Thursday, January 25, 2007

AY's Stuckey spins on WFAN; opponent Turner attempts brief rebuttal

I finally got a chance to listen to the 1/18/07 “Mike and the Mad Dog” show on WFAN radio, in which hosts Mike Francesa and Chris “Mad Dog” Russo, rather uninformed about Atlantic Yards, interviewed the smooth-talking Jim Stuckey, president of Forest City Ratner’s Atlantic Yards Development Group.

Notably, Stuckey downplayed the number of people filing suit to block/stall the project (ten rather than 26), hinted that the unfunded day care and health care facilities in the project would serve all new residents, and claimed that property owners who signed deals to sell to Forest City had "come forth" to praise the developer.

While the same day the Barclays Center deal had been announced, the hosts, who began their discussion before Stuckey got on the line, focused more on the legal issues.

CR: I just spoke to [inaudible] outside, who lives in Brooklyn, 15 minutes away, he thought that–he did not think that there are that many people against it, the eminent domain thing.

MF: There is a group--

CR: There is a group that says develop Brooklyn, don’t destroy it. They don’t have any political clout, but you can find a group to be against anything.

MF: I agree. I don’t know if [it’s] a fair statement or not, I don’t know the answer.

CR: You could build a hospital in a desert and they’re going to find 30 people, ‘What are you doing this for? It’s a beautiful desert you’ve got here.’

MF: There’s always someone in the way of progress. Sometimes it’s fair, sometimes it’s not.

That sounded a little like former Empire State Development Corporation Chairman Charles Gargano, who said last October, "We cannot stop progress."

CR: Now listen, they didn’t have a lot of big political backing here. There wasn’t, as you said--.anybody on the West Side, Cablevision was not in the mix, no [Assembly Speaker] Sheldon Silver type. They didn’t have that powerhouse guy as an engine behind their--

MF: They weren’t going after the same kind of real estate that they were going after in Manhattan.

Nor would the Brooklyn site compete with Cablevision's Madison Square Garden or include sufficient office space to compete with Silver's Lower Manhattan district.

Enter Stuckey

Then Stuckey got on the line, and stayed on message.

CR: Let’s just get to the—we had a little issue with this eminent thing today. How many folks did you, through government, or just make deals with, and how many folks balked? What are the numbers as far as the eminent domain thing?

JS: Here’s what I want to say. This site is 22 acres, and we control and have purchased and have made substantial deals with 90 percent of the site. There is a small group of people who we would still like to make deals with, because we’d like there to be zero eminent domain. But for 90 percent of 22 acres of land, we have now controlled that by going out and making arm’s length transactions with people.

That’s not quite true. The developer claims to own or control 90 percent of the site; I’ve already pointed out how ownership is not control, because the developer can’t evict rent-stabilized tenants, and that control—allegedly via a lease—does not represent ownership.

Beyond that, the largest segment of the site was gained via a controversial bid to the MTA, which chose to negotiate only with Forest City, and the second largest would be city streets that the mayor has agreed (P. 4) to convey for, alternatively, $1 and "fair market value."

JS: In addition to that, the other thing that we’ve done is that we’ve said, we’re building, in addition to the arena, a major residential project, with over 6000 units of housing, at every income level, and what we’ve said, is that, we would of course like to have everyone come back, so the truth is, is that any single person who’s on site today, whether they’re renting, or whether they own their unit, could come back and rent or own and the difference will be--it could even be on the same exact piece of land that they’re at today.

There would be varied income levels. However, while the project would include 900 units for "very low income," defined as 50 percent of the Area Median Income (AMI), that AMI is based on statistics including wealthy suburbs. So 50 percent of the AMI is close to Brooklyn's median income. Lots of low-income Brooklynites wouldn't qualify.

Nor could every person return at this point, because Stuckey has ruled out negotiating with those who are suing the developer.

'Over the top' deal?

JS: The only difference would be is that they’d be a little bit higher in the air, with a better view of Manhattan. They would have a building with a doorman. They would have security, they would have amenities, they would have day care, they would have health care. They’d have a workout room. It would be a far superior place. We’ve gone over the top to try and make sure that everyone who’s on that property today has the opportunity to come back.

