Eminent domain case gets serious consideration in court (but the press mostly passes)

Apparently most of the press missed another doozy of an oral argument yesterday in federal court regarding the Atlantic Yards eminent domain case. U.S. District Judge Nicholas Garaufis considered some defense arguments skeptically, as he devoted more than three hours (including break) to the hearing.

Also, though there were no additional briefs on the issue, Garaufis spent a significant amount of time hearing arguments about the substance of the case, as he considered the defense motion that the case should be dismissed because of a failure to state a valid claim. He also expressed some skepticism about the political process that led to project approval--though that may not have significant bearing on the plaintiffs' charges.

(I'm out of town, and my secondhand and thus highly incomplete account is based on messages from or conversations with four courtroom observers, all project opponents. I hope to have a more thorough account when the hearing transcript becomes available. Observers identified reporters present from the weekly Brooklyn Paper and Brooklyn Downtown Star and the New York Law Journal. They said a New York Post reporter stopped in, but there's no article in today's paper, nor in any other daily.)

It was significant, as I wrote Thursday, that Garaufis would hold a hearing rather than simply rely on briefs from the parties challenging the report and recommendations made by U.S. Magistrate Judge Robert M. Levy and also significant that Garaufis devoted as much time as he did--a point he himself made in court.

Ripeness & state court

While the defendants--the Empire State Development Corporation (ESDC), the city, and developer Forest City Ratner--had challenged Levy's recommendation that the case is ripe for review, Garaufis did not seem sympathetic. The plaintiffs--13 property owners and renters organized by Develop Don't Destroy Brooklyn--had pointed out that demolitions for the project have already begun, and Garaufis also cited those ongoing demolitions.

At one point during this phase, as ESDC lawyer Preeta Bansal argued that the case should be consolidated with a separate case in state court, Garaufis became angry, interrupting her for lecturing him about doctrine he already knew. This isn't a law school class, he told her.

Garaufis also did not entertain the ESDC's argument based on a case known as Younger, which states that federal courts should not interfere with ongoing state proceedings. Levy had said the defense's argument for dismissal wasn't sound.

About Burford

A good portion of the hearing concerned the plaintiffs' challenge to Levy's recommendation that the case be dismissed and sent to state court based on a case known as Burford, which requires federal courts to stand clear when they might disrupt “state efforts to establish a coherent policy with respect to a matter of substantial public concern."

Garaufis seemed willing to at least consider the plaintiffs' contention that, if the case remains in federal court, it would not ride roughshod over the eminent domain process in New York State. The defense has argued that, should the Atlantic Yards plaintiffs succeed, future plaintiffs would all go to federal court, which is more friendly to eminent domain challenges, and thus delay projects that relied in part on eminent domain.

Settlement and discovery

Garaufis seemed interested in easing the case to some kind of resolution. He raised the possibility of settlement, asking plaintiffs' attorney Matthew Brinckerhoff if there was any way an accommodation could be reached short of adjudication. Brinckerhoff said no, that it was an issue of constitutional rights.

The judge also raised the possibility of permitting discovery--the request for background documents--key leverage for plaintiffs in federal court but not permitted when eminent domain is reviewed in New York state court. (The review in the latter is limited to the established record.) Garaufis mused about permitting some kind of limited discovery and having the case moved to state court.

On the merits

As at the first hearing 2/7/07, a good portion of the discussion involved the merits of the case.--the plaintiffs' charge that Atlantic Yards arose from a sweetheart deal and the benefits are pretextual.

Brinckerhoff contended that the project arose from a deal between Mayor Mike Bloomberg and developer Bruce Ratner. ESDC attorney Douglas Kraus pointed out that there had been charges of favoritism in previous cases, such as the Times Square redevelopment, and they were irrelevant.

Brinckerhoff, who noted that there were 26 respondents to a Times Square RFP, again contended that the sequence violates the guidelines suggested in the Supreme Court's 2005 Kelo v. New London decision, where the city had identified the properties at issue before a developer had stepped forward. The ESDC says Kelo doesn't apply, because it was about economic development, not blight removal and other public purposes, as with Atlantic Yards. And Kraus again reminded the court, the act establishing the ESDC aims to maximize the participation of the private sector.

Kraus also pointed out that case law states that it's not up to the courts to second-guess the boundary of a project site that includes eminent domain. The plaintiffs, however, contend that the boundary was drawn by the developer, and that violates Kelo. The case law Kraus cited is pre-Kelo. Whether Kelo is controlling, however, is unclear.

Kraus also pointed to the open space, jobs, and housing arising from the project. The ESDC has said it's not the job of a judge to draw the line as to what public benefits are sufficient once the the approving agency has found such benefits. The plaintiffs say that a closer look suggests the benefits are much smaller than claimed.

Three men in a room

ESDC lawyer Bansal pointed out that Atlantic Yards had been approved by the government, including elected officials. (Actually the project in December was approved by the unelected board of the ESDC; two weeks later, it was approved by the three-member Public Authorities Control Board, or PACB.) Garaufis responded to Bansal by holding up three fingers, noting that three people made the decision.

Whether that influences the judge's ruling, however, remains unknown. Garaufis did not indicate when he might issue an opinion or whether he might hold additional hearings.

Once again, KPMG report on IRR doesn't mean profit

Two published articles this week have inaccurately suggested that the KPMG audit the Empire State Development Corporation (ESDC) commissioned actually estimated Forest City Ratner's profit on the Atlantic Yards project.

First, the New York Sun reported, in an article noting that the state never saw a full business plan for the project:
Cash flow projections and interviews with executives were the basis for the report's conclusion that the developer would stand to make a total return on its investment of about 9.8% on the mixed-use portion of the project.

Then the Brooklyn Paper followed up:
The KPMG report projects that Ratner will walk away with a $400-million profit from his state-backed $4-billion Prospect Heights Xanadu.

So how do we square this with New York magazine's estimate of $1 billion profit? We don't.

IRR vs. profit

As I reported in December, quoting affordable housing expert David A. Smith, internal rate of return (IRR) doesn't mean profit:
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 includes overhead. As I wrote:
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?

Note that the KPMG report was delivered to the ESDC in late December. Forest City Ratner in early October provided its own sketchy three pages of cash-flow estimates, released on February 28. They left the same questions unanswered.

I interviewed Smith again, who said:
“The schedules omit nearly all of the financing and operating assumptions. They omit any sketch as to how the equity will be raised from five different legal and financial entities (team/arena, condo, rental, hotel, and office), without which one cannot tell what is the cost of external capital versus developer capital. They omit a sources and uses of funds, without which it is impossible to tell what fees (however proper they might be!) the developer and its affiliates may be charging the venture ('off the top', as it were). They do not tell us where the $230 million (and counting) of equity that has already been contributed came from, nor at what current or future cost."

So we're still in the dark, but the profit figure is likely well over ten percent.

Procedural arguments return as eminent domain case hearing approaches

The Atlantic Yards eminent domain case gets another day in federal court Friday, as both the plaintiffs and the defendants will argue to U.S. District Judge Nicholas Garaufis that the report and recommendations made last month by U.S. Magistrate Judge Robert M. Levy were incorrect.

Remember, Levy recommended that the case be dismissed and more properly filed in state court. However, he did so based on only one argument by the defense; he agreed with two other arguments by the plaintiffs, 13 property owners and tenants organized by Develop Don’t Destroy Brooklyn (DDDB), that the case should remain in federal court.

Thus, while the DDDB plaintiffs are asking Garaufis to overturn Levy’s one argument for dismissal, the defendants—the city, the Empire State Development Corporation, and developer Forest City Ratner—are not only backing Levy’s dismissal argument, but contending that he was incorrect in not dismissing the case on other grounds.

It’s not automatic that a federal judge will hold a hearing on the responses to a magistrate’s recommendations; the judge could simply rely on legal briefs. But the decision to hold a hearing seems to indicate a recognition of the complexity of the legal arguments and even the importance of the case.

Legal memos are linked from DDDB's case web site.

Procedure, not merits

At issue are only procedural questions, not the issues of substance that actually occupied the majority of the argument in court on 2/7/07.

Levy wrote, "Plaintiffs’ Amended Complaint raises serious and difficult questions regarding the exercise of eminent domain under emerging Supreme Court jurisprudence, many of which were explored in some detail at oral argument. However, in light of my recommendation that this court abstain, it would be inappropriate to address plaintiffs’ claims on the merits."

Then again, should the case be moved to state court, it would be much harder for the plaintiffs to prevail. So procedure affects substance.

(I’m out of town and will miss the oral arguments tomorrow.)

Thinking about Burford

The hardest-fought issue regards Burford, or the 1943 case Burford v. Sun Oil Co. Though the parties in the case devoted just four of 220 pages of preliminary memoranda to Burford, Levy rested his decision on that case.

He cited three factors identified by the Second Circuit Court of Appeals, including "[1] the degree of specificity of the state regulatory scheme, [2] the necessity of discretionary interpretation of state statutes, and [3] whether the subject matter of the litigation is traditionally one of state concern.”

“Here, the first and third factors weigh in favor of abstention,” he wrote, citing the “highly specific and comprehensive mechanism for condemnees” to challenge condemnation “in a state-created system of administrative and judicial review” under the Eminent Domain Procedure Law, or EDPL.

Also, he wrote that “it is indisputable that eminent domain is traditionally a matter of local concern and that the state has a vital interest in establishing a coherent policy with respect to it.”

Plaintiffs disagree

The plaintiffs contend that Levy was wrong. They argue that the EDPL is procedural rather than substantive; not unusually specific; and that there’s no adequate alternative forum. Indeed, should the case go to state court, not only would the plaintiffs not have access to discovery, they wouldn’t be able to sue any entity beyond the ESDC, wouldn’t be able to collect damages, nor be able recover attorneys’ fees.

Moreover, they argue that the issue is not whether hearing the case in federal court would interfere with a state regulatory scheme, but whether that interference would be undue. While eminent domain, they acknowledge, is traditionally a state concern, the Supreme Court has held that eminent domain is not particularly susceptible to Burford abstention.

Nor is there a centralized review procedure in New York under the EDPL, unlike in the other two cases in which the Supreme Court had upheld Burford abstention. Also, because the claims in the case are federal claims, it would not entangle the federal court in state law.

Defense response

The ESDC, however, calls the case “a classic candidate for Burford abstention” and contends the plaintiffs’ argument misunderstands and mischaracterizes the doctrine. The defense memorandum points to a case that states that federal review “would be disruptive of state efforts to establish a coherent policy.”

The ESDC argues that the Supreme Court has in fact affirmed an abstention when federal claims were made. Moreover, the ESDC argues that the plaintiffs’ distinction between “procedural” and “substantive” is incorrect; rather, Burford calls for abstention in regard to “a matter of substantial public concern,” and that a process like the EDPL can be substantial.

The ESDC points out that the challenge to the “public use” clause of the Fifth Amendment aims at an area of law in which federal court mainly defer to state courts. And the ESDC points to a 2005 case, Brody v. Vill. of Port Chester, not cited by the plaintiffs, which upheld the EDPL as adequate, citing “the narrow role that courts play in ensuring that the condemnation is for a public use.”

Last word: plaintiffs

On the Burford issue, the plaintiffs get the last word. They argue that there's a significant difference between the EDPL's exclusive process for arriving at a condemnation decision and the "purportedly exclusive procedure" for judicial review. State policy regarding uniform pre-determination proceeding--the focus of the legislative revamp that led to the EDPL--would not be threatened.

Nor, they say, is the EDPL's state process particularly expeditious. The case in state court likely won't be decided until September.

The Brody case, they argue, isn't applicable because the claims were due process claims, with a much lower threshold regarding the adequacy of an alternative forum. "Here, there is no way Plaintiffs can meaningfully litigate their claims... without discovery and factfinding," the memo states.

AY & affordable housing

The other defendants let the ESDC take the lead in the defense, but in their own memos add some legal and policy arguments.

The city argues, “Allowing plaintiffs to side-step the comprehensive and uniform procedures set forth in the [EDPL] in favor of litigation in federal court would present a serious threat to the City’s ability to move forward with critical projects that depend on public-private partnerships for their success, including the construction of affordable housing and the creation of viable mixed-use developments in blighted urban areas.”

“For example, in a sample of 21 affordable housing projects undertaken by the New York City Housing and Preservation Department (“HPD”) in partnership with private developers between 1995 and 2005, approximately 5832 of 14,369 units required acquisition by eminent domain,” the memo states. “Under plaintiffs’ theory, the owners of those lots acquired by eminent domain and then transferred to private developers to facilitate the construction of the City’s plan for affordable housing would all be able to bring a challenge to the taking in federal court.”

"A copy of relevant documentation may be made available at the Court's request,” the memo says in a footnote, and it would be interesting to see how those projects compare to Atlantic Yards. The Atlantic Yards project would generate 90 units of low-income housing and 135 units of moderate- and middle-income housing a year over ten years, under a best-case scenario, though even landscape architect Laurie Olin suggests the project would take 20 years. That would mean 45 low-income units a year. Meanwhile, the project would include 1930 (or 1730, assuming 200 are subsidized) market-rate condominiums, with a market value of $1.6 to $2 billion.

The city’s memorandum includes a copy of the legislative history of the EDPL, explaining how its 1977 passage reflected a nearly seven-year effort to standardize an inconsistent and complex scheme around the state. “Discovery and trial, such as is sought by plaintiffs here would only increase the uncertainty of vital public projects moving forward,” the city argues.

Forest City argument

The Forest City Ratner memo also cites Brody, noting that this appellate case was decided after the Supreme Court’s 2005 decision in Kelo v. New London, which the plaintiffs have cited as barring sweetheart deals leading to eminent domain. The Brody decision stated that the “wisdom or advisability of a public project is not reasonably subject to the adversarial adjudicative process.”

The Forest City memo notes that, after the passage of the EDPL, “the decision to condemn private property no longer is made by a would-be condemnor in private, but must be considered at a public hearing that is designed to foster meaningful public participation and transparent decision making, and creates the record that forms the basis for subsequent judicial review.” (Did the 8/23/06 public hearing “foster meaningful public participation and transparent decision making”?)

Moreover, Forest City argues, the EDPL offers accelerated judicial review in state court “to offset the delay resulting from the requirement of extensive public participation in a condemnor’s decision.” In this case, “plaintiffs fully participated in the public process that was conducted by ESDC, and personally and by counsel made extensive oral and written contributions to the record. But having participated in the part of the process established by EDPL 207 that they found useful, they have elected not to participate in the second part.”

The Forest City memo cites Levy’s point that allowing this case to continue in federal court “would provide incentive for forum shopping” and send future cases to federal court. Argues Forest City, “Neither the present plaintiffs nor those in similar positions in other cases should be permitted to game the system in this way. Indeed, given the enormous sums of money that a major project puts at risk, opponents can view the mere complexity and prolonged pendency of a litigation as a tactic that may strangle a project prior to any final adjudication of the merits.”

Is the case ripe?

Levy had disagreed with the defense contention that the case should be dismissed because the plaintiffs’ injuries weren’t sufficiently concrete to be considered ripe for judicial review. The pertinent question, he wrote, “is whether the challenged condemnation is final, imminent, or inevitable,” but acknowledged that those concepts remain “amorphous, open to interpretation, and at any rate highly fact-specific.”

The ESDC, however, continues to maintain that the claims aren’t ripe “at least until ESDC commences a proceeding for transfer of title.” The question, according to the ESDC memo, “is whether the alleged future deprivation is imminent and ‘certainly impending.’” Levy's recommended ruling, argues the defense, “threatens… to open the floodgates to the federal courts” because plaintiffs should be in state court.

Alternative universe?

The ripeness argument drew a scathing response from the plaintiffs’ lawyers: “The upshot of Defendants’ argument is that this case is rendered unripe simply because an imaginative person could post an alternate universe in which Defendants will suddenly have an epiphany—recognizing that the Public Use Clause and fundamental notions of representative government are incompatible with their abuse of the power of eminent domain to consummate a private business deal—and decide to scotch the Project. Anything is possible, after all.”

As for whether the courts would be flooded, the plaintiffs respond, “It is plan that courts must give substantial deference to public use findings when made by true legislative bodies, motivated to achieve a public purpose by condemning land identified by the government (not the pre-selected developer) before any private beneficiaries are known.”

While the ESDC points out that the agency has “up to three years” to commence taking title, the plaintiffs respond, “Defendants are playing fast and loose with reality. The reality is that demolition for the Project began last month.”

The Younger abstention

The ESDC also argues that dismissal is appropriate because of a case known as Younger, which states that federal courts should not interfere with ongoing state proceedings. Levy had written that “there is no pending state court proceeding in which plaintiffs will have the opportunity to present the federal claims raised in the instant complaint.”

While other plaintiffs have filed a case in state court challenging the ESDC’s plans regarding two specific properties, “that proceeding will not necessarily address or resolve the claims plaintiffs assert in this matter.”

The defendants take issue with Levy’s description of the plaintiffs in the other case as non-condemnees, arguing that, as rental tenants, they are in fact condemnees—a disputed issue in that state case. The ESDC also suggests that the state case “in all likelihood will have to decide whether the Atlantic Yards project serves a public purpose” and thus would address the question at issue in federal court.

The plaintiffs respond that “nobody knows” whether the state court case “will or will not address public use issues.” Moreover, there’s no reason why that case, with different plaintiffs, would be binding on the federal court case.

Last word: defense

The defendants reiterate that the case is not ripe until the condemnation actually proceeds--a deadline established in other cases. Forest City Ratner "has every right to prepare itself for the Project by beginning demolition work on property it owns or has rights to, while bearing the risk that the Project will not proceed." (Emphasis in original)

As for the Younger argument about why the federal court should abstain, the defense contends that if the state court rejects the ESDC's eminent domain determination and findings, the state agency "cannot proceed with any condemnations pursuant to that decision." (Emphasis in the original)

Public park, indy ESDC, "derelict stretch"? Looking back at the eminent domain argument

As the Atlantic Yards eminent domain case gets another day in court Friday, it’s worth taking another look at a few questionable statements made by defense lawyers during the 2/7/07 hearing.

Would the project really bring public parks and public housing? Is the ESDC really independent? And was Forest City Ratner the only developer that might be interested in a "derelict stretch" near Brooklyn's busiest transit hub?

[The quotes are from an official transcript, which nonetheless contains flaws in transcription.]

AY: public parks, public housing?

Lawyers for the Empire State Development Corporation (ESDC) have challenged the plaintiffs’ efforts to invoke the 2005 Kelo v. New London case, in which the Supreme Court indicated it would look askance on what seemed to be a sweetheart deal. Kelo, noted ESDC attorney Douglas Kraus, was about eminent domain for economic development, while Atlantic Yards, he noted, is about the removal of blight—not an element in Kelo.

He added, “And neither were any of the other indisputably proper public purposes that were served by the Atlantic Yards project in this case, such as the construction of hundreds of millions of dollars worth of infrastructure improvements, the creation of public parks and recreational facilities, and the construction of public housing.”

Kraus, however, overstated the case. The subsidized housing within Atlantic Yards would not be part of the city’s public housing system, nor would the publicly-accessible open space be part of the city park system.

ESDC board independent?

Also at issue is whether the ESDC is an independent agency or an arm of the Governor’s office, especially given that former Governor George Pataki’s chief fund-raiser, Charles Gargano, was named to head the agency. Moreover, as I wrote in December, large donors to Pataki were named to the ESDC board.

According to state courts and the Second Circuit, declared Assistant Attorney General Peter Sistrom during the hearing, the ESDC “is not the state. It is independent of the state, and one of the reasons it is independent of the state is because it is not controlled by the Governor, even though he appoints some, not all, of its members. And even though some, not all, of the members serve at his pleasure, the courts have repeatedly held it is not the state. The whole purpose of it is to create independently [sic] of the state.”

Perhaps, but an information sheet from the State Comptroller’s Office indicates that all the members who served when the board voted on the Atlantic Yards project were gubernatorial appointees. (Click on Staff and scroll down.)

FCR attorney on “derelict” Brooklyn

Was Forest City Ratner taking a big risk by proposing this project? Yes, according to FCR attorney Jeffrey Braun--even though the Prospect Heights neighborhood was on a steady upswing, as noted in New York Times Real Estate section coverage.

“I don’t think the fact that, you know, Forest City Ratner allegedly initiated this has any relevance,” he said. “I mean, frankly, this is not the crossroads of the world, Times Square, where many developers would like to have an opportunity to build. I mean, this an extremely derelict stretch—no, we’re talking about the Vanderbilt Yards—which is an open trench that’s what we’re talking about.”
[Note: I previously reported the term “completely derelict” .]

However, Forest City Enterprises CEO Chuck Ratner three weeks ago called the Atlantic Yards site “a great piece of real estate.” Many developers might indeed covet such a site, or just the Metropolitan Transportation Authority's Vanderbilt Yard.

A private developer's plan

Braun continued, “We’re talking about a private developer allegedly, who came up with a plan for remediating and eliminating this scar on Brooklyn and that’s what happened here and I don’t think that the Court ought to be establishing or recognizing a rule that’s invented by plaintiff’s counsel that would discourage a developer and penalize a developer for coming to the public agencies with a good idea and here that was of a long process and the plan was approved by a public, a public officers, not by Forest City Ratner.”

Whether it's a constitutional violation is up to the court, but it's doubtful that other railyards--extremely valuable pieces of land, given the city's shortage of available land for construction--will be treated in the same way.

After all, urban planner Alexander Garvin, author of the definitive text The American City : What Works, What Doesn't, has recommended that the process for developing a platform for development over Sunnyside Yards in Queens requires a feasibility study with input from "engineers, traffic analysts, site planners, and real estate entrepreneurs.”

Tomorrow, I'll preview the arguments in the hearing Friday.

Relief at the ballot box? Housing expert says ESDC justification seems hollow

Is voting the rascals out sufficient redress for those who want courts to examine what they believe to be eminent domain abuse, as a lawyer representing the Empire State Development Corporation (ESDC) has suggested?

Not at all, says David A. Smith, an affordable housing expert in Boston who supports the targeted use of eminent domain and has been watching Atlantic Yards from afar. (He wrote 3/15/07 that he has "no past, current, or contemplated engagement or professional interest in Atlantic Yards.")

Insider deal?

That issue came up during the 2/7/07 oral argument in the Atlantic Yards eminent domain hearing, when U.S. Magistrate Judge Robert M. Levy posed a hypothetical question to Douglas Kraus, representing the defendant Empire State Development Corporation (ESDC).

Levy wondered that if a constitutional violation would occur in a case involving eminent domain that led to a clear public use--a result that historically justifies condemnations--but also benefited an insider, the governor's brother-in-law.

(The 13 plaintiffs challenging eminent domain in the Atlantic Yards case claim that developer Bruce Ratner got a sweetheart deal, which might violate the guidelines suggested in the U.S. Supreme Court's 2005 Kelo vs. New London decision.)

Kraus responded, "It might violate some state ethics rule or some other law that was indeded to deal with the public performance by the Public Officers Law that regulates our officers in New York State to perform their duty."

He continued, "That might be an issue for the prosecutor; it also might be an issue for the electorate, right. [Plaintiffs' attorney] Mr. [Matthew] Brinckerhoff told us they're all politicians and they're all elected. If his clients or if other members of the community think this was really a terrible project, they can express themselves in the next election when they vote for their City Council representatives, their State Senators, their State Assembly members, their Congresspersons, and their federal Senators."

Is that relief?

Smith, who has supported use of eminent domain for economic development but thinks it must be done with safeguards, was perturbed by Kraus's formulation. (Smith recently commented on the recent release of Atlantic Yards cash flow documents.)

He told me, "In my view, Mr. Kraus's flip comment ["terrible project"] tacitly concedes he has no legal case for his client. For if the project is terrible, and the sole remedy is electoral relief, then there is no check in law to a development agency run amok, and no limit on the powers agencies claiming eminent domain (for removal of blight, economic development, or otherwise) can wield."

Atlantic Yards is considered by the defense not to be an example of eminent domain for economic development, as in Kelo, but instead for other public purposes, including blight removal, below-market housing, open space, and transit improvements. Still, the defense has forcefully argued that the case in Brooklyn does not appear to be a sweetheart deal as outlined in Kelo.

Eminent domain and blight

Smith observed how the use of eminent domain has evolved: "As a general matter, eminent domain is a 'last resort' government action. It is to be used when literally nothing else will suffice; the classical case is a highway that must go straight (yet even Robert Moses's highways and Chicago's Kennedy expressway found ways to curve!)."

Now, however, its use has expanded. Smith said, "Blight, as defined in the landmark post-World War II cases, was a condition of urban economic death--neighborhoods that were entirely gone. In the 70s and 80s the definition of blight kept expanding and the criteria being diluted, so that the 'blight' finding morphed, at least in the minds of some local officials, into 'declining neighborhood that could be revitalized.' When that slippery-slope standard is coupled with an immediate transfer to a private developer, the potential for abuse is vast."

Rules for eminent domain

Smith in November 2005 summarized what he calls [urban planning professor] "Jerold Kayden's 8 Simple Rules For Taking My Urban Property." They are:
1. Be comprehensive. Make your redevelopment authority program comprehensive.
2. Follow due and open process. Adopt it deliberately, transparently, with thorough consideration that you carefully document.
3. Emphasize public-use benefits. Parks and waterfronts trump jobs, and jobs trump new revenues.
4. Compete the bid. Use an RFP (Request For Proposal) or other competitive process to select the plan and developer and to eliminate the presumption of a hard-wired sweetheart deal.
5. Get what you pay for. Use performance benchmarks -- cash flow participations, clawbacks, rescission, right of final refusal -- to make developer perform.
6. Give back what you reap. Earmark incremental benefits like real estate taxes for public-use projects.
7. Embrace public oversight. Have a special public oversight mechanism on the developer.
8. Use 'public-private' partnerships. Use new forms of public-private partnerships that "muddy the private waters." Long-term ground leases are not good enough.
[Emphasis added]

As applied to Atlantic Yards

In the Atlantic Yards eminent domain lawsuit organized by Develop Don't Destroy Brooklyn, the first four are at issue; notably, the Metropolitan Transportation Authority did not issue an RFP for the agency's Vanderbilt Yard--the key public property within the project site--until 18 months after the city and state publicly endorsed Forest City Ratner's project.

That case will be back in federal court on Friday, as lawyers for both sides argue whether U.S. District Judge Nicholas Garaufis should accept the recommendation from U.S. Magistrate Judge Robert M. Levy that the case be dismissed on procedural grounds and refiled in state court. Tomorrow, I'll preview the arguments in the hearing.

Planned demolition of 475 Dean means more "urban room" on crucial block

Though it hasn't been announced yet in a press release, Forest City Ratner "in the near future" intends to demolish 475 Dean Street (Lot 48 on the map at right), according to a 3/15/07 notice sent to Community Board 6 by the developer.

This demolition was not part of the developer's recent press release, nor has Forest City yet applied for a demolition permit. (For all the other demolitions announced to CB 6, permits are in process.) As I wrote last week, Lot 13 has been vacant for a while and lots 19, 20, 55, and 56 were made vacant after demolitions next year. Announced are demolitions of lots 10, 11, 12, 18, 22, 30, and 54--filling in the grey color in the map above. The largest plot, Lot 1, a gas station, is largely absent of structures.

