from permanent jobs
In Table 3, the agency in the December memo estimates tax revenues from permanent jobs at the project. Again, the memo presents only the residential mixed-use version, rather than the alternative plan, with more office space.
In the October memo, by contrast, the agency presents both versions, with the alternative plan estimated to provide more than double the tax revenues.Given the significant decline in projected tax revenues, the contrast between the two versions would be even more glaring. Again, the ESDC changed from a 6% discount rate to a 3% discount rate, which could boost estimated revenue, without explaining why.
Summary of assumptions
The ESDC explains that it has used the REMI model (Regional Economic Models, Inc.) of the New York City region: “REMI tax revenue estimates reported here reflect a broad set of state and local tax collections including personal income tax, corporate and business income tax, sales tax, property tax, and miscellaneous other taxes.”
Confoundingly, both versions of the memo, which skips from Table 3 to Table 5, neglect to explain where in the model the ESDC factors in taxes on” taxable ticket, concessions, and novelties sales at the arena” and effects from the players’ earnings and consumption spending.Player salaries
The ESDC assumes, as did Forest City Ratner consultant Andrew Zimbalist, that “30% of Nets players live in New York City and pay both City and State personal income tax.” Still, it’s not clear whether that's a realistic assumption.
The October memo states:
25% of visiting team players’ salaries is earned in New York City and pay only New York State personal income tax. [sic] All spending from income earned in New York City by visiting team players happens outside of the City and State.
The December memo revises the estimate without providing a figure:
A portion of the visiting team players’ salaries is earned in Brooklyn and only New York State personal income tax is paid on such amount. All spending from income earned in New York City by visiting team players happens outside of the City and State.
(What percentage might that be? There would be 28 NBA teams based outside New York State, if the Nets move to Brooklyn from New Jersey. That suggests that the portion of salaries earned in Brooklyn, which of course does not collect its own taxes, would be 1/28, or less than 4%.)
Consumption spendingThere's a distinct difference between earned income and post-tax disposable income, but the ESDC seems to have discovered that only since October.
The October memo states:
Taxable consumption expenditures are assumed to be 40% of earned income. Sales tax rate is 8.375% (both State and City Sales Tax is 4% and an additional 0.375% collected for the MTA).
The December memo makes a switch:
Taxable consumption expenditures are assumed to be 40% of disposable income. Sales tax rate is 8.375% (both State and City Sales Tax is 4% and an additional 0.375% collected for the MTA).
The reason for the change is not explained. Neither the effect of the switch on the revenue calculations.
What happened to arena jobs?
It's understandable that the number of jobs would go down, but there are fewer parallels between the memos than might be expected.The October version estimates 3639 direct jobs, including 17 at the Urban Room, but ignores all jobs at the arena. The December memo estimates 3047 jobs, with 453 at the arena, but ignores the Urban Room. The ESDC offers no explanation for the changes. Did they just forget about the arena the first time?
What else is missing
Neither memo mentions the subsidies and tax exemptions that the ESDC has acknowledged in its calculations of net fiscal impact. The GPP issued in July (and subject of the October memo) assumes a public contribution of $545.5 million. The GPP issued December 8 (and subject of the most recent memo) assumes a public contribution of $453.4 million. In neither case, however, are those costs delineated.
Why did the public contribution go down? It's not explained, but a smaller project may lead to lesser sales and mortgage recording tax exemptions.
And the ESDC’s analysis has never included a significant number of other public costs and subsidies, including for affordable housing, schools, sanitation, and public safety.
The questions remain.
Friday, December 15, 2006
Stepford editorialists repeat the $5.6 billion lie
Call them the Stepford editorialists, quoting the same new, unverifiable, and outlandish Atlantic Yards statistic, undoubtedly supplied by developer Forest City Ratner: $5.6 billion in new tax revenue.
The Daily News, in a 12/10/06 editorial:
The benefits of the Atlantic Yards are manifest, among them 2,500 apartments geared for the middle and working classes, $5.6 billion in tax revenues over the next 30 years, 15,000 construction jobs, a couple of thousand permanent jobs and a great entertainment venue for Brooklyn. It's a win-win-win.
The Post, in a 12/14/06 editorial:
Imagine: a $4 billion shot in the arm for Brooklyn - bringing 22,000 new jobs over the next decade, another 5,000 permanent jobs and $5.6 billion in tax revenues over 30 years.
Assemblyman Steven Cymbrowitz, in a 12/14/06 op-ed in the Courier-Life chain:
Atlantic Yards will be a huge tax revenue generator providing New York City and New York State with over $5.6 billion in much needed new tax income over the next 30 years, and creating a net positive fiscal impact of more then $1.3 billion.
(Emphases added)
Contrast and antecedent
It's too bad none of those editorialists noticed the Empire State Development Corporation's (ESDC) figure of $944 million, which is drastically lower than the numbers used in the Daily News and Post, and even a good deal lower than the figure Cymbrowitz chose.
The ESDC number represents represents a loss of $456 million, a nearly one-third drop from the agency's previous, and much-challenged, estimate.
I assume the $5.6 billion figure is modified slightly from the Forest City Ratner statistic I dissected in a March article called The $6 billion lie. (Indeed, the Atlantic Yards web site still claims $6 billion in new tax revenues, but it has not been adjusted for the 8% reduction in the project's scale.)
The $6 billion figure comes from a 2005 analysis for the developer by sports economist Andrew Zimbalist, who wrote:
Under the General Project Plan, the total estimated increment to city and state tax revenues from the project comes to $6.02 billion over thirty years, or a present value of $2.13 billion.
Dissecting the lie
I detailed several reasons why the $6 billion figure wasn't credible, and they apply as well to the $5.6 billion lie. But here are the most important ones.
1) The $5.6 billion figure represents the 30-year aggregate of projected revenues. However, the standard way to present such numbers is net present value, or today's value of future payments, with an interest rate applied. Net present value is significantly lower. All other fiscal impact analyses of this project use present value.
2) The $5.6 billion figure ignores costs. In fact, a literal reading of Cymbrowitz's op-ed suggests that the project bringing in $5.6 billion with a net positive fiscal impact $1.3 billion would have $4.3 billion in costs.
Rather, I suspect that the $1.3 billion represents the net revenues in present value (about $2 billion) minus the costs, again in present value. It's completely unclear how it was calculated. Did the developer adjust the number from Zimbalist's study? From the ESDC's original calculations?
3) Neither Zimbalist nor the ESDC have come close to fully accounting for the subsidies and public costs behind the project.
Bad timing
As noted, the Daily News, Post, and Courier-Life have published numbers directly contradicted by the ESDC, which calculated $944 million, a number which still doesn't account for costs.
Affordable housing doubled?
Cymbrowitz, loyally following the Forest City Ratner narrative, calls Atlantic Yards an affordable housing project, even though most of the affordable housing would not be built until the second phase, which could be stalled indefinitely.
And he also somehow doubles the number of affordable rentals, from 2250 to 4500:
New York City is facing a serious shortage of affordable housing. As more and more developments, in just about every community of the city, offer luxury—unaffordable to most New Yorkers—units, the situation is beginning to approach a crisis level....
Brooklyn is fortunate to have the opportunity of adding 4,500 rent-stabilized rental apartments that will be dedicated to low, moderate and middle income families.
The Daily News, in a 12/10/06 editorial:
The benefits of the Atlantic Yards are manifest, among them 2,500 apartments geared for the middle and working classes, $5.6 billion in tax revenues over the next 30 years, 15,000 construction jobs, a couple of thousand permanent jobs and a great entertainment venue for Brooklyn. It's a win-win-win.
The Post, in a 12/14/06 editorial:
Imagine: a $4 billion shot in the arm for Brooklyn - bringing 22,000 new jobs over the next decade, another 5,000 permanent jobs and $5.6 billion in tax revenues over 30 years.
Assemblyman Steven Cymbrowitz, in a 12/14/06 op-ed in the Courier-Life chain:
Atlantic Yards will be a huge tax revenue generator providing New York City and New York State with over $5.6 billion in much needed new tax income over the next 30 years, and creating a net positive fiscal impact of more then $1.3 billion.
(Emphases added)
Contrast and antecedent
It's too bad none of those editorialists noticed the Empire State Development Corporation's (ESDC) figure of $944 million, which is drastically lower than the numbers used in the Daily News and Post, and even a good deal lower than the figure Cymbrowitz chose.
The ESDC number represents represents a loss of $456 million, a nearly one-third drop from the agency's previous, and much-challenged, estimate.
I assume the $5.6 billion figure is modified slightly from the Forest City Ratner statistic I dissected in a March article called The $6 billion lie. (Indeed, the Atlantic Yards web site still claims $6 billion in new tax revenues, but it has not been adjusted for the 8% reduction in the project's scale.)
The $6 billion figure comes from a 2005 analysis for the developer by sports economist Andrew Zimbalist, who wrote:
Under the General Project Plan, the total estimated increment to city and state tax revenues from the project comes to $6.02 billion over thirty years, or a present value of $2.13 billion.
Dissecting the lie
I detailed several reasons why the $6 billion figure wasn't credible, and they apply as well to the $5.6 billion lie. But here are the most important ones.
1) The $5.6 billion figure represents the 30-year aggregate of projected revenues. However, the standard way to present such numbers is net present value, or today's value of future payments, with an interest rate applied. Net present value is significantly lower. All other fiscal impact analyses of this project use present value.
2) The $5.6 billion figure ignores costs. In fact, a literal reading of Cymbrowitz's op-ed suggests that the project bringing in $5.6 billion with a net positive fiscal impact $1.3 billion would have $4.3 billion in costs.
Rather, I suspect that the $1.3 billion represents the net revenues in present value (about $2 billion) minus the costs, again in present value. It's completely unclear how it was calculated. Did the developer adjust the number from Zimbalist's study? From the ESDC's original calculations?
3) Neither Zimbalist nor the ESDC have come close to fully accounting for the subsidies and public costs behind the project.
Bad timing
As noted, the Daily News, Post, and Courier-Life have published numbers directly contradicted by the ESDC, which calculated $944 million, a number which still doesn't account for costs.
Affordable housing doubled?
Cymbrowitz, loyally following the Forest City Ratner narrative, calls Atlantic Yards an affordable housing project, even though most of the affordable housing would not be built until the second phase, which could be stalled indefinitely.
And he also somehow doubles the number of affordable rentals, from 2250 to 4500:
New York City is facing a serious shortage of affordable housing. As more and more developments, in just about every community of the city, offer luxury—unaffordable to most New Yorkers—units, the situation is beginning to approach a crisis level....
Brooklyn is fortunate to have the opportunity of adding 4,500 rent-stabilized rental apartments that will be dedicated to low, moderate and middle income families.
Could lost AY revenues have tripled affordable housing?
Let's approach the $456 million in lost Atlantic Yards projected tax revenues from another perspective.
How much would that sum be worth in terms of affordable housing? (Attorney George Locker, who's suing to block the "friendly condemnations" of 13 rent-stabilized tenants, raised the question.)
The lost city revenue is pegged at $193.2 million, in net present value.
How much does affordable housing cost? Well, the city is spending $83,200 per unit of affordable housing in its Queens West project.
Divide $193.2 million by $83,200 and you get 2322 units.
More than AY
The entire Atlantic Yards project would include 2250 onsite affordable units. So the amount of lost revenue might support even more affordable housing.
And that's just the city's share. The amount lost in projected state revenues was more than double that. So, perhaps we lost out on funds for at least 5000 units of affordable housing, effectively tripling the total number of units.
Of course things are more complicated; the amount spent on housing depends on the costs and constraints of the site, and the range of incomes of the population the housing would include.
And there's no assurance that new revenues would go into housing. (Heck, there's no assurance about the accuracy of the projected new revenues, because the ESDC's calculations ignore all sorts of subsidies and public costs.)
But those calculations are at least as plausible as the $5.6 billion lie--and certainly food for thought.
How much would that sum be worth in terms of affordable housing? (Attorney George Locker, who's suing to block the "friendly condemnations" of 13 rent-stabilized tenants, raised the question.)
The lost city revenue is pegged at $193.2 million, in net present value.
How much does affordable housing cost? Well, the city is spending $83,200 per unit of affordable housing in its Queens West project.
Divide $193.2 million by $83,200 and you get 2322 units.
More than AY
The entire Atlantic Yards project would include 2250 onsite affordable units. So the amount of lost revenue might support even more affordable housing.
And that's just the city's share. The amount lost in projected state revenues was more than double that. So, perhaps we lost out on funds for at least 5000 units of affordable housing, effectively tripling the total number of units.
Of course things are more complicated; the amount spent on housing depends on the costs and constraints of the site, and the range of incomes of the population the housing would include.
And there's no assurance that new revenues would go into housing. (Heck, there's no assurance about the accuracy of the projected new revenues, because the ESDC's calculations ignore all sorts of subsidies and public costs.)
But those calculations are at least as plausible as the $5.6 billion lie--and certainly food for thought.
Thursday, December 14, 2006
Times follows up on ESDC revenue revision; Post editorial page ignores it
In an article headlined Agency Cuts Atlantic Yards Revenue Estimate the Times followed up on the Empire State Development Corporation's revenue cut, a story broken yesterday on this blog:
A state development corporation has drastically decreased its projections for the amount of sales and income tax revenue it expects from the proposed Atlantic Yards project near Downtown Brooklyn.
In the online coverage, but not the print edition (page B4), the Times added some skepticism from an outside observer:
The estimates themselves are largely educated guesswork, relying on assumptions about how many new jobs would be created in a given square footage and how much revenue those jobs would produce.
But it was unclear how a loss of less than 300,000 square feet of office space could account for about a half a billion dollars less in tax revenue, especially considering the project's overall size.
"The cutback on the commercial side is going to have an effect, because that is where the revenue is," said Doug Turetsky, a spokesman for the city's Independent Budget Office. Mr. Turetsky said that the office had not examined the studies behind the estimates, but that "on its face, it seems like a large revenue falloff given the amount of commercial space being cut back."
Cuts in print
Why exactly was that critical segment cut? Obviously, pages change during editions. The rest of page B4 included a "Blocks" feature on logos, a police shooting and a continuation of an article on threats by Yoko Ono's driver, the last two late-breaking. These paragraphs did appear on that page:
Neighbors said they knew that Mr. Karsan was a chauffeur who often drove a black luxury sedan to and from Manhattan each day. Most neighbors interviewed said they did not know for whom he worked, but two real estate brokers who work out of a house next door said they did.
“He wouldn’t say much about Yoko, very closed-mouthed about her, never said anything detrimental,” said Gertrude M. Follett, one of the brokers. “He loved his job and we always assumed she was happy with him. He was a charming man, always impeccably dressed. We never would have thought he would do what they’re saying.”
“Total shock,” said the other broker, Dolores Fox. “Total shock. I hope it’s not true.”
Elys Collado, 25, another neighbor, said that Mr. Karsan had rarely spoken to her since she moved in three years ago, but that he was friendly.
“He recently carried in my new TV set for me, but even then he barely said anything,” she said. “Yoko Ono, that’s a good job to have. Why would he do anything to mess it up?”
Is this of more critical public importance than Turetsky's comments? Brutally weird.
Memo coming?
Back to the ESDC. The Times reported:
The development corporation said it planned to release a memo within a few days to explain its estimates.
Why was this not available as part of the documents released last Friday?
Post coverage
The Post played it straight, in an article headlined NET ARENA OVER$OLD:
The news of the drop-off, uncovered within hundreds of pages of agency documents, has project opponents hopeful that the Public Authorities Control Board in Albany will determine the financial projections are filled with flaws.
The PACB is set to decide the fate of the arena - where Bruce Ratner wants to move the New Jersey Nets - next Wednesday.
Officials with the development company yesterday said the project is still financially sound.
They attributed the revenue loss to Ratner scaling back the development size by 8 percent at the request of the City Planning Commission.
There could've been more skepticism there about the ratio between the reduction in revenue and the reduction in size.
Post editorial
There could've been a lot more skepticism on the Post editorial page, which endorsed the project in an editorial headlined ATLANTIC YARDS QUESTIONS. The Post used the same figure cited Sunday in the Daily News: $5.6 billion in new tax revenues.
That figure, apparently provided by Forest City Ratner (and adjusted from a $6 billion overestimate), was contradicted by the original ESDC figure, and further contradicted by the revised ESDC figure. Do the Post editorial writers read their own newspaper?
(I believe the $5.6 billion figure represents the cumulative value of the projected tax payments, rather than the standard formulation, which uses present value.)
Board ignorance?
The Times added some context:
The new estimate was included in a statement and other documents issued by the development agency on Friday, but the difference went unremarked in both the brief board meeting that preceded the approval vote and the news conference that Charles A. Gargano, the agency’s chairman, held shortly afterward.
Indeed, the board of the ESDC, which met last Friday for only about 15 minutes, did not publicly consider the project's fiscal impact. Wouldn't a responsible agency have briefed them about the nearly one-third drop in projected new tax revenues? And wouldn't a responsible board have given it some thought?
A state development corporation has drastically decreased its projections for the amount of sales and income tax revenue it expects from the proposed Atlantic Yards project near Downtown Brooklyn.
In the online coverage, but not the print edition (page B4), the Times added some skepticism from an outside observer:
The estimates themselves are largely educated guesswork, relying on assumptions about how many new jobs would be created in a given square footage and how much revenue those jobs would produce.
But it was unclear how a loss of less than 300,000 square feet of office space could account for about a half a billion dollars less in tax revenue, especially considering the project's overall size.
"The cutback on the commercial side is going to have an effect, because that is where the revenue is," said Doug Turetsky, a spokesman for the city's Independent Budget Office. Mr. Turetsky said that the office had not examined the studies behind the estimates, but that "on its face, it seems like a large revenue falloff given the amount of commercial space being cut back."
Cuts in print
Why exactly was that critical segment cut? Obviously, pages change during editions. The rest of page B4 included a "Blocks" feature on logos, a police shooting and a continuation of an article on threats by Yoko Ono's driver, the last two late-breaking. These paragraphs did appear on that page:
Neighbors said they knew that Mr. Karsan was a chauffeur who often drove a black luxury sedan to and from Manhattan each day. Most neighbors interviewed said they did not know for whom he worked, but two real estate brokers who work out of a house next door said they did.
“He wouldn’t say much about Yoko, very closed-mouthed about her, never said anything detrimental,” said Gertrude M. Follett, one of the brokers. “He loved his job and we always assumed she was happy with him. He was a charming man, always impeccably dressed. We never would have thought he would do what they’re saying.”
“Total shock,” said the other broker, Dolores Fox. “Total shock. I hope it’s not true.”
Elys Collado, 25, another neighbor, said that Mr. Karsan had rarely spoken to her since she moved in three years ago, but that he was friendly.
“He recently carried in my new TV set for me, but even then he barely said anything,” she said. “Yoko Ono, that’s a good job to have. Why would he do anything to mess it up?”
Is this of more critical public importance than Turetsky's comments? Brutally weird.
Memo coming?
Back to the ESDC. The Times reported:
The development corporation said it planned to release a memo within a few days to explain its estimates.
Why was this not available as part of the documents released last Friday?
Post coverage
The Post played it straight, in an article headlined NET ARENA OVER$OLD:
The news of the drop-off, uncovered within hundreds of pages of agency documents, has project opponents hopeful that the Public Authorities Control Board in Albany will determine the financial projections are filled with flaws.
The PACB is set to decide the fate of the arena - where Bruce Ratner wants to move the New Jersey Nets - next Wednesday.
Officials with the development company yesterday said the project is still financially sound.
They attributed the revenue loss to Ratner scaling back the development size by 8 percent at the request of the City Planning Commission.
There could've been more skepticism there about the ratio between the reduction in revenue and the reduction in size.
Post editorial
There could've been a lot more skepticism on the Post editorial page, which endorsed the project in an editorial headlined ATLANTIC YARDS QUESTIONS. The Post used the same figure cited Sunday in the Daily News: $5.6 billion in new tax revenues.
That figure, apparently provided by Forest City Ratner (and adjusted from a $6 billion overestimate), was contradicted by the original ESDC figure, and further contradicted by the revised ESDC figure. Do the Post editorial writers read their own newspaper?
(I believe the $5.6 billion figure represents the cumulative value of the projected tax payments, rather than the standard formulation, which uses present value.)
Board ignorance?
The Times added some context:
The new estimate was included in a statement and other documents issued by the development agency on Friday, but the difference went unremarked in both the brief board meeting that preceded the approval vote and the news conference that Charles A. Gargano, the agency’s chairman, held shortly afterward.
Indeed, the board of the ESDC, which met last Friday for only about 15 minutes, did not publicly consider the project's fiscal impact. Wouldn't a responsible agency have briefed them about the nearly one-third drop in projected new tax revenues? And wouldn't a responsible board have given it some thought?
ESDC "carefully considered" post-FEIS comments, but won't release them (or responses)
Though the Empire State Development Corporation (ESDC) invited public comment on the Atlantic Yards Final Environmental Impact Statement (FEIS), it won't immediately make public those nine letters nor the agency's responses, which essentially dismissed the concerns expressed.
Rather, in a contradiction of ESDC Chairman Charles Gargano's comments on Friday, the agency directed me to file a Freedom of Information Law (FOIL) request, which would delay the process until after Public Authorities Control Board (PACB) vote scheduled for December 20. Gargano, when asked at a press conference whether the agency could supply the documents to me, had said "of course."
By contrast, the ESDC in the FEIS made public a huge volume of comments and responses. Commented attorney Jeff Baker, who represents Develop Don't Destroy Brooklyn (DDDB) and is a veteran of state environmental reviews, "Of course they should be public. There is no legal requirement for formal publication of the comments and responses, like the comments on the Draft EIS published in the FEIS. However, they are public records and must be made public."
"If Gargano is proclaiming transparency, and if the PACB is going to properly review the project, that information should be made public," he added.
Atlantic Yards is on the agenda for the December 20 meeting of the PACB, the final level of state review. The votes are controlled by Gov. George Pataki, Senate Majority Leader Joseph Bruno, and Assembly Speaker Sheldon Silver, the only Democrat. While there's pressure on Silver to stall the project until the administration of incoming Governor Eliot Spitzer, a fellow Democrat, Pataki is reported to be offering legislators some carrots, such as a long-awaited pay raise, if they embrace several initiatives, including Atlantic Yards.
What's missing
Without the documents requested, we still don't know the ESDC's response, for example, to issues raised by DDDB's Baker about response times for emergency vehicles, the ESDC's unwillingness to consider the threat of terrorism, and the agency's highly questionable blight report.
A response to a FOIL request, much less the delivery of documents, can take weeks. So it's highly unlikely that the ESDC would produce the documents requested before December 20.
A slim opportunity
The opportunity for further comments on the Atlantic Yards project came up on November 27, when Gargano told reporters that the ESDC would continue to accept comments during the ten-day period before the board was to vote.
"If we get any substantive comments, we will take them into account," said general counsel Anita Laremont, who said the ESDC was not required to respond to them in writing.
Such an opportunity for additional comments was not specified in the FEIS. The State Environmental Quality Review Act does not spell it out:
Prior to the lead agency's decision on an action that has been the subject of a final EIS, it shall afford agencies and the public a reasonable time period (not less than 10 calendar days) in which to consider the final EIS before issuing its written findings statement. If a project modification or change of circumstance related to the project requires a lead or involved agency to substantively modify its decision, findings may be amended and filed in accordance with subdivision 617.12(b) of this Part.
Board approval
When the ESDC board met last Friday to approve the Atlantic Yards project, Rachel Shatz, the agency's director of planning and environmental review, read from a statement: "We received a total of nine letters. Staff, with our consultants, carefully considered all the comments and determined that no new issues have been raised and there is no need for any additional analysis in light of the information and conclusions in the FEIS. And the directors have all received copies of these letters."
Copies available?
In the post-meeting press conference, I followed up.
Q: The responses to the questions that came in in the last ten days, were those responded to in writing or not?
Charles Gargano: They were responded to in writing. We have found--I think there were nine?
Rachel Shatz: Nine letters that came in.
CG: Nine letters. And they have been responded to.
RS: Internally.
Q: Can I get a look at that?
RS: We'll review... [The rest of her statement is inaudible on my tape.]