The day care facility would have just 100 slots, serving a new population of some 15,000 people. There's no information on how either the day care or health care facility would be funded, according to the Response to Comments chapter of the Final Environmental Impact Statement:
The source of funding for the day care center amenity is not necessary for impact assessment...The source of funding for the health care center amenity is not necessary for impact assessment.

MF: Jim, 90 percent in, ten percent balking, the ten percent--

JS: I don’t think ten percent is balking. All I’ve said is that we’ve been able to make--

Rough numbers on plaintiffs

MD: What is the amount—in a number—how many people have showed resistance, is it two, is it ten, is it 200?

JS: Well let me just say that, there are a couple of lawsuits on this project, which I obviously can’t get into the details of, but on those lawsuits, there’s maybe ten plaintiffs--

MD: Ten plaintiffs?

JS: Yeah, I think roughly.

Actually, there were ten plaintiffs in the eminent domain lawsuit when it was originally filed; now there are 13 plaintiffs. Two separate lawsuits have been filed by another 13 people, tenants occupying rent-stabilized apartments. Total: 26.

CR: It seems like there are only ten families or whoever owned this units that are against this project then--

JS: There might be more, I’m just saying that--

Indeed, there might be more. Russo was apparently trying to identify the opposition only as those willing to sue. Several community groups representing constituencies outside the project footprint are expected to join in a lawsuit challenging the environmental review, and Develop Don’t Destroy Brooklyn, for example, collected 3600 letters asking that state approval be postponed until the eminent domain case was resolved.

CR: In the lawsuits there’s ten, roughly?

Poll numbers

JS: Exactly.

No, roughly. Very roughly.

JS: Overwhelmingly, just to put it into perspective, there have been a number of polls that were conducted by private entities, not by us, but by Crain’s New York Business, and by one of the local television stations, overwhelmingly, the support for this project hovers around 68-70 percent of the people who support this project, when they’re privately polled.

The Crain’s poll said support was at 60 percent. As I’ve noted, it was deeply flawed.

JS: And then when you look at the affordable housing, y’know New York City is going to grow in the next ten years by a million people… and about 300,000 of those people are going to end up in Brooklyn. People need to live someplace. There’s no place to live right now. Only four percent of the land in Brooklyn is vacant. So where will people live if you don’t build projects like this?

Yes, the decreasing availability of land is an argument for density; the question is how much.

CR: That sounds nice--

What's condemned

MF: Here’s the question I have…. Should anybody have a problem with the fact that this is a misuse of eminent domain, in that this is a private project versus doing it to build a highway or build a road or build a railroad station or whatever eminent domain has been used for in the past?

JS: Well, the courts have actually—in fact, the Supreme Court of the United States ruled on this issue, and what the Supreme Court has ruled is that economic development projects are valid public purposes to do a project. Creating housing is a valid public purpose. Eliminating blight is a valid public purpose. If you were to read and listen to some of the arguments, you know, you would think we were [tearing down brownstone buildings]

Actually, several row houses on Dean Street west (above) and east (r.) of Sixth Avenue would be demolished.

JS: This is an area that has had vacant and abandoned industrial buildings, many of which were falling into the ground, for the last 30 to 50 years.

Vacant industrial buildings have been steadily converted to housing, as well. The largest building, the Pechter Fields Bakery (formerly Ward Bakery), closed in 1995. Another developer planned to turn it into a hotel before selling it to Ratner.

Income levels

JS: You’ve had a railyard that separates neighborhoods for over 100 [years]. If you look at the economic levels surrounding this railyard, these are many, many people who fall into the lower-income category.

Actually, it’s mixed. There are several buildings in the footprint with low-income, rent-stabilized tenants. There were also two buildings with luxury condos, and the largest building bordering the footprint is the high-end Newswalk condos, converted from a former Daily News printing plant. It would’ve been more relevant to say that lower-income people in nearby neighborhoods would be threatened with displacement if the project proceeds.

Office jobs

JS: So, the public purpose here isn’t about whether we’re building a highway, or whether the state’s building a highway. The public purpose really is the elimination of blighted conditions, the creation of housing, the creation of jobs, keeping offices here, giving people a place to live and, also, obviously, bringing a great professional basketball team back to New York City.