Plaintiffs occupy lots 21, 27, 50, 46, 43, and the square above 43. Now 475 Dean, which is set back from the street in the center of the photo at right, will add to the "urban room." (The photo comes from a 7/25/06 New York Times article headlined Blight, Like Beauty, Can Be in the Eye of the Beholder.)

The former garment factory at 475 Dean was turned into artists' lofts; WNYC radio's Andrea Bernstein last year reported on some of the artists who were forced to relocate; those interviewed said that Forest City had given them a fair deal. Relocation contracts often require sellers to speak positively of the developer. (New York Voices also ran a story about the building.)

PLANYC2030: what might sustainability mean?

The battles over land use, including Atlantic Yards, have clearly pointed to the need for planning by the government and various stakeholders, beyond a process driven by real estate developers.

Now, it seems, the city government has recognized that, and more. On 12/12/06, Mayor Mike Bloomberg announced a major sustainability initiative, titled PLANYC 2030, offering ten goals for creating a sustainable city by 2030, by which the city's population is projected to increase from 8 million to 9 million people.

The plan grew out of the mayor’s request that Deputy Mayor for Economic Development Dan Doctoroff draft a long-term land-use plan for the city, which morphed into an attempt to address "the full range of challenges to our city's physical environment," in Bloomberg’s words--issues like energy, water, and climate change. (The land-use plan was likely the unreleased 2006 study by Alex Garvin, which I mentioned yesterday.)

A slick media campaign has involved outreach to community groups and the general public, trade associations, and governmental partners. As we await an announcement of implementation plans in the next few weeks, numerous questions have been raised, among them what goals have been downplayed, whose interests are being served, and how much democratic process will be involved.

The ten goals are grouped under the following color-coded rubrics, with further details in the graphics: OPENYC (housing, transit capacity, parks); MAINTAINYC (infrastructure for water, transit, energy); and GREENYC (carbon emissions, clean air, brownfields cleanup, waterway restoration).

Few specific policies have emerged yet, but congestion pricing must be on the table. Crain's New York Business reported last week that the city is considering "requiring property owners to improve energy efficiency before selling their homes and encouraging construction of modern power plants." In a speech nearly two weeks ago, Doctoroff "hinted that major, regional transportation policy plans were in the works," according to Streetsblog.

The Moses effect

There’s some reason, in this age of Robert Moses revisionism, to be skeptical. In a panel on planning held 3/20/07 at the Museum of the City of New York, urban historian Robert Fishman recalled Rexford Tugwell, who posited a fourth governmental power beyond executive, legislative, and judicial: the “planning power.” Tugwell, who tussled with Moses and was replaced by him on the City Planning Commission, in 1960, Tugwell wrote an article called “The Moses Effect,” a not uncomplimentary acknowledgement of the importance of big plans.

Now, said Fishman, “the Moses Effect” has migrated to the private sector, which has the wherewithal to propose and implement big plans. The city needs such energy, Fishman said, “but how can this energy be contained in a unifying, cohesive, constructive, and truly general force?”

Rohit Aggarwala, the historian and former management consultant tapped to head the mayor’s new sustainability office, declared, “We want a more thoughtful, comprehensive and hopefully benign Moses effect.” To plan, he stressed, is not to site, but to think ahead. (More on Aggarwala from Streetsblog.)

“We don’t want a top-down master plan, but we can’t muddle through,” said Aggarwala, who said the city seeks a middle ground that’s not necessarily consensus-based but involves some input and consensus.

Community input

He got a sharp response from community planner Ron Shiffman, founder of the Pratt Institute Center for Community and Environmental Development, who said, “I like to think of planning as the synthesis of reason and democracy.”

While historians and planners are good at examining past trends, local residents, Shiffman insisted, are the experts on their neighborhoods, the people who reclaimed housing during the 1970s and 1980s when the city was poised to withdraw services and banks refused loans.

(Indeed, just last week, the Municipal Art Society announced the annual Yolanda Garcia Community Planner award, sponsored by the Planning Center with funding from the Citigroup Foundation, honoring Elizabeth Yeampierre, the executive director of the oldest Latino community-based organization in Brooklyn—the United Puerto Rican Organization of Sunset Park, or UPROSE. Yeampierre is one of two community activists on the 18-member sustainability advisory board for PLANYC 2030.)

“There’s one thing missing in PLANYC,” Shiffman said. “You don’t talk about equity and about economic development.” The city needs to be conscious not just of office buildings but manufacturing jobs in new industries, including green ones, that immigrants will seek.

Aggarwala (right) said he generally agreed with Shiffman, but suggested the term “complementarity” rather than “dialectic” or “debate.”

The role of preservation

Urbanist Roberta Brandes Gratz brought up the example of Donovan Rypkema, who spoke at a recent Historic Districts Council conference, insisting that sustainability requires preservation. (Those comments, I noted last week, were pertinent to the debate about razing the Ward Bread Bakery.)

Aggarwala suggested that planners had taken that for granted, and thus not explicitly discussed it, given that some 85% of the buildings in 2030, in terms of square footage, should exist today. Buildings built before 1920 are inherently more energy efficient, he said, because they were built before energy was cheap, though they can be costly to retrofit.

Shiffman said that the Atlantic Yards plan generated a certain amount of skepticism about sustainability plans, given that recently renovated buildings are slated to be demolished, and the decisions on the project were shunted to the state. He’s also argued that the city needs the power of eminent domain, but that, if abused, as he contends it is in the Atlantic Yards and Columbia expansion plans, the backlash will be painful.

Criticism in the Voice

Wayne Barrett’s 3/20/07 Village Voice cover story, headlined All Wet: Bloomberg's man Dan Doctoroff has an answer for rising seas: more coastal condos! warned that the city was not addressing climate change and tied the challenge to the city’s pattern of growth:
There are many reasons why the city is adaptation-averse, and, of course, they start with real estate interests. If Doctoroff were to take adaptation seriously, he'd have to rethink his growth agenda, much of which is centered on the city's shoreline. His greatest development initiatives are coastal rezonings, from the West Side to Greenpoint/Williamsburg; at the same time that he can't get even "moderate" estimates of sea-level rise right, he's spurring development by the sea at an unprecedented pace.

Indeed, Barrett noted that insurance companies are raising rates or pulling out: The only private-sector advice this CEO-led administration appears to reject is the jittery modeling of the insurance industry.

What might be coming

In Matthew Schuerman’s 3/26/07 New York Observer article, headlined Mayor Has 1,000 Days To Go And Plenty To Do, raises the question of what the mayor can accomplish in the rest of his term and floats some possible tactics: congestion pricing, new upzoning, and an energy surcharge.

Some specifics:
The report, for example, is expected to call on city government to further reduce the pollution caused by its own fleet of vehicles by switching to cleaner fuels, according to members of an advisory panel, and to force power producers to retrofit their plants (a requirement that may or may not result in rate hikes).
Developers could be asked to set aside property to create small neighborhood parks in return for permission to build higher, not unlike the incentives for construction along the Williamsburg and Greenpoint waterfront. That step would help achieve the goal of making sure that every New Yorker lives within 10 minutes of a park. (We are already, it turns out, three-quarters of the way there.)

Congestion pricing?

Bloomberg has so far publicly opposed congestion pricing, deeming it a commuter tax, even though it’s been successfully adopted in cities like London and embraced by a range of business and environmental groups. Such a recommendation might emerge out of this plan—a reasonable cover for the mayor.

A meeting in Brooklyn

On 3/6/07, Aggarwala and staffers from the Office of Sustainability, along with representatives of numerous city agencies, held a Brooklyn Town Hall meeting in the Long Island University's Paramount Gymnasium. There were maybe 120 attendees in the cavernous auditorium, with at least 15 of them city officials.

When the city officials, sans microphones, introduced themselves, they couldn’t be heard. (Metaphor?) Assembled at tables, the attendees compiled lists of suggestions and reported to the larger group; both useful and obvious ideas emerged, but there was no process to rank them or assess the fiscal and political constraints.

We were given a sprightly booklet, featuring text in various fonts and colors, laying out the challenges and declaring “It’s up to you.” (Or, in Aggarwala's later explanation, "complementarity.")

Aggarwala read from a script with incomplete casualness, like a new political candidate still getting used to the hustings, less comfortable than at the museum panel of experts a few weeks later. Much of his spiel was in the booklet, for example pointing back to the creation of Central Park and the subways ahead of development

Echoes from a video

An accompanying video offered pronouncements from New Yorkers credentialed and not, about the need to build housing, improve infrastructure, and “green” the city.

For those attuned to the Atlantic Yards debate, unobjectionable general pronouncements offered a certain resonance. “Growth is great, but it has to be done right,” one interviewee declared. Another observed, “There’s no such thing as good housing without good parks.”

Previous suggestions

Aggarwala listed some suggestions that have emerged from prior meetings with Community Board and borough representatives, and others. Under OPENYC, they include:
--upzoning neighborhoods near transit hubs (note: the Atlantic Yards project would not be a rezoning, as the state would override city zoning)
--encourage “green roofs” as open space
--open school playgrounds year-round
--enforce traffic laws better.
--adopt congestion pricing (which also includes road pricing differentiated parking charges)

As for maintaining the city, the suggestions included:
--repair aging power plants
--create a fund for transit improvements
--educate people to reduce peak electricity demand and avoid blackouts
--finish Water Tunnel #3, which would allow the examination and repair of existing tunnels
--promote water conservation, as in the use of low-flow toilets

And for greening the city, the suggestions included:
--promote walking/biking/mass transit
--make the building code green
--retrofit existing buildings
--reduce sewer overflow by encouraging green roofs and permeable surfaces to absorb rainwater
--promote alternative fuel vehicles

(Both low-flow toilets and green roofs are planned for Atlantic Yards; the question is whether the enormous size of the development otherwise overwhelms our infrastructure.)

The audience speaks

Then came suggestions from the audience, reasonably diverse in race and age, and generally well-informed. (City Council Members David Yassky and Letitia James stopped by but didn’t stay. Writer, activist, and former Congressional candidate Kevin Powell presented his table’s list.)

Many were reprised from above, but among the suggestions:
--bus rapid transit
--using illegal housing coversions as a housing resource
--more staff for City Planning
--make the Office of Sustainability permanent
--parks on the roofs of one-story libraries (alternatively, it’s been suggested elsewhere that the libraries be replaced by larger mixed-use projects including a library)
--emphasize ferries
--charge more for streetside parking
--change zoning rules that require parking with new construction
--discincentives to drive to Downtown Brooklyn
--no free parking for city workers
--standardize the NYC building code (that’s coming_
--implement light rail
--make parks active use not passive use
--time lights to slow speeders
--residential parking permits
--penalties for taking away solar rights (an issue raised regarding Atlantic Yards)
--rethink the transportation of goods
--more meetings at the community level
--better recycling
--a bike and pedestrian path on the Verazzano Narrows Bridge

Not everything was unobjectionable. The suggestion of more one-way streets drew some boos from those already exercised by the controversial plan to turn Park Slope’s Seventh and Sixth avenues into one-way thoroughfares.

Bigger issues

Jim Vogel, secretary of the Council of Brooklyn Neighborhoods, raised the question of who the plan would serve, warning that it seemed to support wealthier New Yorkers. He pointed to the example of Brooklyn Bridge Park and wondered if it set a precedent for parks supported by commerce and a city withdrawal of full responsibility.

Aggarwala, who looked on a bit tensely as some representatives exceeded their mandate to address just three issues discussed at their table, said that the results would be synthesized on the web site, and then the office will report back on its recommendations, part of a “continued civic conversation.”

(At a 1/18/07 meeting with Brooklyn stakeholder groups, as reported by Nik Kovac in the Brooklyn Downtown Star, participants were presented with a letter to Bloomberg from more than 30 Brooklyn community groups, warning, "We want you to know that our organizations support well-planned growth in Brooklyn and all of New York City. But the city's traffic situation dictates that development...must be planned and implemented concurrently with significant transportation improvements.")

Cost and concerns

The hard questions, however, await. I caught up with Aggarwala afterward and asked how the city could pay for such changes.

For some issues, there’s a solution. Congestion pricing creates new revenues for public transit. Housing, he said, creates value, so “you can harness the value you create.” (Then again, cleaning up brownfields for housing is costly.) However, he acknowledged, “Do you really want parks to have to pay for themselves?”

On 2/6/07, Neil de Mause covered a meeting of architects and planners for Streetsblog, and found some other concerns emerged. New construction, a structural engineer said, has led to lowered building quality and a tension between union and non-union labor. And, as if presaging Barrett’s article in the Voice, they said there was little about climate change.

In a February article in Gotham Gazette headlined Plan NYC 2030, urban planning professor Tom Angotti questioned whether the population projection was correct, and suggested that the plan “continues, without further discussion, a city-wide land use policy that concentrates density around a small number of downtown centers instead of building centers for neighborhood living throughout the city.”

While Angotti acknowledged important community-driven issues have risen to the fore, including “the asthma epidemic, brownfields reclamation, power plant siting, and the lack of open space,” he pointed out that important community issues like “education, city services (especially sanitation), public health, noise, and neighborhood preservation” have been ignored.

Moreover, he observed that the plan seems to evade the City Charter's mandate about how such plans should be produced and vetted.

Stay tuned for Bloomberg's big announcement, coming sometime in April.

Preservation, planning, and Brooklyn at issue at HDC conference

Forest City Ratner’s much-criticized plans to demolish the Ward Bread Bakery, the issue of whether demolition can be truly green development, and the Atlantic Yards project in general represent Brooklyn embodiments of several issues raised at the Historic Districts Council (HDC) annual conference on 3/10/07.

Author and urbanist Roberta Brandes Gratz led off an overview panel by citing the enormous changes since the 1970s, when local activists responded to the city’s decline by establishing pocket parks in abandoned lots, community groups harnessed sweat equity and government funds to rehabilitate buildings, and intrepid brownstoners invested in yet-to-be historic districts.

“Anyone who doubts the enormous impact of historic preservation either wasn’t here or wasn’t paying attention,” Gratz declared.

Now, however, commented City Council Member Tony Avella, “The very people who brought the city back are being priced out of their developments.” While that may not be true for owners who’ve seen their property rise, Avella expressed a commonplace: “The system is geared to development.”

Avella and Gratz both bemoaned the seemingly inevitable rezoning of manufacturing districts to residential and the shift to a service economy. “The reason we don’t have planning from the bottom up is it’ll take away power from the people at the top,” Avella said. “We let the real estate industry do the planning.”

Preservation debate

Urban planner Alex Garvin Alex Garvin & Associates, who’s worked closely with Deputy Mayor Dan Doctoroff on the Olympics plan and produced a yet-unreleased land use plan for the city in 2006, offered a dose of skepticism. Preservation impulses, he said, can result from “a series of mistakes,” including nostalgia for the past, dislike of the newly-built environment, and selfish NIMBYism.

He offered some broad guidelines for preservationists, though leaving a large middle ground for debate. He recommended landmarking places of true historic significance (Independence Hall vs. “George Washington slept here”), of real esthetic prominence (example: University of Virginia), of social importance (example: the Tenement Museum), and of public significance when festivals happen (the National Mall).

[Would the Ward Bread Bakery qualify? Well, it didn’t make it past the not apolitical Landmarks Preservation Commission but its loss would be considered a significant adverse impact.]

Academic and HDC board member Jeffrey Kroessler said he wanted to contrast Garvin’s citation of “the selfishness of the preservation movement” with “the selfishness of the free market” Historic preservation, Kroessler asserted, “saved New York in the wake of the urban crisis.”

(Indeed, the Draft Environmental Impact Statement for Atlantic Yards downplays the role of historic preservation in the Brooklyn neighborhoods surrounding the proposed site, even though a 1974 city study cited “reviving brownstone residential neighborhoods.”)

Gratz picked up on the criticism. “I defy anyone to go into a community opposing a project to find they are against all change,” she stated. “They are against overwhelming change.”

Garvin wasn’t bowed. He suggested that preservation is intertwined with politics, noting that numerous historic districts are too small and that various resources, notably Art Deco buildings in the Bronx, have yet to get official recognition.

Planning, not preservation

Garvin suggested the issue was more planning that preservation, and referred to “the bad planning that’s quite evident elsewhere in the city.” There was no specific project attached, but read between the lines, Garvin might have been dissing Atlantic Yards.

After all, in his unreleased land use report, Garvin recommends (p. 17, or p. 8 of this PDF) that the process for developing a platform for development over Sunnyside Yards in Queens requires a feasibility study with input from "engineers, traffic analysts, site planners, and real estate entrepreneurs.” Regarding Atlantic Yards, all but the latter were engaged after the fact.

(Garvin's land-use plan has never been released; the Bloomberg administration, as I'll explore tomorrow, has instead expanded its aim, working toward a broader set of goals for 2030. It's not unlikely, however, that some of Garvin's study will emerge, notably its observation that the city can grow by platforming over railyards and highway trenches.)

Planning for growth

Garvin acknowledged that residents understand and care about their neighborhoods, but few can plan for the city as a whole. “It’s a serious question,” he continued. Sustainability, he said, depends on expansion of the transit system and the investment of billions of dollars.

He noted that, the demolition of the Third Avenue El in the 1960s devastated the Bronx. If bus rapid transit or light rail is introduced on Third Avenue between the Hub and the Cross-Bronx Expressway, along with a rezoning, the Bronx could accommodate 100,000 new people on vacant or nearly-vacant land within a quarter mile of the avenue.

The city’s capacity to grow through investment raises questions about Forest City Ratner’s plan for the Atlantic Yards site—sure, increased density could be accommodated near a transit hub, but should it be the density now planned?

Preservation politics

Donovan Rypkema offered the tart observation that preservation was more green than demolition (see architect Jonathan Cohn’s Brooklyn Views blog for more), and pointed out how attitudes had changed.

In the 1940s, the conventional wisdom of architects, developers, and many city officials was they had to raze Class B & C office buildings in Lower Manhattan that couldn’t accommodate more modern offices. “Had preservationists not stood up, those investment bankers wouldn’t have their $3 million condos.” (Left unsaid was that tax breaks supported such conversions, without requiring affordable housing as a tradeoff.)

Asked if we need to save all historic buildinga, Rypkema declared “Absolutely not. We’re not about making cities museums.” However, he suggested that “no demolition permit should be issued if what we’re going to get isn’t better than we have now.”

“I cannot identify a single example of downtown rehabilitation without historic preservation,” he said, noting that some “very expensive failures” have included destruction of buildings.

In several communities, historic buildings are natural incubators of small business. He cited Pioneer Square in Seattle, where tenants cited the historic nature and relatively low cost as reasons for locating there.

Hidden benefits

“I’m introduced as a preservationist, but I’m really an economic development consultant,” Rypkema said, pointing out that, while new construction is half-labor, half materials, historic rehabilitation is 60% to 70% labor and puts more money in the local community. However, he acknowledged, it’s more piecemeal work and generally not unionized and thus not backed by organized labor.

He pointed to the fallacy of considering “green” buildings in a vacuum. “You can build an energy-efficient Wal-Mart,” he said, “but the extra fuel to drive to it wipes out the energy savings.”

Still, he acknowledged, no one in the U.S. has yet tried to produce a complete cost-benefit analysis of a building that also values embodied energy. “We have lot line myopia,” he said, noting that such calculations have begun to emerge in Europe.

“The greenest building is one that’s already built,” added Carl Elefante of Quinn Evans Architects in Washington, DC. He contrasted the traditional wood window, which is completely renewable/repairable, with the modern aluminum window, which is mostly not recyclable.

Dealing with density

Then came a challenge. A participant asked about density, “a friend to the environment but an enemy of preservation,” since it’s an argument for tearing down old buildings in favor of dense new construction—indeed, that's the argument for demolition of industrial buildings on Pacific Street for the Atlantic Yards towers.

After a pause, Elefante observed that “there’s no pat answer,” adding that “the link between land use and infrastructure is profound,” a reference to the carrying capacity of the surrounding neighborhood.

Density, noted Stephen Tilly, an architect in Dobbs Ferry, NY, “can’t continue forever; it has to be balanced.” For example, density eventually conflicts with the emerging concept of solar zoning.

“Historic District Commissions and codes need to build in things like solar access, and that’s a real challenge," Tilly said. He had earlier pointed to generally low-rise Park Slope, Brooklyn, which has many smaller buildings and “lots of potential for harvesting energy with little impact on neighborhood character.”

(Indeed, the size of the Atlantic Yards buildings has short-circuited an effort by the Fifth Avenue Committee to place solar panels on a mid-rise building it plans just north of Atlantic Avenue.)

Growth and Brooklyn

At another panel, Lisa Kersavage of the Municipal Art Society (MAS) cited the “failure of the environmental review process to adequately consider historic districts,” She offered a slideshow of historic resources ignored in the Downtown Brooklyn rezoning and cited a “complete failure to identify historic resources” in the waterfront rezoning. The city identified eight known and 12 potential historic resources; MAS identified 264. (For Hudson Yards, by contrast, the city identified 110 resources, she said.)

“Politicians have the power to deny permits because of negative impacts,” she said, stressing that “we need historic resources identified first.”

At the 22-acre Ikea site in Red Hook, in 2004 rezoned from manufacturing to retail, Ikea plans to fill in and pave over a graving dock—a place for ship repair—even though a new such dock would cost $1 billion and be almost impossible to get through a permit process.

Ikea plans to mitigate the impact by drawing an outline of what’s been filled in, Kersavage reported, “much like a chalk outline around a corpse.” In other maritime cities, graving docks have remained, adapted for public use. In Belfast, two are preserved in a science park, while in London, one’s been landscaped into a park. MAS has filed suit, but Ikea has continued on its plan.

Behind Brooklyn’s growth

“Because of the market and rezoning, Brooklyn is booming,” Kersavage, a partial explanation which nonetheless drew a corrective from longtime community planner Ron Shiffman, who teaches at the Pratt Institute and is on the board of Develop Don’t Destroy Brooklyn.

“Brooklyn is not booming because of rezoning,” he said, urging a look at the diversity of building types and the preservationists, “risk-oblivious population,” newcomers and not, who invested in neighborhoods before it was chic. Community-based organizations renovated and rehabilitated 80,000 units of declining or abandoned housing in the past three decades. “These folks saved the neighborhoods so the risk averse developers could come in.”

Rezoning, Shiffman asserted, “is monolithic and cataclysmic,” and we need a planning program upfront, before developers articulate what they want. A former member of the City Planning Commission, Shiffman said that environmental impact statements—the product of both city and state reviews—are not read by the commissioners. “If they don’t read it, the politicians won’t.”

Wrangling with policy

Shiffman suggested that “we need to rethink density,” given that the city has erred in both directions. We shouldn’t downzone to exclude populations and uses, he said, citing the example of Toronto, where “performance-based zoning” allows light industry, under certain conditions, in residential areas. That would allow new production facilities to thrive in new places.

He cited the “major victory” of inclusionary zoning on the Greenpoint-Williamsburg waterfront, where affordable housing is required as a tradeoff for increased density, but lamented that the city rejected similar zoning on Fourth Avenue between Flatbush Avenue and 15th Street at the border of Park Slope—an area that is now booming with mid-rise luxury construction.

Shiffman showed a slide of the iconic Williamsburgh Savings Bank building “which is unfortunately being renovated into condos” with no affordable housing. The top tower is sheathed in black for renovation; of that black shroud, he said, “I think it is in mourning,” for itself, as well as the nearby Atlantic Yards development.

Cities need "staunch buildings," he said, and, declared the Ward Bakery one of the “staunch buildings… that should be saved.”

Eminent domain, Hamburg & AY

Shiffman criticized Atlantic Yards, saying that “the misuse of eminent domain to help a private developer” sets a dangerous precedent for the city’s growth. In Hafen City, a new port-area development Hamburg, proposed a few months before Atlantic Yards, the city invested in infrastructure—an opera house and subway station—before going forward. THe process has moved much faster there.

“Rather than turn it over to one developer, they spent nine months working on a community program,” he said. “If we did Atlantic Yards right, it would be 12 developers, not one,” he said. (Of course, it wouldn't be Atlantic Yards, because development would likely be limited to the 8.5-acre railyard, not the 22-acre site.)

The Hamburg project, however, included no mandate for subsidized housing, a key element behind the political support for Atlantic Yards. Affordable housing connects to density, but, regarding Atlantic Yards, the issue was take-it-or-leave-it rather than studied from the start.

That connected, in a way, to a comment Kroessler made earlier: “I’m tired of affordable housing being an albatross around the neck of historic preservation.” The tensions between the two might be mediated, as Garvin's comment suggested, by something in short shrift when it came to Atlantic Yards: planning.

Inconsistent silence: the Times editorial page forgets Atlantic Yards subsidies

While the New York Times editorial page generally favors Atlantic Yards, it three times has argued that direct city and state subsidies were unnecessary, and that developer Bruce Ratner should pay his own way.

Now the city subsidy has more than doubled, but the Times has passed on a timely opportunity to restate its stance.

Consistent criticism

In a 3/27/05 editorial headlined A Triple Play for New York Teams, the Times opined:
A mixed-use development like this could be a shot in the arm for the local economy. The low- and moderate-income housing units would be a big plus, and the developer has agreed to pay fair market value for the railyards at the site. But the city and state are each supposed to contribute $100 million to build streets and sidewalks and prepare the site for development. That’s unnecessary: Mr. Ratner should pay his own way.
[Emphases added]


In an 11/27/05 editorial headlined A Matter of Scale in Brooklyn, the Times followed up:
Mr. Ratner has always made it clear that he expects government aid in preparing the arena site, and the city and state have each committed to pitch in $100 million in cash to help. There is no reason to expect taxpayer money to be used to help fund a profit-making real estate venture like this one; those costs should be absorbed by the builder.

The Times missed an opportunity to mention Atlantic Yards in an editorial last April criticizing subsidies "for the already rich owners of the Yankees and the Mets."

Most recently, in a 8/6/06 editorial headlined The Atlantic Yards Project, the Times commented:
And while the Ratner company will finance much of the project, taxpayers are still being asked to underwrite $200 million in direct city and state subsidies. Some $40 million, for example, is for land acquisition for the arena, which should be a developer expense. The project may require the city to build more classrooms, expand sewer and water services and provide more police on game days. It is up to Mayor Michael Bloomberg’s administration to demand from the developer every reasonable contribution to defray these extra expenses.

Missed opportunity

And the Times has failed to comment on the apparent doubling of the city's commitment, to $205 million, of which $100 million would be for land acquisition. That sum represents 2.5 times the $40 million sum the newspaper said last August "should be a developer expense."

Then again, it's not completely fair to blame the editorial writers for not keeping on top of many municipal issues. They rely in part on the Times's coverage--and the Times hasn't reported on the increased public subsidies.

More missed opportunities

Nor has the Times yet reported on the growing furor over the planned demolition of the Ward Bakery. Here's a comment from architectural historian Andrew Dolkart from an online petition:
This is an industrial building of extraordinary grace, heralded at the time of its construction and still a significant architectural monument. Over the past decades we have learned the value of creating urban neighborhoods of old buildings and new buildings. The Ward's Bakery should be preserved and incorporated into a residential community appropriate to the neighborhood.