CG: He wants copies of the--of course.
Of course not.
On Tuesday, ESDC spokeswoman Jessica Copen told me via email that I'd have to file a FOIL request. The agency indeed does have the option to require such a request. But Gargano's response certainly indicated cooperation and transparency.
Or did he, as on the Brian Lehrer Show a week ago, misspeak?
Rather, in a contradiction of ESDC Chairman Charles Gargano's comments on Friday, the agency directed me to file a Freedom of Information Law (FOIL) request, which would delay the process until after Public Authorities Control Board (PACB) vote scheduled for December 20. Gargano, when asked at a press conference whether the agency could supply the documents to me, had said "of course."
By contrast, the ESDC in the FEIS made public a huge volume of comments and responses. Commented attorney Jeff Baker, who represents Develop Don't Destroy Brooklyn (DDDB) and is a veteran of state environmental reviews, "Of course they should be public. There is no legal requirement for formal publication of the comments and responses, like the comments on the Draft EIS published in the FEIS. However, they are public records and must be made public."
"If Gargano is proclaiming transparency, and if the PACB is going to properly review the project, that information should be made public," he added.
Atlantic Yards is on the agenda for the December 20 meeting of the PACB, the final level of state review. The votes are controlled by Gov. George Pataki, Senate Majority Leader Joseph Bruno, and Assembly Speaker Sheldon Silver, the only Democrat. While there's pressure on Silver to stall the project until the administration of incoming Governor Eliot Spitzer, a fellow Democrat, Pataki is reported to be offering legislators some carrots, such as a long-awaited pay raise, if they embrace several initiatives, including Atlantic Yards.
What's missing
Without the documents requested, we still don't know the ESDC's response, for example, to issues raised by DDDB's Baker about response times for emergency vehicles, the ESDC's unwillingness to consider the threat of terrorism, and the agency's highly questionable blight report.
A response to a FOIL request, much less the delivery of documents, can take weeks. So it's highly unlikely that the ESDC would produce the documents requested before December 20.
A slim opportunity
The opportunity for further comments on the Atlantic Yards project came up on November 27, when Gargano told reporters that the ESDC would continue to accept comments during the ten-day period before the board was to vote.
"If we get any substantive comments, we will take them into account," said general counsel Anita Laremont, who said the ESDC was not required to respond to them in writing.
Such an opportunity for additional comments was not specified in the FEIS. The State Environmental Quality Review Act does not spell it out:
Prior to the lead agency's decision on an action that has been the subject of a final EIS, it shall afford agencies and the public a reasonable time period (not less than 10 calendar days) in which to consider the final EIS before issuing its written findings statement. If a project modification or change of circumstance related to the project requires a lead or involved agency to substantively modify its decision, findings may be amended and filed in accordance with subdivision 617.12(b) of this Part.
Board approval
When the ESDC board met last Friday to approve the Atlantic Yards project, Rachel Shatz, the agency's director of planning and environmental review, read from a statement: "We received a total of nine letters. Staff, with our consultants, carefully considered all the comments and determined that no new issues have been raised and there is no need for any additional analysis in light of the information and conclusions in the FEIS. And the directors have all received copies of these letters."
Copies available?
In the post-meeting press conference, I followed up.
Q: The responses to the questions that came in in the last ten days, were those responded to in writing or not?
Charles Gargano: They were responded to in writing. We have found--I think there were nine?
Rachel Shatz: Nine letters that came in.
CG: Nine letters. And they have been responded to.
RS: Internally.
Q: Can I get a look at that?
RS: We'll review... [The rest of her statement is inaudible on my tape.]
CG: He wants copies of the--of course.
Of course not.
On Tuesday, ESDC spokeswoman Jessica Copen told me via email that I'd have to file a FOIL request. The agency indeed does have the option to require such a request. But Gargano's response certainly indicated cooperation and transparency.
Or did he, as on the Brian Lehrer Show a week ago, misspeak?
Wednesday, December 13, 2006
Cut 270,000 square feet of office space, lose $456 million?
I asked the Empire State Development Corporation today for an explanation of the drastically revised fiscal impact for the Atlantic Yards project.
(Why didn't I ask yesterday? Because I didn't discover the change until the evening, and I wanted to get the numbers out there for discussion.)
I asked if there were a memo that explained it, like the one issued in October, but got this response, in full:
The project has been scaled down by 8 percent for both residential and commercial space. The commercial reduction affects tax revenues more than residential reductions because commercial generates more direct jobs. We estimate that for every 300 sq ft. in commercial space there is 1 direct job.
The job multiplier for residential building management and support services is 1.26. This means that 1 direct job in these activities supports an additional 0.26 indirect and induced jobs in the rest of the economy.
By comparison, employment multipliers for the commercial side of the project go from about 2.93 (insurance activities) to 3.28 (securities and investment activities). Internet services and data processing has a multiplier of 1.98. This means that for every direct job in these businesses and additional 1.93, 2.28, and 0.98 indirect and induced jobs, respectively, is supported in the rest of the economy.
Does it make sense?
The agency, however, doesn't explain the calculations.
The project has been scaled down by 8 percent in total space, but the percentage of commercial space reduced has been reduced more significantly, by about 44 percent, from 2424 to about 1340 jobs. So that's about 1086 jobs, while the General Project plan now suggests a decline of 2035 jobs in the city. That could include the multipliers mentioned above.
Those calculations make some more sense than the decline in construction jobs/revenues, since the decline in the latter is more than twice as large as the cut in the size of the project.
Still, who would've thought that an 8 percent cut "recommended" by the City Planning Commission meant nearly half a billion dollars less in net revenues? And that no one in government would have pointed it out?
(Why didn't I ask yesterday? Because I didn't discover the change until the evening, and I wanted to get the numbers out there for discussion.)
I asked if there were a memo that explained it, like the one issued in October, but got this response, in full:
The project has been scaled down by 8 percent for both residential and commercial space. The commercial reduction affects tax revenues more than residential reductions because commercial generates more direct jobs. We estimate that for every 300 sq ft. in commercial space there is 1 direct job.
The job multiplier for residential building management and support services is 1.26. This means that 1 direct job in these activities supports an additional 0.26 indirect and induced jobs in the rest of the economy.
By comparison, employment multipliers for the commercial side of the project go from about 2.93 (insurance activities) to 3.28 (securities and investment activities). Internet services and data processing has a multiplier of 1.98. This means that for every direct job in these businesses and additional 1.93, 2.28, and 0.98 indirect and induced jobs, respectively, is supported in the rest of the economy.
Does it make sense?
The agency, however, doesn't explain the calculations.
The project has been scaled down by 8 percent in total space, but the percentage of commercial space reduced has been reduced more significantly, by about 44 percent, from 2424 to about 1340 jobs. So that's about 1086 jobs, while the General Project plan now suggests a decline of 2035 jobs in the city. That could include the multipliers mentioned above.
Those calculations make some more sense than the decline in construction jobs/revenues, since the decline in the latter is more than twice as large as the cut in the size of the project.
Still, who would've thought that an 8 percent cut "recommended" by the City Planning Commission meant nearly half a billion dollars less in net revenues? And that no one in government would have pointed it out?
The missing half-billion: ESDC cuts projected AY tax revenue by nearly one-third
The Empire State Development Corporation (ESDC) didn't shine a light on it, but nearly half a billion dollars in projected public revenues just vanished.
The revised Atlantic Yards General Project Plan (GPP) issued last Friday by the ESDC contains one very significant change from the document released in July. Projected net new tax revenues have plummeted by $456 million. That's almost a one-third decline from the $1.4 billion figure announced five months ago.
That's much more than a rounding error. And it vastly outpaces other changes regarding Atlantic Yards. After all, since July, the project's cost went down 5% (from $4.2 billion to $4 billion), and its size declined 8% (from 8.659 million square feet to 7.961 million sf).
So how could the revenues drop so much? The change calls into question the ESDC's methods, and its candor, since no supporting study has been released.
It may be worse
Even as the agency has modified its revenue projections to $944.2 million over 30 years, it has yet to acknowledge the full impact of subsidies and public costs that could cut deeply into the overall net revenue.
In other words, there are hundreds of millions of dollars in taxpayer costs--for affordable housing, public safety, schools, and sanitation--that further offset the net revenue. And those costs have not been fully disclosed, nor factored into the ESDC's analysis.
So we still don't know whether Atlantic Yards would be a good deal. But the new numbers raise further questions and demand further transparency.
[Note: I've added boldface in certain passages below.]
Two press releases
The 7/18/06 press release:
On a present value basis, the project will generate $1.4 billion in tax revenues to the State in excess of the public contribution to the project.
The 12/8/06 press release:
On a present value basis, the project will generate $944 million in tax revenues to the State in excess of the public contribution to the project.
Whoops--that's not a rounding error.
(Present value is today's value of a stream of payments to be made over the coming 30 years.)
Teasing out the difference
Let's compare similar passages between the GPP issued in July with the one issued in December. One key difference comes at the start.
July: ESDC has performed an independent economic impact analysis of the Project. ESDC has Projected that the Project will have the following impacts during construction and for the first 40 years of operations
December: ESDC has performed an independent economic impact analysis of the Project. ESDC has Projected that the Project will have the following impacts during construction and for the first 30 years of operations
I reported in August that the ESDC acknowledged that the 40-year time period was a "typo," as 30 years is the standard period for analysis, but the agency didn't revise the GPP until December. It's not clear if it was used in the fiscal impact memo the agency belatedly released 10/18/06, since that memo incompletely describes the ESDC's calculations.
Did the shift from a 40 years to 30 years lower the projected cumulative revenues? It's quite possible, but it certainly shouldn't affect revenues from construction, which is expected to take ten years. And it shouldn't affect the average annual number of jobs. But both figures declined significantly.
Construction jobs
July: (i) Construction of the Project will generate 15,344 new direct job years and 26,803 total job years (direct, indirect and induced);
(These numbers appear in the 10/18/06 memo.)
December: (i) Construction of the Project will generate 12,568 new direct job years and 21,976 total job years (direct, indirect and induced);
The project was reduced in size by 8%. However, the reduction is 18% in both direct job years and total job years. Was the earlier figure an overestimate?
Note that in the GPP the ESDC, at least, distinguishes between jobs and job years, though not in the press release, which states: The project is expected to create almost 22,000 construction jobs during the 10-year construction period.
Direct personal income
July: (ii) Direct personal income related to construction activities will be $721.0 million and total personal income will $1.5 billion (direct, indirect and induced);
(These numbers appear in the 10/18/06 memo.)
December: (ii) Direct personal income related to construction activities will be $590.0 million and total personal income will be $1.2 billion (direct, indirect and induced);
That's a reduction of 18% in direct personal income and 20% in total personal income. Remember, the project was downsized by only 8%.
Total construction employment
July: (iii) Total construction employment will generate $50.4 million in City personal income tax and sales tax on consumption expenditures and $109.5 million for New York State;
(These numbers appear in the 10/18/06 memo.)
December: (iii) Total construction employment will generate $42.1 million in City tax revenues and $89.9 million for New York State;
Those are declines of 16.5% and 18%, respectively.
Operations
July: (iv) Operations at the Arena and additional spending in the region will support an annual average 6,573 new jobs in New York City (direct, indirect and induced) and an annual average 7,378 jobs (direct, indirect and induced) in New York State (inclusive of New York City);
(These numbers appear in the 10/18/06 memo.)
December: (iv) Operations at the Arena and mixed-use development will support an annual average 4,538 new jobs in New York City (direct, indirect and induced) and an annual average 5,065 jobs (direct, indirect and induced) in New York State (inclusive of New York City);
That's a 31% decline in both city and state jobs. But the project hasn't changed that much. What changed with the methodology?
Revenues, in present value
July: (v) On a present value basis, the Project will generate $845.5 million of City tax revenues and $1.1 billion of State tax revenues. Thus the Project will generate $1.4 billion in net tax revenues in excess of the public contribution to the Project.
December: (v) On a present value basis, the Project will generate $652.3 million of City tax revenues and $745.3 million of State tax revenues. Thus the project will generate $944.2 million in net tax revenues in excess of the public contribution to the Project.
Those are declines of 23% for City revenues, 33% for State revenues, and nearly 33% for net revenues. (The GPP also cites an estimated $554 million in public improvements and infrastructure.)
What are the costs?
The July calculation, estimating $1.9455 billion in new revenues and $1.4 billion in net revenues, assumes a public contribution of $545.5 million.
The December calculation, estimating $1.3976 billion in new revenues and $944.2 million in net revenues, assumes a public contribution of $453.4 million.
Why did the public contribution go down? Maybe the ESDC calculated lower sales and mortgage recording tax exemptions. Certainly the $251.8 million in bond financing remains in place.
But it's worth further explanation.
Missing are the costs for schools, sanitation, and public safety acknowledged by the Independent Budget Office and even Forest City Ratner consultant Andrew Zimbalist--not to mention other subsidies, such as for "extraordinary infrastructure costs.”
The revised Atlantic Yards General Project Plan (GPP) issued last Friday by the ESDC contains one very significant change from the document released in July. Projected net new tax revenues have plummeted by $456 million. That's almost a one-third decline from the $1.4 billion figure announced five months ago.
That's much more than a rounding error. And it vastly outpaces other changes regarding Atlantic Yards. After all, since July, the project's cost went down 5% (from $4.2 billion to $4 billion), and its size declined 8% (from 8.659 million square feet to 7.961 million sf).
So how could the revenues drop so much? The change calls into question the ESDC's methods, and its candor, since no supporting study has been released.
It may be worse
Even as the agency has modified its revenue projections to $944.2 million over 30 years, it has yet to acknowledge the full impact of subsidies and public costs that could cut deeply into the overall net revenue.
In other words, there are hundreds of millions of dollars in taxpayer costs--for affordable housing, public safety, schools, and sanitation--that further offset the net revenue. And those costs have not been fully disclosed, nor factored into the ESDC's analysis.
So we still don't know whether Atlantic Yards would be a good deal. But the new numbers raise further questions and demand further transparency.
[Note: I've added boldface in certain passages below.]
Two press releases
The 7/18/06 press release:
On a present value basis, the project will generate $1.4 billion in tax revenues to the State in excess of the public contribution to the project.
The 12/8/06 press release:
On a present value basis, the project will generate $944 million in tax revenues to the State in excess of the public contribution to the project.
Whoops--that's not a rounding error.
(Present value is today's value of a stream of payments to be made over the coming 30 years.)
Teasing out the difference
Let's compare similar passages between the GPP issued in July with the one issued in December. One key difference comes at the start.
July: ESDC has performed an independent economic impact analysis of the Project. ESDC has Projected that the Project will have the following impacts during construction and for the first 40 years of operations
December: ESDC has performed an independent economic impact analysis of the Project. ESDC has Projected that the Project will have the following impacts during construction and for the first 30 years of operations
I reported in August that the ESDC acknowledged that the 40-year time period was a "typo," as 30 years is the standard period for analysis, but the agency didn't revise the GPP until December. It's not clear if it was used in the fiscal impact memo the agency belatedly released 10/18/06, since that memo incompletely describes the ESDC's calculations.
Did the shift from a 40 years to 30 years lower the projected cumulative revenues? It's quite possible, but it certainly shouldn't affect revenues from construction, which is expected to take ten years. And it shouldn't affect the average annual number of jobs. But both figures declined significantly.
Construction jobs
July: (i) Construction of the Project will generate 15,344 new direct job years and 26,803 total job years (direct, indirect and induced);
(These numbers appear in the 10/18/06 memo.)
December: (i) Construction of the Project will generate 12,568 new direct job years and 21,976 total job years (direct, indirect and induced);
The project was reduced in size by 8%. However, the reduction is 18% in both direct job years and total job years. Was the earlier figure an overestimate?
Note that in the GPP the ESDC, at least, distinguishes between jobs and job years, though not in the press release, which states: The project is expected to create almost 22,000 construction jobs during the 10-year construction period.
Direct personal income
July: (ii) Direct personal income related to construction activities will be $721.0 million and total personal income will $1.5 billion (direct, indirect and induced);
(These numbers appear in the 10/18/06 memo.)
December: (ii) Direct personal income related to construction activities will be $590.0 million and total personal income will be $1.2 billion (direct, indirect and induced);
That's a reduction of 18% in direct personal income and 20% in total personal income. Remember, the project was downsized by only 8%.
Total construction employment
July: (iii) Total construction employment will generate $50.4 million in City personal income tax and sales tax on consumption expenditures and $109.5 million for New York State;
(These numbers appear in the 10/18/06 memo.)
December: (iii) Total construction employment will generate $42.1 million in City tax revenues and $89.9 million for New York State;
Those are declines of 16.5% and 18%, respectively.
Operations
July: (iv) Operations at the Arena and additional spending in the region will support an annual average 6,573 new jobs in New York City (direct, indirect and induced) and an annual average 7,378 jobs (direct, indirect and induced) in New York State (inclusive of New York City);
(These numbers appear in the 10/18/06 memo.)
December: (iv) Operations at the Arena and mixed-use development will support an annual average 4,538 new jobs in New York City (direct, indirect and induced) and an annual average 5,065 jobs (direct, indirect and induced) in New York State (inclusive of New York City);
That's a 31% decline in both city and state jobs. But the project hasn't changed that much. What changed with the methodology?
Revenues, in present value
July: (v) On a present value basis, the Project will generate $845.5 million of City tax revenues and $1.1 billion of State tax revenues. Thus the Project will generate $1.4 billion in net tax revenues in excess of the public contribution to the Project.
December: (v) On a present value basis, the Project will generate $652.3 million of City tax revenues and $745.3 million of State tax revenues. Thus the project will generate $944.2 million in net tax revenues in excess of the public contribution to the Project.
Those are declines of 23% for City revenues, 33% for State revenues, and nearly 33% for net revenues. (The GPP also cites an estimated $554 million in public improvements and infrastructure.)
What are the costs?
The July calculation, estimating $1.9455 billion in new revenues and $1.4 billion in net revenues, assumes a public contribution of $545.5 million.
The December calculation, estimating $1.3976 billion in new revenues and $944.2 million in net revenues, assumes a public contribution of $453.4 million.
Why did the public contribution go down? Maybe the ESDC calculated lower sales and mortgage recording tax exemptions. Certainly the $251.8 million in bond financing remains in place.
But it's worth further explanation.
Missing are the costs for schools, sanitation, and public safety acknowledged by the Independent Budget Office and even Forest City Ratner consultant Andrew Zimbalist--not to mention other subsidies, such as for "extraordinary infrastructure costs.”
Tuesday, December 12, 2006
“Stop the Clock:” advocates urge PACB delay on Atlantic Yards
The signs said:
Atlantic Yards: Show Us the Money
Atlantic Yards: Not Ready for Approval
Atlantic Yards: Environment Matters
And that pretty much said it all, three years and a day after the project was announced. At a press conference yesterday at City Hall, a host of groups and individuals, some of them with different visions of the Atlantic Yards endgame, gathered to urge the Public Authorities Control Board to postpone its scheduled December 20 vote on the Atlantic Yards project. In front of them were posters with the project’s massive scale juxtaposed against its low-rise neighbors.
(Pictured in Village Voice photo: State Senator Velmanette Montgomery (l.) and City Council Member Letitia James. Posters pictured by Jonathan Barkey.)
The PACB, which is controlled by Governor George Pataki, and Senate Majority Leader Joseph Bruno, and Assembly Speaker Sheldon Silver must vote unanimously in order for the project to be approved, and there’s pressure on Silver to stall the project until the administration of incoming Governor Eliot Spitzer, a fellow Democrat.
Some ironies
There were more than a few ironies. As Neil de Mause wrote in the Village Voice’s Power Plays blog, “It isn't every day that a bunch of good-government groups hold a press conference to demand that an undemocratic, unelected state panel intervene to delay a public project.”
And both Silver and Spitzer basically support the project, so a delay of a few months might not lead to significant changes in Atlantic Yards.
Then again, the groups assembled hope that Silver and Spitzer will get up to speed on their many concerns, which they say have not been well considered by the undemocractic, unelected Empire State Development Corporation.
Reasons for delay
“A huge amount of information is still missing, and after PACB approval, there will be no legislative oversight of this project, the biggest sole-source land deal in NYC history," said Council Member Letitia James, who represents the area including the site, and who served as the MC for the press conference.
"The Atlantic Yards project would attract more than 20,000 cars per day and many thousands of transit riders to an area often choked with gridlock," said Gene Russianoff of NYPIRG’s Straphangers Campaign. Criticizing the ESDC’s environmental review, he warned that the agency’s plan would be “condemning downtown Brooklyn to traffic hell."
Good Jobs New York Project Director Bettina Damiani said, "The reasonable goals of economic development require a process that is transparent and accountable,” calling it “unconscionable” for the PACB to consider approving this project without further disclosure of subsidies.
“To rush into this decision is just foolhardy,” said City Council Member Tony Avella, who represents a district in Queens and chairs the zoning committee. “If allowed to go ahead as currently constituted, it’ll actually be a blight on Downtown Brooklyn.” (Locals would locate most of the Atlantic Yards site in Prospect Heights, actually.)
What are the chances?
Will the call to action be heard? James indicated that there had been communication with Spitzer, who likely can influence Silver’s vote, but wouldn’t provide details. Asked what she thought the chances of a delay were, she replied, “Keep hope alive.”
One person who did hear something was Brooklyn Borough President Marty Markowitz, an Atlantic Yards booster. He exited City Hall after the event had formally concluded, but there were enough people there to jeer him.
Other listed endorsers of Monday's call for stall included Natural Resources Defense Council, NYPIRG/Straphangers, Sierra Club, Fort Greene Association, Society for Clinton Hill, FROGG, Pratt Area Community Council, BrooklynSpeaks, Develop Don't Destroy Brooklyn, Council of Brooklyn Neighborhoods, Assemblymember Annette Robinson, and the Reverend Clinton Miller of Brown Memorial Church, though not all were present.
Some oppose the project outright, while others want to see it changed significantly or have specific criticisms of the environmental review. Also calling for a delay, though not present, were Assemblymembers Jim Brennan and Joan Millman, who with Robinson sent a letter to Silver, and Assemblymember-elect Hakeem Jeffries, who on Friday sent a letter echoing similar concerns but adding that the project should be held until the eminent domain case is resolved.
Atlantic Yards: Show Us the Money
Atlantic Yards: Not Ready for Approval
Atlantic Yards: Environment Matters
And that pretty much said it all, three years and a day after the project was announced. At a press conference yesterday at City Hall, a host of groups and individuals, some of them with different visions of the Atlantic Yards endgame, gathered to urge the Public Authorities Control Board to postpone its scheduled December 20 vote on the Atlantic Yards project. In front of them were posters with the project’s massive scale juxtaposed against its low-rise neighbors.(Pictured in Village Voice photo: State Senator Velmanette Montgomery (l.) and City Council Member Letitia James. Posters pictured by Jonathan Barkey.)
The PACB, which is controlled by Governor George Pataki, and Senate Majority Leader Joseph Bruno, and Assembly Speaker Sheldon Silver must vote unanimously in order for the project to be approved, and there’s pressure on Silver to stall the project until the administration of incoming Governor Eliot Spitzer, a fellow Democrat.
Some ironies
There were more than a few ironies. As Neil de Mause wrote in the Village Voice’s Power Plays blog, “It isn't every day that a bunch of good-government groups hold a press conference to demand that an undemocratic, unelected state panel intervene to delay a public project.”
And both Silver and Spitzer basically support the project, so a delay of a few months might not lead to significant changes in Atlantic Yards.
Then again, the groups assembled hope that Silver and Spitzer will get up to speed on their many concerns, which they say have not been well considered by the undemocractic, unelected Empire State Development Corporation.
Reasons for delay
“A huge amount of information is still missing, and after PACB approval, there will be no legislative oversight of this project, the biggest sole-source land deal in NYC history," said Council Member Letitia James, who represents the area including the site, and who served as the MC for the press conference.
"The Atlantic Yards project would attract more than 20,000 cars per day and many thousands of transit riders to an area often choked with gridlock," said Gene Russianoff of NYPIRG’s Straphangers Campaign. Criticizing the ESDC’s environmental review, he warned that the agency’s plan would be “condemning downtown Brooklyn to traffic hell."