Stuckey’s use of the term “keeping offices here” may be telling. The office space has shrunk significantly, from a projected 2 million square feet and 10,000 jobs, to a projected 336,000 square feet and 1340 jobs, of which perhaps 375 would be new. All along, a question has been whether those office space would accommodate new jobs or mainly jobs relocated from Manhattan, as with a large segment of the developer MetroTech complex in Brooklyn. Stuckey’s locution suggests they'd be relocated.

Corporate motive

The Mad Dog didn't buy all of Stuckey's spiel, despite his support for Atlantic Yards.

CR: That all sounds great and Jim, Mike and I are for this, so I don’t want to say we’re against it, but you are sounding like you’re doing this out of the goodness of your heart…. Let’s be also honest, you guys are going to make plenty of money on it.

JS: Look, we are a business. You’re absolutely right. We’re not going to apologize for the fact that we’re a business and that we’re making money. But businesses don’t have to invest in New York. And businesses don’t have to invest in hard-to-develop areas.

What exactly does Stuckey mean by that? MetroTech was in some ways a hard-to-develop area, but Forest City got significant subsidies to reduce its risk.

The Atlantic Yards project is a very complex undertaking, especially construction over a railyard, but had the city and state put the railyard out for bid rather than championed Forest City for 18 months, numerous proposals for this exceedingly valuable plot of land likely would’ve emerged. One bid, from Extell, emerged even though Forest City had the inside track.

The CBA

JS: And businesses don’t have to make agreements with the community the way we did, with a historic Community Benefits Agreement, where we said we’re going to work with the community.

As noted, the Community Benefits Agreement is deeply flawed more than historic.

JS: So, the answer is, businesses should make money, there’s nothing wrong with that, but you can make money the right way and you can make money the wrong way. And making money the right way is making sure that, when you do your project you include people and you hit important social goals. When we do this project, we’re going to own it, so we’re going to be in this neighborhood just as we have been in Brooklyn for the last 20 years.

MetroTech

CR: And you built MetroTech, correct?

JS: Exactly. We built a retail center, for example, at Atlantic Terminal, where 80 percent of the employees live within five miles and 50 percent of the managers come from Brooklyn. You have--you can marry goals. You can marry good business with good social policy.

CR: Why do you have to have an arena here? MetroTech doesn’t include an arena. Why in your eyes is the arena so essential for making this project work?

This was an interesting question, since the arena has driven $200 million in direct subsidies, and has helped Forest City garner political support, notably from Brooklyn Borough President Marty Markowitz. But the conversation strayed.

Bruce loves hoops

JS: First, bringing a professional sports team back to Brooklyn, and to New York City--

CR: [Forest City Ratner CEO] Bruce [Ratner] doesn’t care about that--

JS: Of course Bruce cares about that. Bruce is at every game. Bruce completely cares about that.

CR: Yeah, but he’s into the Nets, is he into Ebbets Field and the history of Brooklyn?

Ratner doesn’t live in Brooklyn. But Stuckey changed the subject.

Pioneers

JS: Of course he is. The interesting thing about us is that many people who are attacking this project weren’t here when Bruce planted the seeds to start MetroTech and other projects. The interesting thing is we have people who are sometimes criticizing MetroTech and other things we’ve done, who are doing revisionist history, they weren’t here. When we started MetroTech, quite honestly, there were times when Chase Manhattan bank opened their building, there were bullet holes in some of the glass in that building.

CR: We’ve heard those stories.

JS: We have to be honest. We were here as the pioneers, and now there are a lot of other people who think it’s fashionable to say they’re pioneers, but the truth is, there’s a lot of history that this company has in terms of the renaissance of Brooklyn. I know that there are some that would like to re-spin that because they think people forget, but the truth is that Bruce Ratner came to Brooklyn when a lot of people didn’t know it existed.

Stuckey focused on Forest City’s highly-subsidized and well-defended commercial and retail development, but many critics of the developer were pioneers in reviving residential neighborhoods long before the developer’s projects.

Naming rights

MF: Jim Stuckey, president of the Atlantic Yards development group. We brought this up today, because of the fact that they announced the naming rights for the arena. Barclay will be the name on the building. The Barclay—is it the Barclays Center?

JS: Barclays Center.