The Times does find space today, however, for a not-so-brief article about moving feral cats from the Atlantic Yards site.

You'd think that a newspaper's job is to inform the public about important civic issues. When it comes to Atlantic Yards, however, too often the press just gets "brutally weird" and ignores its duty.

FCR's Stuckey: the right man for the job, as shown in Times Square saga

So who's responsible for Forest City Ratner's aggressive demolitions strategy, aiming to create "facts on the ground" well before the Atlantic Yards legal battles are settled?

One key player is undoubtedly Jim Stuckey, a Forest City Ratner Executive VP and President of the Atlantic Yards Development Group. Last year I suggested that Stuckey was worth profiling and, though no one took me up on the suggestion (see 5. Who's Jim Stuckey?), there's another place to look. (Photo from PBS Newshour.)

The Times Square story

Stuckey turns up as a character in Lynne Sagalyn's comprehensive 2001 analysis of Times Square redevelopment, Times Square Roulette: Remaking a City Icon.

Stuckey then worked for the city, heading the Public Development Corporation (PDC), the forerunner of the New York City Economic Development Corporation. From that perch, curiously enough, he was serving a mayor who didn't want to be perceived as selling out to developers. (Does that attitude persist in city government today?)

Sagalyn writes:
In 1986, a big runup in land prices triggered by a speculative office boom sent PDC's president, James P. Stuckey, back to the negotiating table--on direct orders from Mayor Koch. Believing that the office deal was now unfavorable to the city and under growing criticism for the "loan" portion of the deal, Koch wanted to better the deal with TSCA [Times Square Center Associates]. He was nervous about the political nature of the city's position now that the real estate market had turned hot, particularly, about the developers "making a killing." The mayor, Stuckey explained, "did not want to subsidize a windfall."

Ends justify means?

And to accomplish the city's goals, Stuckey--exhibiting some of the skills that undoubtedly have served him well in his career--was deemed to be pragmatic and hardnosed.

Sagalyn writes:
Hard-driving, focused, and aggressive, the 32-year-old Stuckey was the right city negotiator for the task at hand. Appointed president of PDC in May 1986, he had worked his way up through the organization, which he joined in 1980. He was experienced in the ways of public development, having started his career in 1979 in the Mayor's Office of Development (which was folded into PDC in 1980) working on the South Street Seaport project. A graduate of St. John's University with both a bachelor of science and a master of arts, he focused intently on the politics of feasibility, on getting things done. During his three-and-a-half year tenure as PDC president, Stuckey was responsible for over $15 billion in commercial, industrial, and waterfront real estate development projects. In constrast to [Carl] Weisbrod who cared greatly about planning policy, process, and precedent, Stuckey's attitude toward deal making more closely matched the maxim "the ends justify the means." When interviewed about his role in the renegotiations, he recalled: "We were pulling down the gauntlet at the this time. We didn't want everything to get lost. We approached Pru, who was more pregnant than [its executives] wanted to be. Prudential stepped up to the plate, a real civic thing to do. They understood that they could not jeopardize what they had in it [the 42nd Street Development Project] already. Once in with the public sector," he concluded, "it is hard to pull out."
[Emphasis added]

Today, perhaps, the converse may be true: once in with the private sector, it is hard for a public agency to pull out.

Rounding out the picture

Stuckey, who's described in his Forest City Ratner biography as "an accomplished musician, capable of playing ten instruments," has a notable set of community involvements. He's served as Vice Chairman of Community Board 2 in Staten Island, and as a Trustee of the Jacques Marquis Center of Tibetan Art, also in Staten Island. (Yes, the point man for the city's densest development lives in New York's least-dense borough.)

But he's not born into a real estate dynasty, unlike boss Bruce Ratner. A brief profile in Crain's New York Business last May explained that Stuckey grew up in a "cramped Sunset Park apartment" and is pursuing a master's degree in theology, a fascinating detail.

In that article, Develop Don't Destroy Brooklyn spokesman Daniel Goldstein described Stuckey as "an absolutely cutthroat businessman." Stuckey joined Forest City, Crain's reported, "for precisely the opposite reason," to do projects with "a public purpose."

Would it be possible, as Sagalyn's account hints, that it's possible to have a cutthroat approach to a "public purpose"? Note also that "public purpose" is a legal term, a defense of eminent domain.

Art Commission

Also, since 2002, Stuckey's been a lay member of the city's Art Commission, the city agency that "reviews permanent works of art, architecture and landscape architecture proposed for City-owned property."

The Commission includes 11 members, including an architect, landscape architect, painter, and sculptor, plus representatives of the Brooklyn Museum, the Metropolitan Museum of Art, and the New York Public Library. Recently, Stuckey was named president of the Commission.

And, as I noted, he also served on the committee that chose Renzo Piano as the architect for the Times Tower, which Forest City is building in partnership with the New York Times Company. It will open later this year.

Media-savvy blog masters?

The Crain's article suggested: His first mission is to steer past the media-savvy blog masters who have mounted a David-like effort to stop Atlantic Yards.

Crain's, to its credit, published my letter in response:
As a journalist who closely follows the Atlantic Yards project in my blog, I can tell you how Stuckey and his company "steer past" us unpaid volunteers. They spend large sums on public relations materials and paid print advertising; they don't answer my questions; and they barred me from the May 11 press conference at which architect Frank Gehry discussed new designs for the project.
Perhaps they were afraid of questions about Mr. Gehry's former claim that the development would be "coming way back," about their plan for "interim surface parking" on two large areas of the proposed project footprint, and about Forest City's outlandish (yet often-repeated) claim that Atlantic Yards would provide $6 billion in new tax revenue to the city and state.

I wasn't barred from a subsequent developer event, but that doesn't mean Forest City representatives answer my questions. Stuckey, to his credit, has twice been willing to answer questions after I buttonholed him at public meetings. But it's not like transparency is a priority.

Park Slope one-way traffic plan dead? Well, "not moving forward"

Maybe I'm obtuse about semantics, but I'm still not quite clear on whether the Department of Transportation's plan to make Sixth and Seventh avenues in Park Slope one-way, which generated huge opposition, is dead or merely put aside to be revisited at a later date.

The Brooklyn Paper this week reported:
“We’re listening to the community and not moving ahead with the proposal,” said Department of Transportation (DoT) spokeswoman Kay Sarlin, who had earlier promised that the agency would kill the controversial proposal if “the community” rejected it.

I followed up and asked Sarlin: "Is that any different from following the CB6 transportation committee resolution, which requested that DOT not move forward 'at this time'? In other words, is the plan dead? Or just on hold for revision and discussion? Or?"

Her response: "We're not moving ahead with the plan."

More on the press

I last week criticized the Courier-Life chain for not providing enough coverage of the controversy in its Park Slope zoned edition; I should acknowledge the front-page lead story this week, which quotes Forest City Ratner transportation consultant Sam Schwartz as saying the developer had nothing to do with the plan.

That's not surprising; the story should have noted, as I'd pointed out, that, were the new plan described as an Atlantic Yards traffic mitigation, it could have been fodder for a lawsuit, because it was not mentioned in the environmental review process.

Gersh Kuntzman of the Brooklyn Paper offers a defense of "technocrat" Michael Primeggia of the DoT. In response, Lumi Rolley of NoLandGrab critiques the one-way success the DoT cites in East New York, and Aaron Naparstek of StreetsBlog offers countervailing evidence about the record of one-way streets.

Forest City embraces historic preservation, but not in Brooklyn

The first curious thing about yesterday’s announcement that Forest City Ratner would demolish the Ward Bread Bakery (right), a nearly century-old set of interconnected brick and terracotta-clad buildings beloved by preservationists, is: why now?

The towers planned for the block between Pacific and Dean streets and Carlton and Vanderbilt avenues wouldn’t be built for seven or eight years at the earliest, and likely much longer. Phase 2 of the Atlantic Yards project, which would deliver all the promised open space, isn’t supposed to start until after 2010, and that block would come last. Moreover, the promised ten-year build-out could take 15 or 20 years.

The developer says what’s needed are staging areas and a very large surface parking lot, first for construction workers. Neither need has been proven—note the Empire State Development Corporation’s defense of this notably not-so-transit-oriented development.

Equally importantly, it seems that, even before legal challenges are resolved, the developer wants to create “facts on the ground,” a sense of inevitability.

Forest City loves historic preservation

The second curious thing is that the developer, and especially its parent company, truly embraces historic preservation as a strategy—just not here. Compare the photo of FCE's River Lofts project in Richmond, VA (right) with the view of Pacific Street east of Carlton Avenue (below), with Ward Bakery in background. The Atlantic Yards project would involve not only the demolition of the yet-unrenovated bakery, but the demolition of two other former industrial buildings already renovated into condos, and another partially renovated for office space--the yellow building in the photo. (Former owner Shaya Boymelgreen once saw the "blighted" Ward Bakery as a potential hotel.)

Those are the kind of projects Forest City Enterprises (FCE) has accomplished proudly in several cities.

During the National Trust for Historic Preservation's National Preservation Conference in 2002, FCE was the principal sponsor, and keynote speaker Ronald Ratner, president and CEO of Forest City's Residential Group, made a strong case for incorporating buildings like those on Pacific Street into the company's projects.

"We need to think more about the adaptive re-use opportunities,” Ratner declared. “That's how we can balance historic preservation and economic reality." He cited the importance of looking at the urban fabric: "We cannot focus on a single building. There is a much broader context of neighborhood, district, city and region. No matter how skillfully done, a building must be part of a vibrant urban fabric if it is to maintain its value and provide a return on financial and civic investment.”

Urban context

Indeed, the Ward Bakery is part of a context. On the next block, the “tooth” missing from the Atlantic Yards plan, is the Newswalk condo building (below), a former Daily News printing plant, now the tallest building on the block, and slated to be the shortest major building--at the corner are brownstones, directly across from the project--an anomalous nod to the past surrounded by Frank Gehry’s modernist project. (Photo from ThreeC.)

(Update: Also note that five former industrial buildings across the street from the Ward Bread Bakery on Dean Street, outside the project outlines, were given residential variances in 2002 and 2003. More on the bakery's history, and why it wasn't landmarked.)

Forest City has done adaptive re-use residential projects in Philadelphia, Boston, Denver, Los Angeles, Providence, and Richmond, for a total of 1673 units at eight properties, and converted “train stations, mills, warehouses and other historic buildings into upscale, mixed-use complexes.” In Times Square, the developer moved the landmark Empire Theatre 168 feet down the street to house the lobby of the new AMC Theatres.

Earlier this month, during the Citigroup 2007 Global Property CEO Conference, Forest City Enterprises CEO Chuck Ratner explained the strategy (59:35 of the webcast): “We’ve done a lot of historic rehab, buying old buildings, converting them into rental apartments, using historic tax credits, 80/20 housing, to drive down the cost of capital, increase the equity return.” (AY graphic from Environmental Simulation Center, adapted by Lumi Rolley of NoLandGrab. The block with the Ward Bakery is the southeast block.)

He followed up a little later (1:04:18). “That’s when you add the greatest value, when you see a piece of land and envision what it can be,” he said. “When you see an old tobacco warehouse in Richmond, Virginia, that was formerly Lucky Strike’s manufacturing plant and understand how it can be apartments.

The Richmond example

That Richmond complex, known as The River Lofts, is “a growing community that celebrates the area’s industrial heritage while creating a dynamic future.” According to the developer, the River Lofts offer 329 apartments within three historic buildings, with over 40 different floor plans to choose from.

The Ward Bakery and other buildings could offer a similar project, but in Brooklyn, that’s not enough. The Empire State Development Corporation (ESDC), in the Response to Comments chapter of the Final Environmental Impact Statement (FEIS), called the loss of the building a significant adverse impact, but deemed adaptive reuse “not practicable.”

Adaptive reuse

The reasons: some units would lack access to light and air and thus would be difficult to use and to market; fewer units would be created; repairing the bakery’s terra cotta façade would be expensive; and the interiors and exteriors would be significantly altered. (Aren’t factories converted to residential use always altered?)

Moreover, many fewer units would be produced, and it would be impossible to create the density for the affordable housing plan.

And it would interfere with the project, since the bakery would be the site of some proposed open space, parking, and environmental remediation. The reuse, according to the FEIS, would “interfere” with sustainable design. (That, of course, is a narrow view of sustainability, given the concept of "embodied energy" and the lower energy cost of older materials .)

Size questions

The former Ward Bread Bakery could yield 103 units, the ESDC said in Chapter 7 of the FEIS—much smaller than the building that would go there, but, interestingly enough, comparable to the lofts built in Richmond. An additional 225,000 square feet could be developed above the the bakery, adding another 235 or so units. However, said the ESDC, construction costs would rise by $30 per square foot.

Unmentioned by the ESDC is the total cost of construction. According to an audit by KPMG for the ESDC that I acquired last December, construction costs are about $300 per square foot. That would make the increase about ten percent—not insignificant, but also no larger than other factors, such as the general rising cost of construction materials.

Due to the high costs associated with converting the buildings, however, “the conversion units would have to be condominiums offered at market value, which would preclude affordable housing from being provided in either” the Ward Bakery or the former LIRR stables.

Tradeoffs

So, is the tradeoff density and affordability for preservation and luxury? Partly yes, partly no. First off, given the developer's experience in 80/20 conversions, it seems likely that Forest City would ensure that 20 percent of the building would be affordable. (Note that 20 percent of the Atlantic Yards rentals would be affordable to low-income residents, but 30 percent of the affordable units would be closer to and even above market rates.)

The community-developed UNITY plan, as well as the Extell bid, both were premised on mid-rise or high-rise development on the railyards, with a mixed, lower-rise development on adjacent Pacific and Dean streets. That would produce less housing, and less affordable housing, and no arena. They would preserve already-renovated buildings like the Spalding building (right).

However, the question is how much development is appropriate around and beyond the intersection of Atlantic and Flatbush avenues. At some point, as urban planner Ron Shiffman regularly points out, development exceeds the carrying capacity of the infrastructure. After all, if the goal is simply housing, we can build towers in our parks. (Map below from Develop Don't Destroy Brooklyn.)

And the Atlantic Yards site is not the only place for density, so the difference between a project involving 14,000 people--as currently planned under "extreme density"--and half that may not be crucial.

Urban planner and city advisor Alex Garvin, for example, has suggested that transportation changes--light rail or bus rapid transit--in the Bronx could easily accommodate 100,000 more people. Reforms in the city 421-a subsidy program should yield thousands more affordable units. And, given the likely delays in the Atlantic Yards project, affordable housing would come much faster via other programs.

Mitigating the loss

So how would the loss of the Ward Bakery, and the other cited historic resource, former Long Island Railroad Stables, be mitigated? According to Chapter 19 of the FEIS, the partial mitigation would include “archival documentation of the buildings and additional measures that would document the history of the buildings.”

That’s not quite the same as preservation.

Converting a Ward Bakery

The innovative Ward Bread company built bakeries in cities around the country; some structures remain, and others don’t. In Syracuse, for example, the building was demolished in 1995 for a park, according to a 9/14/06 article in the Syracuse Post- Standard.

In Newark, the Ward Bakery closed in 1979, well before the Pechter Fields Bakery, the last bakery occupant of the Brooklyn building, closed in 1995. (Update: Since then, the building was occupied by a storage firm, which operated at least through 2004.)

The Newark building, bought in 1994 for $100,000 (!), was converted to “a mixed-use project combining 125 rental units with a community center, a daycare facility, and 16,000 square feet of commercial space,” according to the Urban Land Institute. “The building, however, required massive, expensive structural improvements and environmental cleanup.”

But it was, in fact, possible.

Costs and benefits

In the end, the preservation of a building is part of a complex set of questions, involving the value of history and context, the cost of conversion versus replacement, energy costs as expressed in “embedded energy” and new materials, and the tradeoffs regarding increased density.

Yes, the AY project would bring more housing, and more affordable housing, but it would cut off some solar access and impose new social burdens with increased traffic.

The EIS established some of the costs of conversion. But no one’s calculated the full—and in some ways hard to quantify—costs of Forest City Ratner’s plan.

FCE faces the costs

In his 2002 speech, Ronald Ratner said, "Historic rehabilitation introduces costs and complexities that are not associated with new construction. Bringing old buildings into compliance with new needs, codes and demands is very complex and expensive.” The 20 percent federal historic tax credit "brings some economic relief but in most cases it barely offsets the premium costs of doing historic rehabilitation."

Still, Ratner didn’t see that as a reason to throw in the towel. "As a developer, I am sometimes asked if we would ever be willing to sacrifice profitability to achieve excellence in historic preservation. My answer is that's a false choice. Using technical and financial creativity, and working in public-private partnerships, we can have it all, including economic return."

In this case, they didn’t try. There was a Gehry project (above) ready to fly.

Interim Atlantic Yards Environmental Monitor in place (and guess who?)

Residents around the Atlantic Yards footprint have noticed an engineer walking around and an air monitoring station set up. It turns out that, while the Empire State Development Corporation (ESDC) has yet to hire an Environmental Monitor, as per a Request for Proposals (RFP) issued last month, an interim monitor is in place.

The monitor? AKRF, the consulting company known for producing lengthy environmental impact reports that justify development projects while resisting legal attack. AKRF produced the Atlantic Yards environmental impact statement, which remains subject to an expected legal challenge.

The ESDC is evaluating the RFP in-house, agency spokesman Errol Cockfield told me, and a selection should be made “very soon.” Once that firm is chosen, AKRF will hand off the task.

[As I’ve written: Some context about consultants AKRF, who have worked on projects ranging from Shea Stadium to Battery Park City. Obviously large developers value AKRF's work, but a frequent critic is Richard Lipsky, whose Neighborhood Retail Alliance lobbies for local businesses over big boxes and large developments (but is an Atlantic Yards supporter). In a post on his blog, Lipsky wrote, "The AKRF folks are simply rationalizing their job which is to make a great deal of money by minimizing impacts and conducting dishonest research."]

Not an ombudsman

The monitor has some very specific tasks, as detailed in the RFP, including the assurance that appropriate equipment is used, construction isn’t too noisy, and that rodent control and stormwater management plans are implemented.

The monitor, Cockfield noted, is not designed to serve as an ombudsman for the public. So what should residents with concerns about construction activities do?

He suggested three options: contact the city via 311, the developer via the Community Liaison Office, or the ESDC itself. The ESDC hasn’t set up a specific contact number or person, but, then again, it does take public comments at its meetings, and on February 28 was reminded of the urgent need for monitoring.

[Update: George Locker, attorney for 13 tenants in the project footprint, comments, "There is one other alternative for tenants of Ratner who live in the footprint while demolition proceeds- it is a Class E felony for a landlord to harass its rent regulated tenant(s). See New York Penal Law section 241.05. In June 2006, the 78 Police Pct. issued complaint #2316, for harassment, filed against the contractor and Forest City Ratner, based on the mechanical demolition on 6/12/06 against one wall of 624 Pacific Street. So in addition to phoning 311, tenants should call 911." That criminal complaint, he says, was taken but not pursued.]

The Ward Bakery demolition and environmental sustainability

Even if you recycle waste from a building, that doesn't mean the process is environmentally sustainable. That was the message two weeks ago from consultant Donovan Rypkema at the Historic Districts Council conference in New York, and it's relevant in light of Forest City Ratner's press release today announcing the demolition of the Ward Bread Bakery, a building hailed by preservationists.

The press release states:
FOREST CITY RATNER TO BEGIN DEMOLITION OF FORMER WARD BREAD BAKERY
Over 75% of Building to be Recycled as Part of LEED Certification
(Brooklyn, NY) – March 22, 2007 – Forest City Ratner Companies (FCRC), the developer of the Atlantic Yards project in Brooklyn, today announced that abatement and demolition of 800 Pacific Street (also known as the Ward Bread Bakery building) will begin on Monday, March 26, 2007. As part of its sustainability efforts and LEED (Leadership in Energy and Environmental Design) certification process, at least 75% of the demolition debris is expected to be recycled.
“Obtaining LEED certification for Atlantic Yards is one of the highest ‘green’ standards we can achieve,” said Bruce Ratner, President and CEO of FCRC. “Whether it is recycling building materials, using low emission vehicles or reducing storm water overflows into the Gowanus Canal by more than 2 million gallons per year, we are seeking out every possible way to make Atlantic Yards as eco-friendly and environmentally responsible as possible.”

Green buildings not the only answer

Rypkema in New York gave a version of this speech, in which he pointed out that a green building is not necessarily sustainable development:
Far too many advocates in the US far too narrowly define what constitutes sustainable development. Far too many advocates in the US think that so-called green buildings and sustainable development are one in the same. They are not. And I'll come back to that shortly.

Then he got to the issue of "embodied energy":
So much of the "green building" movement focuses on the annual energy use of a building. But the energy embodied in the construction of a building is 15 to 30 times the annual energy use. Razing historic buildings results in a triple hit on scarce resources. First, we throwing away thousands of dollars of embodied energy. Second, we are replacing it with materials vastly more consumptive of energy. What are most historic houses built from? Brick, plaster, concrete and timber. What are among the least energy consumptive of materials? Brick, plaster, concrete and timber. What are major components of new buildings? Plastic, steel, vinyl and aluminum. What are among the most energy consumptive of materials? Plastic, steel, vinyl and aluminum. Third, recurring embodied energy savings increase dramatically as a building life stretches over fifty years. You're a fool or a fraud if you say you are an environmentally conscious builder and yet are throwing away historic buildings, and their components.

Finally, he addressed recycling:
Environmentalists cheer when used tires are incorporated into asphalt shingles and recycled newspapers become part of fiberboard. But when we reuse an historic building, we’re recycling the whole thing. Preservation North Carolina has a bumper sticker that reads, “Historic preservation – the ultimate recycling” and they are absolutely right.

There are costs involved in preserving buildings, and the issue around the Ward Bread Bakery is complex. I'll get to that tomorrow. For now, however, let's recognize the complications behind claims of sustainability.

Coming demolitions mean "urban room" at crucial corner

No, it's not the grand 150-tall Urban Room, the gateway to the "Miss Brooklyn" skyscraper, planned at a short distance to the west. But as developer Forest City Ratner proceeds with demolitions over the next few months, the western segment of the project site is shaping up to become vacant, a distinct vision of "urban room."

Indeed, the triangle of land between Fifth, Flatbush, and Atlantic avenues is already vacant, with one building awaiting demoliton. Just east of Fifth Avenue, betweenFlatbush Avenue and Pacific Street, is where the action will move.
Lot 13 has been vacant for a while. Lots 19, 20, 55, and 56 were made vacant after demolitions next year.

Upcoming are demolitions of lots 10, 11, 12, 18, 22, 30, and 54--filling in the grey color in the map above. The largest plot, Lot 1, a gas station, is largely absent of structures.

The three buildings pictured at right are in lots 12, 11, and 10. Two of the buildings extend from Flatbush Avenue to Pacific Street. The vacant lot at the corner was deployed in December for Christmas tree sales.

Empty corner

Should Forest City Ratner follow through on the planned demolitions over the next weeks and months, that corner will be vacant. Notably, vacant lots--except for that gas station--will partly surround two buildings, on Lots 21 and 27, occupied by plaintiffs in two separate court cases. (Plaintiffs also occupy lots 50, 46, 43, and the square above 43. )

There may be more "urban room" coming soon. The tenants of Lot 29, the Community Benefits Agreement signatory BUILD, recently vacated their space.

Isolated building

Lot 21 is the building at right in the picture below, behind the gas station. Perhaps the court cases will be resolved and Forest City Ratner will be able to proceed apace with construction of the planned Brooklyn arena (aka Barclays Center). But if those cases linger, or the plaintiffs win, the lots likely will linger as well.

It may, indeed, start to look a little like Norwood, OH, where three property owners won a case resisting the use of eminent domain. "Many people who live near the site are tired of looking at the desolate piece of land surrounded by a chain-link fence," the Cincinnati Enquirer reported in a recent article.

"Facts on the ground"

Of course, the court battle is still in the early stages. But it never hurts to create "facts on the ground."

Indeed, in his Robert Moses biography The Power Broker, Robert Caro wrote, regarding demolitions and tenant relocation for expressways (p. 779):
Many tenants were already out, their buildings already demolished. Once you get that first stake driven, Moses was fond of saying, no one could stop you.

In this case, the buildings to be demolished--at least the initial ones--are already vacant. But the emerging "urban room" will help create an argument for action.

Marty's "letter" on Atlantic Yards: it depends on the meaning of "soon" (and more)

In the Spring 2007 issue of his promotional "Brooklyn !!" publication, Borough President Marty Markowitz finally addresses Atlantic Yards, a subject he has assiduously avoided in this venue, but he can't avoid skewing the facts.

He begins with a statement of support:
The Atlantic Yards project took an important step forward when the state approved the project in December.

Benefits soon?

Then, however, he starts straining:
Atlantic Yards promises not only the return of professional sports to Brooklyn, but the creation of union jobs, affordable housing, and the kind of downtown our thriving and growing borough deserves. We will soon be reaping these and other benefits, such as world-class architecture, an on-site school, street-level shopping, and accessible open space, which will enhance Downtown Brooklyn, knitting together neighborhoods to create a vibrant new center of city life.
(Emphasis added)

Soon? It's hardly clear that an "on-site school" would be a benefit to anyone other those in the project--and the school still wouldn't be big enough and wouldn't be built until after 2010.

Similarly, the publicly accessible open space wouldn't begin until after Phase 1 is finished (2010) and, in the best-case scenario, be completed by 2016. (If he's talking about privately-accessible open space on the arena roof, well, that might happen by 2010, but that's hardly a benefit "we" might reap.)

As for the 2016 target, company executives acknowledge that a ten-year buildout is a long shot, which also would delay the affordable housing. And it's hardly certain that the project would "knit together neighborhoods;" BrooklynSpeaks makes a pretty good case that it would be a barrier.

Frank Gehry is a world-class architect, but several critics have already questioned whether this project represents world-class architecture.

Meaningful cuts?

Markowitz continues by claiming victory:
During the project’s planning process, I suggested changes including a reduction in size, asking that the “Miss Brooklyn” building not be taller than the Williamsburgh Savings Bank building, and that the project’s four tallest buildings be reduced in size. I am encouraged that my request to limit height was heeded. I also called for increased open space, and am pleased that a full acre was added to the plan.

Of course, the flagship Miss Brooklyn tower would still block the bank's clock and, as I previously discovered, plans to reduce the project's buildings had been on the table since the beginning of last year, months before Markowitz suggested his changes.

Traffic mitigations

He offers a nod to community concerns:
Mitigating traffic, parking, and construction and infrastructure issues will be a top priority for my office in the days ahead, especially now that preliminary work on the site has started. I remain committed to resolving these issues efficiently and equitably.

Note that Markowitz's efforts to mitigate traffic and parking issues were roundly ignored by the Empire State Development Corporation.

He closes:
We must continue to engage the best minds to address quality-of-life concerns, and work together to ensure that this project delivers on its promise of setting a new standard for urban development across America—which I truly believe it will. At this phase of Atlantic Yards’ development, the more voices and energy dedicated to these goals, the better.

Does a new standard mean "densest residential project in the country"? Weren't the "best minds" supposed to help evaluate the project before it was approved, not after?