Good Jobs New York Project Director Bettina Damiani said, "The reasonable goals of economic development require a process that is transparent and accountable,” calling it “unconscionable” for the PACB to consider approving this project without further disclosure of subsidies.
“To rush into this decision is just foolhardy,” said City Council Member Tony Avella, who represents a district in Queens and chairs the zoning committee. “If allowed to go ahead as currently constituted, it’ll actually be a blight on Downtown Brooklyn.” (Locals would locate most of the Atlantic Yards site in Prospect Heights, actually.)
What are the chances?
Will the call to action be heard? James indicated that there had been communication with Spitzer, who likely can influence Silver’s vote, but wouldn’t provide details. Asked what she thought the chances of a delay were, she replied, “Keep hope alive.”
One person who did hear something was Brooklyn Borough President Marty Markowitz, an Atlantic Yards booster. He exited City Hall after the event had formally concluded, but there were enough people there to jeer him.
Other listed endorsers of Monday's call for stall included Natural Resources Defense Council, NYPIRG/Straphangers, Sierra Club, Fort Greene Association, Society for Clinton Hill, FROGG, Pratt Area Community Council, BrooklynSpeaks, Develop Don't Destroy Brooklyn, Council of Brooklyn Neighborhoods, Assemblymember Annette Robinson, and the Reverend Clinton Miller of Brown Memorial Church, though not all were present.
Some oppose the project outright, while others want to see it changed significantly or have specific criticisms of the environmental review. Also calling for a delay, though not present, were Assemblymembers Jim Brennan and Joan Millman, who with Robinson sent a letter to Silver, and Assemblymember-elect Hakeem Jeffries, who on Friday sent a letter echoing similar concerns but adding that the project should be held until the eminent domain case is resolved.
Lehrer on Gargano: "classic political evasiveness"
Empire State Development Corporation (ESDC) Chairman Charles Gargano's halting and evasive locutions on the Brian Lehrer Show last Thursday prompted Lehrer yesterday to revisit the episode--and the Atlantic Yards development in general.
Lehrer called Gargano's performance "classic political evasiveness." Still, neither he nor guest Matthew Schuerman, who covers real estate and development for the New York Observer, had much encouraging to say to Atlantic Yards opponents who hope that the project is stalled until the administration of incoming Governor Eliot Spitzer, who supports the project.
Lehrer set the scene:
It may happen just about every day that someone in politics tries to get away with lying about something on this program. It definitely does not happen every day, however, that that the alleged lie winds up in the New York Times article linked to other alleged media lies on the same topic and becomes fodder for a lawsuit, even. But all of that happened after Thursday’s show.
Actually, the lawsuit was already in progress and referenced other statements by Gargano.
Replay
Lehrer replayed a segment from the show Thursday:
BL: Part of that vote is any condemnations that you decide are needed. Does that mean seizing property under eminent domain?
CG: At this point, we have, we do—we have not used, or--have not used to date any eminent domain condemn-condemn-condemnation.
BL: And you don’t anticipate a vote on anything like that tomorrow?
CG: No, there is nothing about that tomorrow.
Aftermath
Lehrer yesterday picked up the story:
Opponents of Atlantic Yards went ballistic after that, firing off e-mails and lawyers ' statements about Gargano lied to mislead the public about whether eminent domain was on the agenda. Gargano’s office justified the statement to WNYC by saying no specific condemantions were going to be voted on, just the authorizing of eminent domain in general, if needed, so the answer may have been technically accurate.
He then cited coverage in Saturday's Times:
But even by the standards of development-speak, where hyperbolic promises and grand rhetorical gestures are the norm, some of those comments have left allies and opponents alike perplexed.
Last May, Mr. Gargano suggested that the condemnations had already occurred, telling a reporter that the development agency “didn’t need to use eminent domain” and that “the amount of condemnation that we had to do was very small.”
During a subsequent television appearance, Mr. Gargano characterized the condemnations that might occur as “friendly,” meaning unchallenged, though several apartment owners have long said that they planned to fight the condemnations in court.
Eminent domain
Schuerman came on, and offered some background on eminent domain.
BL: I guess a court will have to decide, does it fit Supreme Court's definition of economic development for the greater good, even by a private entity, or doesn’t it?
MS: I think, by this point, especially with that case, that’s called Kelo vs. New London, it’s pretty well accepted that a government does have the right to seize private proper for economic development. The question is going to be the circumstances of that economic development, how that economic development project came about. In the New London case, writing for four members, Justice [John Paul] Stevens said the taking was a result of a “carefully formulated development plan,” undertaking by the city of New London. Justice [Anthony] Kennedy, who provided a 5th vote, even went further, said a taking fort could not be for the benefit of one private developer over others. And that’s going to be the big question here: Did this project come about due to a carefully formulated development plan, or did it come about from Forest City Ratner’s mind here?
Indeed. (As former New York City Economic Development Corporation president Andrew Alper said at a 5/4/04 meeting of the City Council Economic Development Committee:
This particular project came to us. We were not out soliciting, we were developing a Downtown Brooklyn Plan, but we were not out soliciting a professional sports franchise for Downtown Brooklyn. The developer came to us with what we thought was actually a very clever plan. It is not only bringing a sports team back to Brooklyn, but to do it in a way that provided dramatic economic development catalyst in terms of housing, retail, commercial jobs, construction jobs, permanent jobs. So, they came to us, we did not come to them. And it is not really up to us then to go out and find to try to a better deal.)
Eminent domain & ESDC
Lehrer asked Schuerman if the ESDC identified the taking of any individual tracts. Schuerman pointed out that the properties were identified in the ESDC's blight study. (They were also identified in other documents.)
In light of that, Lehrer said, he wanted to replay his exchange with Gargano.
BL: So, well, y’know, it doesn’t seem a blatant statement to me to say that he was trying not to draw attention to it.
MS: I’d agree with you. What’s interesting is how defensive Charles Gargano has been about the eminent domain issue, perhaps because he realizes this is one of the best arguments opponents have for stopping the project. I will say that the first part of that statement that he gave you, it is true that there has not been any eminent domain so far--
BL: --Right, but even that, y’know, it’s classic political evasiveness. Because I asked him, is there anything on agenda tomorrow about that, and he said, “We have not used anything like that to date.” I asked him a future question and he answered it in the past, apparently to avoid answering directly about what was going to happen the next day.
MS: That’s right. It’s been clear from the get-go that this project is going to require eminent domain. What Mr. Gargano and Forest City Ratner, the developer, have tried to stress is that the developer is trying to buy as much of the property as possible before invoking eminent domain and there for to quote minimize eminent domain.
Gargano redux?
BL: We’ll invite Charles Gargano on the program to talk about this again. He’s always very accessible about coming on and making his case. His office did give us two statements on Friday. One said, he misspoke, which I guess gets called into question by the pattern that the New York Times reported on, of him trying to deflect attention from this in various statements. In one statement, they said he misspoke, in the other statement, they said, well, there were no specific condemnations, and that appeared to be what the question was about. So we’ll see, we’ll invite him, and maybe he’ll stand by one or the other.
MS: Sounds good. I look forward to that one, Brian.
Schuerman allowed himself a slight chuckle.
Endgame
Lehrer pointed toward the coming weeks.
BL: We may be or we may not be in the Atlantic Yards project political endgame. Because after this vote by the Empire State Development Corporation on Friday, it now goes to what’s called the Public Authorities Control Board, which means Speaker Sheldon Silver of the Assembly, state Senate Majority leader Joe Bruno, and Governor Pataki. They all support the plan, but there’s still this outstanding question, whether, for whatever reason, Silver’s own competition with Gargano, and past bad blood, they called each other names, or whatever reason, that Silver may choose to block and kick it down the road into the Spitzer administration. What do you expect?
MS: I think there’s probably a greater likelihood now than before that the PACB, especially Shelly Silver, will do something to delay that final authorization. For one, it’s just a matter of weeks until the Spitzer administration comes into office. And although Shelly Silver has been favorably disposed toward the project, and I think eventually they’re going to approve it, there’s been a lot of pressure to tinker around the edges, most recently with the amount of affordable housing that’s going to built in the first phase of the project, which is supposed to be done by 2010.
Spitzer's support
Lehrer then played an excerpt from an October interview with Spitzer, who was supportive if not fully briefed.
ES: I’m for it, and I know this riles a fair number of people. Again, I was not involved in the process, and I don’t say that to hedge. I know there are people who feel very fervently that it was too big, and it was just scaled back, by 8 percent, I believe. Without having been involved in the process, that seems to me to be an appropriate compromise.
BL: You don’t think it’s out of scale for the neighborhood?
ES: Certainly those who are living adjacent to it have been saying that, and they’ve been saying it with great energy, and I respect that view. What happened recently with the 8 percent reduction seemed like a reasonable compromise. So that’s why I think: Let’s move forward.
Spitzer vs. lawsuit
Lehrer pointed to Spitzer's words.
BL: Boy, that was not ambiguous, he was not ambivalent. So these opponents of Atlantic Yards who are pinning their hopes on getting it out of Pataki and into Spitzer, are they pinning it on anything?
MS: I think at this point the opponents’ greatest hope is the lawsuit, the two lawsuits, especially the eminent domain lawsuit…. I think they’re hoping that Spitzer, once he gets his hands on it, will delve into and find the same things wrong with it that they see wrong with it, and may tinker with it again, but I don’t see major changes coming about as a result of whether the Spitzer administration gets to weight in or not.
The unknowns
BL: Spitzer talked about, recently…some concern that he has about the finances of it and wheter it’s going to cost more than they say it was.
MS: Well, it’s very unclear exactly what the fiscal impact of this project will be. The state and city are putting up $200 million directly for the project to put up a platform over the railyards and do some acquisition actually of the eminent domain properties. But the real impacts, opponents say, could be as much as two billion dollars. Even Forest City Ratner has said the impact will be about a billion dollars over 30 years.
BL: The debate goes on.
Lehrer called Gargano's performance "classic political evasiveness." Still, neither he nor guest Matthew Schuerman, who covers real estate and development for the New York Observer, had much encouraging to say to Atlantic Yards opponents who hope that the project is stalled until the administration of incoming Governor Eliot Spitzer, who supports the project.
Lehrer set the scene:
It may happen just about every day that someone in politics tries to get away with lying about something on this program. It definitely does not happen every day, however, that that the alleged lie winds up in the New York Times article linked to other alleged media lies on the same topic and becomes fodder for a lawsuit, even. But all of that happened after Thursday’s show.
Actually, the lawsuit was already in progress and referenced other statements by Gargano.
Replay
Lehrer replayed a segment from the show Thursday:
BL: Part of that vote is any condemnations that you decide are needed. Does that mean seizing property under eminent domain?
CG: At this point, we have, we do—we have not used, or--have not used to date any eminent domain condemn-condemn-condemnation.
BL: And you don’t anticipate a vote on anything like that tomorrow?
CG: No, there is nothing about that tomorrow.
Aftermath
Lehrer yesterday picked up the story:
Opponents of Atlantic Yards went ballistic after that, firing off e-mails and lawyers ' statements about Gargano lied to mislead the public about whether eminent domain was on the agenda. Gargano’s office justified the statement to WNYC by saying no specific condemantions were going to be voted on, just the authorizing of eminent domain in general, if needed, so the answer may have been technically accurate.
He then cited coverage in Saturday's Times:
But even by the standards of development-speak, where hyperbolic promises and grand rhetorical gestures are the norm, some of those comments have left allies and opponents alike perplexed.
Last May, Mr. Gargano suggested that the condemnations had already occurred, telling a reporter that the development agency “didn’t need to use eminent domain” and that “the amount of condemnation that we had to do was very small.”
During a subsequent television appearance, Mr. Gargano characterized the condemnations that might occur as “friendly,” meaning unchallenged, though several apartment owners have long said that they planned to fight the condemnations in court.
Eminent domain
Schuerman came on, and offered some background on eminent domain.
BL: I guess a court will have to decide, does it fit Supreme Court's definition of economic development for the greater good, even by a private entity, or doesn’t it?
MS: I think, by this point, especially with that case, that’s called Kelo vs. New London, it’s pretty well accepted that a government does have the right to seize private proper for economic development. The question is going to be the circumstances of that economic development, how that economic development project came about. In the New London case, writing for four members, Justice [John Paul] Stevens said the taking was a result of a “carefully formulated development plan,” undertaking by the city of New London. Justice [Anthony] Kennedy, who provided a 5th vote, even went further, said a taking fort could not be for the benefit of one private developer over others. And that’s going to be the big question here: Did this project come about due to a carefully formulated development plan, or did it come about from Forest City Ratner’s mind here?
Indeed. (As former New York City Economic Development Corporation president Andrew Alper said at a 5/4/04 meeting of the City Council Economic Development Committee:
This particular project came to us. We were not out soliciting, we were developing a Downtown Brooklyn Plan, but we were not out soliciting a professional sports franchise for Downtown Brooklyn. The developer came to us with what we thought was actually a very clever plan. It is not only bringing a sports team back to Brooklyn, but to do it in a way that provided dramatic economic development catalyst in terms of housing, retail, commercial jobs, construction jobs, permanent jobs. So, they came to us, we did not come to them. And it is not really up to us then to go out and find to try to a better deal.)
Eminent domain & ESDC
Lehrer asked Schuerman if the ESDC identified the taking of any individual tracts. Schuerman pointed out that the properties were identified in the ESDC's blight study. (They were also identified in other documents.)
In light of that, Lehrer said, he wanted to replay his exchange with Gargano.
BL: So, well, y’know, it doesn’t seem a blatant statement to me to say that he was trying not to draw attention to it.
MS: I’d agree with you. What’s interesting is how defensive Charles Gargano has been about the eminent domain issue, perhaps because he realizes this is one of the best arguments opponents have for stopping the project. I will say that the first part of that statement that he gave you, it is true that there has not been any eminent domain so far--
BL: --Right, but even that, y’know, it’s classic political evasiveness. Because I asked him, is there anything on agenda tomorrow about that, and he said, “We have not used anything like that to date.” I asked him a future question and he answered it in the past, apparently to avoid answering directly about what was going to happen the next day.
MS: That’s right. It’s been clear from the get-go that this project is going to require eminent domain. What Mr. Gargano and Forest City Ratner, the developer, have tried to stress is that the developer is trying to buy as much of the property as possible before invoking eminent domain and there for to quote minimize eminent domain.
Gargano redux?
BL: We’ll invite Charles Gargano on the program to talk about this again. He’s always very accessible about coming on and making his case. His office did give us two statements on Friday. One said, he misspoke, which I guess gets called into question by the pattern that the New York Times reported on, of him trying to deflect attention from this in various statements. In one statement, they said he misspoke, in the other statement, they said, well, there were no specific condemnations, and that appeared to be what the question was about. So we’ll see, we’ll invite him, and maybe he’ll stand by one or the other.
MS: Sounds good. I look forward to that one, Brian.
Schuerman allowed himself a slight chuckle.
Endgame
Lehrer pointed toward the coming weeks.
BL: We may be or we may not be in the Atlantic Yards project political endgame. Because after this vote by the Empire State Development Corporation on Friday, it now goes to what’s called the Public Authorities Control Board, which means Speaker Sheldon Silver of the Assembly, state Senate Majority leader Joe Bruno, and Governor Pataki. They all support the plan, but there’s still this outstanding question, whether, for whatever reason, Silver’s own competition with Gargano, and past bad blood, they called each other names, or whatever reason, that Silver may choose to block and kick it down the road into the Spitzer administration. What do you expect?
MS: I think there’s probably a greater likelihood now than before that the PACB, especially Shelly Silver, will do something to delay that final authorization. For one, it’s just a matter of weeks until the Spitzer administration comes into office. And although Shelly Silver has been favorably disposed toward the project, and I think eventually they’re going to approve it, there’s been a lot of pressure to tinker around the edges, most recently with the amount of affordable housing that’s going to built in the first phase of the project, which is supposed to be done by 2010.
Spitzer's support
Lehrer then played an excerpt from an October interview with Spitzer, who was supportive if not fully briefed.
ES: I’m for it, and I know this riles a fair number of people. Again, I was not involved in the process, and I don’t say that to hedge. I know there are people who feel very fervently that it was too big, and it was just scaled back, by 8 percent, I believe. Without having been involved in the process, that seems to me to be an appropriate compromise.
BL: You don’t think it’s out of scale for the neighborhood?
ES: Certainly those who are living adjacent to it have been saying that, and they’ve been saying it with great energy, and I respect that view. What happened recently with the 8 percent reduction seemed like a reasonable compromise. So that’s why I think: Let’s move forward.
Spitzer vs. lawsuit
Lehrer pointed to Spitzer's words.
BL: Boy, that was not ambiguous, he was not ambivalent. So these opponents of Atlantic Yards who are pinning their hopes on getting it out of Pataki and into Spitzer, are they pinning it on anything?
MS: I think at this point the opponents’ greatest hope is the lawsuit, the two lawsuits, especially the eminent domain lawsuit…. I think they’re hoping that Spitzer, once he gets his hands on it, will delve into and find the same things wrong with it that they see wrong with it, and may tinker with it again, but I don’t see major changes coming about as a result of whether the Spitzer administration gets to weight in or not.
The unknowns
BL: Spitzer talked about, recently…some concern that he has about the finances of it and wheter it’s going to cost more than they say it was.
MS: Well, it’s very unclear exactly what the fiscal impact of this project will be. The state and city are putting up $200 million directly for the project to put up a platform over the railyards and do some acquisition actually of the eminent domain properties. But the real impacts, opponents say, could be as much as two billion dollars. Even Forest City Ratner has said the impact will be about a billion dollars over 30 years.
BL: The debate goes on.
Daily News editorial claims "win-win-win," evades evasiveness
Talk about some cognitive dissonance. Shortly after Brian Lehrer had finished discussing the "evasiveness" of Empire State Development Chairman Charles Gargano, subscribers to Forest City Ratner's Atlantic Yards e-newsletter were sent a copy of Sunday's Daily News editorial on the project, headlined Ready, set, go for Atlantic Yards.It deserves some close analysis.
The $4.2 billion mega-plan to build more than 6,000 units of housing, an arena for the pro basketball Nets and office towers in the heart of Brooklyn won critical approvals from state economic development officials Friday, setting the stage for at long last giving the green light to this vital project.
State economic development officials? Four guys, all unelected appointees of Gov. George Pataki, deliberated for about 15 minutes.
$4.2 billion? No, it’s down to $4 billion.
Office towers? Well, maybe two of 16. The office space has been reduced from 2 million square feet to 336,000 square feet.
Benefits claimed
After three tortuous years, the proposed Atlantic Yards development now goes for final approval to a panel controlled by Gov. Pataki, Assembly Speaker Sheldon Silver and Senate Majority Leader Joe Bruno. And, barring a stunning disclosure on the order of sponsor Bruce Ratner appearing on the FBI's 10 Most Wanted List, Pataki, Silver and Bruno must approve this boon to New York.
The benefits of the Atlantic Yards are manifest, among them 2,500 apartments geared for the middle and working classes, $5.6 billion in tax revenues over the next 30 years, 15,000 construction jobs, a couple of thousand permanent jobs and a great entertainment venue for Brooklyn. It's a win-win-win.
Actually, 2250 apartments, not 2500. That's a basic fact. Why add another ten percent or so--is factchecking that difficult?
$5.6 billion in tax revenues? Only if you play with the numbers.
15,000 construction jobs? That’s job-years.
A couple of thousand permanent jobs? Perhaps, but a lot fewer than promised.
Ratner's struggle?
Even so, getting this far has been an uphill battle for Ratner, who has done what the law requires - and then some. He has acquired property; paid handsome premiums to relocate a small number of residents and businesses; competitively bid for the right to build over MTA tracks; voluntarily entered into a "community benefits agreement"; prevailed in court actions filed by project opponents, reduced the development's scope at the request of the city Planning Commission and prepared thousands of pages of environmental impact statements. We should also mention that Ratner recently agreed to build a public school in the complex.
Relocate the residents? Not the rent-stabilized tenants?
Competitively bid? Had the inside track for 18 months.
The Community Benefits Agreement (CBA)? Helped create it, a far different CBA than more legitimate ones pioneered in Los Angeles.
Reduced the scope at the request of the CPC? Had planned for it all along.
Prepared EIS statements? Significantly inadequate ones, critics believe.
Agreed to build a public school? Agreed to provide space for a school that the city would build and pay for.
PACB review
Now, the fate of Atlantic Yards rests with Pataki, Silver and Bruno as the overseers of the Public Authorities Control Board, an entity established in the fiscal crisis three decades ago to make sure quasi-independent agencies didn't issue bonds that couldn't be repaid. The board has jurisdiction because the Legislature and governor agreed to invest $100 million in infrastructure improvements.
By all rights, the panel should consider only one issue: whether the project is financially sound. Not whether its buildings are too tall and its scale is too large, as opponents argue. The review process has settled those questions, but there's concern that one member of the board - Silver - could use his veto power to demand revisions, if not kill the project, as some of his Assembly colleagues want.
The review process has settled those questions? The review process was barely vetted.
Is the project financially sound? That’s a wide-open question, especially given the dubious fiscal impact analysis.
The speaker exercised such muscle in blocking the Jets stadium proposed for Manhattan's West Side and the transformation of the Farley Post Office into Moynihan Station. He says he was on solid ground in both cases, and he hints he's likely to give a thumbs up to Atlantic Yards - while also saying the deal would rise or fall based "on how the developer responds to some of the criticism, either because of the mass of the project or some of the traffic."
There he is wrong. The board was not established to give lawmakers sway over what gets built, wholly outside legally prescribed planning and review systems. If legislators want to assume that role, they should pass a bill detailing the standards they will apply, along with a process that's open and understandable. Suggesting terms under threat of execution is no way to do business.
The editorial has a point—the PACB isn’t exactly a democratic body. (Neither is the ESDC, however.) But if the PACB merely did its job and examined the financial soundness of the Atlantic Yards plan, a whole lot more public disclosure would be required.
Monday, December 11, 2006
Mayor misunderstands congestion pricing; maps show Brooklyn gridlock
During his weekly radio show with WABC's John Gambling on Friday, Mayor Mike Bloomberg addressed the issue of congestion pricing--an issue crucial to managing growth in the city, including projects like Atlantic Yards--and showed he wasn't quite up to speed.[A.M. Peak (6–10 A.M.) congestion graphic from Battling Traffic: What New Yorkers Think about Road Pricing, published by the Manhattan Institute last week. Note significant congestion in Brooklyn around and leading to the proposed Atlantic Yards site.]
At about a third of the way into the show (about 11:40), Gambling brought up the Partnership for New York City's advocacy on the issue and asked Bloomberg whether he was "in or out on this"?
Bloomberg responded: Let me have it both ways. I think we should look at it. I think that the comparabilities with London aren’t exact, things are different in London in terms of who drives than who drives here. I think the politics here, because we aren’t a city that can enact a law like that ourselves, it would have to be Albany that enacts a law.
Gambling: There’s no way they’re going to do that.
Commuter tax?
MB: And that’s exactly right. Because the ways congestion pricing typically works, you give a break, maybe 100 percent, or some kind of a discount, to those who live in the city, and you fundamentally charge those from outside the city to come in. But that’s what’s called a commuter tax in our system here in New York.
Actually, the various "road pricing" ideas are not at all a commuter tax, since some city residents would have to pay, and the charges would be keyed to uses at certain times, rather than a blanket tax on all out-of-city commuters. Those could include charges for entering or exiting Manhattan's Central Business District during peak hours, using express lanes throughout the city in certain hours, and increased street parking fees in some commercial districts to generate turnover.[Midday (10 A.M.–4 P.M.) congestion map from "Battling Traffic."]
Of course, there is an argument for a commuter tax like the one in place from 1966 through 1999. It was removed because of political deals by both parties aiming to win a single suburban legislative seat. Don't suburbanites working here benefit from city services? Or is it that they already contribute?
Politics in Albany
Bloomberg continued by citing the dicey politics of a "commuter tax":
I’ve got a lot of things to worry about. I’d like to get more charter schools, for example, from Albany—the right to have more charter schools. Very important to our children, very important to our future. That’s a battle I have a chance of winning. Congestion pricing, commuter tax, you probably don’t have a chance of winning. Yeah, it’s a good idea, whether it would work here or not, I’m not a hundred percent convinced. We do have a lot of congestion, but there’s no easy answer.
