Skip to main content

Dark Lady: when it comes to a stadium, follow the money

It’s subway reading, at best. Richard North Patterson’s 1999 mystery Dark Lady got mixed reviews and, frankly, doesn’t completely hang together. Though the title refers to prosecutor Stella Marz, and there’s a woman’s silhouette on the cover, the book is about a development deal, the construction of a baseball stadium (and more) in Steelton, a lightly fictionalized version of Cleveland.

And the lesson, as for Atlantic Yards watchers, is an old one: follow the money.

Steelton, like its model, is a deindustrialized city clawing its way back, with a split in political power between white ethnics and African-Americans. The Steelton 2000 bond deal was sold to voters as a plan based on a baseball stadium, “another Camden Yards or Jacobs Field,” for the Steelton Blues.

The white mayor, Tom Krajek, in a hard-fought race against a black prosecutor, has appealed to minorities by emphasizing that 30 percent of the contracts would go to minority businesses, as would 30 percent of the jobs. The team owner, Peter Hall, has taken on a minority partner, Larry Rockwell, a longtime star of the Blues.

The costs

That prosecutor, Arthor Bright, is the good government candidate, pointing out that it’s the baseball team’s owner who truly benefits.
So,” he asked them, “what are we talking about here?
“Two hundred seventy-five million dollars of your money to build a new ballpark for Mr. Hall.”
“Two hundred seventy-five million dollars for a stadium you can’t afford to take your kids to, crammed with luxury boxes that go for a hundred thousand dollars a year.”

(Emphases in original)

And Bright warns that repaying the bonds will cost taxpayers $450 million, part of a deal done in secret, with no competitive bidding, and millions of additional costs in infrastructure: new roads, sewers, utilities, and maintenance.

It sounds like an eerie echo of the "extraordinary infrastructure" loophole in the Atlantic Yards memorandum of understanding, which could mean that taxpayers pay much more than originally contemplated.

As for the lack of competitive bidding, consider the unwillingness of the Metropolitan Transportation Authority to issue a request for proposals for its Vanderbilt Yard until 18 months after Atlantic Yards was announced. The luxury boxes are the raison d'etre of any new sports facility; the Barclays Center would have an unusual number of such corporate suites.

How it works

The novel contains a lot of potboiling until we meet an architect who designs stadiums but didn’t get to bid on the Steelton one. He explains to Marz how Hall and Krajek pinned down support by going beyond the usual arguments of “enhancing the downtown and maintaining a ‘big-league profile.’” They made sure all the people in on the deal were local and ensured a big role for local minorities.

They cooked up something better. If the project comes in under budget, half of that left over would go back to the city, half to the team owner. But there's room to do that, thanks to cost overruns. The architect suggests that the budget includes a $75 million cushion for waste, screw-ups, and hiring people with no experience.

The book careers through deals and deaths and details of the mall development beyond the stadium. There's organized crime and money laundering. The story is tough to summarize in a short space, but the message, as noted, is clear: follow the money.

Comments

Popular posts from this blog

Barclays Center/Levy Restaurants hit with suit charging discrimination on disability, race; supervisors said to use vicious slurs, pursue retaliation

The Daily News has an article today, Barclays Center hit with $5M suit claiming discrimination against disabled, while the New York Post headlined its article Barclays Center sued over taunting disabled employees.

While that's part of the lawsuit, more prominent are claims of racial discrimination and retaliation, with black employees claiming repeated abuse by white supervisors, preferential treatment toward Hispanic colleagues, and retaliation in response to complaints.

Two individual supervisors, for example, are charged with  referring to black employees as “black motherfucker,” “dumb black bitch,” “black monkey,” “piece of shit” and “nigger.”

Two have referred to an employee blind in one eye as “cyclops,” and “the one-eyed guy,” and an employee with a nose disorder as “the nose guy.”

There's been no official response yet though arena spokesman Barry Baum told the Daily News they, but take “allegations of this kind very seriously” and have "a zero tolerance policy for…

Behind the "empty railyards": 40 years of ATURA, Baruch's plan, and the city's diffidence

To supporters of Forest City Ratner's Atlantic Yards project, it's a long-awaited plan for long-overlooked land. "The Atlantic Yards area has been available for any developer in America for over 100 years,” declared Borough President Marty Markowitz at a 5/26/05 City Council hearing.