A DCP footnote in the Atlantic Yards "permanent campaign"

I recently wrote how the public relations effort behind Atlantic Yards represents a "permanent campaign" and yesterday wrote about Forest City Ratner's lobbying of the Department of City Planning (DCP).

So the email message reproduced here, from Forest City Ratner executive Jane Marshall to Rachaele Raynoff, press secretary at the city's Department of City Planning, shows another footnote in that campaign. (It was obtained via a Freedom of Information Law request.)

Raynoff wanted to send a staffer to the 5/11/06 press conference at which architect Frank Gehry and landscape architect Laurie Olin unveiled the new Atlantic Yards designs.

Marshall said OK, but asked that the staffer not identify herself to the press: "[A]s it is our event we would be grateful if she, like the other public party people attending (ESDC), not identify herself to the press. We do not want the press or anyone else for that matter, putting any public entity on the spot at this event."

Motivations

Was that a desire to shield the public entities? To not distract from Frank Gehry's presentation? To not remind people that the project required public oversight?

It's not clear. However, Forest City was managing that event carefully; I was barred from that press conference.

DCP comment

So, was the request out of line or irregular? I asked DCP's Raynoff to comment on the e-mail, and she responded, "FCR's request was irrelevant because we wouldn't introduce ourselves at someone else's press conference. At the time of this press conference, Ms. Torres was a junior staff member working in City Planning's press office. She was sent to observe so that we would be informed firsthand about a major development in the city, one about which we could eventually get questions. Had she been asked by a reporter, that's exactly what she would have said."

That's a reasonable explanation. Then again, is a request to "not identify herself" the same as "not introduce herself"? Maybe it is, and maybe it isn't.

Lobbying Ms. Burden: DCP gives up on WillyB blockage, mall "overbuild"

So what did Forest City Ratner get from having Fried Frank lawyer Melanie Meyers, a former general counsel (1994-1998) to the Department of City Planning (DCP), lobby her old agency last year regarding Atlantic Yards? (Fried Frank had the largest single lobbying contract in the state.)

We can't be certain, but documents acquired via a Freedom of Information Law request show that DCP in 2006 backed down from two requests--including a request not to block the Williamsburgh Savings Bank--made by City Planning Commission Chair Amanda Burden in the previous year.

Moreover, DCP last year participated in a clear charade--a "recommendation" that Forest City Ratner reduce the height of several buildings, even though the developer had put most of the cuts on the table several months early.

The New York Times even considered the proposed cuts--which would only bring the project back to the originally announced square footage--front-page news and the lead story in New York.

The Atlantic Center mall "overbuild"

In that 8/5/05 letter to Forest City Ratner President Bruce Ratner, Burden wrote, "The project includes not only the Atlantic Yards Project, but also the 'Overbuild' site at Atlantic Centernorth of Atlantic Avenue, and ATURA Site 5 at Fourth, Atlantic and Flatbush avenues." (Click to enlarge)

A 9/20/05 “DCP Checklist” that otherwise focused on AY stated: Review of Atlantic Center (AC) overbuild. Want AC buildings at the same level of design detail as Atlantic Yards (AY).

DCP, however, has said nothing about the overbuild since then. I queried DCP spokeswoman Rachaele Raynoff about the letter, and she responded, "As we understand it, the overbuild is not part of Atlantic Yards. At the time Ms. Burden sought to look at the design relationship between Atlantic Yards and Atlantic Center."

Burden's original letter, however, acknowledges that the overbuild is not part of Atlantic Yards. It uses the term "project," not unreasonably, to describe the concurrent work in the same area being done by Gehry for the same developer.

The overbuild outraces Atlantic Yards

Indeed, while the overbuild may not officially be part of the Atlantic Yards project, it deserves scrutiny, since architect Frank Gehry is working on it and it could add 2000-plus new residents across the street from a project that already promises "extreme density." Forest City Ratner has hardly mentioned it publicly, much less confirm Gehry's role.

A photo of last year's model (right), published by the Courier-Life chain, showed three towers.)

Forest City can build some 1.3 million square feet of office space and housing over the mall, likely in three towers, without any further city or state approval. More importantly, Forest City has made no commitment to affordable housing at the site, which means the deal could be quite lucrative and not depend on negotiating subsidies.

According to the Land Use chapter of the Final Environmental Impact Statement, Atlantic Center would include 850,000 square feet of residential space and 550,000 square feet of commercial space, with the retail space remaining unchanged.

While the project would be complete five years later than initially projected, by 2013, that means it would be finished after the promised end of Atlantic Yards Phase 1 (2010) but before the end of Phase 2 (2016).

Given that most of the affordable housing would be in Phase 2, and the developer likely will wait 15 or 20 years to finish Atlantic Yards, it's likely the Gehry-designed overbuild would be completed first.

Don't block the clock?

Burden also wrote, "The Towers on the Arena Block along Flatbush Avenue should be located or massed in a way that assures the visibility of the Williamsburg Savings Bank clock from Grand Army Plaza/Flatbush Avenue. This might be accomplished by providing additional setbacks of the tower portion of Tower
1."

Tower 1 is Miss Brooklyn and, as I've written, Forest City Ratner promised in its 12/10/03 project announcement that the clock would remain visible. In the end, the height of Miss Brooklyn, once projected at 620 feet, was reduced to just a foot below the 512-foot bank, but it still would block the clock.

I asked Raynoff why DCP didn't press the issue. "These changes were not made," he said. "Forest City Ratner advised that there would be structural issues in doing so."

The Empire State Development Corporation (ESDC), in the Final Environmental Impact Statement (FEIS), also observed that moving the building east wouldn't be feasible from an engineering point of view. That of course raises a question about the sincerity of the developer's pledge in the first place.

But it's hardly clear that structural issues--more than financial ones--would impede the introduction of additional setbacks, or why Burden did not subsequently express any public concern about the outcome.

Reconfiguring the towers?

Burden also commented that a configuration of three towers on the arena block, as originally proposed, would be "superior to more recent proposals with four towers [2005 version at right] because it provides greater separation between buildings and improves their relationship to each other, the arena, and the adjoining neighborhoods.... In our view, the four-tower arrangement as currently designed would result in a massive presence on Flatbush Avenue, with the potential to block light and air at the street and neighborhood level.

(Above, the tower configuration from the October 2005 Draft Scope of Analysis, a prelude to the Environmental Impact Statement.)

Burden continued, "Should four towers continue to be part of the proposal, there should be a greater separation between Towers 2 and 3 to avoid creating a 400-foot wall along Flatbush Avenue and Dean Street. As an alternative to greater separation between Towers 2 and 3, consideration should also be given to combining them."

As shown in the
current rendering from the Empire State Development Corporation (right), there is indeed some greater separation between Towers 2 and 3, notably along the southern border, Dean Street.

It's unclear, however, whether DCP considers that separation sufficient. I asked Raynoff, who responded, "City Planning's views about the project as approved were set forth in the letter on the GPP [General Project Plan]."

In that 9/27/06 letter, the department does not address the separation issue, but does recommend that Tower 3, planned at that time at 428 feet, be reduced to approximately 220 feet, an option presented by Gehry in a 1/12/06 meeting. That recommendation was met.

DCP's influence

You can't say that Burden and the Department of City Planning had no influence on Atlantic Yards. The department offered extensive commentary on the design guidelines for the project, so much so that architect Gehry groused about it. And Burden, in the one City Planning Commission public session devoted to the project, seemed quite concerned about street-level retail.

Also, the recommendations made on page 2 of the above letter regarding "Tower Height" seem to have been followed. Burden wanted Towers 2, 3, and 4 not to exceed 425 feet, 330 feet, and 500 feet, respectively. They're now planned to be 322 feet, 219 feet, and 511 feet, respectively.

Still, DCP never solicited public input , and at its one public meeting last September, Burden and staff were with the Atlantic Yards program and most other commissioners generally uninformed.

And we know that Forest City Ratner was long ready to make concessions about the heights of some buildings. Some more fundamental concessions, however, were taken off the table. [Revised:] Maybe DCP managed that on its own. Maybe a well-compensated lobbyist with an insider's understanding had an influence. And maybe Forest City Ratner's general lobbying effort got the mayor and his deputy to ensure that City Planning got with the program.

Forest City Ratner’s spending on lobbyists: large, but small—and with a big payoff

Compared to other organizations and companies lobbying in New York State, Forest City Ratner stands out. After all, as announced yesterday in a state report, the developer spent $2.1 million last year, ranking third in the state but far outpacing any other organization involved in real estate projects.

The Yankees were a distant eighth, at $1.1 million. The leaders were the Healthcare Association of New York State and Verizon; rounding out the top ten were two medical groups and four unions.

It’s also notable that the largest single lobbying contract, $656,520, went to law firm of Fried Frank Harris Shriver & Jacobson, representing Forest City Ratner.

Coming in second, with a $527,875 contract from Columbia University, was the law firm of Kramer Levin Naftalis & Frankel, which also represents Forest City, though not as a lobbyist. Columbia also has a dicey land use project involving eminent domain.

Also, Forest City Ratner ranked second, tied with the American Lawyer Media Company, behind Verizon in retaining the largest number of lobbyists: 8; up from 7 in 2005. And it’s worth mentioning that the amount of money spent on lobbyists for real estate and construction rose more than 48% over 2005.

$105 million = 5000% payoff

On the other hand, $2.1 million isn’t much. It represents barely .05% of a $4 billion project, though a significantly higher fraction of the money Forest City would put up itself. Then again, should the project work out as expected, $2 millon should be easy to recoup—it’s revenue from the sale of two condos or perhaps ten of 172 arena suites in just one year.

The language concerning topics lobbied --"acquisition of Altantic Avenue railyards from MTA" and "acquisition of city-owned property at Atlantic Yards"—provoked some scorn from Matthew Schuerman in the New York Observer’s blog The Real Estate, who observed that those two goals had been in a February 2005 Memorandum of Underestanding: “Apparently, Mr. Fried and Mr. Frank persuaded Forest City that it needed their help persuading the state and the city to do things that they pledged.”

However, if the lobbyists actually persuaded the city to more than double its contribution from $100 million to $205 million—enough to cover the developer’s bid for the 8.5-acre Vanderbilt Yard, as Develop Don’t Destroy Brooklyn points out—well, they certainly earned their keep.

After all, $105 million represents 5000% of $2.1 million.

News coverage--and not

The New York Sun and Newsday both picked up the Associated Press article that listed the top spenders on lobbying:
After HANYS, Verizon Communications Inc. spent the second most on lobbying — $2.2 million. Forest City Ratner Cos., the company behind the Atlantic Yards project in Brooklyn, spent $2.1 million.

Metro even made Forest City Ratner's spending the focus of its brief piece, headlined Report: Ratner among state lobby leaders, with a quote from DDDB.

The New York Post offered a host of statistics, including that regarding Fried Frank's contract, with no analysis.

The Journal News, which serves Westchester, Rockland and Putnam counties, noted Ratner's spending and offered this obvious but useful observation:
Government-watchdog groups said there's nothing inherently wrong with lobbying. But too often the big-spending special interests set the agenda at the Capitol.
"The ones who are getting heard in Albany are the ones who spend the most," said Rachel Leon of Common Cause.

The Binghamton Press, owned by the same parent (Gannett) as the Journal News, offered the same story, as did the Utica Observer Dispatch, the Rochester Democrat and Chronicle and several other papers in the chain.

The New York Daily News covered the story, even mentioning that "Real estate and construction came in second by sinking $15.9million into lobbying," but didn't see fit to cite Forest City Ratner in the text of the article. (Update: The developer was mentioned in an accompanying chart.) The New York Times is so far AWOL on the lobbying story. (There's a brief mention on their blog.)

CBA "watchdog" sought to ensure "history making" benefits "for local community"

Two yet-to-be-hired Atlantic Yards monitors will be paid by developer Forest City Ratner (FCR), but it's important to keep the two straight.

The more important one will be an Environmental Monitor (EM)--the process is already behind schedule--hired by the Empire State Development Corporation (ESDC) to oversee construction activities, environmental mitigations, and much more. Residents concerned about communications difficulties have already urged the ESDC to put construction on hold until such a monitor is hired.

Enter the ICM

Meanwhile, Forest City wants you to know about another monitor, an Independent Compliance Monitor (ICM) that is part of the Atlantic Yards Community Benefits Agreement (CBA).

(According to the CBA, which was signed in June 2005, the ICM was supposed to be sought "as soon as reasonably practicable after formation of the Executive Committee," as I wrote last August. The term "reasonably practicable" apparently means March 2007.)

"Watchdog" sought

A press release issued last week by a Forest City Ratner-paid public relations firm was headlined "ATLANTIC YARDS CBA COALITION SEEKS INDEPENDENT COMPLIANCE MONITOR: 'Watchdog' To Ensure Community Benefits for Local Community and Residents."

The RFP for the monitor is managed by the same firm, the Darman Group, hired by Forest City to vet minority- and women-owned businesses to work on the project. Given the reference to the "historic Atlantic Yards CBA" (right), it's a good bet that the Darman Group and its funders won't be raising any questions about the CBA.

The press release states:
As outlined in the CBA, the ICM will be responsible for ensuring that all benchmarks for the initiatives in the CBA are met and completed, including the affordable housing, workforce development - consisting of the development of job training programs - inclusion of minority and women-owned enterprises in all phases of the construction and hiring of women and minority workers during the construction.
"The ICM will work with all parties to ensure the goals stated in the CBA are reached and provide an independent third party to mediate any disagreements should they arise," said Delia Hunley-Adossa, Chair of the Executive Committee.

Hunley-Adossa represents Brooklyn Endeavor Experience, formerly First Atlantic Terminal Housing Committee (FATCH), a group which apparently has done little more than testify in favor of the project.

The CBA states:
The terms of employment and evaluation shall be determined by the Executive Committee.

Given that the Executive Committee supports the project and, unlike the ESDC, is not subject to any further oversight, is there reason to think that the monitor would be truly independent? The New York Observer last month reported criticism from an opponent of Columbia University's development plan:
“Ratner and the city got together with one big, national not-for-profit and a set of local sycophants and put something together which doesn’t seem to have satisfied too many people, except for those who are benefiting directly from it,” Mr. [Jordi] Reyes-Montblanc, the chairman of Community Board 9, said.

Affordable housing delay?

Perhaps the first question is whether the ICM would question the pace of the project.

After all, no one from ACORN, which presumably signed the CBA expecting that the promised 2250 units of affordable housing to be delivered in ten years, has mentioned public statements by the developer and supporters that the project could take 15 or 20 years.

In-house discretion

Unmentioned in the press release is that FCR would fund the ICM, according to the CBA, with "an annual payment of up to $100,000 to be paid by the Project Developer."

Responses are due by 4/25/07. While the initial contract term will be two years, the Executive Committee of the CBA "will have the option to extend the contract term at its sole discretion," according to the RFP.

The CBA suggests but does not specify that an ICM would continue through the life of the agreement, which is up to 30 years from the "commencement of construction of the first residential building" or if "the Developers abandon their efforts to acquire or lease from the Metropolitan Transportation Authority and to obtain a rezoning of the Project site for large-scale development." (Fun fact: it's never been a rezoning.)

Looking at the RFP

In the RFP for the monitor, the term "history making" also gets prominence:
...Forest City Ratner Companies... executed a history making Community Benefits Agreement (the “Agreement”) with a coalition of eight (8) community based organizations.
(Emphasis added)

The Darman Group staffer to whom responses should be sent is Hallene Condon, a Queens resident who last year contributed to Atlantic Yards supporter Roger Green's bid for the House of Representatives, which turned into a spoiler race taking votes from Atlantic Yards opponent Charles Barron.

What the ICM might do

The job of the ICM is parceled out into several tasks, some trivial, some more central. It's as if the writer of the RFP was unwilling to consolidate tasks.

Task I
The ICM should establish a clear understanding of the scope, schedule, intricacies and programmatic goals of each phase of the project as set forth in the CBA, a copy of which is attached hereto and made a part hereof.

This would seem to be inherent in the job.

Task II
The ICM shall meet with each of the Executive Committee members to clearly define such member’s individual areas of responsibility as prescribed in the CBA, including with respect to its Governing Council. The ICM will also analyze and measure how these areas of responsibility or lack of fulfillment of such obligations will impact the goals and objectives of the CBA.

Apparently, this means someone will find out what the Executive Committee members are supposed to do.

Task III
The ICM shall meet with the Executive Committee members to clearly define such members’ obligations and responsibilities, as prescribed in the CBA, as a whole toward the effective implementation of the entire CBA. The ICM shall develop quantitative and qualitative measurements of such compliance with the goals outlined in the CBA and evaluate the adherence to the time-lines for the completion of the goals set forth in therein.

This seems somewhat redundant, but it apparently involves setting benchmarks.

Task IV
ICM shall analyze all the initiatives and obligations that are set forth in the CBA and develop a strategy which clearly defines and measures whether compliance objectives set forth in the CBA are being achieved. The ICM shall develop a format for reporting on compliance with the CBA and its initiatives and establish a frequency for such reports.

This apparently involves measuring performance against those benchmarks.

Task V
The ICM shall deliver 10 copies of all reports to the Executive Committee and 2 copies to the Downtown Brooklyn Advisory and Oversight Committee (DBAOC). The execution of all of the above tasks may run concurrently.

This means that the ICM will have access to a copy machine and the U.S. Mail.

Mitigation--CBA vs. ESDC

A closer look at the CBA shows that the monitor hired by the ESDC will have a much greater role than the ICM. Take the question of environmental impacts, which the CBA mentions but then defers to the state.

According to the CBA:
Developers shall consult with FATHC to determine appropriate mitigation measures that will address the concerns of the Community regarding environmental impacts caused by the development of the Arena and the Project, including, but not limited to: an on-site and off-site rodent abatement program; a staging plan for construction that minimizes the effects of idling trucks; a pedestrian and vehicular traffic plan; and encouragement of all contractors to use low sulfur diesel in trucks operating at the Project. In addition, the Developers shall adopt prudent environmentally sound building practices that will take into consideration the goal of promoting sustainable development in an energy efficient manner. The Developers shall notify the Coalition of their ongoing plans and mitigation measures. It is understood that the Project’s environmental impact statement and review process is administered by the State. All potential environmental mitigation measures, the cost to implement such measures, and the party deemed responsible for their compliance is ultimately determined by the State. Therefore, the Developer shall be in compliance with this Agreement by following the state mandated process.
(Emphasis added)

Regarding compliance, the CBA cites mediation and potential court action--except that the state-mandated process would seem to trump that.

The ESDC's monitor

Contrast the seven-page ICM RFP with the 28-page RFP for the ESDC's Environmental Monitor. The tasks for that job include:

1. Compliance with the specific measures to protect historic buildings near the Project site from being potentially damaged as a result of construction activities;
2. Implementation of environmental investigation and remediation measures and construction techniques pertaining to the management of asbestos, PCB-containing equipment, petroleum and other hazardous substances (including contaminated soils and groundwater) in a manner that complies with all applicable laws and regulations and will protect workers and the general public from adverse impacts associated with these environmental conditions, including implementation of a Construction Health and Safety Plan during remediation and excavation and a Community Air Monitoring Plan during excavation;
3. Numerous specific measures to reduce the effects of the Project’s construction on traffic conditions, air quality and noise, including the scheduling of truck deliveries, the use of designated truck routes, the use of on-site staging areas to reduce queueing on City streets, provision of an appropriate amount of on-site construction worker parking spaces, the use of equipment that meets the sound level standards specified in the New York City Noise Code or more stringent specified performance standards, scheduling construction to reduce noise impacts during evenings and weekends, situating noisy equipment away from the sidewalk were feasible, construction of noise barriers, use of quality mufflers, proper maintenance of equipment, provision of double-glazed windows and alternative ventilation to certain buildings near the project site, use of quiet construction techniques where feasible, use of dust suppression measures, use of electric-powered rather than diesel-powered equipment where feasible, limiting vehicle idling, use of ultra-low sulfur diesel fuel for all equipment with diesel engines, use and proper maintenance of best available tailpipe emission reduction technologies, location of stationary engines away from the sidewalk where feasible, and preparation and implementation of a construction air quality compliance plan;
4. Implementation of a rodent control program during construction activities;
5. Implementation of measures to retain and detain stormwater to meet certain performance standards with respect to Project-related combined sewer overflows;
6. Use of low emission boilers for the Project buildings and location of the HVAC vents in certain locations to protect outdoor and indoor air quality; and
7. Implementation of incentives to reduce traffic demand associated with operation of the Project to reduce the overall number of vehicles coming to the arena for a Nets basketball games.

That's a lot more to do.

Enforcement murky

Still, the memo (p. 28) establishing the Environmental Monitor sets out a vague description of enforcement, with no specific penalties or arbitrator:
1. The Project Documentation shall provide that ESDC shall have the right to enforce FCRC’s compliance with the commitments set forth above.
2. ESDC shall have the right to enter the Project site at all reasonable times, subject to safety and operational constraints, to monitor FCRC’s and FCRC’s contractors’ compliance with the terms of such commitments.
3. FCRC and FCRC’s general contractor shall meet with ESDC, at ESDC’s request, to discuss the compliance and implementation of the obligations and measures set forth in this memorandum.

What "community"?

While the ICM press release emphasizes the benefits to the "local community and residents," it's not quite clear what "community" means.

The CBA offers several definitions of "community":
“Community” means: the borough of Brooklyn, New York City, inclusive of the Neighboring Community and Surrounding Community, as herein defined.
“Neighboring Community” means: Community Boards 2, 6 and 8 within the borough of Brooklyn, New York City.
“Surrounding Community” means: the two-mile radius of the Project site within Brooklyn.

So far, however, the most important criterion for preliminary site work is status as a minority- or woman-owned enterprise, not "community" status.

According to a press release issued by Forest City Ratner regarding pre-construction work for the Atlantic Yards project, The largest of these contracts were awarded to the woman-owned demolition firm A. Russo Wrecking to remove the MTA bus parking facility on the east side of the track and the minority-owned security firm Eddington & Associates. Other contracts went to J&J Asbestos Abatement Corp., C & W Cleaning, JMV Associates and Cole Consulting.
...Demolition [at 179 Flatbush] will be performed by Cole Partners, a minority-owned firm, with construction management services provided by Gateway Demolition. Air monitoring during and after abatement was conducted by Safety Environmental, also a minority-owned firm. (Links added)

According to a second press release:
Jobie Demolition & Contracting, a Brooklyn-based minority-owned firm; Sukram & Sons Trucking Ltd, a minority-owned firm; and Cole Partners, a Brooklyn-based minority-owned firm, have been contracted to remove the structures.

Of the firms, three (J&J, Cole Partners, and Jobie Demolition) are from Brooklyn, two are from Nassau County (Russo and Sukram), and one each are from Queens (JMV), Staten Island (Safety Environmental), the Bronx (Eddington), and Westchester (Cole Consulting) counties. (I'm not certain about C&W, but it may be this Brooklyn firm.)

If the outer counties are defined as the "community," maybe the Community Benefits Agreement should not have been "negotiated" only by six mainly-black groups from Central Brooklyn, the New York State Association of Minority Contractors, plus the New York branch of the national housing group ACORN.

The CBA states: the Coalition and the Developers seek to maximize the benefits of the Project to residents of Brooklyn, as well as minority and women construction, professional and operational workers and business owners and thereby to encourage systemic changes in the traditional ways of doing business on large urban development projects

Maybe the work so far represents systemic change. Then again, as I wrote, hiring an architect who's already working on towers in Brooklyn doesn't exactly represent systemic change.

Crime trumps traffic: the Post-tabloidization of the Courier-Life tabloid

Yesterday, I picked up my copy of the Park Slope Courier, part of the Courier-Life chain, and looked for any mention of the proposed traffic changes that have the neighborhood up in arms. There was no coverage of concerns or a preview of the Community Board Transportation Committee meeting Thursday (which occurred past the paper's deadline). So much for the "Your Neighborhood -- Your News" slogan.

The front page stories concerned a Park Slope man stabbed in Manhattan last weekend, a local teen who needs a transplant, and a local man convicted of molestation. Crime--and human interest--but not "our news." Oh, let's not forget--a banner advertising "The Boro's ultimate classifieds" and "16 pages of SmartSource coupons."

The latter is the result of the chain's sale last September, when the longtime family owners accepted an offer from Rupert Murdoch's News Corp. , which owns the New York Post. In the process, the Courier-Life has actually gotten worse.

It's always had weaknesses--it's less aggressive than the rival Brooklyn Paper in covering Brooklyn's neighborhoods, and co-publisher Dan Holt's chairing of the Brooklyn Chamber of Commerce raises questions, as the Brooklyn Paper has noted, about the paper's coziness to Brooklyn's establishment.

But it also has covered a good range of stories, and put important ones on the front page. Last week, however, the Courier-Life cover stories concerned a Prospect Heights man who has threatened Police Commissioner Ray Kelly, a new playground for a local school, and photo of a cute kid.

There was some more substantial news inside the paper. The traffic controversy got three paragraphs, at the end of an article about traffic calming on Third Avenue, with no mention of Park Slope concerns in the headline.

Looking for local news

The Brooklyn Paper has its flaws, including its own tabloid tendencies, but it's been on top of the traffic story, offering front-page coverage two straight weeks on the traffic plan. The Brooklyn Paper even covered the Thursday hearing online.

(Of course, several journalists using blogs provided faster and more substantial coverage, but the Brooklyn Paper left the Courier-Life in the dust on that one. And the Brooklyn Paper was the only outlet to offer video.)

On Thursday, I did see a photographer who contributes to the Courier-Life at the meeting, so maybe we'll see some coverage next week. Still, anyone who thinks that "GUNNING FOR KELLY" and "SHOCK OVER SLAYING" are the big news headlines in Park Slope has been spending too much time in tabloid-land.

Let's not forget the February 2 issue. The front-page headlines were "SEX FIENDS & OUR KIDS" and "Hundreds vie for glory in shopping cart race." Inside were "City doubles down on Atlantic Yards project" and "New vision for Gowanus: Rezoning plan underway."

Note: I've exempted from comparison the Brooklyn Downtown Star, to which I contribute. While it offers some substantial coverage (and more space than the other weeklies), it [clarification] is is part of a chain with only two editions aimed at Brooklyn (including the Greenpoint Star), while the above weeklies have multiple neighborhood editions. Like the Brooklyn Paper, the Downtown Star is family-owned, part of the Queens Ledger chain.

Clarifying the Community Board 6 committee vote, and the genesis of the DoT plan

Some commentary and reportage on the vote by the Community Board 6 Transportation Committee Thursday night overstated the opposition to the city Department of Transportation's plans to make Sixth and Seventh avenues one-way.

The Brooklyn Paper offered the headline Board votes down one-way proposal. On Streetsblog, Aaron Naparstek wrote that the committee "fully and unequivocally rejected" the proposal.

Actually, as reported in this blog, as well as by Robert Guskind in the Gowanus Lounge and Neil deMause in the Village Voice online, the committee, expressing disapproval, voted to table discussion on the plans until further talks with DoT and implementation of community-requested changes. The DoT's plans for Fourth Avenue were similarly put on hold.

The motions

District Manager Craig Hammerman yesterday forwarded the motions to various parties. They will be presented for a vote to the full Community Board at their next meeting, on April 11th.