Least-worst solution?
Bloomberg said he'd heard suggestions about scheduling deliveries or trash pickup at night, and said they wouldn't work.
His suggestion: take mass transit. (That echoes his quote to the Times last September: “I take the subway. My attitude is go earlier if the train’s crowded.”)
However, there's no incentive for drivers from, say, eastern Queens, to take mass transit rather than drive. Were they charged for entering the Central Business District during peak hours, and the money steered to enhance public transit services, then the city could benefit.
One goal, however, of congestion pricing is to raise money to support and improve mass transit so those who drive have an incentive to do so. And it also aims to reduce the cost of congestion in the city--a huge figure, estimated by "Battling Traffic" author Bruce Schaller at $8 billion a year and by the Partnership for New York City, in its own study, at $13 billion (for the metro region).
[P.M. Peak (4–8 P.M.) congestion map from "Battling Traffic."]
Congestion in Brooklyn
Schaller's "Battling Traffic" begins with a nod to Atlantic Yards:
As new condos and other commercial and residential developments rise around the city, an increasingly key issue for New Yorkers is: How can the city cope with success? The implications for transportation are foremost on people’s minds. The majority of New York City residents consider traffic jams to be a “major problem.”[1] Traffic is a key issue throughout the city, from the development of Atlantic Yards in Brooklyn and the West Side of Manhattan to asthma rates in East Harlem and the Bronx to population growth on Staten Island.
And the problem spreads beyond Manhattan's Central Business District (CBD) to Brooklyn:
Congestion is most severe and widespread in the Manhattan CBD (60th Street to the Battery) during midday hours, as shown in Figure 2 [second graphic]. Midday in the CBD shows the clearest need for an areawide congestion pricing program. Areawide pricing might also be applied to downtown Brooklyn, where congestion approaches Manhattan levels during the midday period.
Moreover, peak-hour pricing in the morning, via an EZ Pass system or license plate cameras, would help Brooklyn:
Reducing the number of vehicles entering the CBD in the morning would almost certainly reduce traffic in downtown Brooklyn, Long Island City, and the Upper East and West Sides.
...This approach especially relieves traffic in downtown Brooklyn and Long Island City. Fewer vehicles would be driven through these areas on their way to the free East River bridges. In addition, drivers who currently bypass the Brooklyn Battery Tunnel to reach a free bridge would no longer have an incentive to do so.
Beyond London
Singapore, London, and Stockholm have all succeeded in levying fees and tolls to raise revenue from congested during Drivers could be given the option of buying a disposable E-ZPass tag to maintain their privacy. There would be no tollbooths and no need for cars to slow down while the toll is deducted from their E-ZPass.
Fees and toll revenues should be be used for road and transit improvements, especially for public transportation in areas with heavy auto usage, Schaller writes.
What next?
Schaller's report suggests that New Yorkers are more open to change than the tabloid media allow, as long as that change seems fair.
Schaller suggests three key strategies toward development a road pricing program:
--start a public dialogue about the problem and the importance of relieving it
--engage the public in discussing a range of solutions
--take steps toward progress, such as the upcoming trial of bus rapid transit.
That all requires leadership from the top, and the mayor already scuttled one congestion pricing plan last year. Yesterday, in an editorial in the City weekly headlined Reducing the Cost of Congestion, the Times opined:
It is reassuring that Mayor Michael Bloomberg has not shut the door on congestion pricing, even in the face of those who incorrectly call it a tax.
That was rather generous to the Mayor, since he had just used the misleading rhetoric. It's not leadership for him to dismiss an innovative concept--supported by many of the city's business leaders, transportation wonks, and bicycle and public transit advocates--as a "commuter tax" and suggesting that people crowd further into a yet-unimproved subway system.
Sunday, December 10, 2006
Times Magazine suggests AY a city project & done deal
From a New York Times Magazine article today headlined Big Urbanism, part of the "Year in Ideas" package:
But now cities are once again planning with grandiosity. This year witnessed the return of what you might call big urbanism, with large-scale redevelopment projects sprouting nationwide. In the summer, the New York City Planning Commission approved the controversial $4.2 billion, 22-acre Atlantic Yards project, which only a few years prior was widely dismissed as impossibly overscaled.
That's wrong.
The City Planning Commission (CPC) couldn't approve anything, because Atlantic Yards is a state project. The commission of course endorsed the project, because they work for Mayor Mike Bloomberg, and Bloomberg loves AY. Many of the CPC's "recommendations" had been agreed to months earlier by developer Forest City Ratner. And the project Design Guidelines were primarily the work of architect Frank Gehry.
[Also, the CPC met September 25 and sent its recommendations two days later, so their endorsement didn't occur during the summer, which ended September 23. And the project "sprouted" in 2003.]
"Impossibly overscaled"?
As to whether the project will be approved at the current scale and density, that remains up in the air. After the Empire State Development Corporation approved the project on Friday, it still must pass the Public Authorities Control Board (PACB), and there are many calls for the PACB to delay the vote and revisit the project.
Careless reporting
Does such carelessness indicate any conscious bias in favor of Atlantic Yards developer Forest City Ratner, which is the parent Times Company's business partner in building the new Times Tower? Doubtful.
Still, the business relationship obligates the the Times to cover Forest City Ratner exactingly, to avoid the perception of conflict of interest. Instead, the Times's coverage has been quite variable, especially in the Times Magazine.
The Times Magazine published a 6/26/05 Q&A with CEO Bruce Ratner, and neglected to point out the business relationship between Ratner and the Times. Public Editor Byron Calame chided the Magazine for not doing so, but the Magazine never published a letter or correction.
Correction efforts
I called in a correction at about 10:15 p.m. last night, but it didn't make it into the paper. It's curious, and disturbing, that no one on the Times's staff on Saturday could have read both the Magazine and the daily paper's most recent coverage of the state project and concluded that a correction would be in order.
Response from the Times
At 9:13 a.m. today, I contacted Greg Brock, the senior editor in charge of corrections, requesting a correction in the daily paper, and got the following response at 11:40 a.m.:
I have passed this query on to the magazine editors. As a rule, we run magazine corrections in the magazine, not in the daily newspaper. But the magazines have early closes, so if the magazine cannot print a correction before the vote, then a daily correction -- or more likely a correction next Sunday on Page A2, so magazine readers will see it -- would be an option.
You made reference that you called this in at 10 p.m. on Saturday. We do not put corrections in the paper in the middle of the printing of editions. We try to make sure all readers of all editions see the corrections.
And, of course, since the magazine was printed a week ago, there was no way to correct it in the actual magazine.
Regarding his point about the timing of corrections, the Times has done something related: it has corrected an article between editions, and then published a correction (in all editions) that indicates that the error occurred in some editions.
But now cities are once again planning with grandiosity. This year witnessed the return of what you might call big urbanism, with large-scale redevelopment projects sprouting nationwide. In the summer, the New York City Planning Commission approved the controversial $4.2 billion, 22-acre Atlantic Yards project, which only a few years prior was widely dismissed as impossibly overscaled.
That's wrong.
The City Planning Commission (CPC) couldn't approve anything, because Atlantic Yards is a state project. The commission of course endorsed the project, because they work for Mayor Mike Bloomberg, and Bloomberg loves AY. Many of the CPC's "recommendations" had been agreed to months earlier by developer Forest City Ratner. And the project Design Guidelines were primarily the work of architect Frank Gehry.
[Also, the CPC met September 25 and sent its recommendations two days later, so their endorsement didn't occur during the summer, which ended September 23. And the project "sprouted" in 2003.]
"Impossibly overscaled"?
As to whether the project will be approved at the current scale and density, that remains up in the air. After the Empire State Development Corporation approved the project on Friday, it still must pass the Public Authorities Control Board (PACB), and there are many calls for the PACB to delay the vote and revisit the project.
Careless reporting
Does such carelessness indicate any conscious bias in favor of Atlantic Yards developer Forest City Ratner, which is the parent Times Company's business partner in building the new Times Tower? Doubtful.
Still, the business relationship obligates the the Times to cover Forest City Ratner exactingly, to avoid the perception of conflict of interest. Instead, the Times's coverage has been quite variable, especially in the Times Magazine.
The Times Magazine published a 6/26/05 Q&A with CEO Bruce Ratner, and neglected to point out the business relationship between Ratner and the Times. Public Editor Byron Calame chided the Magazine for not doing so, but the Magazine never published a letter or correction.
Correction efforts
I called in a correction at about 10:15 p.m. last night, but it didn't make it into the paper. It's curious, and disturbing, that no one on the Times's staff on Saturday could have read both the Magazine and the daily paper's most recent coverage of the state project and concluded that a correction would be in order.
Response from the Times
At 9:13 a.m. today, I contacted Greg Brock, the senior editor in charge of corrections, requesting a correction in the daily paper, and got the following response at 11:40 a.m.:
I have passed this query on to the magazine editors. As a rule, we run magazine corrections in the magazine, not in the daily newspaper. But the magazines have early closes, so if the magazine cannot print a correction before the vote, then a daily correction -- or more likely a correction next Sunday on Page A2, so magazine readers will see it -- would be an option.
You made reference that you called this in at 10 p.m. on Saturday. We do not put corrections in the paper in the middle of the printing of editions. We try to make sure all readers of all editions see the corrections.
And, of course, since the magazine was printed a week ago, there was no way to correct it in the actual magazine.
Regarding his point about the timing of corrections, the Times has done something related: it has corrected an article between editions, and then published a correction (in all editions) that indicates that the error occurred in some editions.
A frustrated sigh from Gehry on the signage issue
There's another reason to echo the concerns raised Tuesday that 150-high signs on the proposed Atlantic Yards Urban Room might turn Brooklyn's busiest intersection into Times Square. Frank Gehry is frustrated, according to an interview he gave Advertising Age published in September.
The original tune
In April, in an interview with New York Times critic Nicolai Ouroussoff on the Charlie Rose show, Gehry sounded confident that he and branding expert Peter Arnell could craft creative signage that could be used for advertising, community issues, and art.
"This would not be Times Square," he told the Daily News in May.
(Above right, a graphic by BrooklynSpeaks adapted from two separate renderings in the Atlantic Yards Final Environmental Impact Statement. Note that the perspective is not from ground level.)
Evolving signage
The Gehry/Arnell team got to articulate their philosophy in a 9/11/06 Advertising Age article (subscribers only) headlined "The true brand architects; Frank Gehry and Peter Arnell have long professed that a marketer's building should also be its best billboard. Corporate America might finally be ready to listen."
The article tracks innovations in signage, noting the new roles for architects:
Meanwhile, American corporations, perplexed by a rapidly changing media environment, are looking for ways-besides the increasingly ignorable 30-second spot-to engage consumers with their messages. Architecture and design, with its power to turn an assemblage of building materials into a storytelling experience not that different from brand-building, has become one of the most powerful options available to them.
Enter Gehry
Architects like Gehry have entered the picture. "Building facades are becoming billboards," Gehry said, citing the "inevitable" electronics in the facade. But how, Gehry asked, "do you do that with dignity and maintain the character called architecture?"
Atlantic Yards blues
Citing Arnell and Gehry, the article continues:
The pair can't yet point to actual work that exemplifies their thinking, save for mention of an ongoing ``competition.'' But the Gehry- designed project that lies just below many of these ideas is the $3.5 billion Atlantic Yards development in Brooklyn, N.Y., a 22-acre project that includes a sports arena, both residential and office buildings, and a hotel. Because the project will significantly alter the physical, economic and cultural shape of Brooklyn, a radically diverse and quickly changing New York City borough that prides itself on organically grown neighborhoods, Atlantic Yards has been intensely controversial.
The key to making the development work will be respect for the context. Mr. Gehry, who was born in the borough, has designed the plans with traditional materials, brick and stone, in mind. The opportunity for interactive architecture that's tailored to the neighborhood and can be synced to its rhythm is obvious. Imagine if the seizure-inducing flash of Times Square could be shut down after hours.
When asked if the Brooklyn project will embody any of this thinking, Mr. Gehry only offered a long sigh and said, ''We don't know yet.''
We don't know either.
Saturday, December 09, 2006
In 15 minutes, four ESDC board members approve AY project
Yes, it was rubberstamped. Even though Empire State Development Corporation (ESDC) Chairman Charles Gargano had said in a radio interview Thursday that “it’ll be up to the board members to vote yes or no” on the Atlantic Yards project, the press release had already been prepared when the 3:30 pm board meeting began yesterday.That press release indicated that the board had approved the plan for the project, the Final Environmental Impact Statement (FEIS), the override of city laws governing such things as zoning and signage, and the power to use eminent domain.
So the special board meeting, which lasted about 15 minutes and attracted a cluster of television cameras, was a mere formality. Only four of the agency’s seven board members, including Gargano, were present, but that meant a quorum.
Their brief questions and comments showed neither much understanding of the project location nor sympathies toward public concerns. And Gargano, gamely taking some tough questions from reporters afterward, gave no quarter.
The agency received nine letters since the Final Environmental Impact Statement (FEIS) was issued November 27 but none caused the agency to change course. Develop Don’t Destroy Brooklyn (DDDB) argued that the FEIS was "fatally flawed" because of, in part, miscalculation of open space; failure to address emergency response times; and a failure to respond to criticisms of the ESDC's blight study. The Council of Brooklyn Neighborhoods (CBN) also deemed the FEIS inadequate, citing, among other things, "self-referential circular logic" in the responses and a failure to consider terrorism among worst-case scenarios.
More call for PACB delay
Now the project goes to the Public Authorities Control Board (PACB), which is scheduled to meet December 20. The three controlling voters are Gov. George Pataki, Senate Majority Leader Joseph Bruno, and Assembly Speaker Sheldon Silver, the only Democrat. There’s been considerable pressure on Silver, who supports the project, to delay it until the administration of incoming Governor Eliot Spitzer, a fellow Democrat.
Yesterday, Hakeem Jeffries, Assemblymember-elect for the 57th District, which includes the Atlantic Yards site, urged the PACB to delay the vote until the affordable housing program is modified, the project size is reduced, and the eminent-domain case is resolved. He joins a trio of Assemblymembers who have also asked for the project to be delayed and modified.
Also, several community, environmental, and good government groups, including the Sierra Club, the Natural Resources Defense Council, and Good Jobs New York, called on the PACB to postpone their vote to allow for more time to evaluate flaws in the review of environmental impacts and to gain “full, transparent disclosure of the project's public financing and the developer's profit.” The groups will hold a press conference at City Hall on Monday at 1:30 p.m.
Boilerplate process
The meeting, held in the 37th floor boardroom at ESDC headquarters at 633 Third Avenue, began as Ann Hulka, a senior VP for real estate, uninflectedly read a boilerplate description of project changes officially announced last month, including plans for a school.There was one intriguing change: Atlantic Yards, following a recent 8% trim, is now described as a $4 billion project, not a $4.2 billion one.
“The entire project is expected to be completed by 2016,” she recited dutifully, adding that the project “avoids or minimizes adverse environmental impacts to the maximum extent practicable… and provides mitigation where practical and feasible.”
“A blight study was prepared which documents blighted conditions on the project site. ESDC intends to exercise the power of eminent domain to remove these blighted conditions. Various objections were raised and outlined in the materials. Without condemnation, ESDC would be unable to assemble the site, remove the blighted conditions on the site, and develop the project.”
She noted the pending eminent domain case: “The corporation is vigorously defending the litigation and expects to prevail.”
Demonstration time
Then ESDC Director of Planning and Environmental Review Rachel Shatz described the project as presented on large posterboards, adding that the project had been reduced by 8 percent “in response to comments we received from the public and specific recommendations” from City Planning Commission.
She pointed to a poster that showed reduced elevations on three buildings in the plan. Her demonstration prompted a few questions. “What are the cross streets for (Site) 5,” asked board member Charles Dorkey (right), apparently unfamiliar with Brooklyn’s busiest intersection.Post-FEIS letter
“There were letters submitted to the corporation on the Final Environmental Impact Statement following its issuance on November 27,” Shatz reported. “We received a total of nine letters, as of today. Staff with our consultants carefully considered all the comments and determined that no new issues had been raised, and there is no need for any additional analysis in light of the information and conclusions in the FEIS, and the directors have all received copies of these letters.”
(I asked for copies of the letters and the responses, and was told they'd be provided shortly.)
Board member Joseph Holland asked a basic question: “Is there any allowance for flexibility in the project program once the GPP is affirmed?”
Shatz responded that the FEIS had analyzed the residential variation, three of the four buildings around the arena devoted to housing, but there’s an alternate option that uses commercial space instead. (The “worst case” impacts would come from the residentail version, so that’s why it was studied in the FEIS.)
Looking at the map
A little later, Dorkey had identified Atlantic and Flatbush avenues on one posterboard. He pointed to the southern border of the project site. “Is that Pacific, at the bottom of the project?”
“This is Dean Street,” Shatz responded, offering some basic Brooklyn map work. “Pacific is the one in the middle.”
Timeline
Holland (right) asked about the timeline for the project, seemingly an issue already covered.“The way that we’re looking at it now,”Hulka responded, “the first phase, assuming no litigation, the first phase of the project—
“Assuming no delays from litigation,” Gargano interjected, leaning forward a little tensely.
Hulka reiterated that the first phase—five towers, an arena, and a new and relocated railyard—would be completed by 2010, with the remainder of the project completed by 2016.
Security issue
Then board member Kevin S. Corbett, a former agency executive, raised the issue of security, piquing the interest of several people in the room representing DDDB and the Council of Brooklyn Neighborhoods. But what he said didn’t respond to their concerns about the agency’s failure to consider post-9/11 terrorism.
“I read the letters, as well," said Corbett (right). "The issues that came up--one was post-9/11, has the situation changed both on transportation and also security issues. I just reflect on the work that ESD did… with the decentralization of office space out of Lower Manhattan. Of course we had Bank of New York and several others relocated to the outer boroughts. That commercial flexibility plays well.”He said the plan responds to the post-9/11 environment and smart growth around transportation. He pointed out that the Regional Plan Association (RPA) has opposed some projects but has favored this one. “This project seems like a great project,” he concluded.
Eminent domain
Dorkey asked general counsel Anita Laremont if ESDC was satisfied with the blight study needed to pursue eminent domain.
“We’re very confident,” Laremont said.
The board then voted 4-0 to approve the various elements of the project, and dispersed. Absent were members David H. Feinberg, Mark Hamister, and Diana Taylor.
What the RPA said
I caught up with Corbett in the hall, identified myself as a journalist and said I had a few questions. He told me that the press should speak to the ESDC press officer.
I pressed on, saying that he’d brought up the RPA statement in favor of the project (He’s an RPA board member.) I pointed out that the RPA’s statement was very critical of the second half of the project.
He responded, “From the meeting I was in with the RPA and again, you’d have to go to [RPA President] Bob Yaro for that, but those issues were addressed.”
There’s no evidence that the RPA’s call for turning the open space into city parkland and a design review process a la Battery Park City has been heeded.
Gargano under the gun
Given Gargano’s stumbling and incongruous statements about the use of eminent domain, it was inevitable that he’d be pressed on them.Nicholas Confessore of the New York Times was first out of the box, pointing out to Gargano (right) that he'd made factually incorrect and contradictory statements.
“I have no idea of what you’re talking about,” Gargano responded testily. “If you’re going to ask me a question, ask me a question,”
Confessore continued, and Gargano responded, “Eminent domain has not occurred on this project. I never said it did.”
Confessore returned a bit later with the direct quote from Gargano’s May 17 interview in Metro, which was cited in the lawsuit filed yesterday: “The facts are that we didn’t really have to use eminent domain because there were friendly condemnations done. The amount of condemnation that we had to do was very small.”
“I don’t know what’s written there,” Gargano said. “What I probably did say, I recall, is that if there is any condemnation that will be required, it would be very small.”
[The Times's coverage was the most thorough in the dailies, mentioning the new lawsuit. The Daily News was brief. The Post focused on the politics. The Associated Press, in a story that appeared in hundreds of outlets around the country, relied significantly on the press release.]
Buildout delay?
I pointed out the skepticism of the planned ten-year buildout expressed by Kathryn Wylde of the Partnership for New York City, who suggested the project would likely take 15-20 years. “So how can you say this environmental review is sufficient?” I asked.
“Number one, I don’t know where Ms. Wylde’s facts come from” he responded. “We hire consultants to advise us on these issues. Turner Construction is a very well-known developer who has decades and decades of experience… This project will be built in quarters, in sections, and they have broken it down for us. And they say the project can be built over a ten-year period. We depend on experts in this area to advise us. There are other people who can make comments all they want. I don’t know how valuable those comments are. If the project is estimated to take ten years and we have some delays, as a result of lawsuits or whatever, it could take 11 years, or 12 years. So what. But we have an estimate, assuming we have no unnecessary delays, of ten years, given to us, by expert developers. Those who are in the business of developing, those who understand construction, they’re the people we listen to, not the people who want to be out there talking numbers they have no knowledge of.”
(Actually, Turner Construction is working on the project for Forest City Ratner, as well)
“What about the track record with MetroTech?” I asked, pointing to Forest City Ratner's largest completed Brooklyn project. “MetroTech took nine years longer” than planned.
“I have very little knowledge about MetroTech,” he responded. “MetroTech started a long, long time ago.”
Security, round one
Have changes in the project been made in response to security concerns, he was asked.
“It’s an ongoing process,” Gargano replied, “and we have certainly during that process taken into consideration many security issues that we make public. Then there are other security issues where the sponsor of the project, the developer, is working with the appropriate agencies such as the New York City Police Department, on other security matters that are not for the public at this time.”
Has NYPD signed off on this one?
“NYPD has been consulted during the process of the FEIS, and it’s an ongoing thing with the developers and the New York City Police Department,” he responded.
Security, round two
I brought up the issue whether a large-scale terrorist attack is a "reasonable worst-case scenario," something the ESDC rejected, as DDDB had pointed out. "What do you say to the people of Brooklyn: is it an unreasonable worst-case scenario?"
“I’m not here to predict terrorist attacks," Gargano responded. "That’s for the security people to decide, and to take all the necessary precautions.”
I pointed to the EIS process.
“As I said the last time you asked me similar questions, the EIS is not really the place for--to find or resolve all of the security problems," he said. "As many as we possibly can anticipate, but it’s something we use experts for that. And that’s the New York City Police Department, and others, the sponsors, the developer, has ongoing discussions with them now about security for the project.”
Afterward, in an impromptu press conference outside the ESDC office at 633 Third Avenue, DDDB’s Daniel Goldstein called the agency’s posture “confounding. They’re building a glass tower… at a major transportation hub.”
CBA inclusion
The press release included comments from Governor George Pataki, Mayor Mike Bloomberg, Brooklyn Borough President Marty Markowitz, Gargano, and Deputy Mayor for Economic Development Dan Doctoroff.
There were no quotes from Forest City Ratner—though p.r. staff were at the meeting—and two quotes from people outside government. Praise came from Mike Fishman, president of 32BJ, Service Employees International Union, whose members would work in building maintenance.
And then there was a quote from Delia Hunley-Adossa, Community Benefits Agreement (CBA) Executive Committee Chair, who has been otherwise inaccessible to the press:
“Today is an important day for all of us,” said Delia Hunley-Adossa, Community Benefits Agreement (CBA) Executive Committee Chair. “This is a significant step forward for Atlantic Yards and for the Borough of Brooklyn. The project is more than an arena for the Nets; it is about affordable housing, it is about creating jobs for the community and it is about creating real business opportunities for communities that have been historically shut out of the process.’
Interestingly, there are a host of comments, pro and con, regarding the CBA, in the FEIS. Critics pointed out that it’s unenforceable because it’s not written into the plan itself. The ESDC responded briefly, suggesting more of an arms-length posture than was demonstrated in the press release issued yesterday:
The CBA is an agreement between the project sponsors and certain community-based organizations and is separate from the GPP. The DEIS included elements of the CBA to the extent that they relate to the program elements that are part of the GPP.
Friday, December 08, 2006
Atlantic Yards site plan
This is from the Final Environmental Impact Statement, issued 11/27/06. Click to enlarge.