CR: And they do the Westchester golf…

MF: So that’s what they announced today. There are still some people to be dealt with, there are still some lawsuits, as you stated, you’d like to get all your ducks in a row. Is it still reasonable to feel you can placate or come to agreements with everyone who has a gripe or is that a unrealistic view?

JS: We certainly hope we can, and it’s our goal… we’re willing at any time to step up to the table and speak and work with anybody.

Not if they’re suing.

Making deals

CR: Jim, how did you come up with the price? Of the 90 percent of the 22 acres, where people lived, you made deals with them, did the government fix that price of what their apartment or what they’re unit would cost?

JS: Nope.

CR: How did those deals work?

JS: We met individually with each and every single one of the owners or residents or tenants, every single one personally. In some cases they decided to come back into the project. In other cases they wanted to move into a comparable facility at a comparable or a different location, so we helped work with them to make that happen. In some cases, we had people who for example decided that they had personal situations that gave them an opportunity to make a relocation…. We had one person who had a medical condition and wanted to move back to the Midwest to be with their family, and this gave them an opportunity to do it.

CR: How’d you negotiate the price?

Market value

JS: For example, if somebody owned a condominium unit, we can’t violate their confidence…. they came to us and said, ‘It’s not relevant what we paid for our condominium unit, what’s relevant is we’re going to have to go buy another one in Brooklyn, so what we need to be is compensated for what it costs today'--

MF: --that’s a good point.

JS: --and we thought that was completely reasonable. So we worked with them on an individual one on basis, helped them find a unit that they liked, and then helped make it happen so they could move.

This “completely reasonable” point has been ignored by columnist like Errol Louis, who wrote last May:
For a real look at "displacement" – a look you won't find on the antiproject blogs – consider the condo owners, many of them newcomers who made out like bandits when Forest City bought their homes.

CR: They did OK--the bottom line is, the folks that you moved out, or displaced, or made deals with the new facility that you’re building, you made ‘em happy.

JS: We worked very hard--

CR: You didn’t penny pinch ‘em, you gave them a good deal.

Ignoring the gag order

JS: We made it very easy to make them happy. In fact, there have been a lot of stories where people have come forth to the press and basically talked about the fact that they were happy and thought they were treated very fairly.

There’s a distinction between the condo owners who were paid a healthy market rate and the tenants with whom Forest City offered deals that left them vulnerable to losing their rent-stabilized leases.

As for “come forth,” some of the agreements Forest City signed with those selling property require them to speak positively about the developer and not contribute to groups opposing the project. For a Times article, the developer agreed to lift a gag order.

CR: Now with these extra ten people you got, that you gotta take care of, do you have to be extra good to them, which is not fair to the original 90 percent? You almost gotta give the new ten the same deal you gave to the old 90, right?

Russo had the numbers all wrong and obviously doesn’t know that renters and owners have been offered different deals, not to mention that owners of businesses have resisted because relocation would be a hardship.

JS: I want to be clear, I don’t know that it’s ten people or more than ten people. I want to distinguish ten people—there may be ten people or organizations that have sued, but that doesn’t mean there’s only ten people. We ultimately don’t know how many there might be, but yes, we’re going to work very hard with them, just as we did with the first 90 percent, to try and work on a one on one basis, if they’re willing to do that.

MF: But you can move them out. You’ve already won the right to move them out, right?

JS: Let’s also be clear. Forest City as a business doesn’t have the right to move anyone. The government has the right--

Court fight over?

MF: --but they’ve already had their day in court and lost?

JS: The project has been approved from a public approval point of view, from a legislative point of view, and now they have filed suits, and they will indeed have their day in court.

A legislative “point of view” may be a good way to describe it. While the city and state have approved subsidies, there’s been no legislative vote on the project as a whole. The appointed board of the Empire State Development Corporation approved the project in 15 minutes; it was later passed by the three-member Public Authorities Control Board.

MF: Will they hold up the project?

JS: Y’know, I don’t really want to comment on the legal process.

Stuckey left the call.

Summing up

CR: Here’s what I would say. I’ll be fair. Ten percent is not enough to close the deal. How come 90 percent say it’s OK and ten percent are going to give this a hard time? If this is 50/50, I’d say, y‘know, jeez, half the people there have an issue. If 90 percent are OK with it, that’s a pretty nice percentage, is it not?