Motion 1: CB6 thanks DOT for their efforts to improve pedestrian safety and facilitate the flow of traffic in and around Park Slope as dialogue and discussions are always beneficial; however, we request that DOT not proceed with their proposal to convert 6th and 7th Avenues from two-way to one-way streets at this time because there are too many questions about the impact of this change and how it would affect the neighborhood's traffic flow and pedestrian safety.

We further request that DOT continue to work with the Community Board and the Park Slope community in resolving Park Slope's very real traffic and pedestrian safety problems. For example, the perceived/actual high rate of speed of vehicles traveling on 8th Avenue and Prospect Park West, and the congested Union Street approach to the Grand Army Plaza. By working more closely with the Community Board and community we are committing to work with DOT to produce an improved set of remedies and actions designed to further enhance pedestrian safety and facilitate the safe movement of vehicles within our community.

Motion 2: CB6 would table making a recommendation on the 4th Avenue proposal until after such time as we have had a chance to engage DOT in a more comprehensive discussion of the traffic planning needs and challenges facing the Park Slope community.

The plan's genesis

I asked DoT spokeswoman Kay Sarlin how the plan was developed, and when. Her response:
According to [Deputy Commissioner] Mike Primeggia the trigger for developing the proposal was a desire to implement safety improvements in our continuing effort to reduce accidents and make the city streets safer for all road users. In addition DOT recognized that the substandard turn bays on 4th Avenue and the extremely narrow width of 6th Avenue in the section between Carroll Street and Flatbush Avenue made these two corridors in particular most appropriate for intervention. Our work on developing this proposal however began in earnest in the late Summer of 2006.

Note Naparstek's skepticism of the safety rationale.

A parallel case?

Primeggia also said Thursday night that, after making a Brooklyn street one-way, crashes had declined 15% and total injuries 22%. That street, according to Sarlin, is the 1.5 mile stretch of Glenmore Avenue between Euclid and Pennsylvania Avenues, in East New York.

How much that's a direct parallel to Seventh Avenue in Park Slope will undoubtedly be the subject of more discussion.

Arena, 2010 (but early 2010)?

Would the Atlantic Yards arena open for the beginning of the basketball season in 2009, or for the 2010 season--or maybe early 2010? The predictions deserve another look, especially given a new hint from the insider publication Sports Business Journal.

After Forest City Enterprises' Chuck Ratner earlier this month said the arena would open in time for the 2010-11 NBA season, Forest City Ratner released a statement that said the arena would open by the 2009-10 season.

That doesn't necessarily promise that the arena would open at the beginning of the season, just some time that season. The same language appears on the Atlantic Yards web site.

And Sports Business Journal, in its 2/26/07 issue, reported: The Nets, for example, could open their Barclays Center in early 2010 instead of late 2009, according to a source familiar with the project...

That would still contradict the estimates in the Atlantic Yards General Project Plan, approved by the Empire State Development Corporation on 12/8/06. That document states (p. 9):
Based on the current schedule, the Arena would open in time for the 2009 NBA season in October.

Money issues

Wouldn't that be a tough season ticket sell?

Still, it might be in the developer's interest to move to Brooklyn as quickly as possible, because the new arena would have many more suites (172) than at the current Continental Airlines Arena at the Meadowlands (29) or even at the potential interim location in Newark, the Prudential Center (82).

Curiously, Sports Business Journal describes the Brooklyn arena as a $1 billion project. According to state documents, it's a $637.2 million project. That's a pretty big margin of difference.

One way? NOOO way! 400+ Slopers deride DoT plans for Sixth and Seventh avenues

For more than a week, the message had come loud and clear, from Park Slope residents, organizations, and their elected officials. The plan by the Department of Transportation (DoT) plan to turn Sixth and Seventh avenues in Park Slope into one-way streets, faced nearly unanimous opposition, in part because it was seen as way to relieve Atlantic Yards-related congestion and turn neighborhood streets into speedy thoroughfares. (Atlantic Yards site outlined at right.)

The message was even louder last night at a meeting of the Community Board 6 (CB 6) Transportation Committee, where at least 160 people squeezed into an auditorium at New York Methodist Hospital, some 250 listened outside via loudspeaker, and Eric McClure of Park Slope Neighbors presented a petition with nearly 1500 signatures. [Update Friday afternoon: McClure reports 600 more signatures from the event itself.]

DoT Deputy Commissioner Michael Primeggia (right), gamely presenting the rationale for the plan, made a fundamental point: the DoT believes that one-way streets are safer because they make it easier for pedestrians to cross and eliminate head-on collisions and turning conflicts. Neighborhood residents, however, point to one-way streets like Eighth Avenue and say they induce speeding.
(Photos by Jonathan Barkey)

Indeed, Aaron Naparstek who broke the DoT story on Streetsblog on Feb. 28 and has mercilessly diced the DoT’s plans, this week posted a film in which volunteers timed traffic on Eighth Avenue as nearly twice as fast as that on two-way Seventh Avenue, the neighborhood’s shopping spine.

(Unremarked on, but notable: the DoT’s plan to make mainly residential Sixth Avenue one-way northbound from 23rd Street to Atlantic Avenue would contradict the Atlantic Yards Final Environmental Impact Statement, in which Sixth Avenue is proposed to run in two directions between Flatbush and Atlantic avenues.)

A vote to table

Primeggia didn’t get far with the skeptical and derisive crowd, though the plan wasn’t fully shot down. After some 90 minutes of nearly unrelenting criticism from the audience, bolstered by cheers and boos from the shadow crowd in the hall, members of the committee called for a vote, perhaps partly to call it a night.

They agreed to ask DoT not to continue with the plans for one-way streets at this time, and that the agency should first work with the community to address existing issues, such as speeding on the one-way Eighth Avenue and Prospect Park West.

“What about Atlantic Yards? That’s the context,” shouted Stuart Pertz, a former City Planning Commissioner and a member of the Municipal Art Society’s Atlantic Yards committee, echoing a point several others had made.

“Atlantic Yards is out of the purview of the city and the community board,” replied the committee’s Jerry Armer, who was chairing the meeting. (Armer’s point was that AY is a state project; still, surely city agencies must address it.)

Fourth Avenue tabled, too

What about Fourth Avenue, asked another person in the crowd; the DoT’s second proposal is to turn that busy thoroughfare at Park Slope’s western border, now three lanes on each side, to two-lane traffic, thus providing much longer bays for turning.

Naparstek, a member of CB6, suggested that the committee ask the DoT to work with the community on a “comprehensive, multi-modal planning process.”

Armer (right) suggested that was going too far, though he did offer a personal verdict, observing, “I somehow doubt we will see either of these two avenues as one-way.” The committee then voted to table the Fourth Avenue changes until further discussion with DoT regarding the rest of the neighborhood issues.

Primeggia said the DoT would be guided by the community, but negotiations with the agency might not be easy. City Council Member David Yassky said that some of the changes proposed, such as muni-meters that serve several spaces and truck loading changes on Seventh Avenue, could be worth pursuing. He asked if DoT would consider piecemeal changes.

Primeggia demurred. “We believe this is a nice package,” he replied. “All of the elements sort of complement each other.” He pointed out, for example, that some of the increased parking would be dependent on eliminating bus stops on one side of a one-way Seventh Avenue.

Atlantic Yards-induced traffic?

Primeggia did not utter the term “Atlantic Yards,” though he said, to some skepticism, that “I’m convinced we’re not going to induce traffic on Fourth or Third avenues” to use Sixth Avenue. Yassky, who earlier had called the plans "Atlantic Yards coming home to roost," disagreed, though he didn’t specifically cite the project.

Lydia Denworth (right), the generally diplomatic president of the Park Slope Civic Council, was the first to make it plain. “You say it won’t induce traffic,” declared Denworth, a Sixth Avenue resident and mother of young children. “You left out the 800-pound gorilla”—the arena.

She said it wasn’t possible that Atlantic Yards visitors wouldn’t use 6th Avenue—one-way northbound—to cross Flatbush Avenue to get to the arena. The Civic Council had earlier also complained that the community was excluded from the planning process.

"This community has come together in a way that's truly astonishing," Denworth declared.

AY mitigations?

Though Primeggia wasn’t asked the question directly, Craig Hammerman, District Manager for CB6, told me after the meeting that he had queried DoT as to whether the changes were to mitigate the effect of the 17-building Atlantic Yards development nearby. The response, he said, was no, because the changes were not studied in the Atlantic Yards Environmental Impact Statement (EIS).

Had DoT claimed the changes as a mitigation, he said, the EIS would be vulnerable to a lawsuit over its inadequacies.

Still, Primeggia’s announcement marked a significant divergence from the mitigations announced. Currently, Sixth Avenue runs two-way to Flatbush Avenue; between Flatbush and Atlantic avenues, it’s one-way southbound. The DoT would make Sixth Avenue one-way northbound from 23rd Street through to Atlantic.

However, in the AY Final EIS (Chapter 12, p. 2), it’s proposed that Sixth Avenue be made two-way between Flatbush and Atlantic avenues, “partly to accommodate diverted traffic resulting from the closure of 5th Avenue.” How that squares with the DoT’s plans remains to be seen.

Does Hammerman think the changes are a response to Atlantic Yards? He said he wouldn’t say Atlantic Yards was the foremost reason, but said “any responsible planner” would have to consider it.

Jeff Strabone, a member of CB 6, was more forceful, telling the audience, “There’s only one reason for the proposed changes, and that’s Atlantic Yards.” He noted that the intersection of Atlantic and Flatbush avenues is particularly dangerous “So what does the city propose to do? To extend the danger zone,” he said. “Park Slope should not have to bear the burden for [developer Bruce] Ratner’s greed.” (More from Strabone's blog.)

DoT rationale

Primeggia led off, working a bit tensely through a slideshow that explained the DoT’s rationales for turning Sixth and Seventh avenues one-way. Among the reasons: to enhance pedestrian safety, to complement the enhancements on Fourth Avenue, and to “better serve current and future land uses.” (He didn’t elaborate, but that likely refers to the rezoning on Fourth Avenue. Could it be an oblique reference to Atlantic Yards?)

[Update: here's the bootleg slideshow, via Streetsblog; Naparstek comments, "Though the plan is supposedly all about improving pedestrian safety, you can see for yourself that it is almost entirely concerned with the movement and flow of motor vehicles and the calculation of 'vehicular level of service.'"]

The B67 bus on Seventh Avenue would have to be re-routed, with northbound service assigned to Eighth Avenue. Currently two bus lines serve Eighth Avenue, with ten stops and hour. Eight more would be added, but no new bus stops would be created.

“We’re not looking to increase throughput,” he declared. In fact, he said, “We believe we can take as much as ten percent of the green [signal] time and give it to the cross streets,” thus making it easier to cross the avenues.

As for Fourth Avenue, he noted that the turning bays are the length of one car, which often creates backups and abrupt lane changes. There’s no way to extend those bays without damaging the airshaft over the subway, so the elimination of the current left lane would establish an 80-foot bay.

He concluded that Sixth and Seventh avenues were such good candidates because they were mostly contained within the Park Slope neighborhood. He said DoT doesn’t believe traffic will be generated from outside the neighborhood just to use the streets.

Council Members skeptical

“I certainly will need to be convinced,” declared Yassky (right), the first public official to speak. “You’re going to bring traffic from Fourth to Sixth and Seventh avenues, which are neighborhood streets.” The audience clapped heartily.

Primeggia protested that one-way streets are successful in Cobble Hill/Carroll Gardens, where DoT has had “wonderful results” at maintaining order on Court Street. (Court Street and Smith Street, both one way, are both also shopping streets.)

Council Member Bill DeBlasio called Seventh Avenue the neighborhood’s lifeblood, warning that the proposals “would change the character of the neighborhood.”

Primeggia responded, “We do not believe this will increase speeds on Sixth or Seventh avenue.” The crowd groaned, and Armer had to call for order.

Primeggia hearkened back to the success on Court Street and offered an olive branch. “On Eighth Avenue and Prospect Park West, we believe we can make the same kinds of improvements.” He said DoT was currently “experimenting” with various solutions. That might have been welcomed more had Denworth not later pointed out that the Civic Council last year had asked for changes in signal timing and been refused.

DeBlasio asked if the Metropolitan Transportation Authority had signed off on plans to change the bus routes. “It’s a proposal,” Primeggia replied, adding that it would be taken to sister agencies later. He added that the MTA was stodgy about change, a point Armer backed up.

Adams, Brennan, Marty

State Senator Eric Adams, a retired police department captain, said, “I find that one-way streets are an invitation for drag racing.”

Assemblyman Jim Brennan, who’d strongly opposed the plan, observed, “Currently, Seventh Avenue is safe and local.” With the changes, “It will become speedy and a thoroughfare.”

Borough President Marty Markowitz, whose Park Slope apartment is a reasonable walk from the meeting site, didn’t attend, nor has he stated a position. He sent a staffer, Michael Rossmy, who said the Borough President appreciated the opportunity to hear the concerns, and was particularly averse to any change that diminishes pedestrian safety.

Hospital opposition

Lyn Hill, a VP at New York Methodist and one of the Park Slope Civic Council’s more cautious voices on Atlantic Yards, said the hospital was opposed to the proposed changes.

One-way streets, she said, “would be nearly intolerable,” forcing loud ambulances onto mainly residential thoroughfares and requiring them to circle the block to reach the hospital emergency room.

Naparstek confronts nemesis

Naparstek (right) took the microphone, calmly but pointedly recalling the last time he met with Primeggia in person, a 2003 meeting regarding the Downtown Brooklyn Traffic Calming Project, an effort to assist pedestrians. “I watched the Deputy Commissioner terminate the project,” Naparstek declared. Primeggia sat stonefaced, facing the crowd rather than his interlocutor.

Last year, Naparstek invited DoT to a transportation forum sponsored by the Park Slope Civic Council, but the agency didn’t send anyone. People complained about one-way streets. Recently, Naparstek pointed out, there have been several high-profile pedestrian deaths, most recently on Third Avenue, where traffic calming was promised by the end of last year, but hasn’t arrived.

“If you are concerned about pedestrian safety, will you finally do traffic calming on Third Avenue,” Naparstek challenged Primeggia. “Will you take the neighborhood’s request to make Eighth Avenue and Prospect Park West safer for pedestrians?”

Primeggia was unbowed. “This administration has been extremely focused on improving safety,” he replied, adding that “we’re at historic lows” regarding pedestrian fatalities. “To suggest that the Department hasn’t done enough is a little harsh.”

“The answer to everyone’s question: are one-way streets safer?" Primeggia said. "The answer is a resounding yes.” From inside the room, the crowd outside could be heard chanting, “One Way! No Way!”

(Pictured is Lumi Rolley of NoLandGrab, who helped deliver to CB 6 a tablecloth with signatures of those who didn't get into the auditorium.)

Regarding Third Avenue, Primeggia said, “I don’t have the answer to that question,” noting he was present to talk about other projects. He said the department, if queried, would report back to the community board.

Shortly afterward, the Transportation Committee took its votes, which will be relayed to CB 6 as a whole for further evaluation.

[Update: While DoT spokeswoman Kay Sarlin told the Sun earlier this week, "If the community doesn't support these proposed changes, we will not move forward with them," Primeggia last night--as noted by Neil deMause in the Voice online--offered a more equivocal commitment, saying "our commissioner said she will be guided by the community board's letter."]

Curiously, none of the daily newspapers deemed the meeting worth coverage, though the New York Times sent a contributor to the Sunday City section. Bob Guskind of Gowanus Lounge also provides a thorough report, as does Naparstek's Streetsblog.

To fight $2000 fine for unsafe demolition, FCR sends top-gun lawyer to Brooklyn

What was Jeffrey Braun, a hard-driving land-use lawyer who represents major developers like Donald Trump and institutions like the Guggenheim Museum, doing Monday at a hearing of the city’s Environmental Control Board (ECB), the administrative tribunal that oversees violations issued by city agencies?

Well, Braun (right) also represents Forest City Ratner (FCR), and even though the penalty at issue was just $2000—surely less than the cost of getting Braun to Brooklyn—the developer’s challenge concerns perception as much as cash.

FCR plans to demolish a dozen buildings in the planned Atlantic Yards footprint; meanwhile, the developer seeks to disprove charges that a contractor last June used a backhoe to demolish a wall adjacent to a residential structure, violating safety standards and alarming the tenants. That story, first reported in this blog, was picked up by the New York Times.

In a two-and-a-half-hour hearing, Braun pressed hard, questioning some photos that a city inspector found convincing, contending that a witness was biased, and steadily raising objections.

Had it been a criminal case, he might have planted reasonable doubt. But there's a lesser standard of proof in such administrative cases, "preponderance of the relevant evidence." [See Rules of the City of NY, Title 15, §32-02(b)(2).] And Braun was dealt a tough hand to play, given that he admitted from the start that the contractor committed one of the two violations.

Office = hearing room

Before the hearing was called, the parties waited nearly 90 minutes in the 11th floor waiting room at 233 Schermerhorn Street, a space with stiff plastic seating and photocopied posters on the walls. Then eight people squeezed into the office of Administrative Law Judge Helaine Balsam, forming a semicircle of two rows each. It was a far cry from the expansive modern federal courtroom in which Braun argued an Atlantic Yards case five weeks earlier.

The group, besides the judge and Braun, included two representatives of Solomon Oliver Mechanical Contracting, the firm hired for the demolitions; three staffers from the Department of Buildings (DoB); witness David Gochfeld, whose fiancée lives at 624 Pacific Street; and this reporter. Braun wore a suit; everyone else dressed in either business casual or construction casual. To create a record, Balsam deployed a cassette tape recorder of some vintage.

At issue were violations for two instances of unsafe demolition, at 622 and 620 Pacific Street (the two buildings at center), because the contractor had not applied for a permit for mechanical demolition but instead used a backhoe to take down walls of each building. Both buildings were deemed unsafe by the Empire State Development Corporation, and thus subject to emergency demolition.
(Photo from December 2005, by Norman Oder; 622 Pacific is the one-story building.)

The case begins

Braun, at first, objected to this reporter's presence, saying I was “not a party to the case.” Balsam informed him the press wasn’t barred.

Then Braun launched into an opening statement, admitting that the contractor had used a backhoe at 620 Pacific, which abutted an empty building, but said that was it. “To the best of our knowledge," he told the judge, "there was no use at 622 Pacific Street,” which abuts the occupied 624 Pacific Street.

Balsam--also Managing Attorney of the ECB--dryly suggested that Braun should first let the DoB make its case, which charged that a backhoe was used to dislodge bricks from a wall (right) attached to the occupied 624 Pacific Street. [Update: A reader pointes to the intact fence in the upper right of the photo. That's absent from the second to last photo near bottom.]
(Photo copyright David Gochfeld)

The violations were written up in September, but the events occurred in June. Hearing representative Chris Oliver (unrelated to Solomon Oliver) then asked Phillip Krikorian, an inspector for the DOB’s Buildings Enforcement Safety Team (B.E.S.T.) to explain how he learned of the violations after the fact.

Braun objected, suggesting that the DoB's Oliver was soliciting hearsay. “Our rules of evidence," Balsam pointed out, "do allow for hearsay.”

Krikorian, in a gravelly voice, explained that a demolition using mechanical equipment requires a pre-inspection before a letter is issued. “On this job, to the best of my knowledge, they never asked for it,” he said.

No safety zone

The DoB's Oliver pulled out a stack of photos Gochfeld took. He pointed to one. “The bucket [of the backhoe] is up against the adjoining building that is not being demolished,” Krikorian declared. “That photo is specifically why you’d have to have a letter for mechanical demolition.”
(Photo copyright David Gochfeld)

Why? Krikorian explained that mechanical demolition requires a safety zone and "that safety zone could’ve never existed.” Braun was tight-lipped. The demolition, Krikorian said, should’ve been done by hand, with machinery available to remove debris and load it into a container.

(Note: Without access to the record, I'm not certain that this was the photo he cited, but more than one photo showed the bucket very close to the wall, as noted below below. )

Braun cross-examined Krikorian, establishing that the inspector hadn’t been to the site when the alleged violations occurred. Rather, the citations were based on Gochfeld’s photos and statement. Krikorian acknowledged that it was the first time he found violations in that way.

Braun queried him: “The mere presence of heavy equipment is not a violation of the building code."

Absolutely right,” Krikorian responded. “It’s how you use it.”

Braun pointed to a photo (right) Gochfeld took from his building’s roof, looking down. “You don’t see it demolishing the building,” he said.
(Photo copyright David Gochfeld)

“I do,” Krikorian countered. “I see the bricks coming off the building in mid-air.”

That observation remained a point of contention.

Man with a camera

Chris Oliver called Gochfeld to testify. Gochfeld explained he was staying with his fiancée Leigh Anderson, a building resident. (Anderson's a plaintiff in two current lawsuits involving Atlantic Yards.) He showed pictures of the backhoe demolishing the wall of 620 Pacific and said that he saw the contractors using the same technique on the 622 Pacific wall abutting Anderson’s building, “but every time I came out, they stopped.”

Gochfeld described the backhoe as centered between the two properties to be demolished, so its bucket could be used on each wall. “We were in fear that our building was going to collapse," he said softly. "It felt like an earthquake—regular, rhythmic pounding.”

Balsam asked him to speak louder so the tape recorder would pick up his testimony. Gochfeld explained that recalling the event still left him unnerved: “It was actually quite terrifying.”

After Braun began cross-examination, Gochfeld explained that he called 311 and also the police in response to the demolition. Braun asked if the DoB issued any violations. Gochfeld said there were violations, but not regarding the mechanical demolitions.

Braun asked if Gochfeld could identify Butch Banks, the foreman on the project, who was sitting a few seats away. He could. Braun then asked, “Did you tell him you hated Forest City Ratner?”

Gochfeld denied using the word “hate” but said he’d expressed his dislike of the company and its plans for the Atlantic Yards project. Banks, he said, told him, “Oh, you’re the one we’ve been warned about.”

Gochfeld said he assumed Banks was referring to Daniel Goldstein—another bespectacled 30something with the same initials—the spokesman for Develop Don’t Destroy Brooklyn who lives just two buildings away.
(Photo copyright David Gochfeld)

No scaffolding

Braun called Solomon Oliver, a 60ish man with a Caribbean lilt to his voice, as a witness. Solomon Oliver said that he did not give instructions for mechanical equipment to be used for demolition and that wrecking bars and sledgehammers should be used. (The choice of Solomon Oliver, a minority-owned firm, was recently praised by a signatory of the Community Benefits Agreement.)

The contractor recalled encountering Gochfeld, who told him he didn’t want the developer to take down buildings in the footprint. On his daily visits, Solomon Oliver said, he observed only proper demolition techniques.

Under cross-examination from the DoB's Oliver, a 30something man with a faint Caribbean accent, Solomon Oliver acknowledged there was no scaffolding used for the demolition--and it wasn’t required, because "it was a one-story structure," he said.

Judge Balsam asked for clarification; were both one-story buildings?

Both, said Solomon Oliver.

The DoB's Oliver countered, "Our information is it's a two-story building."

Foreman Banks, a burly fellow in a leather jacket, took the stand, citing nearly 30 years of demolition experience. “For the record, one was a two-story, the other was a one-story,” he said, correcting his boss.

Braun walked him through the demolition process. Did DoB, he asked, issue any violations based on mechanical demolition? No, Banks responded.

Banks, referring to Gochfeld as “Goldberg,” said that the latter had apologized for calling the cops, but had said he felt his building was in danger. (Chris Oliver, apparently new to the case, also got Gochfeld’s name wrong.)

Braun pointed to one photo of the backhoe and asked Banks what it indicated. “We’re lifting debris right here,” Banks declared. Krikorian, the city inspector, wasn't testifying for the record, but could be heard to mutter incredulously, “The bucket’s upside down.”

Two versions of the facts

Braun asked Banks plainly if the backhoe’s bucket was used to demolish the wall at 622 Pacific. “Nah, I’m positive,” Banks replied, a bit subdued. “You can’t take a chance swinging a bucket like that. It’s too close to 624.”

“Mr. Gochfeld’s not correct?” Braun continued.

“Yes, he’s not correct,” Banks responded.

“Then Braun had to address the actual violation. He showed Banks the photos Gochfeld took of the mechanical demolition at 620 Pacific. “Why’d you use the bucket?” Braun asked.
(Photo copyright David Gochfeld)

“Because this part of the wall was hard to come down,” Banks said, explaining that hand demolition had been uneven and left a hole.

How long did it take? “About ten minutes, seven minutes,” Banks responded. He agreed that he made the decision without consulting his boss.

Unoccupied building?

Though Gochfeld wasn’t asked the question Monday, he last June described a more ominous scenario, in which the workers from Solomon Oliver Mechanical Contracting believed they were working next to two unoccupied buildings "The foreman said to me: 'They told me that nobody lived there,'" Gochfeld said at the time.

That foreman was Banks. On Monday, the DoB's Oliver asked Banks, “Were you informed 624 wasn’t vacant?”

“Nah, it wasn’t vacant,” Banks replied. He didn’t quite answer the question, but the cross–examination didn't go further.

On redirect examination, Braun took the opportunity to question his witness one more time. How then, did the contractor demolish the wall of 622 Pacific that abutted the building where Gochfeld stays?

Banks explained that workers stacked up lumber along the wall and stood on it, using hand tools. (The photo below does suggest stacked lumber, but also shows the bucket touching--or nearly touching--the building. Photo copyright David Gochfeld.)

Belated rebuttal

After Braun finished, Judge Balsam asked the DoB's Oliver if he had any rebuttal witnesses. He said no. Krikorian nudged him; he said yes.

Based on your experience, Krikorian was asked by the DoB's Oliver, would a scaffold be needed for such a demolition? Braun objected on grounds of relevance. The judge let the question stand.

“I’ve done demolition inspections since 1988—at no time have I seen a building come down without a scaffold,” Krikorian said emphatically. “A scaffold allows you a buffer zone. I would find that, at the least, a very unsafe way of taking down a wall.”

Braun moved to strike the testimony. Balsam said she wouldn’t, but stopped Krikorian from going on.

Final arguments

In closing, Braun conceded the violation at 620 Pacific but said that there wasn’t evidence for the other violation. The photos didn’t prove anything, he asserted, and Krikorian wasn’t present. “We’ve had testimony from an occupant, but he’s a layperson and, to put it crudely, has an axe to grind,” Braun said, citing Gochfeld’s political opposition to the project and his understandable concern about his building. [Update: Note the damaged fence behind 624--signs of hand demolition?]
(June 2006 photo at right by Norman Oder)

“We ask you to consider evidence in mitigation,” Braun continued, noting that Solomon Oliver had directed that hand equipment be used and that Banks decided that holes in the adjoining building meant that “safety required” mechanical demolition. (Braun bypassed the “hard to come down” admission.) He asked for an “appropriate fine” for that violation.

Balsam explained that her discretion was limited—“it’s all or nothing; there’s no mitigation of penalty, which in this case is $2000” per violation.

The DoB's Oliver argued that the violation should be sustained “due to the foreseeable danger and the harm to the adjoining property.”