[This was posted on 3/26/07 but backdated, then updated on 11/12/07.]
Lawsuit filed by 13 rent-stabilized tenants; success would break new legal ground
Following the Empire State Development Corporation’s (ESDC) approval today of the Atlantic Yards project, tenants in two buildings owned by Forest City Ratner filed suit today in state court challenging the ESDC's use of eminent domain to demolish their buildings and override their rights as rent-stabilized tenants. The lawsuit had long been anticipated.
The lawsuit contends that a landlord that refuses to renew rent-stabilized leases and extinguish the tenants’ rights via demolition must obtain permission from the New York State Division of Housing and Community Renewal (DHCR).
Tenants of one of the buildings, 624 Pacific Street (at left in picture), were rudely awakened in June by some startling demolitions next door. The other building is 473 Dean Street. Both would be the subject of "friendly condemnations"--actions welcomed by Forest City Ratner as owner, but not by their tenants.
New legal ground
ESDC, an executive agency, cannot override DHCR’s legislative mandate, argues attorney George Locker. Still, he acknowledged that the claim raises an untested issue and would break new legal ground: “There is no reported case that I could find where the developer seeking state use of eminent domain to enable demolition was also the landlord of rent-stabilized tenants.”
Locker said that, in the past, eminent domain has been used to wipe out the leases of rent-stabilized tenants who were not tenants of buildings owned by the project developer. But he also pointed to another case, which did not involve eminent domain, “that states unequivocally that in demolition cases, DHCR was given ‘exclusive and original jurisdiction’ from the legislature.”
Private roads
In another novel claim, Locker argues that, under the New York State Constitution, a jury is required to determine the necessity of using eminent domain to seize property in order to build a private road, and the amount of compensation to be paid. (A jury has not been empaneled.)
The lawsuit cites 16 miles of private roads in the project—based on estimates from a transportation expert he consulted—mainly involving underground parking facilities.
The issue has never been tested in court, Locker said. “But the state constitutional provision requiring a jury to determine the necessity of using eminent domain to build a private road is clear, and it seems to me that this litigation will have to go up to the Court of Appeals,” he said, noting that, while some “relatively recent cases discuss juries and private roads, the issues were different” than with Atlantic Yards.
Developer misled city?
The lawsuit argues, as Locker has done before, that in a May 26, 2005 Power Point presentation to the New York City Council, the developer "falsely represented to the members of the City Council that FCRC-owned property within the Project Site would not be subject to condemnation."
The lawsuit points to other statements about "friendly condemnations" made by ESDC Chairman Charles Gargano, noting the condemnation is not considered "friendly" by the tenants.
Settlement?
Could the suit be dropped in exchange for appropriate settlement, I asked Locker. “I am guided by my clients, who are being run over by a steamroller,” he responded. “If they are appropriately compensated, so they can permanently relocate to a comparable Brooklyn neighborhood, far from Atlantic Yards, and without threat of eviction, that is their preference.”
(He's criticized the current relocation agreements as placing the risks inappropriately on the tenants rather than the developer.)
Another case challenging the use of eminent domain, filed in federal court by property owners, a commercial tenant, and residential renters, is also pending.
The lawsuit contends that a landlord that refuses to renew rent-stabilized leases and extinguish the tenants’ rights via demolition must obtain permission from the New York State Division of Housing and Community Renewal (DHCR).
Tenants of one of the buildings, 624 Pacific Street (at left in picture), were rudely awakened in June by some startling demolitions next door. The other building is 473 Dean Street. Both would be the subject of "friendly condemnations"--actions welcomed by Forest City Ratner as owner, but not by their tenants.New legal ground
ESDC, an executive agency, cannot override DHCR’s legislative mandate, argues attorney George Locker. Still, he acknowledged that the claim raises an untested issue and would break new legal ground: “There is no reported case that I could find where the developer seeking state use of eminent domain to enable demolition was also the landlord of rent-stabilized tenants.”
Locker said that, in the past, eminent domain has been used to wipe out the leases of rent-stabilized tenants who were not tenants of buildings owned by the project developer. But he also pointed to another case, which did not involve eminent domain, “that states unequivocally that in demolition cases, DHCR was given ‘exclusive and original jurisdiction’ from the legislature.”
Private roads
In another novel claim, Locker argues that, under the New York State Constitution, a jury is required to determine the necessity of using eminent domain to seize property in order to build a private road, and the amount of compensation to be paid. (A jury has not been empaneled.)
The lawsuit cites 16 miles of private roads in the project—based on estimates from a transportation expert he consulted—mainly involving underground parking facilities.
The issue has never been tested in court, Locker said. “But the state constitutional provision requiring a jury to determine the necessity of using eminent domain to build a private road is clear, and it seems to me that this litigation will have to go up to the Court of Appeals,” he said, noting that, while some “relatively recent cases discuss juries and private roads, the issues were different” than with Atlantic Yards.
Developer misled city?The lawsuit argues, as Locker has done before, that in a May 26, 2005 Power Point presentation to the New York City Council, the developer "falsely represented to the members of the City Council that FCRC-owned property within the Project Site would not be subject to condemnation."
The lawsuit points to other statements about "friendly condemnations" made by ESDC Chairman Charles Gargano, noting the condemnation is not considered "friendly" by the tenants.
Settlement?
Could the suit be dropped in exchange for appropriate settlement, I asked Locker. “I am guided by my clients, who are being run over by a steamroller,” he responded. “If they are appropriately compensated, so they can permanently relocate to a comparable Brooklyn neighborhood, far from Atlantic Yards, and without threat of eviction, that is their preference.”
(He's criticized the current relocation agreements as placing the risks inappropriately on the tenants rather than the developer.)
Another case challenging the use of eminent domain, filed in federal court by property owners, a commercial tenant, and residential renters, is also pending.
Nets for sale? Revised ESDC document gives Ratner an out
There's a tantalizing hint in the revised Atlantic Yards General Project Plan (GPP) issued today by the Empire State Development Corporation (ESDC) that the money-losing New Jersey Nets might be for sale before the planned Brooklyn Arena opens in 2009. The revised GPP, issued as part of the ESDC's approval of Atlantic Yards, includes a section on Transferability that did not appear in the GPP released in July.
It states, in part:
In addition, in the event the Nets professional basketball franchise is sold to another entity prior to the completion of the Arena, Project Sponsors may transfer their interest in the Arena to the purchasing entity or its affiliate, provided ESDC and the City are reasonably satisfied that such entity can satisfactorily complete the development of the Arena or if such entity retains the Project Sponsors to develop the Arena.
The Nets' web site describes principal owner Bruce Ratner as "[f]irmly committed to making the Nets a successful organization on and off the court." But the clause in the GPP suggests that, when Ratner agreed to buy the Nets, and the city got behind the effort, the development deal was first and foremost.
Update 12/9
A reader writes:
You don't think that's a highly tendentious reading of the relevant passage?
As far as I can tell, all it does is allow for the possibility of a sale. It would be extremely stupid of them not to have that written into the plan. It allows FCRC to basically hand over the stadium to whoever buys the Nets, if someone buys the Nets.
Well, I agree that contracts generally should contain contingencies. However, this passage was not in the GPP as issued in July.
Do you think they just figured out not to be "extremely stupid"?
By writing in that contingency--for a sale before 2009--without any accompanying affirmation of their commitment to the team, the Ratner organization seems to be backing off from that commitment. And we know that when they want to pump out press releases, they do.
Let's see what surfaces.
Atlantic Yards, 2026? Business leader doubts ten-year buildout prediction
As the Empire State Development Corporation (ESDC) prepares today to approve the Atlantic Yards project, we should consider the very real possibility—echoed yesterday by a prominent project supporter—that it could take twice as long as promised.If so, that raises significant questions about the delayed provision of open space and affordable housing, the persistence of a large interim surface parking lot, and the adequacy of the ESDC’s review of the project.
According to developer Forest City Ratner, “assuming the project receives the needed public approvals, FCRC anticipates breaking ground in late 2006 on the arena and at least two residential buildings. The construction will be phased over 10 years.”
In its environmental review, the ESDC used a ten-year analysis, saying it was conforming to state law—despite requests that the agency should take a broader view. (The ESDC approval must be followed by approval from the Public Authorities Control Board, which may stall Atlantic Yards at least until the term of incoming Governor Eliot Spitzer.)
Transportation effects
The time frame affects the analysis of the project's impact on transit and transportation. While a slower buildout means that the effect of the development might be absorbed more slowly, that longer time frame also would include more developments in the area. Transportation experts say the ESDC already low-balled the number of projects it included in its environmental review and thus underestimated traffic problems.
Yesterday, I caught up with Kathryn Wylde, president and CEO of the Partnership for New York City, which represents the city’s largest private-sector employers.
She was participating in a breakfast discussion of congestion pricing, an idea, already implemented successfully in London, that’s been embraced by business groups, transportation wonks, and leftish types as way to limit traffic into Manhattan’s Central Business District (CBD) and steer more money to public transit.
The peak-hour imposition of new tolls, charges for using reserved highway lanes, or increased parking charges in the CBD could stem some of the traffic coursing through Brooklyn on the way to free East River bridges. The counter-argument is that it’s a burdensome “tax” on outer borough drivers. (StreetsBlog has a solid report on the session.)
Congestion pricing & AY
Congestion pricing, the ESDC said in its Atlantic Yards review, is "beyond the scope of this project."
To what extent, I asked Wylde, does the absence of congestion pricing make her rethink support for a project like Atlantic Yards. (“Unlike many other developing areas of the city, the transportation infrastructure needed to accommodate Atlantic Yards is largely in place,” she had testified.)
“Well, Atlantic Yards development is over a long period of time," she responded. "So hopefully we’ll have some solutions on the congestion side before we hit that critical mass, in terms of additional traffic."
"You’re talking about a 15-year, 20-year buildout,” she added.
“They say ten years,” I pointed out.
“Not a chance,” Wylde responded, with a smile.
More than a decade?
Indeed, Wylde merely articulated what many believe. After all, as the New York Observer recently reported, Forest City Ratner's MetroTech Center project in Brooklyn was supposed to be finished within five years after groundbreaking in 1989, but the last building originally planned didn't open until 2003, nine years late.
The Observer reported:
“The quality that Forest City has is that they are very disciplined about moving forward in stages,” said Rich Moore, an analyst at RBC Capital Markets who covers Forest City Enterprises. “They build one office tower and see if they are doing well, and if they are not, there is always the option of waiting until the market catches up to them or of altering their plans.”
Phase 2, the 11 buildings east of Sixth Avenue, would contain all of the eight acres of publicly accessible open space and more than 75% of the 2250 affordable apartments. And if an underground parking garage isn't built, then the interim surface parking lot planned for the southeast block--between Carlton and Vanderbilt avenues and Atlantic Avenue and Pacific Street--could persist for a while.And wouldn't the construction of Phase 1, the arena block, generate significant traffic itself? Transportation analysts Carolyn Konheim and Brian Ketcham this week warned that the proposed traffic mitigation for the arena would affect only Nets games, not other events.
ESDC: ten years
The ESDC, however, isn't buying any of this concern.
Both the Council of Brooklyn Neighborhoods (CBN) and Brooklyn resident Margot Gibson both raised the issue of the ten-year buildout to the ESDC:
The dates for analysis are inadequate. Community responses to the Draft Scope proposed looking 20-40 years ahead to assess potential impacts. While such lengthy time horizons may not be feasible for every measure, they are essential to assess major project impacts. The most glaring error is that the DEIS fails to measure project impacts beyond the day the project is completed. A longer time frame is also needed to take into account the probability (and likelihood) of delays in development, and changes to the phasing.
The agency responded:
In accordance with established CEQR Technical Manual methodology, the DEIS analyzed the proposed project’s effects for the 2010 and 2016 analysis years, which is when the proposed project’s Phase I and full Build program, respectively, would be in full operation. Analysis of its impacts in the 2016 build year discloses the long-term impacts of the project. Further unrelated changes in Brooklyn outside the project site may occur after 2016, but impacts from such changes are not ascribed to the project, in accordance with the analysis methodology set forth in the CEQR Technical Manual. Should the project phasing and/or program change in a magnitude necessary to warrant a modification of the General Project Plan (GPP), the proposed project would require additional environmental review to reassess the impacts on environmental conditions.
Thursday, December 07, 2006
Gargano stumbles on Lehrer's show: no eminent domain quite yet?
Appearing likely for the last time on the WNYC radio show Brian Lehrer Live, Empire State Development Corporation (ESDC) Chairman Charles Gargano today again defended the Atlantic Yards project and offered some evasive words about exactly when eminent domain would be used for the project.
The interview ranged over a number of issues, but, before it concluded, Lehrer made sure he tackled Atlantic Yards.
BL: I just want to get to Atlantic Yards. Is your final approval vote tomorrow?
CG: Yes. Friday, we have a board meeting at 3:30 to approve the final General Project Plan.
Actually, the ESDC board must do the following, as per the public hearing notice:
These actions include ESDC’s affirmation of the General Project Plan, the condemnation of privately owned land and City owned land, the disposition by ESDC of the Project site and the provision of State funds in furtherance of the Project.
In doing so, they must approve the Final Environmental Impact Statement, as well.
BL: And that’s definitely going to be a yes?
CG: Well, we don’t know. We’ll see. Right now, all of the board members have been given material in advance to review. And then it’ll be up to the board members to vote yes or no.
Would any of the board members--all appointed by Governor George Pataki--vote no? Unlikely.
The eminent domain stumble
BL: Part of that vote is any condemnations that you decide are needed. Does that mean seizing property under eminent domain?
Gargano became a little tongue-tied.
CG: At this point, we have, we do—we have not used, or--have not used to date any eminent domain condemn-condemn-condemnation.
BL: And you don’t anticipate a vote on anything like that tomorrow?
CG: No, there is nothing about that tomorrow.
What exactly does this mean? The ESDC plans to condemn all the property, including that owned by Forest City Ratner, in part to remove tenants with rent-regulated leases.
I asked ESDC spokeswoman Jessica Copen for clarification. She responded, "The Chairman misspoke. Approval for authorization of eminent domain will go before the Board tomorrow. And, no, we have not used eminent domain."
The PACB vote
The project would then have to go to the Public Authorities Control Board (PACB), which is controlled by Governor George Pataki, Senate Majority Leader Joseph Bruno, and Assembly Speaker Sheldon Silver.
Silver has been at odds with Gargano, and may want to hold the project so it could be considered by the administration of incoming Governor Eliot Spitzer, a fellow Democrat. Then again, Silver generally supports Atlantic Yards.
BL: Silver supports this project, so do you expect final approval—final approval--before the governor’s term is up?
Gargano got a little combative.
CG: Y’know, Brian, I don’t want to talk about the governor’s term. He is still the governor. Should we stop work now because his term is going to be up?
BL: I’m asking you if this is going to get done?
CG: I hope so. We intend to—if it’s approved tomorrow at the board, we intend to move it to the Public Authority Control Board for the December meeting, which I believe is December 20.
Spitzer concerns
BL: And Eliot Spitzer has expressed concerns in the past about how much money the state might need to contribute in the future to Atlantic Yards, although he too supports the project. Do you think those numbers are rock solid?
CB: We think so. We’ve hired financial consultants to review those numbers, as we do in every other phase in a project, we hire the experts from the outside to make sure that everything is in order and we are comfortable with the information, and in, this case, with the financial numbers. So, look, I understand, he’s going to be the governor, so he should be concerned. But I think--I would like to to say to Governor-elect Spitzer that we have done everything possible to make sure that the numbers are good.
Well, the numbers are incomplete. And opaque.
ESDC vs. developers?
Gargano, in discussing the failure of the Moynihan Station project, again took aim at the PACB:
The process we have, the PACB, where one of the three…can knock down a project, is a terrible, dysfunctional process....Sheldon Silver has called me all kinds of names. He called me corrupt with out any facts whatsoever… That’s as much of a joke as when he said, ‘I can’t vote for the project, it’s not what the developers want to build.’ We don’t care what the developers want to build. We are the public authority. We want to do something that’s for the public benefit. And Moynihan Station must be built.
An ESDC lawyer had, in a previous case regarding demolitions for the Atlantic Yards project, described the relationship between agency and developer as "collaborative."
Lehrer asked Gargano of Silver's association's with Madison Square Garden and Gargano, who said he ordinarily wouldn't stoop to such criticims, defended himself:
It will come out, I guarantee you, sooner or later, that he’s being influenced by Madison Square Garden, for a number of reasons. And we’ll find out who’s corrupt… His former chief of staff works there as a lobbyist. His daughter works there.
The interview ranged over a number of issues, but, before it concluded, Lehrer made sure he tackled Atlantic Yards.
BL: I just want to get to Atlantic Yards. Is your final approval vote tomorrow?
CG: Yes. Friday, we have a board meeting at 3:30 to approve the final General Project Plan.
Actually, the ESDC board must do the following, as per the public hearing notice:
These actions include ESDC’s affirmation of the General Project Plan, the condemnation of privately owned land and City owned land, the disposition by ESDC of the Project site and the provision of State funds in furtherance of the Project.
In doing so, they must approve the Final Environmental Impact Statement, as well.
BL: And that’s definitely going to be a yes?
CG: Well, we don’t know. We’ll see. Right now, all of the board members have been given material in advance to review. And then it’ll be up to the board members to vote yes or no.
Would any of the board members--all appointed by Governor George Pataki--vote no? Unlikely.
The eminent domain stumble
BL: Part of that vote is any condemnations that you decide are needed. Does that mean seizing property under eminent domain?
Gargano became a little tongue-tied.
CG: At this point, we have, we do—we have not used, or--have not used to date any eminent domain condemn-condemn-condemnation.
BL: And you don’t anticipate a vote on anything like that tomorrow?
CG: No, there is nothing about that tomorrow.
What exactly does this mean? The ESDC plans to condemn all the property, including that owned by Forest City Ratner, in part to remove tenants with rent-regulated leases.
I asked ESDC spokeswoman Jessica Copen for clarification. She responded, "The Chairman misspoke. Approval for authorization of eminent domain will go before the Board tomorrow. And, no, we have not used eminent domain."
The PACB vote
The project would then have to go to the Public Authorities Control Board (PACB), which is controlled by Governor George Pataki, Senate Majority Leader Joseph Bruno, and Assembly Speaker Sheldon Silver.
Silver has been at odds with Gargano, and may want to hold the project so it could be considered by the administration of incoming Governor Eliot Spitzer, a fellow Democrat. Then again, Silver generally supports Atlantic Yards.
BL: Silver supports this project, so do you expect final approval—final approval--before the governor’s term is up?
Gargano got a little combative.
CG: Y’know, Brian, I don’t want to talk about the governor’s term. He is still the governor. Should we stop work now because his term is going to be up?
BL: I’m asking you if this is going to get done?
CG: I hope so. We intend to—if it’s approved tomorrow at the board, we intend to move it to the Public Authority Control Board for the December meeting, which I believe is December 20.
Spitzer concerns
BL: And Eliot Spitzer has expressed concerns in the past about how much money the state might need to contribute in the future to Atlantic Yards, although he too supports the project. Do you think those numbers are rock solid?
CB: We think so. We’ve hired financial consultants to review those numbers, as we do in every other phase in a project, we hire the experts from the outside to make sure that everything is in order and we are comfortable with the information, and in, this case, with the financial numbers. So, look, I understand, he’s going to be the governor, so he should be concerned. But I think--I would like to to say to Governor-elect Spitzer that we have done everything possible to make sure that the numbers are good.
Well, the numbers are incomplete. And opaque.
ESDC vs. developers?
Gargano, in discussing the failure of the Moynihan Station project, again took aim at the PACB:
The process we have, the PACB, where one of the three…can knock down a project, is a terrible, dysfunctional process....Sheldon Silver has called me all kinds of names. He called me corrupt with out any facts whatsoever… That’s as much of a joke as when he said, ‘I can’t vote for the project, it’s not what the developers want to build.’ We don’t care what the developers want to build. We are the public authority. We want to do something that’s for the public benefit. And Moynihan Station must be built.
An ESDC lawyer had, in a previous case regarding demolitions for the Atlantic Yards project, described the relationship between agency and developer as "collaborative."
Lehrer asked Gargano of Silver's association's with Madison Square Garden and Gargano, who said he ordinarily wouldn't stoop to such criticims, defended himself:
It will come out, I guarantee you, sooner or later, that he’s being influenced by Madison Square Garden, for a number of reasons. And we’ll find out who’s corrupt… His former chief of staff works there as a lobbyist. His daughter works there.
The ESDC board: team players and big donors
Here are the Empire State Development Corporation (ESDC) board members, who are expected to approve the Atlantic Yards project at a meeting tomorrow.
(One vacancy)
It’s a formality, most likely. If their past performance is any indication, the board members won't discuss the issue much.
Indeed, the ESDC is no legislative agency (an issue relevant to the eminent domain case). It is best seen as an extension of the office of Governor George Pataki.
Most of the board members, who are unpaid, have contributed heavily to Pataki or Republican causes. Several have ties to the real estate industry. Chairman Charles Gargano (right) was Pataki’s chief fund raiser; his office at the ESDC’s headquarters on Third Avenue near Grand Central Station is festooned with photos of Gargano and Pataki.
Here’s a profile praising Gargano; here's where Assembly Speaker Sheldon Silver called him corrupt.
(The project would then go to the Public Authorities Control Board, which is controlled by Pataki, Senate Majority Leader Joseph Bruno, and Silver. The latter might stall the project, as he's been lobbied by Brooklyn colleagues. An aide to incoming Governor Eliot Spitzer told the Times today that "If we thought it were a seriously flawed proposal, we would encourage people to hold it until we had an opportunity to make further review of it.")
Occasional criticism
When board members were first appointed, with the advice and consent of the Senate (which is Republican-controlled), some press outlets and Democratic legislators made an issue out of it. A 3/1/98 Newsday article headlined “Donors Deep Pockets Secured Jobs” put it plainly:
Over the past four years, David Feinberg, a wealthy New York City Realtor and construction executive, has contributed $66,000 to Gov. George Pataki's campaign and has worked as a fund raiser, soliciting additional donations.
In return, Feinberg said, Pataki appointed him to two influential boards - the Urban Development Corp., [aka ESDC] which can give tax breaks to businesses, and the Science and Technology Foundation, which doles out grants to high-technology firms.
"I think it is kind of logical. That's the way the system works," said Feinberg, adding that he genuinely believes in Pataki's agenda. "Look, it is a reward and punishment system."
A Pataki spokesman said individuals were chosen for their qualifications. Since then, the issue has died down, though it might re-emerge when incoming Gov. Eliot Spitzer puts his own stamp on state agencies and boards.
However many briefing books they get, members of the ESDC board have their own jobs, so they likely don’t spend much time with the details. That’s what the agency staff is for.
A warning
The chairpersons and boards of public authorities are more responsive to the governor than in the era of Robert Moses, who had his own power base. However, the longer a governor serves, the more that governor controls those boards, because he controls the appointments, according to former State Senator Seymour Lachman, author of Three Men in a Room.
Lachman offers an observation that likely applies to the ESDC and its posture toward the Atlantic Yards project:
At that point, there is a risk that an authority’s decisions will no longer be based on rational, dispassionate, nonpolitical assessments of the public’s interests, but on the political calculations of the person who appointed a majority of its board.
Who are they? (The following information was culled from the public record; the ESDC provided only a list of names and terms.)
Kevin S. Corbett
Kevin Corbett is an insider with direct experience. After all, until late 2004, he had served as the ESDC’s chief operating officer. Now he’s VP for Marine Business at global transportation and infrastructure company DMJM+HARRIS. He remains a member of several boards, including the Moynihan Station Development Corporation, the New York State Economic Development Power Allocation Board, and the board of the Regional Plan Association, which issued a qualified endorsement of the Atlantic Yards project.
Corbett does not appear to have been a major donor to Republican causes, though he (apparently) gave $2000 to Pataki in 2002.
A 9/8/03 Times article headlined TWO YEARS LATER: THE MONEY; Downtown Grants Found To Favor Investment Field laid out a post-9/11 scenario:
More than a third of the emergency grant money intended to help small businesses in Lower Manhattan survive after the Sept. 11 terrorist attack went to investment firms, financial traders and lawyers, a result that some New York legislators who helped secure money for the program say they never envisioned.