Charles Gargano, chairman of the Empire State Development Corporation, mused on 11/15/05 to WNYC's Brian Lehrer, “Isn’t it interesting that these railyards have sat for decades and decades and decades, and no one has done a thing about them.” Forest City Ratner spokesman Joe DePlasco, in a 12/19/04 New York Times article ("In a War of Words, One Has the Power to Wound") described the railyards as "an empty scar dividing the community."

But why exactly has the Metropolitan Transportation Authority’s Vanderbilt Yard never been developed? Do public officials have some responsibility?

At a hearing yesterday of the Brooklyn Borough Board Atlantic Yards Committee, Kate Suisma…

Forest City acknowledges unspecified delays in Pacific Park, cites $300 million "impairment" in project value; what about affordable housing pledge?

Updated Monday Nov. 7 am: Note follow-up coverage of stock price drop and investor conference call and pending questions.

Pacific Park Brooklyn is seriously delayed, Forest City Realty Trust said yesterday in a news release, which further acknowledged that the project has caused a $300 million impairment, or write-down of the asset, as the expected revenues no longer exceed the carrying cost.

The Cleveland-based developer, parent of Brooklyn-based Forest City Ratner, which is a 30% investor in Pacific Park along with 70% partner/overseer Greenland USA, blamed the "significant impairment" on an oversupply of market-rate apartments, the uncertain fate of the 421-a tax break, and a continued increase in construction costs.

While the delay essentially confirms the obvious, given that two major buildings have not launched despite plans to do so, it raises significant questions about the future of the project, including:
if market-rate construction is delayed, will the affordable h…

Revising official figures, new report reveals Nets averaged just 11,622 home fans last season, Islanders drew 11,200 (and have option to leave in 2018)

The Brooklyn Nets drew an average of only 11,622 fans per home game in their most recent (and lousy) season, more than 23% below the announced official attendance figure, and little more than 65% of the Barclays Center's capacity.

The New York Islanders also drew some 19.4% below announced attendance, or 11,200 fans per home game.

The surprising numbers were disclosed in a consultant's report attached to the Preliminary Official Statement for the refinancing of some $462 million in tax-exempt bonds for the Barclays Center (plus another $20 million in taxable bonds). The refinancing should lower costs to Mikhail Prokhorov, owner of the arena operating company, by and average of $3.4 million a year through 2044 in paying off arena construction.

According to official figures, the Brooklyn Nets attendance averaged 17,187 in the debut season, 2012-13, 17,251 in 2013-14, 17,037 in 2014-15, and 15,125 in the most recent season, 2015-16. For hoops, the arena holds 17,732.

But official…

So, Forest City has some property subject to the future Gowanus rezoning

Writing yesterday, MAP: Who Owns All the Property Along the Gowanus Canal, DNAinfo's Leslie Albrecht lays out the positioning of various real estate players along the Gowanus Canal, a Superfund site:
As the city considers whether to rezone Gowanus and, perhaps, morph the gritty low-rise industrial area into a hot new neighborhood of residential towers (albeit at a fraction of the height of Manhattan's supertall buildings), DNAinfo reviewed property records along the canal to find out who stands to benefit most from the changes.
Investors have poured at least $440 million into buying land on the polluted waterway and more than a third of the properties have changed hands in the past decade, according to an examination of records for the nearly 130 properties along the 1.8-mile canal. While the single largest landowner is developer Property Markets Group, other landowners include Kushner Companies, Alloy Development, Two Trees, and Forest City New York.

Forest City's plans unc…

At 550 Vanderbilt, big chunk of apartments pitched to Chinese buyers as "international units"

One key to sales at the 550 Vanderbilt condo is the connection to China, thanks to Shanghai-based developer Greenland Holdings.

It's the parent of Greenland USA, which as part of Greenland Forest City Partners owns 70% of Pacific Park (except 461 Dean and the arena).

And sales in China may help explain how the developer was able to claim early momentum.
"Since 550 Vanderbilt launched pre-sales in June [2015], more than 80 residences have gone into contract, representing over 30% of the building’s 278 total residences," the developer said in a 9/25/15 press release announcing the opening of a sales gallery in Brooklyn. "The strong response from the marketplace indicates the high level of demand for well-designed new luxury homes in Brooklyn..."

Maybe. Or maybe it just meant a decent initial pipeline to Chinese buyers.

As lawyer Jay Neveloff, who represents Forest City, told the Real Deal in 2015, a project involving a Chinese firm "creates a huge market for…