The DoB rep--maybe because he lacks Braun's jugular instinct or because such hearings aren't generally confrontational--chose not to attack the credibility of the defense witnesses, even though Banks had already admitted one violation.

Still, Judge Balsam, who went through three cassette tapes during the hearing and took steady notes, was left with a lengthy record to examine. She said she’d reserve her decision until a later date.

By then, it’s likely that Forest City Ratner will have demolished more buildings, that their contractors will have been reminded not to cut corners, and that residents in the footprint will have their cameras ready. Indeed, one of the buildings slated for demolition (above) abuts the other side of 624 Pacific Street.
(February 2007 photo by Norman Oder)

Challenging demolitions, renters’ lawyer faces a skeptical judge

It was an uphill battle in state Supreme Court yesterday for George Locker, the attorney for 13 rent-stabilized tenants challenging the demolition of their buildings by the Empire State Development Corporation (ESDC), as state Supreme Court Justice Walter B. Tolub seemed skeptical that the case belonged in his Manhattan court.

The plaintiffs, who live in two buildings in the planned Atlantic Yards footprint--624 Pacific is four-story building at right--claim that their landlord, Forest City Ratner, should be subject to the tougher regulations of the New York State Division of Housing and Community Renewal (DHCR), rather than be able to convey the buildings to ESDC for “friendly condemnations.”

Locker also argues that the creation of private roads for the project requires a jury trial--a case never tested in court. The ESDC disagrees with those arguments, but also argues that the case belongs in the Appellate Division, designated to hear cases challenging eminent domain, not the lower trial court. In that lower court, the Supreme Court, the plaintiffs would have more of an opportunity, via discovery, to extract documents bolstering their case.

The federal eminent domain challenge to Atlantic Yards also has so far also turned on procedural grounds, and procedural issues occupied most of the hour-long argument yesterday.

Locker appeared solo, with three ESDC attorneys facing him at the lawyers' table. Watching in the audience were a cluster of lawyers associated with the defense case, as well as a few plaintiffs. Only this reporter and a reporter for the Brooklyn Daily Eagle represented the press.

Plaintiffs first

Hearing ESDC’s motion to dismiss the case, Tolub took the unusual step of asking Locker, rather than the defendants, to argue first. “He’s arguing what I regard as an interesting and novel and new cause of action,” Tolub explained.

Locker acknowledged that there was little case law to back—or oppose—his claims. Residential tenants, he said, almost never challenge condemnations, he pointed out. However, he said, “It’s black-letter law that noncondemnees cannot challenge condemnations” in the Appellate Division.

Then he got in some political licks. “That’s probably why former Empire State Development Corporation Chairman Charles Gargano repeatedly told the press that the condemnations would be ‘friendly,’” he said.

“Perhaps that is why Forest City Ratner misled—and I would say lied—to City Council” in 2005 when it said it had “substantially reduced the need for condemnations.” The developer’s reward, he said, was $205 million from City Council, a reference to the city’s contribution to the project.

While Locker argued that the State Supreme Court always has jurisdiction to her claims against a state agency, the judge interrupted him, asking if the case shouldn’t have been brought under the Eminent Domain Procedure Law (EDPL), in the Appellate Division. On behalf of the same plaintiffs, Locker in January filed a separate case challenging the state’s relocation offer because it doesn’t provide comparable housing as required by the law.

Correct court?

“If my clients were property owners,” Locker replied, it would be appropriate. His clients, he said, lack standing to bring the case. Tolub asked if the defendants had raised the standing issue in the Appellate Division. Locker said no.

Tolub observed, “The only authority you’ve cited is a very uncertain and murky case." (In it, the plaintiffs were not located in the project site.) "The defendants have not raised a challenge to standing [in the Appellate Division]. Would you agree that, if the Appellate Division does say you do have standing, then whatever I do is moot?” He continued, “Remember, they’re the Appellate Division and I’m just a trial judge.”

Locker pointed out that the Legislature could’ve directed cases like this one to the Appellate Division but didn’t. He described the “very narrow” relocation case brought in that court, saying that, by offering tenants--whose average rent “is in the neighborhood of $850”--“essentially the services of a real estate broker… is tantamount to offering them nothing.”

He pointed out that Forest City Ratner executive Jim Stuckey had said in a press interview that no one suing the company—which includes Locker’s clients—would get relocation help. “So the Appellate Division will have to deal with a sham relocation offer.”

“Illusory landlord”

Tolub suggested he bring the instant case to that court, as well. Locker repeated that he didn’t believe the tenants had standing, and suggested that Forest City is using the ESDC as an “illusory landlord” to accomplish eminent domain.

“ESDC says DHCR doesn’t have to give its blessing” to the demolition, Locker stated, pointing out that DHCR “is a creation of the legislature.”

“But eminent domain is a creation of the sovereign,” Tolub responded.

Locker countered that it was limited by the Legislature.

Tolub replied it was limited by the New York State Constitution.

Locker, with the trump card in this exchange, responded that EDPL was a statute, not a constitutional provision.

Then, he noted that the defendants take no issue with his strongest case, Sohn v. Calderon, which said DHCR had “exclusive and original jurisction over demolition of a rent-regulated building.” (The ESDC, in legal papers, said the case applies to a private landlord, not a public one.)

At that point, Tolub asked Locker to “wrap it up.”

“You made it hard for me,” Locker observed, by requiring him to go first.

“You have a tougher row to hoe,” Tolub replied.

“The word ‘exclusive’ means ‘exclusive,’” Locker said, citing Sohn. He repeated the reference to the “illusory landlord,” and Tolub said, a bit impatiently, “I get your point, Mr. Locker.”

Locker closed by noting that the ESDC not only wants to take away his clients’ homes, but to “take away their voice.”

Defense case

ESDC defense attorney Charles Webb focused on the procedural issue. He argued that, as lessees, “There’s no question [plaintiffs] have standing in the Appellate Division.” He noted that a plaintiffs’ memorandum of law acknowledged the tenants had both a “property interest” and “significant property rights.”

Webb, piling on to the judge's comment, also noted that a case Locker cited was off-point because those objecting lived outside the project footprint.

Tolub played devil’s advocate. If the Appellate Division says the case doesn’t belong there; would it belong in his court? Webb responded that the statute was “so clear” that result wouldn’t occur.

(The defendants' memorandum noted that the EDPL allows any persons "aggrieved by the condemnor's determination and findings" to file a challenge in the Appellate Division.)

When, inquired the judge, would the parallel case on relocation be argued in the Appellate Division? Probably not before June, Webb replied. That led Tolub to muse that such a schedule precluded “any hope of a decision that will free me” from having to decide.

He asked Locker if the Appellate Division also would be asked to decide whether the DHCR demolition process trumps the ESDC’s exercise of eminent domain, a central claim in the case before him. “I put it in the petition,” Locker replied, “so the Appellate Division would know what I was pleading (in Supreme Court).”

Property vs. ownership

Given two minutes for a final statement, Locker tried to distinguish the notion of “property interest" from “ownership.” He said, “There’s a plethora of cases that say some kind of ownership is required to be considered a condemnee.”

Tolub responded, benignly, “Everyone but you can see you have proprietary rights”—a reference to ownership.

He called that a “major concession” for the ESDC to make. Locker wasn’t buying it. “It’s to their advantage that we go to the Appellate Division,” he said.

Indeed, Locker's memorandum of law cited a case that states, "In order to have any standing in a condemnation proceeding, one must show an ownership interest in the property." Then again, Webb's response memorandum argued that lessees fit the definition of condemnees because they hold "any right, title, interest.... in real property subject to an acqusition."

Tolub, in closing, said he didn’t know when he’d have a decision, but clearly it would precede any decision on the parallel case in the Appellate Division. “Given the nature of the novelty,” he informed the attorneys, “you’d better expect the full 60 days.”

Proposed Park Slope traffic changes driven by AY?

At Streetsblog (source of the map), Aaron Naparstek points out that the planned narrowing of Fourth Avenue and conversion of Park Slope's Sixth and Seventh avenues to one-way streets seems suspiciously like an effort to relieve Atlantic Yards traffic jams than to fulfill the explanation of pedestrian safety.

After all, the Atlantic Yards Final Environmental Impact Statement would bar vehicles from the northbound segment of Fourth Avenue between Atlantic and Flatbush avenues. "Could it be that DOT's Park Slope plan is aimed at shunting Fourth Avenue's Manhattan Bridge-bound morning traffic jam over to Sixth and Eighth Avenues?" Naparstek writes.

(Answer: if that's the goal, then there may have to be another bypass for Fourth Avenue northbound traffic than the extremely narrow Pacific Street.)

"Historic" expressway

Naparstek's waiting for answers. Meanwhile, consider the observations of Park Slope resident and former City Planning Commissioner Ron Shiffman, speaking at the Historic Districts Council conference last Saturday.

"Seventh Avenue needs to be calmed, not made one way. Take a lane and make it pedestrian," commented Shiffman. He added that the community should not "allow a historic district to become an expressway to alleviate congestion created by Forest City Ratner."

Stay tuned for a donnybrook of a Community Board 6 meeting on Thursday at 6:30 pm.

Which way would Pacific Street go? The FEIS confuses

If the government is going to recommend traffic changes in to mitigate adverse impacts from the Atlantic Yards project, you'd hope the message would be consistent. However, two separate chapters of the Atlantic Yards Final Environmental Impact Statement (FEIS) offer contradictory accounts of the fate of Pacific Street between Fourth and Flatbush avenues. That street, currently one way going west, would be made one way going east, as indicated in Chapter 19, Mitigation of the FEIS (p. 19-11). Text below; click to enlarge.

"The Fourth-to-Flatbush Two-Step"

The Brooklyn Paper, source of the above map, called it the “Fourth-to-Flatbush Two-Step.” The south side of the street is residential, mostly row houses. The north side is Site Five, part of the Atlantic Terminal Urban Renewal Area (ATURA), housing P.C. Richards, Modell's, and a parking lot, slated to be replaced by a 250-foot tower. (The Brooklyn Bear's Garden would remain, albeit with more shade.)

Wait, it's two-way?

However, if you read Chapter 12 of the FEIS, Traffic and Parking, you might conclude that the writers had not consulted Chapter 19.

On page 12 (excerpt at right), the FEIS claims:
(Under the proposed project, Pacific Street would be closed between Flatbush and 6th Avenues, and between Carlton and Vanderbilt Avenues, and would be converted to bi-directional operation between 4th and Flatbush Avenues.)

[UPDATE: A reader writes that this may only be during the construction phase. If so, it should be clearer. Another reader says the documents don't spell out that scenario.]

While large documents inevitably are imperfect, this error further suggests that proofreading and harmonizing the document was less of a priority than the rush for approval before the end of Gov. George Pataki's administration.

Nets to Newark? Suites offer more reasons to move

Last week, I cited a Crain's Insider report that quoted an insider--from Forest City Ratner?--who suggested that the soon-to-open Prudential Center in Newark, more accessible than the Nets' current home in the Meadowlands, would make a good interim arena as they wait for the Brooklyn arena to be built.

The arena, built for the New Jersey Devils but with room for more tenants, is near a transit hub, academic institutions, and entertainment destinations.

But another reason went unmentioned. The new arena will have much more premium seating--82 suites, according to an article in the Feb. 19-25 Sports Business Journal. By contrast, the relatively antiquated Continental Airlines Arena has only 29 suites.

Suites = revenue$

The Brooklyn arena would have 172 suites, and Forest City Ratner projects that revenue would start at $38 million a year. A stint at the Prudential Center could get them halfway there--and better.

According to Sports Business Journal, for the Devils team, 56 12-seat suites are priced at $225,000 annually, 20 18-seat suites are priced up to $275,000 annually, and four bunker suites are priced at $350,000 annually. That adds up to $19.5 million a year, not counting two party suites available on a nightly basis.

For the Nets, the suites might be sold for even more--and suite revenues would soar compared to current levels.

And what if they move?

The Sports Business Journal article noted that building operator Anschutz Entertainment Group could help the Prudential Center "increase its event load from 200 to 250 shows annually," but to do that, more sports tenants would be needed.

One possible tenant is Seton Hall University men's basketball. The Nets went unmentioned, but the 41 home games, plus preseason and playoff games, would seem to be a natural fit.

Should the Nets move to Newark on an interim basis--remember, the Brooklyn move has been pushed back to 2010 at the earliest--they might recoup some losses and build a new fan base.

However, beyond public promises and contractual requirements, there'd still be another reason for the Nets to move to Brooklyn. Remember, the Brooklyn arena (aka Barclays Center) would have twice the number of suites as its rival in Newark.

Rent-stabilized tenants' case to be heard tomorrow

The “other” set of Atlantic Yards plaintiffs—13 rent-stabilized tenants challenging the condemnations of two buildings—will get their day in State Supreme Court Tuesday following an exchange of contentious legal memos between their lawyer, George Locker, and lawyers for the Empire State Development Corporation (ESDC).

The plaintiffs live in buildings on Dean and Pacific streets now owned by Atlantic Yards developer Forest City Ratner. Rather than apply for demolition via the New York State Division of Housing and Community Renewal (DHCR), as is generally required for buildings with rent-regulated tenants, in this case, the developer will convey the properties to the ESDC. Then the ESDC would exercise its powers of condemnation in a much faster process than had DHCR been involved.

The demolitions would be “friendly condemnations,” given that the owner doesn’t object, but the tenants don’t consider them friendly.

The court case now concerns a motion to dismiss, rather than a hearing on the merits. Thus, the bar for the plaintiffs—as with the plaintiffs in the eminent domain case filed in federal court—is relatively low. For example, for the purposes of the motion, the facts as alleged by the plaintiffs are considered true, even though they would be contested if the case goes to trial.

Two charges

Locker's case is based on two charges. First, the ESDC’s power of eminent domain isn’t absolute but rather trumped by DHCR. Second, the creation of “private roads”— for underground parking garages and access roads—requires a jury trial under the plain language of the New York State Constitution, enacted in 1846.

To that, ESDC lawyers Charles Webb and Kenneth Applebaum reply that Locker reads it wrong, that cases point to the primacy of eminent domain, and that the “private roads” contention, which has never been tested in court, is “a complete non sequitur.”

Jursidictional question

Even before that, however, the ESDC argues that the case should be heard in the Appellate Division, which is empowered to review cases regarding eminent domain, rather than the Supreme Court, which in New York State is actually the lowest-level court.

Locker responds that the Supreme Court always is supposed to hear challenges to an agency’s wrongful exercise of authority or jurisdiction. He argues that the tenants lack an ownership interest and thus don’t have standing to pursue such a case; the ESDC says that a lease represents such an ownership interest.

(They've also filed a separate suit in the Appellate Division challenging the relocation offer.)

Leases sign away rights?

The plaintiffs signed leases acknowledging the possibilityof eminent domain. One states that “this Lease shall end” when the government or agency takes title, while the other states, more broadly, “the Term, and Tenant’s rights shall end.”

Does that sabotage their case? Locker contends that those provisions are “intended only as a waiver of monetary claims for the value of a lease cancelled by the otherwise lawful exercise of eminent domain.”

Private roads?

The legal motions by the ESDC make the point that the agency has deemed the project as involving a “public purpose”—the elimination of blight, the creation of below-market housing, etc.—and the roads would “incidental or appurtenant” to the public purpose and would be “public in nature.”

Locker argues that’s not relevant; the plaintiffs aren’t claiming that ESDC’s use of eminent domain to create a private road isn’t a public purpose, just that the use of “eminent domain to create a private road requires a jury determination.”

Of course, if they’re not private roads, then the claim crumbles., but for the purposes of this motion, the claim is accepted as correct.

The ESDC says that the Constitutional reference to private roads more appropriately applies to cases in which a landlocked private party needs access to a public highway via a road over privately-owned land. If the plaintiffs’ argument is accepted, the ESDC argues, it “would have the absurd result" of requiring jury trials for "every major public project that uses eminent domain” and creates various roads and parking areas.

To that, Locker responds, “It is not ‘absurd’ to enforce the jury requirement. Every major public project does not contain 16 miles of private roads.”

The extent of the private roads would seem to be irrelevant, though; either there is or is not a jury requirement.

Limits on ESDC?

At issue is whether there are limits on the ESDC’s power of eminent domain. ESDC lawyers say the power is only limited by the state and federal constitutions. Locker points out that legislatures can limit such power.

Does the Eminent Domain Procedure Law (EDPL) trump DHCR? The ESDC argues that the law establishing the agency states that its provisions trump other state laws.

Public landlord, private landlord

However, regarding the role of DHCR, Locker cites a 1991 state case called Sohn v. Calderon; the ruling states, “It is clear beyond question that the Legislature intended disputes over a landlord’s right to demolish a regulated building to be adjudicated by the DHCR.”

The ESDC, however, argues that the Rent Stabilization Code is “notably silent on the issue of condemnation” and does not limit the ESDC’s powers. As for Sohn, the ESDC says it applies to a private landlord, not a public one.

Further, argue agency lawyers, even if the ESDC didn’t have jurisdiction to exercise condemnation powers over these buildings, the developer “simply could convey the properties…and the Rent Stabilization Code would cease to apply by its own terms.”

The plaintiffs' response, however, is that the ESDC would not be acquiring the buildings for the required purpose—state-owned or -managed housing—but rather to demolish them.

Which arguments have the most weight? Supreme Court Justice Walter B. Tolub will give us a clue on Tuesday.

AY opponents and proponents go "off message," confessing doubt, admitting delays

In the past couple of weeks, both Atlantic Yards opponents and proponents have gone "off message," making public statements that alarmed some allies and, in the case of the proponents, required public contradiction.

The episodes aren't exactly equivalent. After all, the opponents who went off-message were mostly expressing personal opinions, while the proponents who went off message have access to more information than has been made public as of yet.

Opponents admit inevitability

Two Thursday ago, an Atlantic Yards question came up at the forum, "Where Goes the Neighborhood: The Past, Present, and Future of Park Slope," sponsored by the Park Slope Civic Council, which drew about 100 people to the Old First Reformed Church.

"Is there really any possibility of preventing Atlantic Yards from being approved?" moderator Craig Hammerman, district manager of Community Board 6, read an audience member's question. Hammerman pointed out that the project has in fact been approved by the state, so the question is whether it could be stopped.

Architectural historian Francis Morrone, a member of the Develop Don't Destroy Brooklyn (DDDB) advisory board, declared that it could be. Many in the crowd clapped heartily. He described how, on behalf of DDDB, he'd talked at various gathering about appropriate development but acknowledged that he wasn't up on the eminent domain lawsuit organized by DDDB. (Indeed, he was at the forum to talk about the history of Park Slope, not the legal case.)

"It is not too late," added Stuart Pertz, an architect and former City Planning Commissioner. "It is never too late if you can get the public to respond." Then again, he pointed out that a representative of Assembly Speaker Sheldon Silver had said the office received more than 20,000 letters protesting the West Side Stadium. (That's perhaps five times the number gathered last year by DDDB, albeit in a short stretch, regarding Atlantic Yards, and ten times the number gathered by the BrooklynSpeaks campaign.)

"I feel strongly that the courts are not a place to do planning," said Pertz, noting that, if a lawsuit fails, there's no backup. He's an advisor to the Municipal Art Society and the BrooklynSpeaks coalition, which has stayed out of the court battle.

"We're hoping to make some changes to the first phase," Pertz said, acknowledging that would be difficult, "but there is a second phase that could go on for 20 years, and we just have to not roll over."

Morrone picked that up: "Will we stop Atlantic Yards? The question is no. Will we modify Atlantic Yards? The question is yes."

Morrone's statement wasn't included in coverage from the Brooklyn Downtown Star or the Brooklyn Paper. The Courier-Life report got it right, but missed the alarm it caused some in the audience who know that DDDB isn't giving any ground--at least, not publicly--but, rather, aims to raise funds for its current and future court cases.

After all, while DDDB is at some disadvantage in the pending eminent domain case, given a magistrate's recommendation that it be heard in plaintiff-unfriendly state court, that magistrate also acknowledged that the case raised "serious and difficult questions regarding the exercise of eminent domain under emerging Supreme Court jurisprudence."

A few weeks earlier, another DDDB advisory board member, comedian Michael Showalter, in an interview with the New York Observer's blog The Real Estate, declared, "Clearly, we're in a losing battle." (He also was criticized for complaining about traffic congestion when he himself drives; that criticism could be applied to others on both sides of the debate.)

Also last month, novelist and journalist Jennifer Egan, another advisory board member, penned a Times Atlantic Yards op-ed that described resignation among the public and reflected some resignation of her own, using the phrase "should Mr. Ratner yet fail” rather than pointing out that Ratner might be faced with organized opposition. (Then again, who knows what her article looked like before the Times's editing.)

These cases show the potential pitfalls of organizing an advisory board with certain expertise or celebrity but whose members may not be up to speed--or on message--when they speak in public. (They are allowed their own opinions, of course.)

Proponents admit delay

Still, the advisory board members are not central players in the Atlantic Yards narrative. By contrast, project landscape architect Laurie Olin went way off message, in a New York Observer interview last month, declaring that the project would last 20 years, not ten as announced, and that architect Frank Gehry wouldn't design all the buildings.

Forest City Ratner executive Jim Stuckey had to publicly contradict him.

No wonder the developer hasn't let Olin, nor project architect Frank Gehry, talk to community groups. Artists can be candid.

And so can Clevelanders. Just last week, Chuck Ratner, CEO of the parent Forest City Enterprises, acknowledged to investment analysts that the project would last 15 years and the arena would open in 2010, both contradicting the official prognosis. DDDB seized on it; Forest City then issued an unconvincing clarification of the timetable--after all, Ratner admitted that the company was "terrible" at predicting when projects go from idea to reality--and DDDB piled on.

Staying on message

I suspect that, upon learning of the off-message statements, the consternation within Forest City Enterprises was greater than that within DDDB. After all, Chuck Ratner cannot be said to be underinformed.

Forest City Ratner CEO Bruce Ratner has been much better at staying on message. Consider his unwillingness to talk about the Barclays Center naming deal but willingness to tell sports writers about his appreciation for just-off-the-trading-block players Jason Kidd and Vince Carter.

And then there's Ratner's conversation with the clueless Post columnist Andrea Peyser, whose “It’s about freakin time” column last week was instantly repackaged as an Atlantic Yards e-newsletter. (Peyser conveniently forgot her previous column touting the promise of 10,000 office jobs, more than 85 percent of which have evaporated.)

Then again, it's easier to stay on message when the press is so tractable.

Goldberger says balance on big projects elusive; Quinn admits AY abdication

So, could Atlantic Yards have proceeded more effectively in the Robert Moses era?

During the Robert Moses symposium last weekend, New Yorker architecture critic Paul Goldberger's evenhanded assessment of the Moses rehabilitation was cited:
And Robert Moses got things done. In the age of citizen participation, this has become harder and harder. For more than five years, we have been fighting over what to do at Ground Zero, and the future of much of the sixteen-acre site is still unresolved. The idea of Moynihan Station—a conversion of the classical Farley Post Office, on Eighth Avenue, into an improved Penn Station—was first proposed a decade ago, and it still hasn’t happened. By contrast, Moses’s plan to cover miles of train tracks on the Upper West Side with an extension of Riverside Park took under three years from design to completion.
In an era when almost any project can be held up for years by public hearings and reviews by community boards, community groups, civic groups, and planning commissions, not to mention the courts, it is hard not to feel a certain nostalgic tug for Moses’s method of building by decree. It may not have been democratic, or even right. Still, somebody has to look at the big picture and make decisions for the greater good. Moses’s problem was that he couldn’t take his eye off the big picture. He was so in tune with New York’s vastness that he had no patience for anything small within it. Caro brilliantly immortalized Moses’s indifference to neighborhoods and people at a time when the city was weak, when the wounds from his high-handed approach were raw, and when Jane Jacobs’s focus on the fine grain of neighborhoods held fresh promise. But there is a price to pay for thinking small, just as there is for thinking big. Thirty years later, we are still trying to find the balance.
(Emphasis added)

The balance and AY

Indeed. Is Atlantic Yards an example of shortsighted citizens unwilling to look at the big picture, thinking too small? Is it an example of political leaders willing to cut corners, thinking too big?

Both premises can be debated. What might be less debatable, however, is that "activist planning"--what one participant at the symposium called a prerequisite for such projects--has been absent.

Indeed, City Council President Christine Quinn last week told the Brooklyn Heights Association, according to the Courier-Life chain, that the city failed:
Asked about the massive Atlantic Yards project, Quinn said it should have gone through a thorough review. “The city abdicated its role,” she said.
Demolition prep work on the $4 billion project, which includes a new arena for the Nets, has already started.
“I don’t know what options are left now,” she said. “I’m not sure anything is left to be done.”

Note that, while Atlantic Yards is a state project, the city has, in other projects involving partly city land, requested that the city's land use review procedure be included. In this case, don't Quinn and fellow City Council members have any say in the $205 million--up from the $100 million promised in a 2005 Memorandum of Understanding--that Mayor Bloomberg wants to commit to the project?

As for Goldberger, recall his assessment last October of Atlantic Yards:
Although the site cries out for development, neither Ratner nor Gehry has a convincing idea of how this should be done. Ratner seems to have been less interested in using Gehry’s architectural talent to best advantage than in trying to leverage his celebrity to make an unpopular development more palatable.

The open space dodge, revisited

Last April, I pointed out that the section on Open Space in the new Atlantic Yards.com web site deceptively claimed that the developer "will transform portions of the exposed rail yards into publicly accessible open space."

While portions of the rail yards would indeed become "publicly accessible open space," the phrasing suggests that the open space would be built only above the unsightly rail yards. Indeed, landscape architect Laurie Olin, in a candid interview with the New York Observer, explained how taking the street was crucial for Forest City Ratner to assemble the quota of open space necessary for the project to pass muster.

Taking the streets

A comparison of Olin's sketch on the Atlantic Yards web site (above) with the schematic of the project footprint created by BrooklynSpeaks (right), shows that open space would be built over the currently functioning Pacific Street, as well as the area between Pacific and Dean streets currently occupied by buildings.

The Observer reported:
The design is far from finished, and the east end, where the superblock lies, is particularly rough. Mr. Olin admits that the site plan was put together to establish the parameters of the project—the ratio of open to built space—to go through the approval process.

Olin called streets "useless space"--a claim seized on by architect Jonathan Cohn and BrooklynSpeaks.

Indeed, the streets--and part of the project's southeast superblock--are clearly crucial to creating the open space that the developer, on AtlanticYards.com, attributes to the rail yards.

On Tuesday, rent-stabilized tenants will get day in court

On Tuesday, the "other" Atlantic Yards lawsuit will get its day in court.

Tenants in two buildings owned by Forest City Ratner filed suit in December challenging the Empire State Development Corporation's (ESDC) use of eminent domain to demolish their buildings and override their rights as rent-stabilized tenants.

The latter case is in the state Supreme Court. (They've also filed a separate suit in the Appellate Division challenging the relocation offer.)

Yesterday, at a brief hearing before Supreme Court Justice Walter B. Tolub, lawyers for both the 13 tenants and the ESDC briefly outlined their arguments regarding the ESDC's motion to dismiss the case.

Tolub, recognizing that the case couldn't be handled in a few minutes, said he needed to read the legal briefs, and scheduled a hearing for 9:30 a.m. on Tuesday. Before then, I'll try to summarize the legal arguments.