Corbett defended the record:
"With the economic conditions and physical conditions we were faced with downtown, and the need to get the money out, we had to make decisions quickly," said Kevin S. Corbett, chief operating officer at Empire State Development, which is controlled by Gov. George E. Pataki. "We had no template at all for this kind of challenge."
Charles E. Dorkey
Charles E. (Trip) Dorkey III is U.S. chairman of Torys, a leading Canadian law firm, with 300 New York and Toronto lawyers. He’s been a major donor to Pataki.
In 1995 he was nominated to the board of the Science and Technology Foundation. The Albany Times-Union reported, in a 10/12/95 article headlined “Pataki donors cash in on key positions”:
Charles Dorkey III, a partner in the Haythe & Curley law firm in New York City, is the third nominee to the Science and Technology Foundation. He and the firm contributed $26,800 to Pataki in the past two years. Dorkey also gave $10,000 to the state GOP committee, $3,500 to Vacco and $ 3,050 to other Republicans.
Dorkey gave Pataki more than $36,000 from 1999 to 2002.
In a 7/15/05 profile in the New York Sun, headlined This 'Trip' Straddles the Public and Private Sectors, Dorkey characterized himself as a non-ideologue who gets along with Democrats, and talked of his roles as a trustee of the New-York Historical Society and as chairman of the Hudson River Park Trust. He offered an evergreen quote:
"It's very important for everyday citizens to get involved in public issues," Mr. Dorkey said. "Good citizenship means participation in issues that matter."
Then again, an 8/5/97 article The Bond Buyer headlined “Bond lawyers' contributions to N.Y. GOP prompt plea to ABA” described how
State Sen. Franz S. Leichter has urged the American Bar Association to halt pay-to-play practices by municipal bond lawyers, in the wake of a new report by his staff claiming that 14 law firms won lucrative bond business in the state - four of them for the first time - after contributing more than $400,000 to state Republican committees and parties.
Among those four firms was Haythe & Curley, whose partners include Charles Dorkey 3d, a Pataki appointee and one of Pataki's top 10 contributors.
David H. Feinberg
In 2002, when he was appointed to the New York Olympic Games Commission, Feinberg was described as Partner, Feinberg Realty and Construction. He’s also self-reported as a principal of Laramie Dawson Corporation, which is described as one of the nation's largest commercial real-estate development companies. It apparently doesn't have a web site.
A 3/1/98 New York Times article headlined “State G.O.P. Gives Pataki Fund Cushion” explained how the Republican Party transferred nearly all of the $3.25 million it raised in the first half of 1997 to Pataki’s campaign, thus allowing major contributors—who had already maxed out what they could give Pataki—another opportunity to fund the campaing.
Among the six people who had given $25,000 to Pataki and $20,000 or more to the party was “real estate magnate” David H. Feinberg.
Feinberg apparently gave $30,700 to Pataki in 2000 and $105,000 to the Republican State Committee from 2000 to 2006. (I say apparently because the contributions come from two different addresses.)
The 10/12/95 Albany Times-Union article stated:
He and his wife contributed $ 43,000 to Pataki over the past two years. Since 1993, he's also donated $ 30,000 to the state Republican Committee.
A 10/13/95 article in the Times Union headlined “Democrats criticize Pataki's nominees” described how Democratic Sen. Franz Leichter tried unsuccessfully to stall the nomination of three Pataki appointees, including Dorkey and Feinberg, to the state Science and Technology Foundation, which funds research.
Mark E. Hamister
Mark E. Hamister is the only ESDC representative from upstate. He runs the Hamister Group, which manages assisted living and health care facilities, and also a hospitality management group and hotel acquisition company. Hamister is a member and/or officer of multiple boards and civic organizations.
Indeed. A 1/3/03 profile in the Buffalo News was headlined “A Matter of Pull; As Mark E. Hamister seeks state and local aid to help buy the Buffalo Sabres, how much help will his political connections prove to be?”
It described how he chaired the Buffalo Niagara Partnership, Western New York’s “most influential business organization,” which “threw the organization's considerable weight behind the re-election efforts of Gov. George E. Pataki,” even as the Partnership’s president “introduced Hamister as ‘the next owner of the Buffalo Sabres.’” (He eventually withdrew from the effort.)
The article outlined Hamister’s clout:
Hamister ranks as a major donor to area politicians -- Democrat as well as Republican -- dropping about $45,000 on local and state candidates over the past several years. That includes $6,000 to Pataki and more than $13,000 to County Executive Joel A. Giambra. Both will play major roles in determining whether Hamister receives public money to support his bid.
Hamister and his companies have continued to make significant campaign contributions.
Joseph H. Holland
Joseph H. Holland is the managing member of Uptown Partners, which develops market-rate, multi-family housing in New York City, notably Harlem. He is also of counsel with the law firm of Van Lierop, Burns & Bassett, focusing on the development of affordable housing projects.
Holland is also a Director, Municipal Assistance Corporation of the City of New York, gubernatorial appointee since 1998 and a Member, Board of Trustees, Cornell University since 1998.
He was formerly Commissioner of the New York State Division of Housing and Community Renewal, Pataki’s most prominent black appointee. A 5/24/95 profile in Real Estate Weekly quoted Holland as saying, "To the extent that the system was tilted in the past in favor of tenants, that's just going to stop. Our message is not real popular with certain groups, but it's one that has to be put out there."
An 11/6/05 New York Times article headlined A Developer's Rocky Quest to Revitalize Harlem described Holland’s struggles and successes nearly a decade earlier. His investments had floundered. Some in the Pataki administration didn’t support his efforts to support housing. And some in the African-American community targeted Holland as way of criticizing Pataki. (Photo from the Times)
He was described as an idealist whose activism (starting business staffed by homeless-shelter residents) was tempered by experience (the residents weren’t that responsible.). He tried to find wealthy African-Americans to fund investments in Harlem, but wound up with more traditional investors for projects Holland describes as “gentrification without displacement," since they’re built on vacant land in Harlem.
Then again, his company has also sought to play the political game. An October 2003 article in Gotham Gazette described Uptown’s effort to get a variance, and the local opposition it generated:
In their first proposal Uptown Partners claimed that they had to have at least 24 stories in order to make the project economically feasible. The residents look back at this claim and say that it was false because now the developer is willing to settle for 14 stories while at the same time saying they now need at least 14 stories to make the numbers work. This proves, they say, that the motive is more profit.
Sounds like… Atlantic Yards?
Diana Taylor
Taylor, an investment banker, was named Superintendent of Banks for the State of New York by Pataki in 2003.
According to a 12/8/03 profile in Newsday:
In 1996, Taylor went to work for Pataki, becoming his deputy secretary for finance and housing, and a member of his inner circle. She left to become chief financial officer for the Long Island Power Authority and then vice president at KeySpan Energy, only to return to the Pataki administration in 2002. Pataki named Taylor banking superintendent in June.
She’s also been Mayor Michael Bloomberg’s companion since 2000, so we might suspect she shares Bloomberg’s support for Atlantic Yards. (She's given relatively small contributions to state races.)
According to a 10/17/06 article in the Daily News headlined “MIKE'S GAL DID 'GREAT' WORK: ELIOT,” Governor-elect Eliot Spitzer, who has otherwise promised to clean house in Albany - said Taylor would be welcome to stay.
| Name | Appointed By | Term Expires | Charles A. Gargano (Chair) | Governor | Pleasure of Governor |
| Kevin S. Corbett | Governor | Pleasure of Governor |
| Charles E. (Trip) Dorkey | Governor | Pleasure of Governor |
| David H. Feinberg | Governor | 1/1/2007 |
| Mark E. Hamister | Governor | 1/1/2009 |
| Joseph H. Holland | Governor | 1/1/2001 (holdover) |
| Diana Taylor | Governor | Ex Officio |
(One vacancy)
It’s a formality, most likely. If their past performance is any indication, the board members won't discuss the issue much.
Indeed, the ESDC is no legislative agency (an issue relevant to the eminent domain case). It is best seen as an extension of the office of Governor George Pataki.Most of the board members, who are unpaid, have contributed heavily to Pataki or Republican causes. Several have ties to the real estate industry. Chairman Charles Gargano (right) was Pataki’s chief fund raiser; his office at the ESDC’s headquarters on Third Avenue near Grand Central Station is festooned with photos of Gargano and Pataki.
Here’s a profile praising Gargano; here's where Assembly Speaker Sheldon Silver called him corrupt.
(The project would then go to the Public Authorities Control Board, which is controlled by Pataki, Senate Majority Leader Joseph Bruno, and Silver. The latter might stall the project, as he's been lobbied by Brooklyn colleagues. An aide to incoming Governor Eliot Spitzer told the Times today that "If we thought it were a seriously flawed proposal, we would encourage people to hold it until we had an opportunity to make further review of it.")
Occasional criticism
When board members were first appointed, with the advice and consent of the Senate (which is Republican-controlled), some press outlets and Democratic legislators made an issue out of it. A 3/1/98 Newsday article headlined “Donors Deep Pockets Secured Jobs” put it plainly:
Over the past four years, David Feinberg, a wealthy New York City Realtor and construction executive, has contributed $66,000 to Gov. George Pataki's campaign and has worked as a fund raiser, soliciting additional donations.
In return, Feinberg said, Pataki appointed him to two influential boards - the Urban Development Corp., [aka ESDC] which can give tax breaks to businesses, and the Science and Technology Foundation, which doles out grants to high-technology firms.
"I think it is kind of logical. That's the way the system works," said Feinberg, adding that he genuinely believes in Pataki's agenda. "Look, it is a reward and punishment system."
A Pataki spokesman said individuals were chosen for their qualifications. Since then, the issue has died down, though it might re-emerge when incoming Gov. Eliot Spitzer puts his own stamp on state agencies and boards.
However many briefing books they get, members of the ESDC board have their own jobs, so they likely don’t spend much time with the details. That’s what the agency staff is for.
A warning
The chairpersons and boards of public authorities are more responsive to the governor than in the era of Robert Moses, who had his own power base. However, the longer a governor serves, the more that governor controls those boards, because he controls the appointments, according to former State Senator Seymour Lachman, author of Three Men in a Room.
Lachman offers an observation that likely applies to the ESDC and its posture toward the Atlantic Yards project:
At that point, there is a risk that an authority’s decisions will no longer be based on rational, dispassionate, nonpolitical assessments of the public’s interests, but on the political calculations of the person who appointed a majority of its board.
Who are they? (The following information was culled from the public record; the ESDC provided only a list of names and terms.)
Kevin S. Corbett
Kevin Corbett is an insider with direct experience. After all, until late 2004, he had served as the ESDC’s chief operating officer. Now he’s VP for Marine Business at global transportation and infrastructure company DMJM+HARRIS. He remains a member of several boards, including the Moynihan Station Development Corporation, the New York State Economic Development Power Allocation Board, and the board of the Regional Plan Association, which issued a qualified endorsement of the Atlantic Yards project.Corbett does not appear to have been a major donor to Republican causes, though he (apparently) gave $2000 to Pataki in 2002.
A 9/8/03 Times article headlined TWO YEARS LATER: THE MONEY; Downtown Grants Found To Favor Investment Field laid out a post-9/11 scenario:
More than a third of the emergency grant money intended to help small businesses in Lower Manhattan survive after the Sept. 11 terrorist attack went to investment firms, financial traders and lawyers, a result that some New York legislators who helped secure money for the program say they never envisioned.
Corbett defended the record:
"With the economic conditions and physical conditions we were faced with downtown, and the need to get the money out, we had to make decisions quickly," said Kevin S. Corbett, chief operating officer at Empire State Development, which is controlled by Gov. George E. Pataki. "We had no template at all for this kind of challenge."
Charles E. Dorkey
Charles E. (Trip) Dorkey III is U.S. chairman of Torys, a leading Canadian law firm, with 300 New York and Toronto lawyers. He’s been a major donor to Pataki.In 1995 he was nominated to the board of the Science and Technology Foundation. The Albany Times-Union reported, in a 10/12/95 article headlined “Pataki donors cash in on key positions”:
Charles Dorkey III, a partner in the Haythe & Curley law firm in New York City, is the third nominee to the Science and Technology Foundation. He and the firm contributed $26,800 to Pataki in the past two years. Dorkey also gave $10,000 to the state GOP committee, $3,500 to Vacco and $ 3,050 to other Republicans.
Dorkey gave Pataki more than $36,000 from 1999 to 2002.
In a 7/15/05 profile in the New York Sun, headlined This 'Trip' Straddles the Public and Private Sectors, Dorkey characterized himself as a non-ideologue who gets along with Democrats, and talked of his roles as a trustee of the New-York Historical Society and as chairman of the Hudson River Park Trust. He offered an evergreen quote:
"It's very important for everyday citizens to get involved in public issues," Mr. Dorkey said. "Good citizenship means participation in issues that matter."
Then again, an 8/5/97 article The Bond Buyer headlined “Bond lawyers' contributions to N.Y. GOP prompt plea to ABA” described how
State Sen. Franz S. Leichter has urged the American Bar Association to halt pay-to-play practices by municipal bond lawyers, in the wake of a new report by his staff claiming that 14 law firms won lucrative bond business in the state - four of them for the first time - after contributing more than $400,000 to state Republican committees and parties.
Among those four firms was Haythe & Curley, whose partners include Charles Dorkey 3d, a Pataki appointee and one of Pataki's top 10 contributors.
David H. Feinberg
In 2002, when he was appointed to the New York Olympic Games Commission, Feinberg was described as Partner, Feinberg Realty and Construction. He’s also self-reported as a principal of Laramie Dawson Corporation, which is described as one of the nation's largest commercial real-estate development companies. It apparently doesn't have a web site.
A 3/1/98 New York Times article headlined “State G.O.P. Gives Pataki Fund Cushion” explained how the Republican Party transferred nearly all of the $3.25 million it raised in the first half of 1997 to Pataki’s campaign, thus allowing major contributors—who had already maxed out what they could give Pataki—another opportunity to fund the campaing.
Among the six people who had given $25,000 to Pataki and $20,000 or more to the party was “real estate magnate” David H. Feinberg.
Feinberg apparently gave $30,700 to Pataki in 2000 and $105,000 to the Republican State Committee from 2000 to 2006. (I say apparently because the contributions come from two different addresses.)
The 10/12/95 Albany Times-Union article stated:
He and his wife contributed $ 43,000 to Pataki over the past two years. Since 1993, he's also donated $ 30,000 to the state Republican Committee.
A 10/13/95 article in the Times Union headlined “Democrats criticize Pataki's nominees” described how Democratic Sen. Franz Leichter tried unsuccessfully to stall the nomination of three Pataki appointees, including Dorkey and Feinberg, to the state Science and Technology Foundation, which funds research.
Mark E. Hamister
Mark E. Hamister is the only ESDC representative from upstate. He runs the Hamister Group, which manages assisted living and health care facilities, and also a hospitality management group and hotel acquisition company. Hamister is a member and/or officer of multiple boards and civic organizations. Indeed. A 1/3/03 profile in the Buffalo News was headlined “A Matter of Pull; As Mark E. Hamister seeks state and local aid to help buy the Buffalo Sabres, how much help will his political connections prove to be?”
It described how he chaired the Buffalo Niagara Partnership, Western New York’s “most influential business organization,” which “threw the organization's considerable weight behind the re-election efforts of Gov. George E. Pataki,” even as the Partnership’s president “introduced Hamister as ‘the next owner of the Buffalo Sabres.’” (He eventually withdrew from the effort.)
The article outlined Hamister’s clout:
Hamister ranks as a major donor to area politicians -- Democrat as well as Republican -- dropping about $45,000 on local and state candidates over the past several years. That includes $6,000 to Pataki and more than $13,000 to County Executive Joel A. Giambra. Both will play major roles in determining whether Hamister receives public money to support his bid.
Hamister and his companies have continued to make significant campaign contributions.
Joseph H. Holland
Joseph H. Holland is the managing member of Uptown Partners, which develops market-rate, multi-family housing in New York City, notably Harlem. He is also of counsel with the law firm of Van Lierop, Burns & Bassett, focusing on the development of affordable housing projects. Holland is also a Director, Municipal Assistance Corporation of the City of New York, gubernatorial appointee since 1998 and a Member, Board of Trustees, Cornell University since 1998.
He was formerly Commissioner of the New York State Division of Housing and Community Renewal, Pataki’s most prominent black appointee. A 5/24/95 profile in Real Estate Weekly quoted Holland as saying, "To the extent that the system was tilted in the past in favor of tenants, that's just going to stop. Our message is not real popular with certain groups, but it's one that has to be put out there."
An 11/6/05 New York Times article headlined A Developer's Rocky Quest to Revitalize Harlem described Holland’s struggles and successes nearly a decade earlier. His investments had floundered. Some in the Pataki administration didn’t support his efforts to support housing. And some in the African-American community targeted Holland as way of criticizing Pataki. (Photo from the Times)
He was described as an idealist whose activism (starting business staffed by homeless-shelter residents) was tempered by experience (the residents weren’t that responsible.). He tried to find wealthy African-Americans to fund investments in Harlem, but wound up with more traditional investors for projects Holland describes as “gentrification without displacement," since they’re built on vacant land in Harlem.
Then again, his company has also sought to play the political game. An October 2003 article in Gotham Gazette described Uptown’s effort to get a variance, and the local opposition it generated:
In their first proposal Uptown Partners claimed that they had to have at least 24 stories in order to make the project economically feasible. The residents look back at this claim and say that it was false because now the developer is willing to settle for 14 stories while at the same time saying they now need at least 14 stories to make the numbers work. This proves, they say, that the motive is more profit.
Sounds like… Atlantic Yards?
Diana Taylor
Taylor, an investment banker, was named Superintendent of Banks for the State of New York by Pataki in 2003.According to a 12/8/03 profile in Newsday:
In 1996, Taylor went to work for Pataki, becoming his deputy secretary for finance and housing, and a member of his inner circle. She left to become chief financial officer for the Long Island Power Authority and then vice president at KeySpan Energy, only to return to the Pataki administration in 2002. Pataki named Taylor banking superintendent in June.
She’s also been Mayor Michael Bloomberg’s companion since 2000, so we might suspect she shares Bloomberg’s support for Atlantic Yards. (She's given relatively small contributions to state races.)
According to a 10/17/06 article in the Daily News headlined “MIKE'S GAL DID 'GREAT' WORK: ELIOT,” Governor-elect Eliot Spitzer, who has otherwise promised to clean house in Albany - said Taylor would be welcome to stay.
Transportation consultants blast FEIS, say it should be rejected
“Fix the traffic first,” protesters at the corner of Atlantic and Flatbush avenue have been urging for two weeks, and now there’s an extensive argument to back that up.
In a blistering letter sent yesterday to the Empire State Development Corporation and numerous elected officials, Carolyn Konheim and Brian Ketcham of Community Consulting Services warned that the Atlantic Yards Final Environmental Impact Statement (FEIS) is deeply flawed regarding transportation impacts and should be rejected.
In fact, wrote the pair, who are transportation consultants to the Council of Brooklyn Neighborhoods, “numerous egregious errors and omissions” in the Draft Environmental Impact Statement remain unchanged and certain deficiencies “became more pronounced in the FEIS.”
Mitigation “a hoax”
For example, they pointed out that innovative parking/transit incentives, intended to reduce auto trips to the Nets games by 20%., do not apply to the expected 184 other events, which are left to manage on their own without any administrative framework, but are not analyzed on the unsubstantiated premise that they would likely attract fewer auto trips. The abdication of responsibility for non-Nets events is a prescription for traffic chaos on many days of the year.
The ESDC essentially punted:
As a conservative measure, it is assumed in the DEIS and FEIS that the demand management strategies (DMS) and remote parking required for arena basketball games would not be also used for other arena events. With the imposition of DMS and remote parking mitigation, the basketball games would still typically generate the highest expected level of vehicular travel demand for arena events, and thus, would continue to represent the reasonable worst-case scenario.
The comprehensive traffic management plan included for the Nets basketball games is made possible because of the project sponsors’ relationship with the basketball team and the nature of basketball games as an ongoing activity with a high percentage of repeat attendees. Other arena events would generally be operated by a variety of promoters who cannot be identified at this time.
Wrong peak period?
Konheim and Ketcham write:
The planned mitigation for Nets game traffic appears to be for the wrong time period. A comment on the DEIS revealed that East Coast NBA games start at 7:30 p.m., not 8:00 p.m. as assumed in the DEIS, resulting in the pre-game period being 6:30-7:30 p.m., not the7 :00-8:00 p.m. assumed in the DEIS. To defend making no change, the preparers of the FEIS wiggle through an argument that Madison Square Garden data suggests as much as 30% of game-goers arrive in the half hour after the game begins. Besides not making such anomalous data open to inspection, the preparers of the DEIS pretend not to understand that the real issue is that the baseline traffic volumes are for the wrong time period. Based on Brooklyn Bridge hourly counts, there is a significant drop in traffic volume after 7:00 p.m., suggesting that the analysis did not capture higher background traffic between 6:30 and 7:00 p.m. The matter could have been put to rest with the publication of hourly traffic volumes, required in the CEQR process for this very purpose. But that obvious response might have shown all that the pre-game analyses had to be redone, and slowed the project approval. Many errors of the DEIS/FEIS appear to be result of short-cuts and time pressures.
Data belatedly arrives
Actually, Konheim and Ketcham did get some data. In their message to officials and the press, Konheim wrote:
Just as I was about to e-mail this to you at 6:30 p.m. on December 6th, ESDC delivered 600 pages of crucial traffic data requested by Brian Ketcham during the DEIS process last summer. Who's kidding who?
Ludicrous logic
They criticize the free MetroCard idea, writing:
The claimed effectiveness of the initial transit incentive mitigation in the DEIS, a 50% discount on a two-way MetroCard, was so debunked by the public that the FEIS now offers a “free” two-way subway pass, reinforcing the conclusion that the preparers of the FEIS are either hopelessly naive or are banking to be so. The free MetroCard would be targeted to on-line purchasers of high end tickets, which are well above $100/seat. This “$4 value” package is postured as a 100% in the cost (whereas, this is only for the MetroCard) and, in reality, $4 is less than a 4% saving on the entire $100+ package.
Then to justify that this estimated cost/benefit will get drivers and their passengers to give up their cars, the FEIS cites the MTA half-fare holiday bonus experiment in 2005. Selecting this as a justification is even more ludicrous than the example in the DEIS, since the holiday half-fare program was found to result in no increase of ridership whatsoever on commuter trains and a big loss in fares of subway riders who would have traveled anyway. The irrelevance the example to the Arena is underscored by the lack of any correlation of change in auto use corresponding to the change of fares. Thus, the key travel demand mitigation in the FEIS relies on a hoax.
Other concerns
Other charges include:
--no basis for the FEIS claim of mitigation of the two Atlantic Avenue intersections close to the exit and entry ramps of the Brooklyn Queens Expressway
--a method that analyzes each intersection in isolation seriously conceals the magnitude of the areawide impact of the project,
--failure to look closely or realistically at the traffic behavior immediately around the site entrance.
--failure to account for all Downtown Brooklyn development projects by 2016.
--failure to account for growth in subway trips
--lack of capacity by NYC Transit to put new trains in service in peak hours.
In a blistering letter sent yesterday to the Empire State Development Corporation and numerous elected officials, Carolyn Konheim and Brian Ketcham of Community Consulting Services warned that the Atlantic Yards Final Environmental Impact Statement (FEIS) is deeply flawed regarding transportation impacts and should be rejected.
In fact, wrote the pair, who are transportation consultants to the Council of Brooklyn Neighborhoods, “numerous egregious errors and omissions” in the Draft Environmental Impact Statement remain unchanged and certain deficiencies “became more pronounced in the FEIS.”
Mitigation “a hoax”
For example, they pointed out that innovative parking/transit incentives, intended to reduce auto trips to the Nets games by 20%., do not apply to the expected 184 other events, which are left to manage on their own without any administrative framework, but are not analyzed on the unsubstantiated premise that they would likely attract fewer auto trips. The abdication of responsibility for non-Nets events is a prescription for traffic chaos on many days of the year.
