Friday, August 17, 2007

Stadtmauer Bailkin, Bruce Ratner, and the web of subsidies

The package of subsidies that have been pledged for Atlantic Yards are part of a pattern in large projects. A law firm specializing in wrangling such subsidies was where Forest City Ratner CEO Bruce Ratner got some key experience. And now that firm's behavior in a Yankee Stadium deal has been questioned.

Consider Metro's report July 30 on the questionable deal for parking garages at Yankee Stadium, and the web of insider connections:
At a Community Board 4 meeting last month, attorney Steven Polivy took credit for putting together the “private-public partnership.” Polivy works for Stadtmauer Bailkin LLP, which specializes in securing government subsidies for corporate clients. CIDC’s president, William Lowenstein, has had a long relationship with the firm.

That’s one of many backroom connections listed in a new report by watchdog group Good Jobs New York.


The report

Here's the press release for Insider Baseball: How Current and Former Public Officials Pitched a Community Shutout for the New York Yankees, and the full report--3.75 MB PDF.

The report states:
CIDC’s President William Loewenstein was a strategic partner with incentives procurement advisors Stadtmauer Bailkin Biggins, LLC, until 2006...
Lowenstein is currently a “market team member” with the successor firm Stadtmauer Bailkin Economic Development Group (SB-EDGe). One of Stadtmauer Bailkin, LLP’s specialties involves securing economic development subsidies for corporate clients; it is listed on the New York City Industrial Development Agency’s core application for the parking bonds as legal counsel for CIDC.
One of Stadtmauer Bailkin’s managing directors, Jane Orlin, has promoted herself as having written incentive guidelines while she was an employee of the New York City Economic Development Corporation.


The Bruce Ratner connection

An article in the January 1999 issue of the late magazine Brooklyn Bridge, headlined "King of the Deal," explained the origins of MetroTech:
At around the same time, Polytechnic, the private engineering university located on Jay Street, was suffering a financial crisis, and its president, George Bugliarello, came up with an idea that was designed to save both his university and the neighborhood. He proposed to turn the run-down area around the university's campus into an East Coast version of Silicon Valley, a high-tech research center to be called MetroTech. In 1984, Polytechnic issued a request for proposals (RFP) to develop the 16-acre site.
The attorney who assisted Polytechnic in the preparation of their RFP was Michael Bailkin, a partner at the law firm of Stadtmauer, Bailkin, Kessler, Walzer & Ratner. Bruce Ratner had joined the firm after leaving his position as consumer affairs commissioner in the Koch administration in 1982. "Bruce was at the firm to look for development deals when MetroTech came along," says Bailkin. And it was Ratner's connections that got the ball rolling.


Bruce Ratner's role in the firm is not mentioned in his biographical sketch on the Forest City Ratner web site.

The Forest City Ratner connection

At the law firm's web site, there's a page titled Representative Clients — Economic Development Incentives - Zoning, Planning & Large Scale Redevelopment.

Stadtmauer Bailkin's practice encompasses all aspects of land use. Its primary focus, however, is on major projects that create or redefine the urban framework. The firm has been responsible for some of the largest and most complex redevelopment projects in New York City.

Atlantic Center
The firm initially represented Rose Associates, the original developer of this 24-acre urban renewal site in Brooklyn, in securing a $10.7 million Urban Development Action Grant. The firm then represented Forest City Ratner Companies in the development of the multi-phased retail, office and residential complex. The first phase involved the construction of a 300,000 square foot shopping complex. The firm obtained City approvals, restructured the UDAG grant and obtained Caldor as the anchor retail tenant.

MetroTech - Brooklyn, New York
This project is a 6 million sq. ft. office complex for applied technology operations. The firm conceptualized the project, and was primarily responsible for urban renewal designation, rezoning, and incentives in the range of $300 million for the overall projects and for major tenants. The firm also negotiated incentives packages to attract each of the following anchor tenants:

One MetroTech Center / Bear Stearns and Co.
The firm assisted in packaging approximately $17.5 million in incentives for Bear Stearns' relocation to 250,000 square feet in One MetroTech Center. The package included electrical subsidies and sales tax exemptions on construction materials, machinery and equipment, in addition to job tax credits.

One MetroTech Center / Brooklyn Union
Stadtmauer Bailkin negotiated and secured an incentives package to induce Brooklyn Union to relocate its corporate headquarters to 450,000 square feet at One MetroTech Center, the newly constructed 865,000 sq. ft., 23-story building. The package included $10.3 million in City capital budget funds, $130 million in taxable Industrial Revenue Bond financing and an $8 million Urban Development Action Grant.

Two MetroTech Center / Securities Industry Automation Corporation ("SIAC")
Two MetroTech Center is a 535,000 square foot, 10-story building. SIAC, the company that processes securities transactions for the New York and American stock exchanges, relocated its corporate headquarters to 320,000 square feet in this building. The incentives secured by the firm included a $6 million Urban Development Action Grant, $80 million in taxable Industrial Revenue Bond financing and $16.3 million in Municipal Assistance Corporation and City capital budget funds.

Three & Four MetroTech Center / Chase Manhattan Bank
This project consisted of the construction of a 1.5 million square foot computer operations complex on two sites in MetroTech. The firm conceptualized and helped negotiate an incentives package that induced Chase to retain operations in New York by relocating to Brooklyn instead of to a competing site in New Jersey. A complex package of electrical subsidies, tax abatements, city grants and related incentives valued at $235 million was provided by the City and State.


There's no mention of Atlantic Yards, so it's possible the firm hasn't worked on the latest project. Had Forest City Ratner developed enough in-house expertise, or did some other firm help?

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