Daily News in the tank? (redux)

The Daily News had a scoop yesterday--the explanation that the city would spend $100 million on land for the Atlantic Yards project as part of a $205 million contribution--far more than the originally contemplated $100 million in a 2/18/05 Memorandum of Understanding.

That story appeared only in the Brooklyn section. Don't they think it's news to any of their readers outside the borough?

Unfortunately, it's part of a pattern--as I detailed in December, the Daily News overhyped a story on a proposed new Brooklyn Tech High School, running it on page 2, while it relegated to the Brooklyn section important articles about the decline in projected tax revenues and the filing of the Atlantic Yards eminent domain lawsuit.

In the tank?

The question remains: Are the editors deliberately underplaying stories of civic importance and hyping the ephemeral?

Perhaps we shouldn't be surprised: that can be a tabloid's m.o. But when they underplay and hype stories about the same topic, the disjuncture is grating.

In some ways, this gives News editors some plausible deniability. They can indeed say they covered this story, and those searching the Internet or various databases won't easily notice certain stories were limited to the Brooklyn section. But if you pick up a paper in Manhattan, you notice.

Cash flow docs mystery: missing revenues, missing subsidies

The three pages of cash flow documents regarding Atlantic Yards, drawn up by Forest City Ratner and released last week by the Empire State Development Corporation (ESDC), contain some significant gaps compared to a yet-unreleased review conducted for the ESDC by the firm KPMG.

Notably, the documents released by the state agency omit millions of dollars in revenue that the developer would receive from ownership of the Nets basketball team and also omit millions in subsidies not enumerated.

Neither set of documents provides a clear sense of the project bottom line; for that, we’d need a full accounting of “sources and uses” of the funds. However, the unreleased document—which I and some other reporters have acquired, though not via the ESDC—goes much farther than the document publicly released.

The three pages released by the ESDC were dated 10/10/06 and 10/11/06; the 24-page KPMG report was dated December 2006, with the notation that its statistics were as of 12/19/06.that it referred to “certain cash flows and assumptions” in connection with Atlantic Yards. In other words, the latter document is more current.

More Nets gains

Regarding the Nets, the document released last week (right) has some gaps. The KPMG document includes $33.5 million in annual TV revenue and $27 million in “other Nets-related revenue,” figures that do not appear explicitly on the document at right.

That suggests more than $60 million annually should be added to the bottom line—a significant gain, given that the developer’s obligation to pay for the arena would be less than $44 million a year. That sum refers to debt service on tax-exempt bonds; it would be higher if the state required Forest City Ratner to pay for the arena directly rather than have it be “publicly-owned” by a state subsidiary.

Condos nearly $1M, reaping $1.5B

The KPMG document shows that the price for condos would be $850/square foot, a sum surely to go up when constructed by 2009 or later. Given condo sizes ranging from 1008 to 1072 square feet, the cost would be from $856,800 to $911,200, with an average of $884,000.

There would be 1930 condos, but 200 would be subsidized, so let’s put them aside for now. At $884,000, 1730 condos would result in $1.53 billion in revenues. (The project would cost $4 billion, but it’s hardly clear how much the developer is putting up.)

Smaller rentals

Note that the market-rate and affordable rentals would be significantly smaller than the condos. The 2250 market-rate rentals would average 714 square feet. The 2250 affordable rentals would average 665 square feet. (See my report on apartment sizes.)

Housing (and other) subsidies

A big mystery regarding the Atlantic Yards project regards housing subsidies. City officials have refused to make them public and, indeed, Forest City Enterprises executive Chuck Ratner indicated on Tuesday that the numbers remain under negotiation.

However, the document last week, in a footnote (right), indicates $1.15 billion in tax-exempt bonds, based on the Housing Development Corporation’s (HDC) 50/30/20 mixed-income program.

The KPMG indicates that program and more. Along with HDC’s program, it delineates $95,000 to $165,000 in low income housing credits per unit. It includes a 25-year tax abatement for the condos, based on the city’s 421- program, which has been used to finance luxury construction around the city.

It includes tax abatements for the commercial space, value unspecified, and $10 million in commercial rent subsidies. As for city and state infrastructure support, it cites $200 million. Now we know that’s up to $305 million, and $100 million includes land acquisition costs.

Retail and laundry revenues

Omitted in the documents released last week was any indication of retail income. The KPMG document indicates 200,000 square feet of retail at $30/square foot, or $6 million a year in rent.

The KPMG document even estimates laundry revenue at $10 monthly per housing unit. Let’s assume that all 6430 units would spend $10 a month (though the condos might include washers and dryers). That would reap $771,600 annually.

The bottom line

The bottom line is simple. We still need a more accurate accounting of the sources of funds and subsidies for this project, and the potential revenues.

FCR offers clarification on AY timetable; is it credible?

Metro NY follows up on my report yesterday that Forest City Enterprises CEO Chuck Ratner told investment analysts that Atlantic Yards would take 15 years to build, rather than 10, and that the arena wouldn't open until 2010, rather than a year earlier.

The question is whether Forest City Ratner's clarification is credible.

Metro reports:
FCR released a clarification.
“When I referred to the project taking 15 years to build I was referring to the total time, from the idea or conception of the development to completion of the final building,” he said in the statement. “The actual construction of Atlantic Yards will take 10 years and, as we have announced, preliminary work on the site has begun.”
He also said the arena would open by the 2009-10 NBA season. The 2010 remark referred to the entire block of office and residential space, he said.

Arena in 2010

The direct exchange regarding the arena, between executive Bob O'Brien and Ratner, included:

BO: ...the current timeline is to have the ball team open in 10-11?

CR: 10-11.

That doesn't sound like they were talking about the entire block (though, yes, it is supposed to be open in 2010).

Buildout timeline

As for the timeline, Chuck Ratner said: this is going to be a 15-year buildout...

When others use the term "buildout," it does not refer to the "idea or conception of the development." For example, a press release from the Empire State Development Corporation on 12/8/06 stated:
The project build out will occur in two phases. The first phase, anticipated to be completed by 2010, will include the new rail yard and the arena and developments on the western portion of the site. At least 30 percent of the housing developed on the arena block in the first phase will be affordable housing. The arena is expected to be in use for approximately 225 events per year (inclusive of 41 home games for the Nets.) The second phase of the Project is scheduled to be completed by 2016.
(Emphasis added)

The use of the future tense regarding "build out" suggests that it does not include the "idea or conception of the development."

Remember that Chuck Ratner also said:
We are terrible, and we’ve been a developer for 50 years, on these big multi-use, public private urban developments, to be able to predict when it will go from idea to reality.

Public obligation creep: city will spend $100M for AY land acquisition

It isn't news that some of New York City's cash contribution to the Atlantic Yards project would help Forest City Ratner with both acquisition of land and infrastructure improvements. That was contemplated in a Memorandum of Understanding (MOU) signed 2/18/05.

However, that MOU (p. 4) contemplated a city contribution of $100 million. In January, I reported the city's contribution has been more than doubled, to $205 million; the explanation was murky.

City explains funds

Now the Daily News (which passed on the $205 million story) reports that $100 million alone would go to land acquisition. In an article today headlined City: 100M for Yards land: Pols rip EDC plan to use public funds for private Ratner mega-project, the newspaper explains that the New York City Economic Development Corporation told City Council that $100 million would be for land and $105 million for infrastructure.

The criticism was swift. Council Member David Yassky said the "money should be spent on transportation infrastructure, schools and traffic calming" and Council Member Letitia James said it "should go to traffic mitigation and affordable housing."

EDC fudges the issue

The Daily News reports:
EDC spokeswoman Yonit Golub said the city's memorandum of understanding with Ratner had always included the possibility of buying land, as well as improving the infrastructure.

That's true. The Council Members protest a bit much about the uses of the city subsidy, given that it was announced more than two years ago. However, it was never contemplated that a sum that large--$100 million--would be used for land acquisition.

Apparently the really important part of the MOU was the declaration (p. 8) that it was non-binding.

A Cleveland Ratner offers timeline candor: Arena by 2010; project would take 15 years

Forest City Ratner (FCR) executives have claimed that the planned Brooklyn arena (aka Barclays Center) would open in 2009 and the Atlantic Yards project would take ten years. However, executives from the parent company were far more candid while speaking on Tuesday to investment analysts.

The arena would open by 2010, at best.

The project would take at least 15 years--and that's from a CEO who acknowledges that the company is "terrible" at predicting when a project will go from idea to reality.

Skepticism surfaces

Since December, even project supporters have expressed skepticism about the proposed ten-year time frame. Kathryn Wylde, CEO of the Partnership for New York City, predicted that the project would require a 15- to 20-year buildout.

Two weeks ago, in the New York Observer, Forest City Ratner executive Jim Stuckey contradicted project landscape architect Laurie Olin, who had claimed the project would take 20 years. “We don’t believe it is going to take 20 years. We expect that it will take 10,” Stuckey said.

A 20-year buildout, of course, would deliver the promised affordable housing at half the speed.

Earlier this week, an unindentified "insider"--perhaps from the developer--suggested to Crain's NY Insider that the Nets should occupy "the new Prudential Center in Newark before relocating to Brooklyn in 2009 or 2010," thus floating the possibility of a move later than promised.

(FCR CEO Bruce Ratner last week, in the New York Times, called the 2009 target "aggressive, but I think we can do it.")

Webcast candor

Stuckey and Ratner were speaking to the press. Investment analysts get a different story--though it still requires some footnotes.

In a webcast of a Forest City Enterprises (FCE) presentation at the Citigroup 2007 Global Property CEO Conference on Tuesday, CEO Chuck Ratner (right) and Executive Vice President, Finance and Investment Bob O’Brien answered a series of questions about Atlantic Yards with candor and optimism. (Cleveland-based FCE is the parent of New York-based FCR.)

(The sequence starts at 1:21:35.)

BO: We’ve been working on Atlantic Yards for a little over three years now.

CR: Everybody know the project? It’s Downtown Brooklyn, it’s the current Illinois--the current LIRR yards, it sits right on Flatbush and Atlantic. It’s a great piece of real estate. We’re trying to develop it into a mixed-use project.

Actually, it's in Prospect Heights, and the railyards would be 8.5 acres of a 22-acre site.

More office space?

BO: It’s development of an arena to take the New Jersey Nets, which we have an ownership interest in, relocate them to Brooklyn, to bring a professional sports franchise to Brooklyn, in an arena venue, to compete in… one of the best marketplaces in the world. With that would come, in the neighborhood of 6000 housing units, up to a million and a half to 2 million square feet of office and about 300,000 square feet of retail.
(O'Brien at right)

O'Brien's numbers are curious. The project, according to the Executive Summary of the Final Environmental Impact Statement (p. 3), would include 6430 apartments and 336,000 square feet of office space. An alternative plan would include 5325 apartments and 1.6 million square feet of office space. But the market for office space is weak and the market for housing is hot, as Chuck Ratner was to observe a few minutes later.

Final approval? Not quite

BO: We reached a significant milestone in 2006. The Public Authorities Control Board, which had the right to review and approve our development plans, after we completed our full environmental impact statement, that was completed and they approved that in mid-December, that was one major milestone. Many of you who are in New York know that this is in the paper often. It’s a controversial project and there is some very vocal, articulate opposition. That’s the American way, and that’s fine.

Note that he calls it "our" environmental impact statement (EIS) rather than the state's. It reflects, inadvertently or not, that the developers foot the bill for the environmental review.

BO: We are making our way through that process. We control about 90 percent of the land--own or control 90 percent of that land for the full development of that project. While we have a number of hurdles to get through yet and we’re not home free, we’ve begun to move some dirt on the site to relocate the Long Island Rail Road tracks so we can begin to build some of the infrastructure.

The term "own or control" is flawed, as I've written, since Forest City Ratner owns some buildings whose tenants won't leave without eminent domain, and it "controls" some leases in buildings it doesn't own. Indeed, that percentage just went down to about 85 percent, if State Supreme Court Justice Ira Harkavy's decision regarding a lease of Henry Weinstein's property stands.

Timeline questions

O'Brien was asked about the hurdles and the timeline.

BO: The timeline is as soon as possible. We’re actually 18-24 months behind what our original estimates were. Those hurdles are getting through the final approvals, not the least of which is full control of 100 percent of the land, which may involve eminent domain, that’s obviously something that will likely take lawsuits to ultimately get through. We would expect and our goal is to have vertical construction up and operating within 30 to 36 months, and hopefully, the current timeline is to have the ball team open in 10-11?

CR: 10-11.

From March 2007, 30 months would be September 2009; 36 months would be March 2010. It seems that a September 2009 opening would be unlikely.

Delay=returns

A questioner asked if the delay in the project affects anticipated returns. Ratner acknowledged a 15-year buildout.

CR: Return expectations have not changed since we started. That is--this is going to be a 15-year buildout, so obviously, we believe over time that we’ll be able to make up for this, as we have. MetroTech was a perfect example. We had the same kind of issue.

Indeed, MetroTech was supposed to take five years. It took 14, as the New York Observer's Matthew Schuerman reported last September.

CR: And we believe that over time—what’s happened in Brooklyn, all that’s happened during the delay is the market’s gotten much stronger. Nobody knows that better than you and the rest of you in the room from New York. There’s just been an article recently in the Times about what’s happened to housing in Brooklyn, and it’s largely housing. I have a daughter who lives in Park Slope. She’s just had a second baby, she’s looking for a place to move--it’s unbelievable to me what she has to pay. So I don’t expect our returns to moderate.

Subsidies still murky

CR: What we are still doing…it’s not just getting through the issue with the opposition and the lawsuits. We also have a public entitlement in this process. There’s a public subsidy, it’s been announced, $200 million. There’s an affordable housing requirement in this, a moderate housing requirement in this, and we’re still negotiating with the public authorities as to how that will come out.

Actually, the direct subsidy would now be $305 million, given the apparent doubling of the city's contribution. No public entity has acknowledge the amount of housing subsidies, though a Forest CIty Ratner document released by the ESDC last week cited $1.15 billion in tax-exempt bonds.

More than 15 years?

Ratner then went off on a peroration on how even his 15-year estimate could be wrong: I’m confident that Bob is right, we will start within that time frame. I’m not at all confident of how long it will take us to finish. Y’know, it’s an amazing thing, this San Francisco thing. If you’d have told me… in 1994 that we’d open this [San Franciso] project in 2006, I’d have said “You’re insane, it couldn’t possibly take that long.”

We’re very good at estimating markets, we’re very good at estimating rents, at estimating lease-ups, and estimating costs. We are terrible, and we’ve been a developer for 50 years, on these big multi-use, public private urban developments, to be able to predict when it will go from idea to reality. All we know is that if we pick the right place and we’re in with the right people, that over time we’re going to create tremendous value.

Track record

Ratner pointed to the developer's track record and public support:
And we’ve done this before, and that’s a track record that adds to credibility. We did it in MetroTech, we did it in Cambridge, we’re doing it in Stapleton, we did it in Central Station. And I’m convinced that this is a great market, and it’s a unique piece of real estate. We’ll get it done. We have very strong political support. The mayor, the borough president, the governor, have all been steadfast in supporting what we’re doing and in supporting Bruce.

Well, new Governor Eliot Spitzer has been historically supportive of the project, but, then again, he didn't know much about it, last October calling a promised 8% reduction in the project a "reasonable compromise," betraying no knowledge that the cutback would bring the project back to the square footage originally proposed.

Now, apparently, his downstate economic development chief, Patrick Foye, is getting up to speed on Atlantic Yards.

One of the first things he should get straight, apparently, is the timeline.

“Unclean hands”? Judge raps Boymelgreen, Ratner in AY lease dispute

A state judge has backed charges that developer Forest City Ratner has “unclean hands” in a dispute over property in the planned Atlantic Yards footprint.

For months, Henry Weinstein—who owns some key properties in the proposed Atlantic Yards footprint—has protested in state court that his tenant, developer Shaya Boymelgreen, improperly assigned leases to a Pacific Street building and adjacent parking lot to an affiliate of Forest City Ratner. And that assignment, he argued, allowed the Empire State Development Corporation (ESDC) to deceptively portray—since October 2005—that Forest City Ratner “controlled” the land, thus suggesting a lesser need for eminent domain.

Weinstein called it “unclean hands,” and though State Supreme Court Justice Ira B. Harkavy didn’t use those words, he has agreed with Weinstein’s case, ruling that Boymelgreen’s lease assignment to Ratner violated the terms of the original leases with Weinstein, which required the landlord’s “written consent,” and declaring the latter leases “terminated.” (The decision.)

Now Weinstein, who’s also a plaintiff in the federal eminent domain case organized by Develop Don't Destroy Brooklyn (DDDB) challenging the project, will move to evict Boymelgreen and other tenants in the six-story building on Pacific Street just east of Carlton Avenue. They had leased back the space from AY 535 Carlton, a Forest City Ratner affiliate.

[Updated] Boymelgreen will appeal, according to a statement from a Forest City Ratner attorney, posted on the New York Observer's blog, The Real Estate.

More costly condemnation?

The ruling can't stop the state from using eminent domain to take the properties. But it might make it more costly. Boymelgreen had argued that Weinstein is using the legal fight to shore up his negotiating position with Ratner, while Weinstein responded that Boymelgreen’s deal with Ratner would diminish the value of his property.

Weinstein claimed that Forest City Ratner executive Jim Stuckey made a verbal offer to buy his property but wouldn’t put in in writing, and threatened that if no agreement was reached, the state would use eminent domain. FCR denied making any threats or raising the issue of condemnation, according to Harkavy’s decision.

DDDB, in a statement, observed that Forest City misled not only the ESDC but also the Public Authorities Control Board by claiming control of Weinstein's properties. DDDB charged, "By acquiring Mr. Weinstein's leases - which run until 2048 - FCRC likely hoped to claim that the properties had little value beyond the leases themselves. With full control restored to Mr. Weinstein, however, the cost of acquisition has likely increased ten-fold." There's no citation for those numbers, however.

The state’s willingness to portray the properties as “controlled” by Forest City Ratner may be used in the federal eminent domain case to argue that the developer has benefited from favoritism. (According to the ESDC, the asterixes indicate: FCRC has closed on an option to take by assignment the lessee's interests under the ground leases for these properties. However, the property owner has objected to such assignments.)

The properties at stake

Companies controlled by Weinstein own the six-story yellow former manufacturing building at 752-766 Pacific Street, as well as two adjacent lots, used as a parking lot. They make up about one acre of the proposed 22-acre site.

The leases between Weinstein and Boymelgreen, for just under 49 years, were signed in October 1999, long before the Atlantic Yards plan was contemplated, and about six months after Boymelgreen bought the nearby former Daily News printing plant, which was subsequently converted to the Newswalk building of luxury condos. (Boymelgreen also sold the Ward Bakery, seen as a potential hotel, to Forest City.)

The leases provide that the tenants may assign their leases with the consents of the landlord, which “shall not be unreasonably withheld or delayed.” At issue was whether Weinstein unreasonably withheld the lease.

Around 3/31/05, Boymelgreen and Ratner agreed on a one-year option for Ratner to acquire Boymelgreen’s lease. (That was about the same time that Boymelgreen agreed to sell two nearby properties to Ratner for $44 million.) On 2/16/06, they asked Weinstein by letter to consent to the agreement, according to Boymelgreen’s complaint. Weinstein didn’t reply, so on 3/2/06, two weeks later, they closed the transaction, believing there was no reasonable basis to any objection.

The wrong address

But Weinstein said that, back in 2000, he had given Boymelgreen an address on Long Island, rather than Brooklyn, for all business mail, and Boymelgreen had been sending rent to the correct address. However, the lease request was mailed to Weinstein's outdated Brooklyn address. (Boymelgreen and Forest City called it an excusable error.)

Weinstein’s lawyer questioned the assignments, asking for financial information about AY Carlton, the Forest City affiliate. While AY Carlton initially declined to provide that, in legal papers, the developer asserted that AY Carlton is financially responsible, as it’s affiliated with Forest City Ratner and the parent Forest City Enterprises.

In oral argument 11/15/06, Weinstein’s lawyer, David Brody, called the affiliate a shell and claimed, “The people spent considerable time negotiating the amount of the litigation fund that Forest City Ratner would provide for the Boymelgreen organization.”

Defense lawyer John Sheridan said that “this case is all about greed,” arguing that Weinstein in 1999 “was thrilled to get a tenant, any tenant,” but now sees the value of his property rising given the Atlantic Yards project. (Weinstein has said he had plans to develop the property himself.)

Sheridan also argued that the absence of a financial guarantee from the Ratner affiliate wasn’t important, since the previous guarantee from Boymelgreen had already expired.

Clear decision

In his decision, dated 3/1/07 but released on Tuesday, Harkavy wrote:
The leases in question here clearly and unambiguously required tenants to “first” obtain the written consent of the landlords before any assignment of the leases. Notwithstanding that provision, the tenants chose to execute the assignments to AY Carlton, even though they had not received the written consent of the landlords. Indeed, the tenants chose to execute the assignments less than two weeks after sending their letter requests, before they received any response from the landlords, without trying to contact the landlords. The tenants’ assignment was clearly not permitted by the leases.

As for whether Weinstein’s withholding consent was unreasonable, Harkavy wrote:
However, according to the clear terms of the leases, plaintiffs were required to obtain consent prior to assigning the leases, regardless of the reasonableness of withholding consent. Additionally, it is not clear that the landlords’ withholding was unreasonable as a matter of law.

Moreover, even after plaintiffs responded, they refused, among other things, to provide specific financial information about AY Carlton itself, instead simply asserting that AY Carlton is “affiliated” with larger companies. Similarly, the proposed use of the premises—namely, demolition—would constitute a material change in use.

Had the tenants believed Weinstein was unreasonably withholding consent, Harkavy wrote, the leases provided for them to go to court to seek such consent. However, he wrote:
The tenants chose not to utilize that option and so they cannot now try to cure their default in another matter.

[Updated] Still, as with the pattern of legal disputes regarding Atlantic Yards, the case will get another hearing in appellate court.

Andrea Peyser spies a rat

From Andrea Peyser's Post column today on her Bruce Ratner-guided tour:
As we walked further, to a spot where ground has yet to be broken, we passed an enormous, dead rat.

Ratner opponent Patti Hagan reminds us that the developer has placed rat poison in buildings that were open to the elements.

Indeed, Community Board 2 last September warned that rats would be proliferate during construction, stating, “Containment plans to mitigate the inevitable disturbance and escape of large numbers of rodents into neighboring communities needs to be specifically defined and coordinated with appropriate governmental agencies in advance.”

(If we're talking rats, should the subway system be considered blighted? More criticism of Peyser from NoLandGrab and this blog.)

Office market (and tax revenues) tanking for Atlantic Yards?

An article in the March issue of The Real Deal, headlined Downtown Brooklyn office vacancy rises, details the opportunity provided to companies by "the relatively new availability of large blocks of Class A office space in Downtown Brooklyn -- as well as low rents compared to Manhattan."

While we await the results of that positive spin, that certainly suggests that there may be even less demand for office space in the Atlantic Yards project than currently envisioned. That would mean even less tax revenue, which was already lowered significantly by a cut in office space.

Remember, the original promise was space for 10,000 office jobs. At last count, there'd be space for 1340 office jobs, though the number of new jobs might be 375. Now even that's jeopardized.

MetroTech losing tenants

The reason for the current downturn: Forest City Ratner's MetroTech Center has been losing tenants, as investment banks, insurance companies and other financial institutions have relocated or shrunk their back office space.

The RealDeal quotes the Downtown Brooklyn Partnership's Joe Chan, who had in November also cited an office space glut:
In the fourth quarter of last year, JP Morgan Chase and Empire Blue Cross moved back-office operations from Brooklyn. The companies vacated 250,000 and 100,000 square feet, respectively, of Class A space, Chan said. This boosted Brooklyn's Class A office space inventory to about 716,273 square feet at the end of January 2007, compared with 644,909 square feet at the end of January 2006, according to a Cushman & Wakefield report.

That's a net loss of only about 70,000 square feet, rather than 350,000 square feet, just for the record.

FCR overestimates

In January 2006, I explained how the enviornmental review for the Downtown Brooklyn rezoning suggested that Brooklyn couldn't absorb the amount of office space originally announced for Atlantic Yards.

Still, Forest City Ratner consultant Andrew Zimbalist, in his June 2005 fiscal impact analysis, claimed that all was well:
The FCRC Atlantic Yards General Project Plan will eventually create 1.2 million square feet of first-class office space. The Alternative Plan will create 259,078 square feet of new commercial space. Since 1988, downtown Brooklyn has absorbed an average of 600,000 square feet of new office space per year. As of early April 2004, the vacancy rate of class A office space built in Brooklyn since 1985 was less than one percent.

Had the vacancy rate changed between April 2004--a benchmark chosen for Zimbalist's May 2004 original report--and June 2005? Zimbalist didn't check. Did the office space market tank only after the publication of his analysis?

Now office space is getting cheaper. Chan is seeking "creative industries" like architecture, engineering and graphic design firms, but they don't need such large floor plates, 30,000 to 40,000 square feet, so they'll have to be subdivided.

FCR reacts

And yes, Forest City Ratner will subdivide some of its space. Jim Stuckey, who handles the company's office space and serves as president of the Atlantic Yards Development Group, agreed that Brooklyn could attract such industries, telling the magazine, "What is different now in Brooklyn is that it has become a forward-thinking, hip, cool, place to be -- the idea that it is for back office only is antiquated."

Other buildings in MetroTech remain underutilized; the Metropolitan Transit Authority-occupied, 425,000-square-foot building at 370 Jay Street is about half-empty.

Lower cost, but not too much

The Real Deal reports:
Downtown Brooklyn office rents may increase, but centralized ownership that leaves most space in the control of two or three parties may allow some pricing stability in order to continue to attract the new wave of tenants, [Cushman & Wakefield's [Glenn] Markman said. "We will not see runaway rents," he added.

That centralized ownership involves Forest City Ratner.

Some skepticism

The Real Deal acknowledges some skepticism about the purported office boom, but closes with an optimistic Stuckey:
Some argue that despite low rents and newly available Class A inventory, the wave of new office tenants in the area is more like a trickle. Jim Clark, division manager at Fillmore Real Estate, said the residential market has boomed since the 2004 rezoning, while office growth has been somewhat stagnant.

"A lot of things that were done Downtown went residential. The condo market is more profitable -- the big rush was residential," he said. During the Downtown Brooklyn rezoning, the commercial real estate market was somewhat cool in contrast to the hot residential market at the time. Stuckey said that the commercial real estate market is "now heating up," and that Brooklyn office space will soon follow.

Well, maybe.

Atlantic Yards errors

Consider the role of Atlantic Yards. The Real Deal states:
Forest City Ratner's Atlantic Yards will add even more Class A office space. The project -- made possible by the 2004 Downtown Brooklyn rezoning for commercial, residential and academic development -- will have between 600,000 and 1.8 million square feet of office space, more than 6,400 units of affordable housing, a sports and entertainment arena and more than 400,000 square feet of hotel and retail space.

Actually, the project is a state project and has nothing to do with any rezoning, since the state will override city zoning. Also, amount of office space would be either 336,000 sf or 1,606,000 sf. See p. 3. Also, while there would be some 6400 housing units, there would be 2250 affordable rentals.