The ESDC essentially punted:
As a conservative measure, it is assumed in the DEIS and FEIS that the demand management strategies (DMS) and remote parking required for arena basketball games would not be also used for other arena events. With the imposition of DMS and remote parking mitigation, the basketball games would still typically generate the highest expected level of vehicular travel demand for arena events, and thus, would continue to represent the reasonable worst-case scenario.
The comprehensive traffic management plan included for the Nets basketball games is made possible because of the project sponsors’ relationship with the basketball team and the nature of basketball games as an ongoing activity with a high percentage of repeat attendees. Other arena events would generally be operated by a variety of promoters who cannot be identified at this time.
Wrong peak period?
Konheim and Ketcham write:
The planned mitigation for Nets game traffic appears to be for the wrong time period. A comment on the DEIS revealed that East Coast NBA games start at 7:30 p.m., not 8:00 p.m. as assumed in the DEIS, resulting in the pre-game period being 6:30-7:30 p.m., not the7 :00-8:00 p.m. assumed in the DEIS. To defend making no change, the preparers of the FEIS wiggle through an argument that Madison Square Garden data suggests as much as 30% of game-goers arrive in the half hour after the game begins. Besides not making such anomalous data open to inspection, the preparers of the DEIS pretend not to understand that the real issue is that the baseline traffic volumes are for the wrong time period. Based on Brooklyn Bridge hourly counts, there is a significant drop in traffic volume after 7:00 p.m., suggesting that the analysis did not capture higher background traffic between 6:30 and 7:00 p.m. The matter could have been put to rest with the publication of hourly traffic volumes, required in the CEQR process for this very purpose. But that obvious response might have shown all that the pre-game analyses had to be redone, and slowed the project approval. Many errors of the DEIS/FEIS appear to be result of short-cuts and time pressures.
Data belatedly arrives
Actually, Konheim and Ketcham did get some data. In their message to officials and the press, Konheim wrote:
Just as I was about to e-mail this to you at 6:30 p.m. on December 6th, ESDC delivered 600 pages of crucial traffic data requested by Brian Ketcham during the DEIS process last summer. Who's kidding who?
Ludicrous logic
They criticize the free MetroCard idea, writing:
The claimed effectiveness of the initial transit incentive mitigation in the DEIS, a 50% discount on a two-way MetroCard, was so debunked by the public that the FEIS now offers a “free” two-way subway pass, reinforcing the conclusion that the preparers of the FEIS are either hopelessly naive or are banking to be so. The free MetroCard would be targeted to on-line purchasers of high end tickets, which are well above $100/seat. This “$4 value” package is postured as a 100% in the cost (whereas, this is only for the MetroCard) and, in reality, $4 is less than a 4% saving on the entire $100+ package.
Then to justify that this estimated cost/benefit will get drivers and their passengers to give up their cars, the FEIS cites the MTA half-fare holiday bonus experiment in 2005. Selecting this as a justification is even more ludicrous than the example in the DEIS, since the holiday half-fare program was found to result in no increase of ridership whatsoever on commuter trains and a big loss in fares of subway riders who would have traveled anyway. The irrelevance the example to the Arena is underscored by the lack of any correlation of change in auto use corresponding to the change of fares. Thus, the key travel demand mitigation in the FEIS relies on a hoax.
Other concerns
Other charges include:
--no basis for the FEIS claim of mitigation of the two Atlantic Avenue intersections close to the exit and entry ramps of the Brooklyn Queens Expressway
--a method that analyzes each intersection in isolation seriously conceals the magnitude of the areawide impact of the project,
--failure to look closely or realistically at the traffic behavior immediately around the site entrance.
--failure to account for all Downtown Brooklyn development projects by 2016.
--failure to account for growth in subway trips
--lack of capacity by NYC Transit to put new trains in service in peak hours.
City subsidies make little difference with AY?
An article in the New York Observer this week, headlined No, No, No. Yes. The Mayor’s Curious Evolution on Public Money for Private Real Estate, sketches how Mayor Mike Bloomberg has come around on the issue of city support for private projects. The paragraphs relevant to Atlantic Yards:
A city economic-development official said that capital subsidies—or, rather, investments—serve another purpose. “It provides the type of upfront capital funding that is needed in the early stages of the project, when it might be hard to get that money from other sources,” the official said.
Thus, the city is pitching in $100 million for Atlantic Yards, even though that project is so gargantuan—$4.2 billion—that it’s hard to believe it will make a difference. Opponents of the project argue that the public could end up paying much more, through indirect subsidies and also because the memorandum of understanding calls on the city and state to “consider making additional contributions for extraordinary infrastructure costs.”
Not just opponents
Actually, the Independent Budget Office toted up a long list of public costs, and the Empire State Development Corporation acknowledges both city and state costs.
The affordable housing subsidies, among other things, remain unknown. Indeed, three Assemblymembers recently warned “there has been, to date, no public disclosure of the project’s finances, including detailed cost analysis, anticipated public subsidies, and expected financial return."
Some criticism
Some criticism did surface in the Observer article
“It seems that the power of the real-estate industry was more than what the administration anticipated,” said Bettina Damiani, the project director of Good Jobs New York. “Ideally, the Mayor says, ‘Look, I’m a successful business guy; we are going to make the investments we need to make the city attractive in terms of police and affordable housing and education.’ To the extent that the real-estate industry is the big dog in the room, I imagine it was awfully difficult to hold the line.”
A city economic-development official said that capital subsidies—or, rather, investments—serve another purpose. “It provides the type of upfront capital funding that is needed in the early stages of the project, when it might be hard to get that money from other sources,” the official said.
Thus, the city is pitching in $100 million for Atlantic Yards, even though that project is so gargantuan—$4.2 billion—that it’s hard to believe it will make a difference. Opponents of the project argue that the public could end up paying much more, through indirect subsidies and also because the memorandum of understanding calls on the city and state to “consider making additional contributions for extraordinary infrastructure costs.”
Not just opponents
Actually, the Independent Budget Office toted up a long list of public costs, and the Empire State Development Corporation acknowledges both city and state costs.
The affordable housing subsidies, among other things, remain unknown. Indeed, three Assemblymembers recently warned “there has been, to date, no public disclosure of the project’s finances, including detailed cost analysis, anticipated public subsidies, and expected financial return."
Some criticism
Some criticism did surface in the Observer article
“It seems that the power of the real-estate industry was more than what the administration anticipated,” said Bettina Damiani, the project director of Good Jobs New York. “Ideally, the Mayor says, ‘Look, I’m a successful business guy; we are going to make the investments we need to make the city attractive in terms of police and affordable housing and education.’ To the extent that the real-estate industry is the big dog in the room, I imagine it was awfully difficult to hold the line.”
Wednesday, December 06, 2006
New warnings: AY would overwhelm neighborhoods, signage would bring Times Square to Brooklyn
It’s not easy for historic preservationists to articulate their concerns about the proposed Atlantic Yards development. After all, only a few historic buildings would be obliterated. As Columbia University's Shirley Morillo recently wrote, what's at stake is not a historic district but less tangible elements like scale and neighborhood character.Yesterday two national organizations, the National Trust for Historic Preservation and Scenic America, ratcheted up such concerns. They warned that the scale of the project would overwhelm Brooklyn’s row house neighborhoods and that the massive illuminated signage—an issue given short shrift in the public discussion and even the state environmental review—could turn the corner of Atlantic and Flatbush avenues into something resembling Times Square. Some signs would be 150-feet high and 75-feet wide.
(Above right, a graphic by BrooklynSpeaks adapted from two separate renderings in the Atlantic Yards Final Environmental Impact Statement. Even with the adaptation, it's tough to get a sense of the scale from ground level.)
The press conference organized by BrooklynSpeaks, the coalition that calls for major changes in the AY plan but does not oppose it fundamentally, was held, appropriately enough, on the row house block of Fort Greene Place in Fort Greene, in between commercial Fulton Street and the border zone of Hanson Place. Across Hanson are Forest City Ratner’s two malls, Atlantic Center and Atlantic Terminal, which already have impinged on their row house neighbors. (They were built on urban renewal land.)Context vital
“New development can serve of all the worthy aims of the Atlantic Yards project - while also respecting its context,” said Roberta Lane, program officer and regional attorney, National Trust for Historic Preservation.
“In the view of the National Trust for Historic Preservation, the historic brownstone neighborhoods surrounding the Atlantic Yards site are a national treasure, and preservation of their character is a national concern.”(Graphic from the Environmental Simulation Center for the Council of Brooklyn Neighborhoods. Three buildings have since been reduced.)
“Massive in scale and incompatible in its design, Atlantic Yards should be substantially reduced and improved to address the damaging effect it will otherwise have on Brooklyn's historic and visual character,” she added.
"Brooklyn retains the largest concentration of 19th and early 20th century urban residential architecture in America,” said Andrew S. Dolkart, James Marston Fitch Professor of Historic Preservation, Columbia University. “These are cohesive neighborhoods of low-scale buildings where the skyline is generally pierced only by church steeples, school gables, or decorative iron cresting. Nearby are Fort Greene, Clinton Hill, Boerum Hill, Prospect Heights, Bedford Stuyvesant, Crown Heights. Some of these neighborhoods are historic districts, some are not yet designated, but all have extraordinary urban architecture.”
“The proposed Atlantic Yards project is so misguided and reflects such a crisis of imagination in our government leaders on all levels and in our development community,” Dolkart added. “The project is ignoring what makes Brooklyn great – its scale, its low density, its intimacy. Not out of scale towers that bear no relationship to Brooklyn but could be built anywhere in the world.”(At right, another graphic by BrooklynSpeaks adapted from two separate renderings in the Atlantic Yards Final Environmental Impact Statement.)
How much should it shrink?
Such quotes, of course, left open the question: how much should Atlantic Yards shrink? BrooklynSpeaks has raised the possibility of cuts by one-third or one-half, which still would involve dramatically large buildings at the northwest edge of Prospect Heights (and a corner of Downtown Brooklyn)..
“I wouldn’t answer “x number of square feet,’” Dolkart responded. “Development should occur in context with neighborhoods.” Stuart Pertz, an architect and advisor to the Municipal Art Society, a principal convenor of BrooklynSpeaks, similarly wouldn’t be pinned down. “It needs to be well-designed, and it’s not,” he said of AY.
What about an arena?
They also left open the question: how does an arena fit into such neighborhoods? (That question came to mind only later, so I didn't ask them.)
Signage fears
The corner of Atlantic and Flatbush has the potential to be a dramatic crossroads—indeed, underground is Brooklyn’s busiest transit hub. On the other hand, it’s a block away, in one direction, from a row house street, and near many others.(At right, a graphic from the Draft Environmental Impact Statement, which did not fully depict the signage.)
The Empire State Development Corporation claims that the signage—both opaque and transparent—planned for the signature Urban Room and arena block wouldn’t impinge on the surrounding neighborhoods. On the other hand, the signage plan would override city regulations.
“Our motto is ‘Change is inevitable. Ugliness is not,’” declared Kevin Fry, president of Scenic America. “The notion of 150-foot animated billboards on this development is a direct assault on the character of this community,” he added. “The developers want to create a garish, out-of-scale commercial intrusion that would not be permitted by the community otherwise. Times Square should not be exported to Brooklyn.(Above right, a graphic from the Draft Environmental Impact Statement, which did not fully depict the signage.)
Different levels of illumination
Fry noted, “The developer claims that there will be different levels of illumination and that the brightest setting will only be used when events are going on in the arena. Of course since they have exempted themselves from the law, there will be no real way to ensure that they will resist pressure from advertisers to max out the use of the technology. The end result is pretty clear. Brooklyn’s famed brownstones will be constantly bathed in the light from 15-story-high beer ads.”
That sounded like an exaggeration—though without better simulations, it’s hard to tell exactly what the effect would be.(At right, a new graphic from the Final Environmental Impact Statement. Two other such new graphics are below.)
“The outdoor advertising industry is attempting to seize the public realm for its own purposes,” Fry continued. “It’s turning our cities into nothing more than a convenient backdrop for commercial advertising…. This sign scheme should be scrapped and replaced with something in keeping with one of the great neighborhoods in the world.
ESDC responseThe Empire State Development Corporation noted that signage on the project site would be typical for local retail and commercial areas in New York City with the exception of portions of the Atlantic and Flatbush Avenue frontages…
On locations on the Atlantic and Flatbush Avenue frontages of the Arena block, specific controls would be placed that would allow for illuminated and non-illuminated opaque signs limited to the westernmost 75 feet of the Arena block (to the height of the prow extending from the Urban Room) and Building 1 (to a height of 40 feet), with additional transparent signage permitted on the Urban Room (to its full height of 80 to 150 feet), Building 1 (to a height of 60 feet), and the Arena (to a height of 40 feet).
Since the signage would be focused at the intersection of Atlantic and Flatbush Avenues, it would be visible east and west on Atlantic Avenue, north and south on Flatbush Avenue, and on a small portion of Pacific and Dean Streets south of Flatbush Avenue…
It is not expected that the proposed signage would adversely affect other historic resources in the study area. The historic resources located north of Atlantic Avenue closest to the Arena block are located north of Hanson Place, with fully developed intervening blocks containing the Atlantic Center and Atlantic Terminal Malls, with a 10-story tower rising from the north end of the three-story Atlantic Center Mall.
These include resources No. 5 (BAM Historic District, No. 8 (Fort Greene Historic District), and No. 12 (Williamsburgh Savings Bank).Other historic resources in the area are at too great a distance and buffered by intervening existing buildings, and some are oriented away from the signage.
So, apparently, there's a debate: exactly how much impact would such signage have?
Going transparent
ESDC observed:The provision for “transparent signage” would allow for larger, and potentially changeable, graphic images to be located on these two frontages in a way that does not interfere with the architecture of the building or views into or out of the arena. Because of the required transparency, the larger graphics would not be particularly visible to pedestrians on the adjacent residential streets, but would have a presence from a farther distance along the Atlantic and Flatbush Avenue corridors.
The transparency issue also is contentious. At the press conference yesterday, a Municipal Art Society representative held a poster with a photograph of a very noticeable but still "transparent" sign from Midtown Manhattan.
(The above graphic, and the following renderings, are from a design presentation prepared for Forest City Ratner. Note the tension between "respectful" and "immersive." Click on all to enlarge.)
New graphics
ESDC added:
Images illustrating concepts for the signage are included in the FEIS (see Figures 8-37a through 8-38b).
In other words, those illustrations were unavailable in the Draft Environmental Impact Statement issued in July. To recap: the top two graphics in this article are mashups by BrooklynSpeaks of the graphics in the Final Environmental Impact Statement.Below the rendering of the project's scale are, in sequence, two graphics from the Draft Environmental Impact Statement and three new graphics from the FEIS. Below them are graphics, including the one at right, from a design presentation prepared for the developer.
Still, the ESDC did not respond to a comment from the Council of Brooklyn Neighborhoods, which stated:
Needed are comparative sections and elevations, showing signage and illumination schemes within the context of Downtown Brooklyn (BAM, etc.), as well as relevant precedents—Times Square, Madison Square Garden, e.g.
The future of BrooklynThe Regional Plan Association, which offered support for the plan mixed with cautions, commented:
This location at the crossroads of Flatbush and Atlantic Avenues, at the edge of Brooklyn’s commercial core and in the heart of a burgeoning cultural district, is also the perfect site for a signature project that could elevate Downtown Brooklyn as a destination and a true third Central Business District for the city...
Within reason, this “Manhattan-ization” that is proposed for Downtown Brooklyn is part of an ongoing and necessary process that will affect communities in downtowns and transit hubs across the region. However, it can and should be a process that successfully integrates large, iconic buildings with their surroundings and provides benefits that compensate for the increased congestion, noise and visual impacts that accompany these projects.
The question remains: what exactly is that visual impact?FCR's bigger plans
Interestingly, Forest City Ratner has considered even more ambitious plans than have been announced in the Atlantic Yards General Project Plan. Via a Freedom of Information Law request, I acquired from the Department of City Planning a document titled BKLN ARENA COMMUNITY MEDIA, credited to FCRC/GANY/NETS/AG. GANY is, I believe, Frank Gehry's New York Office, while AG refers to the Arnell Group, run by branding expert Peter Arnell.
"This is more of a residential district. This would not be Times Square," architect Gehry told the Daily News in May. "The question was how do you create activity at game time and have it disappear."Gehry on signage
Gehry, in an interview last April with the New York Times's Nicoloi Ouroussoff on the Charlie Rose, addressed the planned innovations in signage.
NO: Let's be more specific--you're talking about a kind of layering--is it OK to talk about the models that I saw? We're talking about a layering around the exterior, this is around the arena in Brooklyn, it starts to peel apart, where the advertising and the facades of the buildings start to blur.FG: So it's not there sometimes and it's there sometimes. There's a little bit of it, and there's more of it. And it can be used for community issues, as well as advertising. It has a social function, if it's played right, it can be used for art... How do you make that--everybody's getting it, whether they like it or not, it's all over us.
NO: Meaning people will have to live with this, so the question is: what can you turn it into.
FG: If I look at what Peter Arnell and I are doing right now, they're baby steps. I really think we've got to get into the technology and see where really the root of it. Y'know, LED is little tiny things, they sit on black background--it's not pretty yet. How do you turn it into something--that's the trick. And maybe there's something other than LED.Still the plan?
I asked DCP if the plans suggested by the document were still in force. DCP spokesperson Rachaele Raynoff responded this week, “I believe you're referring to a proposal by the developer's signage consultant for the signage on the exterior of the Arena block. DCP reviewed this document and used it to inform DCP's recommendations for the Atlantic Yards Design Guidelines for signage on the Arena block. The signage to be permitted under the Design Guidelines, as you are aware, is far more limited.”
More from the document
The document shows Arnell grappling with the issue of making the signage visible to people on the main streets, but not certain residential areas.
Three years later, a look at the changing Atlantic Yards narrative, from hoops to housing
Nearly three years ago, when the Atlantic Yards plan was announced at a 12/10/03 press conference, the project was, more than anything else, about basketball. The web site for the project was Bball.net. The slogan became “Jobs, Housing and Hoops.”
Now, if you listen to Forest City Ratner, the project is mostly about affordable housing—an issue cited but not prioritized at the outset. And, according to the Empire State Development Corporation, it’s about the elimination of blight, an affliction unmentioned at the start.
Along the way, the jobs issue receded, likely because the number of office jobs plummeted. The developer backed off pledges to make the roof of the arena public park space, to make sure the tallest building didn’t block the Williamsburgh Savings Bank, and to respect the scale of the surrounding neighborhoods.
Perhaps most importantly, the amount of known public subsidy—downplayed from the start—has ballooned, even as major components, such as the support for affordable housing, remain unknown.
Hoop dreams
A video of that original press conference, held at Brooklyn's Borough Hall, is available via the Mayor’s web site (go to the December 10 Economic Development Announcement).
Fort Greene native Bernard King (behind Bloomberg and Markowitz), a former Net and Knick, was recruited for the event, declaring that “this represents the dreams and aspirations of youth everywhere throughout Brooklyn.” (He was later dropped from the Nets’ team after charges of domestic abuse, and his brother Albert, a lesser star with a clean record, has taken his place.)
Rap star Jay-Z, who described himself as “just a kid from the Marcy Projects and I love Brooklyn.” Citing “prestige, community opportunities, I’m in love with the whole thing,” he concluded, “Let’s get the Nets.” He later was to own a piece of the team.
(Photo credits from press conference: Edward Reed)
Dodgers redux
Brooklyn Borough President Marty Markowitz, who harangued developer Bruce Ratner to buy the Nets--at least according to the official creation story, though Ratner had long eyed the MTA’s Vanderbilt Yard--nearly choked up as he introduced Ratner.
“Bruce, I don’t know what to say to you, I just don’t know what to say," uttered the increasingly verklempt Markowitz. "I just--you don’t know what this little boy, at 12 years old, crying like a baby, I lived on Empire Boulevard and Brooklyn Avenue, a few blocks from Ebbets Field, like a baby—and those tears of joy are swelling up in me, I just can’t wait.”
The focus was on the arena and the team. Markowitz, wearing a big button advertising the project, declared, “We are on the threshold of restoring Brooklyn to its rightful place on the national sports stage. Brooklyn, as everyone knows, is a world-class city, and it deserves a world class team playing in a world class arena designed by a world-class architect.”
Markowitz did offer a look at the bigger picture: “This plan goes even further, creating thousands of apartments affordable to Brooklynites of every income, and producing hundreds of good solid jobs. I’m confident this will be a win-win for the communities surrounding the arena, for all of Brooklyn, and of course all of the city of New York.”
Ratner’s record
When Mayor Mike Bloomberg took the stage, he laid it on thick. Addressing Ratner, he declared, “The MetroTech Center that you created certainly has been an anchor to Downtown Brooklyn's resurgence. It’s brought major employers into the city: Chase Manhattan, Morgan Stanley, Empire Blue-Cross, Blue Shield.”
Actually, MetroTech has served as back office space for employers in Manhattan that were being lured by Jersey City. "Those were not new jobs," Michael Burke, director of the Brooklyn Downtown Business Council, said in a January/February 2005 article in City Limits. "A lot of those jobs existed when the buildings went up. For the most part, they were relocated jobs."
Of Atlantic Yards, Bloomberg said, “This is just going to keep Brooklyn going in terms of job creation and housing and being the magnet that we need to have companies and people from around the world come here. This project is really in some senses the capstone of the renaissance of Brooklyn.”
Local political process
Bloomberg reflected on architect Frank Gehry’s Guggenheim Museum in Bilbao, Spain, adding, “I think it’s just fitting that Brooklyn is on the edge of exciting and innovative and risk taking urban design. One of the things I always thought in Bilbao was: wow, this was a building that was approved by local people--the local political process. You think we have to settle for mediocrity and the conventional. They showed we don’t, and you’re showing that we don’t.”
(At right, Gehry with Jay-Z.)
What Bloomberg didn’t say was that the “local political process” to approve Gehry’s project in Brooklyn would be bypassed, because the city agreed to have the Empire State Development Corporation fast-track the project, which includes an override of city zoning. The Uniform Land Use Review Procedure (ULURP), which includes City Council and Community Board hearings, does not apply.
Bloomberg declared, “I can just tell you that this administration will put on a full-court press for the approval of this project. We’re prepared to team up with Forest City Ratner and with the elected officials and with the people of Brooklyn to get this going and to bring the Nets to New York.”
“If you’ll pardon a sports analogy, it’s not going to be a slam dunk, but we are all rooting hard and while some of us just have to root from the grandstands, some of us will be on the floor with you,” he added. Bloomberg seemed to be emphasizing the attempt to buy the Nets, which was still in process, but his words apply equally to the city’s efforts to move the entire project along.
Ratner on inclusiveness
Ratner took the podium and showed he’d been schooled well. “Probably the overall guiding principle is inclusiveness, is making sure that listen to everybody and we try to include everybody,” he said.
The includes housing, “and that housing doesn’t mean only market-rate housing, it means middle income and it means affordable housing—and we will get that done,” he said.
Then he cited tickets “affordable for everybody,” “diversity of ownership” (huh?) and enhancing community, whether it be schools or a children’s zone, as some very good local official has said, it’s very important that we have community enhancement, that this project enhances.”
CBA history
Ratner's statement suggests that the Community Benefits Agreement, engineered with the help of Assemblyman Roger Green, was already in process. According to a press release accompanying the 6/27/05 CBA press conference, Green said, "When I proposed a legally binding community benefits agreement, it was not because I doubted Forest City Ratner. Rather, it was because I wanted this community benefits agreement to be part of a process that included community needs at the start of the project…. It's about creating a children's zone where kids can be safe, play and grow.”
Ratner said in that CBA press release, "We turned to these organizations because each has expertise that we believed would benefit the overall project." But groups like Brooklyn Endeavor Experience don't have a track record in their assigned CBA issue.
Creating jobs
“We must create more jobs in this city," Ratner declared at the 12/10/03 event, and then verged toward babble. "It’s what I’ve been about. I made a decision that Brooklyn would be the place where I would develop, because my major goal has been economic development from the time I started as a developer. I understand the importance of having a job. That is critical. So jobs are one of the most important things about this project.”