First, constitutional rights are not defended by a majority vote. Second, there’s a difference between public attitudes toward the project and the percentage of property owned or controlled by the developer.

MF: Well, I’m sure we’ll hear from the other side, the opposition, at some time, very quickly.

Turner responds

A little later, Scott Turner of Fans for Fair Play got a few minutes of airtime and found himself being challenged more aggressively by the hosts.

ST: The project’s a bad deal for Brooklyn. It doesn’t—well, for one thing, I know you guys will agree with this, in fact it does involve public money, it’s expected to involve two--

CR: If that’s the case, we shouldn’t build Shea, we shouldn’t build a new Yankee Stadium, because that involves public money too.

That’s a bit conclusory. The amount of public money should be evaluated against the expected return and competing uses. Projects differ.

ST: We feel that way. The rich team owners should be doing this. This project in Brooklyn is going to cost $2 billion, and the sports arena’s just a small part of it. It’s primarily luxury condominium buildings--

The $2 billion cost is a cumulative estimate involving tax breaks, direct subsidies, and public costs. The costs would be significant, but we really don’t know.

CR: So in other words, we can’t build Yankee Stadium then, we also can’t build Shea, because they’re being built with partly public money as well.

He didn't seem to get Turner’s point that the Atlantic Yards project is primarily a land deal.

ST: WFAN wouldn’t get a government grant to build a new studio and I wouldn’t get a government grant for my business. And I think these guys are not putting enough money back in. They had a referendum out in Seattle that said that, if the owners are going to be loaned this money, then it should return the same amount as a bond.

MF: Do you live in that area?

ST: I used to live there. I lived there for ten years, and then I got priced out: me, my wife and my dog. So now we’re living closer to Greenwood Cemetery.

Displacement questions

CR: How about the people who are being displaced? We had Jim Stuckey on, he said… 90 percent agreed to it, no problem, there’s been ten percent holdouts. Are those correct numbers?

Saying that “90 percent agreed” is not the same as control or ownership of 90 percent of the site.

ST: Well, about 1000 people have been displaced, either their jobs or their living spaces. And the things is, they didn’t have a choice but to agree to it—they could either take his money or have their properties condemned by eminent domain, and that is so anti-American that either take a person’s money you don’t like or you’re forced to move when the government say have to get out of here. And then they don’t get fair value for their property.

CR: I do think they get fair value.

ST: They don’t get fair value. When Ratner had property condemned for the Times building project in Times Square, the property owners there received 30 percent on the dollar. And that was through a state condemnation process. So there’s no guarantee that they’d get fair value.

The condo owners in the AY footprint certainly did get fair value. Not all renters and business owners and remaining homeowners believe they’d get fair value.

Arguing over history

CR: Did he do a good job at MetroTech?

ST: No, he did a terrible job at MetroTech. He promised jobs. First of all, he turned that area into a ghost town--

The failure to provide jobs has been documented.

CR: It was a ghost town before that--

ST: It’s a big corporate nine-to-five ghost town--

CR: Hold on, Scott, there were gunshots all over the place before MetroTech--

ST: There are gunshots in East New York today, but he’s not building there… If he really wants to do good for Brooklyn, he should be building truly affordable housing without government subsidies, for people out in East New York, in Bushwick.

Affordable housing

Affordable housing depends almost exclusively on government subsidies, so that’s asking a bit much.

CR: Isn’t he building affordable housing with this big development?

ST: 88 percent of the housing in the Ratner development, in Atlantic Yards, is priced beyond the reach of low-income Brooklynites, 88 percent. That’s the median income level.

It would be more precise to say that nearly 88 percent is priced beyond the reach of the average Brooklyn household, which is, according to the regional AMI, low-income.

MR: What are we talking about, what price?

ST: He’s got an affordable housing scheme where apartments for $3000 a month are listed under affordable--

That’s true, though only a few would be over $3000.

MF: What’s the purchase price of these, are they only for rent?

ST: He’s making a tiny amount available for purchase, but before that, there were no units available at all for purchase, for low-income Brooklynites.

It’s not clear whether any of the 200 affordable for-sale units would be for low-income Brooklynites. Then again, most affordable homeowner units, including those in projects beyond Atlantic Yards, are aimed at moderate- and middle-income households.

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