The number of jobs, of course, has plummeted. Initially, the developer promised 10,000 office jobs. Now the number is 1340, with perhaps 375 of them new rather than relocated from Manhattan. Given the track record of MetroTech, Ratner has mainly "been about" creating office space for jobs to keep them from going to New Jersey, which, from the city's perspective, was a reasonable goal.
Public funding
The Times's coverage added some important context:
"This started with basketball, a Brooklyn sport," Mr. Ratner said. "This was always the site. But it became clear it was not economically viable without a real estate component...
Mr. Ratner said that the project "will be almost exclusively privately financed," although taxes derived from elements of the project will be diverted to help pay for it.
Ratner was even more emphatic on the video: “Another major concept here is: we understand the city’s position and the state’s position and the taxpayer’s position. And it is our goal—in fact we will only use taxes that are generated out of this arena from the public. We do not want to go and get taxes from elsewhere, from the existing base.”
According to an accompanying press release:
The Arena will be primarily privately funded. Incremental revenues will be derived from sales taxes on tickets, food and merchandise sold at the new Arena.
Well, besides sales tax exemptions, mortgage recording tax exemptions, and bond financing, there would be a host of other costs: schools, sanitation, and public safety among them.
The total? Opponents say nearly $2 billion. Some local legislators are still inquiring, and say the project shouldn't be approved until the numbers are known.
Affordable housing
Contrast all that with the urgency of FCR VP Jim Stuckey’s testimony submitted to the ESDC this past August:
I am proud to be here tonight to talk about Atlantic Yards—a project that responds to the basic but dire needs of the borough and the city: for affordable housing, for jobs and economic opportunity. This project will also bring the return of professional sports to our borough, and over seven acres of publicly accessible open space.
In other words, sports came second. It’s an affordable housing project above all. Except, if you look at the numbers, it’s a luxury housing project above all. Nobody talks about the people who’d be paying market rate for rentals or condos.
And we still don't know how much the affordable housing would cost.
Final EIS: blight
According to the executive summary of the Final Environmental Impact Statement, issued last month:
The overarching goal of the proposed project is to transform a blighted area into a vibrant mixed-use community, incorporating principles of environmental sustainability. The proposed project aims to provide a state-of-the-art arena, affordable and market-rate housing, first-class office space, publicly accessible open space, local retail and community services, a hotel (under one variation of the project program), a new subway entrance, and an improved Long Island Rail Road rail yard. The proposed project’s buildings would contribute to the Brooklyn skyline and the open space would connect the surrounding neighborhoods, which are currently separated by the open rail yard and a major avenue (Atlantic Avenue).
Not about blight
According to the original Project Overview:
Brooklyn Atlantic Yards addresses several issues for both Brooklyn and New York City. New York City requires new housing that meets all levels of need and income—and additional office space to create and retain new jobs. The project has four essential components, which support and complement each other: the Arena, commercial space and housing—interspersed with a significant amount of publicly accessible open space to enhance existing neighborhoods.
There wasn't much about the site, and nothing about blight, a crucial term for legal purposes, since it justifies the use of eminent domain:
The primary existing use on the proposed site is a rail storage yard for the Long Island Railroad, which has created a strong psychological and physical barrier between the neighborhoods north and south of Atlantic Avenue.
Goal missed: respecting scale
Some of the goals originally announced haven’t panned out. One was to respect the scale of the existing neighborhoods surrounding the site.
Even Gehry acknowledged that at an appearance last January: "I think the scale issue is the only problem, we're out of whack with that."
Blocking the Willy B
Another goal was that the northernmost building on the site, an office building, will be set back slightly from the intersection of Atlantic and Flatbush Avenues, to maintain the view corridor to the Williamsburg Bank building.
In other words, FCR pledged not to block the bank. Maybe that’s before Frank Gehry finished the designs for his Miss Brooklyn tower and overruled them. But it’s instructive to read the ESDC’s explanation:
Much of Block 1118, located on the southeast corner of Flatbush and Atlantic Avenues, is privately owned and is currently occupied with vacant lots and two low-rise commercial buildings. This block is zoned C6-1 and is within the Special Downtown Brooklyn District, which would permit mid- to high-density residential, commercial, or community facility uses. An as-of-right building up to 495 feet tall could be developed on Block 1118. However, given the location of the Bank Building, even a 320-foot-tall building would substantially obstruct views of the Williamsburgh Savings Bank Building from the south along the Flatbush Avenue view corridor.
However, there are only two owners of that triangular block at the northwest tip of the project site, east of Flatbush Avenue. As the associated property map shows, one is New York City and the other is Forest City Ratner. In other words, even though FCR could, as of right, build a tall sliver of a building, they could also honor their own promise.
(The ESDC also says that moving the building east wouldn't be feasible from an engineering point of view.)
Arena roof
It’s worth another look at the original pledges regarding the arena roof:
The roof of the Arena offers an exciting opportunity to create new public space, with 52,000 square feet in four lushly landscaped areas for passive recreation and a promenade along the outside edge of the roof with outstanding panoramic vistas facing Manhattan. For active recreation, an outdoor ice-skating rink connects the four gardens; in warmer months the rink will become a running track. This open space not only provides a destination for community residents as well as for the workers in the office buildings—it also allows the commercial buildings surrounding the arena to be connected at the sky-lobby level.
As we know, Forest City has changed plans, and now will offer the arena roof only to residents of the surrounding four towers.
Timing
Originally, the plan was Arena development to begin at the end of 2004, with completion set for the summer of 2006.
The rest of the project was to be in “future phases.” Now everything’s pushed back three years. The developer now projects only two phases. Could there be more?
Why has it taken so long? Markowitz offered a hint. "There will obviously be community concerns such as traffic and parking," he said at the press conference. Later, he added, "The passion is what we call the Brooklyn attitude."
Now, if you listen to Forest City Ratner, the project is mostly about affordable housing—an issue cited but not prioritized at the outset. And, according to the Empire State Development Corporation, it’s about the elimination of blight, an affliction unmentioned at the start.Along the way, the jobs issue receded, likely because the number of office jobs plummeted. The developer backed off pledges to make the roof of the arena public park space, to make sure the tallest building didn’t block the Williamsburgh Savings Bank, and to respect the scale of the surrounding neighborhoods.
Perhaps most importantly, the amount of known public subsidy—downplayed from the start—has ballooned, even as major components, such as the support for affordable housing, remain unknown.
Hoop dreams
A video of that original press conference, held at Brooklyn's Borough Hall, is available via the Mayor’s web site (go to the December 10 Economic Development Announcement).Fort Greene native Bernard King (behind Bloomberg and Markowitz), a former Net and Knick, was recruited for the event, declaring that “this represents the dreams and aspirations of youth everywhere throughout Brooklyn.” (He was later dropped from the Nets’ team after charges of domestic abuse, and his brother Albert, a lesser star with a clean record, has taken his place.)
Rap star Jay-Z, who described himself as “just a kid from the Marcy Projects and I love Brooklyn.” Citing “prestige, community opportunities, I’m in love with the whole thing,” he concluded, “Let’s get the Nets.” He later was to own a piece of the team.
(Photo credits from press conference: Edward Reed)
Dodgers redux
Brooklyn Borough President Marty Markowitz, who harangued developer Bruce Ratner to buy the Nets--at least according to the official creation story, though Ratner had long eyed the MTA’s Vanderbilt Yard--nearly choked up as he introduced Ratner.
“Bruce, I don’t know what to say to you, I just don’t know what to say," uttered the increasingly verklempt Markowitz. "I just--you don’t know what this little boy, at 12 years old, crying like a baby, I lived on Empire Boulevard and Brooklyn Avenue, a few blocks from Ebbets Field, like a baby—and those tears of joy are swelling up in me, I just can’t wait.”
The focus was on the arena and the team. Markowitz, wearing a big button advertising the project, declared, “We are on the threshold of restoring Brooklyn to its rightful place on the national sports stage. Brooklyn, as everyone knows, is a world-class city, and it deserves a world class team playing in a world class arena designed by a world-class architect.”Markowitz did offer a look at the bigger picture: “This plan goes even further, creating thousands of apartments affordable to Brooklynites of every income, and producing hundreds of good solid jobs. I’m confident this will be a win-win for the communities surrounding the arena, for all of Brooklyn, and of course all of the city of New York.”
Ratner’s record
When Mayor Mike Bloomberg took the stage, he laid it on thick. Addressing Ratner, he declared, “The MetroTech Center that you created certainly has been an anchor to Downtown Brooklyn's resurgence. It’s brought major employers into the city: Chase Manhattan, Morgan Stanley, Empire Blue-Cross, Blue Shield.”
Actually, MetroTech has served as back office space for employers in Manhattan that were being lured by Jersey City. "Those were not new jobs," Michael Burke, director of the Brooklyn Downtown Business Council, said in a January/February 2005 article in City Limits. "A lot of those jobs existed when the buildings went up. For the most part, they were relocated jobs."
Of Atlantic Yards, Bloomberg said, “This is just going to keep Brooklyn going in terms of job creation and housing and being the magnet that we need to have companies and people from around the world come here. This project is really in some senses the capstone of the renaissance of Brooklyn.”
Local political process
Bloomberg reflected on architect Frank Gehry’s Guggenheim Museum in Bilbao, Spain, adding, “I think it’s just fitting that Brooklyn is on the edge of exciting and innovative and risk taking urban design. One of the things I always thought in Bilbao was: wow, this was a building that was approved by local people--the local political process. You think we have to settle for mediocrity and the conventional. They showed we don’t, and you’re showing that we don’t.”(At right, Gehry with Jay-Z.)
What Bloomberg didn’t say was that the “local political process” to approve Gehry’s project in Brooklyn would be bypassed, because the city agreed to have the Empire State Development Corporation fast-track the project, which includes an override of city zoning. The Uniform Land Use Review Procedure (ULURP), which includes City Council and Community Board hearings, does not apply.
Bloomberg declared, “I can just tell you that this administration will put on a full-court press for the approval of this project. We’re prepared to team up with Forest City Ratner and with the elected officials and with the people of Brooklyn to get this going and to bring the Nets to New York.”
“If you’ll pardon a sports analogy, it’s not going to be a slam dunk, but we are all rooting hard and while some of us just have to root from the grandstands, some of us will be on the floor with you,” he added. Bloomberg seemed to be emphasizing the attempt to buy the Nets, which was still in process, but his words apply equally to the city’s efforts to move the entire project along.
Ratner on inclusiveness
Ratner took the podium and showed he’d been schooled well. “Probably the overall guiding principle is inclusiveness, is making sure that listen to everybody and we try to include everybody,” he said.
The includes housing, “and that housing doesn’t mean only market-rate housing, it means middle income and it means affordable housing—and we will get that done,” he said.
Then he cited tickets “affordable for everybody,” “diversity of ownership” (huh?) and enhancing community, whether it be schools or a children’s zone, as some very good local official has said, it’s very important that we have community enhancement, that this project enhances.”
CBA history
Ratner's statement suggests that the Community Benefits Agreement, engineered with the help of Assemblyman Roger Green, was already in process. According to a press release accompanying the 6/27/05 CBA press conference, Green said, "When I proposed a legally binding community benefits agreement, it was not because I doubted Forest City Ratner. Rather, it was because I wanted this community benefits agreement to be part of a process that included community needs at the start of the project…. It's about creating a children's zone where kids can be safe, play and grow.”
Ratner said in that CBA press release, "We turned to these organizations because each has expertise that we believed would benefit the overall project." But groups like Brooklyn Endeavor Experience don't have a track record in their assigned CBA issue.
Creating jobs
“We must create more jobs in this city," Ratner declared at the 12/10/03 event, and then verged toward babble. "It’s what I’ve been about. I made a decision that Brooklyn would be the place where I would develop, because my major goal has been economic development from the time I started as a developer. I understand the importance of having a job. That is critical. So jobs are one of the most important things about this project.”
The number of jobs, of course, has plummeted. Initially, the developer promised 10,000 office jobs. Now the number is 1340, with perhaps 375 of them new rather than relocated from Manhattan. Given the track record of MetroTech, Ratner has mainly "been about" creating office space for jobs to keep them from going to New Jersey, which, from the city's perspective, was a reasonable goal.
Public funding
The Times's coverage added some important context:
"This started with basketball, a Brooklyn sport," Mr. Ratner said. "This was always the site. But it became clear it was not economically viable without a real estate component...
Mr. Ratner said that the project "will be almost exclusively privately financed," although taxes derived from elements of the project will be diverted to help pay for it.
Ratner was even more emphatic on the video: “Another major concept here is: we understand the city’s position and the state’s position and the taxpayer’s position. And it is our goal—in fact we will only use taxes that are generated out of this arena from the public. We do not want to go and get taxes from elsewhere, from the existing base.”
According to an accompanying press release:
The Arena will be primarily privately funded. Incremental revenues will be derived from sales taxes on tickets, food and merchandise sold at the new Arena.
Well, besides sales tax exemptions, mortgage recording tax exemptions, and bond financing, there would be a host of other costs: schools, sanitation, and public safety among them.
The total? Opponents say nearly $2 billion. Some local legislators are still inquiring, and say the project shouldn't be approved until the numbers are known.
Affordable housing
Contrast all that with the urgency of FCR VP Jim Stuckey’s testimony submitted to the ESDC this past August:
I am proud to be here tonight to talk about Atlantic Yards—a project that responds to the basic but dire needs of the borough and the city: for affordable housing, for jobs and economic opportunity. This project will also bring the return of professional sports to our borough, and over seven acres of publicly accessible open space.
In other words, sports came second. It’s an affordable housing project above all. Except, if you look at the numbers, it’s a luxury housing project above all. Nobody talks about the people who’d be paying market rate for rentals or condos.And we still don't know how much the affordable housing would cost.
Final EIS: blight
According to the executive summary of the Final Environmental Impact Statement, issued last month:
The overarching goal of the proposed project is to transform a blighted area into a vibrant mixed-use community, incorporating principles of environmental sustainability. The proposed project aims to provide a state-of-the-art arena, affordable and market-rate housing, first-class office space, publicly accessible open space, local retail and community services, a hotel (under one variation of the project program), a new subway entrance, and an improved Long Island Rail Road rail yard. The proposed project’s buildings would contribute to the Brooklyn skyline and the open space would connect the surrounding neighborhoods, which are currently separated by the open rail yard and a major avenue (Atlantic Avenue).
Not about blight
According to the original Project Overview:Brooklyn Atlantic Yards addresses several issues for both Brooklyn and New York City. New York City requires new housing that meets all levels of need and income—and additional office space to create and retain new jobs. The project has four essential components, which support and complement each other: the Arena, commercial space and housing—interspersed with a significant amount of publicly accessible open space to enhance existing neighborhoods.
There wasn't much about the site, and nothing about blight, a crucial term for legal purposes, since it justifies the use of eminent domain:
The primary existing use on the proposed site is a rail storage yard for the Long Island Railroad, which has created a strong psychological and physical barrier between the neighborhoods north and south of Atlantic Avenue.
Goal missed: respecting scale
Some of the goals originally announced haven’t panned out. One was to respect the scale of the existing neighborhoods surrounding the site.
Even Gehry acknowledged that at an appearance last January: "I think the scale issue is the only problem, we're out of whack with that."
Blocking the Willy B
Another goal was that the northernmost building on the site, an office building, will be set back slightly from the intersection of Atlantic and Flatbush Avenues, to maintain the view corridor to the Williamsburg Bank building.
In other words, FCR pledged not to block the bank. Maybe that’s before Frank Gehry finished the designs for his Miss Brooklyn tower and overruled them. But it’s instructive to read the ESDC’s explanation:
Much of Block 1118, located on the southeast corner of Flatbush and Atlantic Avenues, is privately owned and is currently occupied with vacant lots and two low-rise commercial buildings. This block is zoned C6-1 and is within the Special Downtown Brooklyn District, which would permit mid- to high-density residential, commercial, or community facility uses. An as-of-right building up to 495 feet tall could be developed on Block 1118. However, given the location of the Bank Building, even a 320-foot-tall building would substantially obstruct views of the Williamsburgh Savings Bank Building from the south along the Flatbush Avenue view corridor.
However, there are only two owners of that triangular block at the northwest tip of the project site, east of Flatbush Avenue. As the associated property map shows, one is New York City and the other is Forest City Ratner. In other words, even though FCR could, as of right, build a tall sliver of a building, they could also honor their own promise.(The ESDC also says that moving the building east wouldn't be feasible from an engineering point of view.)
Arena roof
It’s worth another look at the original pledges regarding the arena roof:
The roof of the Arena offers an exciting opportunity to create new public space, with 52,000 square feet in four lushly landscaped areas for passive recreation and a promenade along the outside edge of the roof with outstanding panoramic vistas facing Manhattan. For active recreation, an outdoor ice-skating rink connects the four gardens; in warmer months the rink will become a running track. This open space not only provides a destination for community residents as well as for the workers in the office buildings—it also allows the commercial buildings surrounding the arena to be connected at the sky-lobby level.
As we know, Forest City has changed plans, and now will offer the arena roof only to residents of the surrounding four towers.
Timing
Originally, the plan was Arena development to begin at the end of 2004, with completion set for the summer of 2006.
The rest of the project was to be in “future phases.” Now everything’s pushed back three years. The developer now projects only two phases. Could there be more?
Why has it taken so long? Markowitz offered a hint. "There will obviously be community concerns such as traffic and parking," he said at the press conference. Later, he added, "The passion is what we call the Brooklyn attitude."
Bad math on open space in the FEIS
It's widely understood that, though the Atlantic Yards project would provide eight acres of open space, the large accompanying population would mean far less open space than city guidelines suggest.
According to one comment in the Final Environmental Impact Statement
The DEIS states that the City's open-space goals are not considered impact thresholds, as it is understood that they are not feasible for most neighborhoods in New York City. Contrast this, though, with Battery Park City, which also has about a third of its acres set aside with parks and fields. When completely built it will have about 14,000 residents, so the ratio of open space per 1,000 residents meets the City's goal of 2.5 [acres].
ESDC response
The ESDC responded:
The percentage of open space in Battery Park City (approximately 33 percent) is comparable to the Atlantic Yards project site (approximately 36 percent—8 of the project site’s 22 acres). The proposed project would provide approximately 1.7 acres of open space per 1,000 residents on the project site. Although this number is less than the citywide goal of 2.5 acres per 1,000 residents, the citywide goal is not feasible and not achievable for many areas of the city and is not considered as an impact threshold for CEQR purposes.
Bad math
That deserves a recalculation. For 8 acres of open space to represent 1.7 acres per 1000 residents, that would mean a project with some 4700 residents.
However, there would be 6430 housing units; at 2.4 people/unit, there would be 15,432 residents. At 2.1 people/unit (the FEIS estimate), there would be 13,503 people.
For a population of 13,503, a ratio of 1.7 acres per 1000 people would require 23 acres of open space--more than the entire AY project. For a population of 15,432 that ratio would mean more than 26 acres of open space.
For the smaller estimated population, there would be .6 acre of open space per 1000 people. For the larger estimate, there would be .5 acre of open space per 1000 people.
According to one comment in the Final Environmental Impact Statement
The DEIS states that the City's open-space goals are not considered impact thresholds, as it is understood that they are not feasible for most neighborhoods in New York City. Contrast this, though, with Battery Park City, which also has about a third of its acres set aside with parks and fields. When completely built it will have about 14,000 residents, so the ratio of open space per 1,000 residents meets the City's goal of 2.5 [acres].
ESDC response
The ESDC responded:
The percentage of open space in Battery Park City (approximately 33 percent) is comparable to the Atlantic Yards project site (approximately 36 percent—8 of the project site’s 22 acres). The proposed project would provide approximately 1.7 acres of open space per 1,000 residents on the project site. Although this number is less than the citywide goal of 2.5 acres per 1,000 residents, the citywide goal is not feasible and not achievable for many areas of the city and is not considered as an impact threshold for CEQR purposes.
Bad math
That deserves a recalculation. For 8 acres of open space to represent 1.7 acres per 1000 residents, that would mean a project with some 4700 residents.
However, there would be 6430 housing units; at 2.4 people/unit, there would be 15,432 residents. At 2.1 people/unit (the FEIS estimate), there would be 13,503 people.
For a population of 13,503, a ratio of 1.7 acres per 1000 people would require 23 acres of open space--more than the entire AY project. For a population of 15,432 that ratio would mean more than 26 acres of open space.
For the smaller estimated population, there would be .6 acre of open space per 1000 people. For the larger estimate, there would be .5 acre of open space per 1000 people.
DDDB asks PACB to say "whoa;" Lupica puts Silver on notice
Develop Don't Destroy Brooklyn (DDDB) yesterday delivered 3600 letters to the controlling members of the Public Authorities Control Board (PACB), asking them to wait to vote on the Atlantic Yards project until the eminent domain case is resolved.
The PACB, whose controlling members are Governor George Pataki, Senate Majority Leader Joseph Bruno, and Assembly Speaker Sheldon Silver, could get to vote on the project as early as December 15, assuming the Empire State Development Corporation (ESDC) approves the project at its meeting on Friday. (Note: the meeting time has been changed to 3:30 pm from 10 am.)
Lupica's broadside
On Sunday, Daily News sports columnist Mike Lupica urged Silver, the only Democrat among the trio, to put the project on hold:
Shelly Silver can be the one to stop this between now and the end of the year, tell Ratner to bring the project back to him in miniature, not as something that eats up neighborhoods and homes in the name of Ratner.
Silver may slow the project--if not for the months and years that the eminent domain case might take to resolve--given that he's been feuding with ESDC Chairman Charles Gargano. Also, he may want the project to be considered under the administration of incoming Gov. Eliot Spitzer, a fellow Democrat. Then again, both Silver and Spitzer generally favor the project, and have been keeping their cards close to their vests.
The PACB, whose controlling members are Governor George Pataki, Senate Majority Leader Joseph Bruno, and Assembly Speaker Sheldon Silver, could get to vote on the project as early as December 15, assuming the Empire State Development Corporation (ESDC) approves the project at its meeting on Friday. (Note: the meeting time has been changed to 3:30 pm from 10 am.)
Lupica's broadside
On Sunday, Daily News sports columnist Mike Lupica urged Silver, the only Democrat among the trio, to put the project on hold:
Shelly Silver can be the one to stop this between now and the end of the year, tell Ratner to bring the project back to him in miniature, not as something that eats up neighborhoods and homes in the name of Ratner.
Silver may slow the project--if not for the months and years that the eminent domain case might take to resolve--given that he's been feuding with ESDC Chairman Charles Gargano. Also, he may want the project to be considered under the administration of incoming Gov. Eliot Spitzer, a fellow Democrat. Then again, both Silver and Spitzer generally favor the project, and have been keeping their cards close to their vests.
Tuesday, December 05, 2006
Brooklyn's "front stoop"? Study for FEIS says area too windy for much sitting
So much for sitting at leisure outside the Urban Room.
The Urban Room proposed for the corner of Flatbush and Atlantic avenues would serve as the entrance to the Brooklyn Arena and Frank Gehry’s flagship skyscraper Miss Brooklyn. Graphics (right) from landscape architect Laurie Olin show people sitting on the steps and at tables outside. (That table in the foreground would be right near a supremely busy intersection.)
Gehry calls it the “front stoop,” a place for kids to "hang out," according to a 5/13/06 Brooklyn Papers article headlined MEET MISS BROOKLYN.
But a newly released “pedestrian wind impact study,” cited in the Atlantic Yards Final Environmental Impact Statement (FEIS), suggests that the area around the Urban Room wouldn’t be suitable for l
The Urban Room proposed for the corner of Flatbush and Atlantic avenues would serve as the entrance to the Brooklyn Arena and Frank Gehry’s flagship skyscraper Miss Brooklyn. Graphics (right) from landscape architect Laurie Olin show people sitting on the steps and at tables outside. (That table in the foreground would be right near a supremely busy intersection.)Gehry calls it the “front stoop,” a place for kids to "hang out," according to a 5/13/06 Brooklyn Papers article headlined MEET MISS BROOKLYN.
But a newly released “pedestrian wind impact study,” cited in the Atlantic Yards Final Environmental Impact Statement (FEIS), suggests that the area around the Urban Room wouldn’t be suitable for l