AY office space

But the office space will sell:
Stuckey expects architect Frank Gehry's designs to attract a new breed of Brooklyn office tenant. He said the office buildings may be small and tenant-friendly, thanks to flexible layouts and the availability of shared services.

It's impossible for the Atlantic Yards office buildings to be "small," but perhaps what Stuckey meant was that the floorplates would be small. Stuckey offered an interesting spin, because whole point of Atlantic Yards was to be near a transit hub for large companies that would fill 2 million square feet of office space.

As Stuckey said at a 5/4/04 City Council hearing, dismissing alternative arena sites:
The Brooklyn Navy Yard could never result in the jobs that we would be able to create here, because you could not build the amount of office space that we are talking about building here.
And the Brooklyn Navy Yard would never permit us to build the amount of housing that we can build on this site, nor could Coney Island. It could not sustain it, it does not have the development ability and you could not attract the companies to go to those locations... As I mentioned before, this is a major mass transportation hub, there are 10 subway lines, and virtually every single, as I mentioned, Long Island Railroad Line comes through this site too.

But the question remains: is there a market? According to the New York Observer, landscape architect Laurie Olin was skeptical of the market for condos:
Even the three towers that directly ring the arena are not on Mr. Olin’s immediate radar. The developers, he said, would “love to see one of these going, but I haven’t heard them saying that there is this market crying out for condos at Atlantic and Flatbush.”

Then again, the first phase would take four years to build, so the market for residential space, and for commercial space, could change--and change again. Still, as of now, businesses looking for office space in Brooklyn are facing a glut, not a shortage.

Post columnist's amnesia

Today New York Post columnist Andrea Peyser rhapsodizes about Atlantic Yards, calling the area "horribly blighted" (she finds dangerous garbage--who's responsible?--but doesn't mention the luxury condos), quoting Bruce Ratner as saying there will be "parks" (the plan is for privately-managed "open space"), and declaring that Ratner's fans "always get shouted down" (um, Peyser wasn't at the 8/23/06 public hearing).

In April 2004, less than two years ago, Peyser wrote:
I offer 10,000 incontrovertible reasons why the planned Nets basketball arena in Downtown Brooklyn is not just a good idea, but a crucial one: Ten-thousand jobs.

Today, forgetting the decline in office jobs, she writes:
But Ratner gets turned on by building things. And that includes the socially responsible items - jobs and affordable housing. "We have to keep the middle class in New York!" he insisted.

She also writes:
Ratner, 62, and a self-described liberal Democrat, is a mass of contradictions.

According to a 2004 New York Magazine profile, "Access unlocks Peyser’s affections." However, contradictory facts elude her.

(On NoLandGrab, Lumi Rolley deconstructs more of Peyser's column, pointing out, among other things, that the developer of two malls across the street hardly needs a "Welcome to Brooklyn.")

ESDC's Foye gets up to speed on Atlantic Yards

Patrick Foye, Governor Eliot Spitzer's appointee as Downstate Chairman of the Empire State Development Corporation (ESDC), is getting up to speed on Atlantic Yards. First, he heard last week from the Fifth Avenue Committee's Michelle de la Uz, representing BrooklynSpeaks, about "urgent concerns" regarding oversight of project construction.

On March 22, as the New York Observer reported, Foye will visit the Atlantic Yards site, at the request of City Council Member Letitia James.

AY on DVD

And Foye has already seen a copy of Isabel Hill's documentary Brooklyn Matters, sent to him by three former City Planning Commissioners: Ron Shiffman (on the Develop Don't Destroy Brooklyn advisory board), Stuart Pertz (an advisor to BrooklynSpeaks), and Marilyn Gelber. The trio urged the ESDC to take a second look at the project, warning that the project "leaves us with a legacy of lawsuits which can damage future opportunities for growth."

In his response, Foye thanked the three, responding that the ESDC was analyzing the project approved by the Public Authorities Control Board, and that a thorough examination of the project's environmental, financial, and fiscal impacts was proceeding before funds are released.

Does that mean that the Spitzer-era ESDC could wring changes in the project? Unclear--but stay tuned.

Jane Jacobs, Atlantic Yards, and "the age of marketing"

Architect Robert A. M. Stern, in Metropolis, recently declared Atlantic Yards "quite Jane Jacobs-like in its urban pattern." Lumi Rolley of NoLandGrab yesterday "overkilled" that pronouncement, pointing to Jacobs's opposition to eminent domain for such private projects, the demapping of city streets in favor of superblocks, the lack of meaningful community input and review, and the lack of open space relative to the expected population.

Still, Atlantic Yards, despite its extreme density and paucity of open space, would represent a significant step up from Forest City Ratner's anti-urban Atlantic Center mall and suburban-style office park development at MetroTech. There would be more retail on the ground floors and a bicycle path and a place to sit outside the Urban Room (at least if it's not too windy.)

Indeed, the Empire State Development Corporation defended Atlantic Yards in comparison to Stuyvesant Town--which I characterized as "building a better superblock."

That doesn't make it Jacobsian, though.

The age of marketing

In his 2004 book Up From Zero, about the contested process to rebuild the World Trade Center site, Paul Goldberger pointed to how Jacobs's neighborhood-scale emphasis is employed to justify some big projects:
Public involvement in planning will not go away. Government agencies and private developers have all recognized this, and it is a common occurrence to have new urban projects marketed to the public in the manner of the New York football stadium proposal, as their supporters try to make the case that huge developments embody the small-scale values of traditional urban neighborhoods. Sometimes they may actually do so, but they can also be Trojan horses, containing not the seeds of renewal but of destruction. We may well be living in the age of Jane Jacobs, as opposed to the age of Robert Moses, but we also live in the age of marketing, and it is common today to see large projects presented as if they epitomized the small-scale, naturally occurring urban values Jacobs espoused.
(Emphasis added)

Indeed, Atlantic Yards was pitched to the public like a political campaign, with brochures (below) produced by a company specializing in such campaigns, but the press didn't address that.

Public involvement

Goldberger continued:
The challenge, as we move forward from Ground Zero, is twofold, and it requires a willingness to do things that do not seem to go together. The first is to keep public involvement meaningful and not allow it to be restricted, as it was at Ground Zero, to issues of design, but rather to assure that the public has the opportunity to say something about what a block or neighborhood or a riverfront should be used for in the first place. There never was such an opportunity at Ground Zero; that, more than anything else, was where the process failed. The public was only invited into the dialogue to talk about what the place would look like, not to share in the earlier decisions about what use this land would be put to.

The public involvement in the Atlantic Yards project has been even less than in the Ground Zero project. (Indeed, the Listening to the City deliberative exercise regarding Ground Zero has been suggested as a new paradigm.) The developer hardly met with groups critical of the project. The architect met with the Department of City Planning but not with the public. (With Ground Zero, there were several public presentations.)

As the Regional Plan Association testified at the one AY public hearing:
The details of the project were largely devised behind closed doors by the developer, and only minor modifications have been made in response to public criticisms. While the developer has held numerous public meetings and provided information to the community, most of the decisions regarding the site had already been made. As a result, the public has no way of knowing if this project is the best possible one for the site.

Not a referendum

Goldberger continued:
The second challenge, paradoxically, is not to think of public involvement as a panacea, and to remember that planning is not something best done by referendum. Planning and building cities involve difficult choices that often require long-term vision, and sometimes they involve being willing to take risks. Putting plans up for a vote is no guarantee of a mandate for greatness and daring. In design, the public voice is often a cautious one. Cities--for all that they need the loving serendipity of neighborhoods and the vital energy of streets--flourish also in boldness and a willingness to embrace the new. At Ground Zero, the public moved closer to a bold vision that it has in a long time, and the greatest legacy of the process will be to inspire even more confident alliances of private imagination and public passion.

He makes an important point--planning requires choices. The Metropolitan Transportation Authority's Vanderbilt Yard, if not the adjacent blocks that also make up the Atlantic Yards side, was ripe for a platform and a major project, given the rising value of land and the proximity to a transit hub.

But shouldn't planning be done with the input of professionals who are accountable to constituencies, not in response to a project already endorsed by the powers that be?

That's what Majora Carter of Sustainable South Bronx was getting at last month, when, at a panel discussion on Robert Moses, she addressed Deputy Mayor Dan Doctoroff: "Yeah, the interesting thing about listening is you have to do it openly and not have a predetermined idea set."

Nets to Newark? The option emerges, as Ratner hedges on Brooklyn timing

Could the Nets be headed to Newark, as an interim option before the arena Brooklyn in Brooklyn is completed? And could that be the fallback if the Atlantic Yards plan dies?

That's what the tea leaves suggest. First, last week, the New York Times reported on a press conference held by Nets majority owner Bruce Ratner:
To some, rebuilding seems a logical step for the Nets because they are scheduled to move to Brooklyn by the 2009-10 season. The Nets’ new arena will be the centerpiece of Ratner’s $4 billion Atlantic Yards project. Construction crews have already begun clearing the area for the arena to be built, and Ratner said that the time frame for having the arena ready was “aggressive, but I think we can do it.”

Translation: it may not be ready by 2009.

Newark option

Now, the subscription-only Crain's NY Insider has reported, in an article headlined Jumping through hoops in Jersey,
It would make sense for the New Jersey Nets to decamp to the new Prudential Center in Newark before relocating to Brooklyn in 2009 or 2010, but such a move is a long shot, one insider says. The center is slated to open for the Devils hockey team in October; it could also handle basketball.

Unlike the relatively inaccessible Meadowlands, where Nets attendance has been dismal for years, the Prudential Center is near a transit hub and universities, colleges, hotels, restaurants and the popular Ironbound district. Newark Mayor Cory Booker has been calling for the Meadowlands to be closed and all its activities transferred to the new facility.

"It seems logical, but I guess that's the problem," the source says, referring to state politics. Gov. Jon Corzine is not inclined to deprive the Meadowlands of a major tenant.

Translation: it may not be ready by 2009.

Yes, it would make sense for the Nets to move to Newark as soon as possible, for the reasons noted by Crain's. Also, unmentioned, is that if the Atlantic Yards project is further delayed, or even killed, the Nets could establish some longevity in their new (temporary?) home.

Remember, the state and Forest City Ratner have predicted 225 events annually at the Brooklyn arena--but that's predicated on the absence of an arena in Newark. The presence of the Newark arena would reduce revenues in Brooklyn.

Who's the insider?

So, who might Crain's be quoting? The newspaper does have an inside line to Forest City Ratner, which obviously has an interest in a move to Newark. But the newspaper could just as easily be quoting an official from Newark, or the new Newark arena, who could be in contact with the owners of the Nets.

Also--synergy watch!--the press spokesperson for Newark Mayor Cory Booker is Lupe Todd, who formerly worked for Dan Klores Communications, most recently on the Forest City Ratner account.

The coming isolation on Pacific Street (though AY's not a "done deal")

It's not exactly clear why Forest City Ratner last week announced plans to demolish 12 structures within the planned Atlantic Yards footprint over the next five months. There's been no claim of urgency or necessity regarding these specific structures; however, the developer need not seek permission beyond the Department of Buildings.

Forest City can do as it pleases, though the developer can't construct the first phase--or the project as a whole--until the pending court cases are resolved. (Here's Hunter College urban planning professor Tom Angotti's Gotham Gazette article, Atlantic Yards: A “Done Deal?”)

Develop Don't Destroy Brooklyn thinks the timing was keyed to Magistrate Judge Robert M. Levy's recommendation that the Atlantic Yards eminent domain case be dismissed from federal court and sent to state court, where such cases have less of a chance. (The decision is up to Judge Nicholas Garaufis, who will be receiving legal briefs this month and will hold an oral argument on March 30.)

DDDB said:
The action appears to be an attempt to intimidate the suit’s plaintiffs by threatening to knock down, or actually demolish, perfectly sound buildings adjacent to or near the plaintiffs’ homes and businesses.

Well, some of the buildings are more sound than others, but their demolition certainly would isolate plaintiffs and could make daily life uncomfortable. In the photo above, the two one-story structures at left would be demolished, leaving a vacant lot next to one of the two four-story buildings, 812 Pacific Street near Vanderbilt Avenue. That happens to be the home of several plaintiffs in the Atlantic Yards eminent domain case.

The arena block

Also planned for demolition is the low-slung building bordering 624 Pacific Street, home to several plaintiffs in a separate case challenging the demolition plan in state court. Two buildings on the other side of 624 Pacific were demolished last June.

If this demolition proceeds, the tenants at 624 Pacific will have vacant lots on both sides of their building. "I think they would like us to leave…," said tenant Leigh Anderson in June, "and this is essentially a war of attrition." That, apparently, remains true.

Corrections fatigue: The Times stonewalls on lawsuit story

The importance of the New York Times to the historical record was reinforced this past weekend during a symposium on Robert Moses, where several of the presenters, in their accompanying slides, included copies of Times articles.

Then again, one academic, the University of Pennsylvania's Lynne Sagalyn, observed that, to study coverage of Atlantic Yards, you have to look at the blogs, and that's true. Otherwise, historians might be confused, for example, by the Times's 2/24/07 coverage of the federal eminent domain case.

Filing a complaint

A week ago, I contacted Karin Roberts, assistant to the Metropolitan Editor, who handles corrections on the Metro Desk, to complain about an Associated Press article the Times published on the case:
I write to request a Correction (not merely For the Record).

The Times's headline and excerpting of an AP article on the Atlantic Yards eminent domain lawsuit Saturday was irresponsible.

The five-paragraph article was headlined "Judge Urges Dismissal of Atlantic Yards Suit" and indicated that, following the magistrate's recommendation, a judge "has the final say on whether the suit survives."

However, the Times failed to inform its readers that the case could be re-filed in state court, and that the plaintiffs will do so. The magistrate's recommendation was that the suit be dismissed without prejudice, on procedural grounds, and he even made a respectful reference to the merits of the case.

A longer version of the AP story, updated in the early evening on Friday, made that point, though it was clear to anyone skimming the legal opinion.

(The text was on the New York Observer's blog The Real Estate before 6 pm.)

When the AP updated the story, the news service did not revise the lead, as it should have done. (The AP should've gotten it right the first time, as well.) The Times, and perhaps some other news outlets, cut from the bottom but didn't rewrite the lead or headline to indicate the state court option.

The Daily News was more precise, in an article headlined N.Y. home court in arena suit - judge.

I posted accurate coverage shortly after 9 pm. I updated it in the morning with references to the news coverage.

The Times's coverage was inadequate and misleading. It should be corrected.

I would appreciate your prompt attention to this matter, and a direct response.

The Times responds

Roberts provided a prompt, direct, and brief response:
Please take this up with the Associated Press. If they run a correction, we will publish it.

Appeal to Public Editor

That struck me as inadequate, since I was pointing to the Times's responsibility. So I wrote to Public Editor Byron Calame:
You can scroll down to read my letter requesting a correction below, and also Karin Roberts' brief response disclaiming any Times responsibility and sloughing off the issue to the AP.

My request for correction regards the Times's editing and thus interpretation of the AP story. By truncating a story that had key information several paragraphs down, the Times disserved its readers.

The AP story had a misleading lead and was poorly organized; however, the Times's editing of the story turned it into a gross distortion.

Public Editor weighs in

Calame responded promptly:
I think the response of Karin Roberts was responsible and appropriate.

Calame's email contains the disclaimer that his opinions are his own and don't represent that of the Times. Then again, the Public Editor is the readers' representative.

Even if the AP were exclusively responsible for the error--which wasn't the case--why should it be the responsibility of a reader to ensure a correction? If the Times published incorrect information from any source, you'd think the newspaper would take on the responsibility of correcting it.

Times policy

Indeed, the Times Stylebook sets out a far-reaching Corrections policy:
Because its voice is loud and far-reaching, The Times recognizes an ethical responsibility to correct all its factual errors, large and small (even misspellings of names), promptly and in a prominent reserved space in the paper. A correction serves all readers, not just those who were injured or who complained...

A complaint from any source should be relayed to a responsible editor and investigated quickly....

Seldom should a correction try to place blame or deflect it outside The Times; the effort might appear defensive or insincere. But when an error has occurred under the byline or credit of a blameless staff member or news agency, the correction may cite an editing error or a transmission error.

The Times, in this case, does not appear to be following that policy, and the Public Editor doesn't seem to care.

It's another case of Atlantic Yards corrections fatigue, which I've defined as "the disturbing realization that we too often make errors in covering Atlantic Yards."

Fatigue overcome?

Yesterday, the Times, in the Styles section, published the following correction:
The Night Out column on Sept. 10, about the novelist James Ellroy, misstated the surname of a Los Angeles police detective who helped Mr. Ellroy investigate the unsolved case of his mother’s murder. He was Rick Jackson, not Jacobson. A reader pointed out the error in an e-mail message Nov. 22. This correction was delayed because editors did not follow through on the complaint.
(Emphasis added)

Someday, perhaps, editors will follow through on several Atlantic Yards corrections.

Would Robert Moses hate Atlantic Yards? Yes, but... maybe not

Francis Morrone, an architectural historian and commentator for the New York Sun, has been thinking about the legacy of master builder/power broker Robert Moses, subject of the three exhibitions and book, and several of Morrone's columns.

And the immersion has led Morrone, who lives in Park Slope and is on the advisory board of Develop Don't Destroy Brooklyn, to another conclusion: Moses would hate Atlantic Yards, even though it has been touted by Deputy Mayor Dan Doctoroff as kinder, gentler version a Moses-style megadevelopment. (Indeed, many fewer people and business would be displaced.)

Morrone told me he'd flesh out his thoughts further, but summarized what he thought would be Moses's objections:
--he disliked flashy architecture (and starchitect Frank Gehry's work embodies flash)
--he disavowed corporate branding (as with the Barclays Center)
--he avoided gaudy signage (as planned at the Urban Room and arena)
--he would've looked askance at small amount of open space (the ratio for the population would actually go down)
--he would've been appalled at the lack of coordinated traffic planning (and even project booster Marty Markowitz has come up short).

Morrone spoke Thursday night after a forum, titled "Where Goes the Neighborhood: The Past, Present, and Future of Park Slope," sponsored by the Park Slope Civic Council.

Product of his time

Some implicit endorsement of Morrone's views, but perhaps more implicit contradiction, was on evidence this weekend at a conference devoted to the legacy and reevaluation of Moses. Notably, participants observed that the city is more receptive in general to big projects.

We should remember, as those organizing the revisionist look stress, that Moses was a product of his times. Some of his projects were good architecture, and some were lousy, and that depended in part on the financing and the rules. He opposed subsidies for sports facilities, but so did everyone else.

Indeed, an analyst of Moses's rejection of subsidies for the Brooklyn Dodgers speculated that Moses might even support subsidies for projects today.

Moses, 2007?

Would he have come around to starchitecture? At the symposium Friday keyed to the new museum exhibitions, Robert Moses: New Perspectives on the Master Builder, Hilary Kitasei of the Henry Hudson Parkway Task Force observed that "Gehry is an original and has style--but does he have the taste and esthetics for the public realm?"

She pointed to Gehry's Millennium Park Bridge in Chicago, the Atlantic Yards project, and the new InterActive headquarters in Chelsea and asked, "Will these stand the test of time?" Her tone was doubtful.

At the symposium yesterday, Lynne Sagalyn of the University of Pennsylvania said that, even today, people are concerned about the commercialization of the public realm, pointing to the response to the Trump on the Ocean plan at Jones Beach. (Then again, the corner of Atlantic and Flatbush avenues is not Jones Beach.)

No one specifically mentioned traffic--remember, Moses warned of a "China wall of traffic" if a baseball stadium were to be built--but that remains the biggest issue regarding Atlantic Yards.

From Jacobs to Moses

Sagalyn, who's been examining 26 years of press coverage of Moses, said that Moses's legacy has had a huge impact on the way urban development has been portrayed. She showed a slide of three images: Jane Jacobs at a community meeting; the large crowd discussing Ground Zero redevelopment in the Listening to the City exercise; and an eminent domain abuse sign, which she identified as coming from "a blog on Atlantic Yards."

(While she's used clip files from five major newspapers to research the legacy of Moses, Sagalyn said that to examine Atlantic Yards she's had to include "the blogs." Indeed.)

Sagalyn, who teaches real estate development and planning, noted that the battle between Jacobs and Moses "is framed as neighborhood accretions versus large gestures, but it’s not a zero sum game; cities are built with all kinds of projects."

At another juncture, Lizabeth Cohen of Harvard University observed, “I appreciate the Jane Jacobs critique, but let’s remember, Jacobs is used by some people on the right as a justification for not doing anything."

Sagalyn said the legacy of Moses is grassroots participation and “do no harm” site selection. A questioner from the audience pointed to a paucity of such participation regarding Atlantic Yards.

While Sagalyn is a formidable scholar--her book Times Square Roulette is dense with detail--in her response she offered an off-the-cuff misassessment of open space proposed for the project. She said that the developer and proponents argue “there is a lot of open space” and the opponents say it’s “not truly public” and “I think both are valid.” (Actually, while there's more open space than previously, the ratio of open space to the population declines.)

Growth in Brooklyn

In the final panel, summing up the two-day conference, Columbia University urban historian Kenneth Jackson said, "I would argue that we need big projects. I’m a fan of Jane Jacobs, but I don’t think you can depend on that to run a great city."

"I think we need to grow and change," he said, noting that "you can’t have big growth in areas of Queens” far from public transportation. By contrast, he said, "We do have it at Atlantic Yards." While we can argue about the amount of such growth, "it should be much more dense than it is now.”

I caught up with Jackson afterward to point out that no one opposes significant development on the railyard, but they question the process for disposing of a significant piece of public property. He told me he wasn’t taking sides, just pointing out the opportunity near a transit hub. (Still, even by using the term Atlantic Yards, he was repeating the developer’s meme.)

Looking forward

Robert Fishman, an architectural historian at the University of Michigan, offered some pessimism. “What I’ll call the Jane Jacobs era, of citizen participation—I say this with apprehension—I think the Jane Jacobs era is over, or is coming to an end…. Those are my ideals, but we’re nearing a whole new era in which the issue is the capacity of public administration to make tough decisions."

Thomas Wright of the Regional Plan Association was more optimistic, saying that the product can't be divorced from planning. "It might be that we don’t have institutions that are up to the challenge," he said. "If you look at the process, it’s clear that models are emerging that will do a better job." His example: Listening to the City.

“It’s amazing to me that public hearings are considered useful,” he said, noting that Moses taught his successors how to ignore such input. (So much for the Atlantic Yards public hearing.)

Government, some said, must make large-scale changes that have ripple effects. Sagalyn praised Chicago's leaders for a "willingness to invest in the public realm, not just projects."

Wright said that, in New York, "it’s not a matter of if, it’s when we regulate auto use" (via congestion pricing). That, he said, "will finance the next generation of public investment."

The changing battle

The Moses legacy offers another ripple. While he didn't make explicit reference to Atlantic Yards, historian Samuel Zipp, describing the 1950s battle to clear the West Side for Lincoln Center, explained how the conflict represented a new frame.

Those behind Moses's project argued that urban renewal had a higher mission, a symbol of national maturity, of "cultural resurgence in the midst of the Cold War." The opposition, he said, found a new way to articulate their cause, protesting not merely the loss of thousands of houses and hundreds of businesses, but their neighborhood, their world.

With Atlantic Yards, as has been argued, this issue is not so much the direct displacement or the loss of historic buildings but the effect on adjacent neighborhoods that have revived steadily since Moses's time, less specific space but "a sense of place."

Moses to O'Malley, 1953: urban renewal won't support "speculation in baseball enterprises"

Master builder Robert Moses, vilified for ignoring neighborhoods and prioritizing the automobile, nevertheless was unwilling to be strongarmed by Brooklyn Dodgers owner Walter O'Malley into supporting significant government subsidy for a privately-run sports facility.

Indeed, a 6/22/53 letter from Moses to O'Malley on exhibit at Columbia University's Wallach Art Gallery puts it plainly. In the letter, part of the "Slum Clearance and the Superblock Solution" exhibit that's one of three segments in Robert Moses & the Modern City, Moses resists O'Malley's entreaty to locate a new stadium in urban renewal land between DeKalb and Myrtle avenues, just east of Flatbush.

(Note: O'Malley primarily wanted a separate site over the Long Island Rail Road station and including land to the east, site of the Fort Greene Meat Market, both north of Atlantic Avenue. That's not the same as the site south of Atlantic Avenue--including the MTA's Vanderbilt Yard and more--planned for the Atlantic Yards project, though Mayor Mike Bloomberg and others have conflated the two. But Forest City Ratner has malls north of Atlantic Avenue and wants to build Atlantic Yards across the road.)

Public purpose

First, Moses advises O'Malley that the stadium plan would not be allowed by federal law. He did allow that the New York Coliseum in Manhattan, which opened in 1956 (and was demolished for the Time Warner Center), had also been the beneficiary of federal Title I funds, but said that that project had been authorized and declared a "public purpose."

(That's the issue regarding Atlantic Yards. The Empire State Development Corporation declared it a public purpose, because of the arena, below market housing, transit improvements, and blight removal, but those challenging eminent domain assert those benefits are pretextual.)

Sports speculation

But Moses had more to say. He wrote:
Let me add that there are other reasons aside from those of law and sound policy why your plan is not one that justifies the exercise of the power of eminent domain, not to speak of the use of public funds to reduce the cost of land. Our Slum Clearance committee cannot be used to encourage speculation in baseball enterprises. You are, of course, the best judge as to whether in fact a new Dodger Stadium would be anything other than a white elephant, and whether the extension of your present property with additional surface and other parking facilities would not meet every problem you mention except television competition.

I am sorry to have to write this letter but I know you want it straight from the shoulder.

Moses to blame?

So, was Moses to blame for the loss of the Dodgers? Many now think that, but Henry Fetter, a lawyer and author of Taking on the Yankees: Winning and Losing in the Business of Baseball, 1903 to 2003, says no.

He spoke yesterday at a symposium keyed to the exhibitions, Robert Moses: New Perspectives on the Master Builder. Moses reflected the public and political consensus against public assistance for sports teams, he said. The willingness of newer cities, like Los Angeles, to shell out for sports facilities led older cities to follow suit.

"Moses was not alone--there was simply no political support for this kind of public subsidy for a private stadium," Fetter said. Had Moses said yes to O'Malley, Fetter said, he would've been vilified.

Back to AY

So that suggests future historians--heck, contemporary ones--will study how Forest City Ratner helped engineer public and political support for the Atlantic Yards plan. Among them:
--finding (and funding) local "sycophants" for a Community Benefits Agreement.
--sending deceptive brochures and buying newspaper ads.
--hiring economist Andrew Zimbalist, a foe of sports subsidies, to conjure up a study claiming enormous new revenues.
--claiming some $1.15 billion in subsidized loans to build affordable housing, some 60% of which would be unaffordable to the average Brooklyn household.
--and yes, capitalizing on the failure of local leaders to rezone some valuable land, to plan for development, to address the affordable housing crisis, and to move forward on a major sports facility.

There certainly would be a public purpose, but the question in court is the amount of that purpose relative to the private benefit.

Indeed, the project also would bail out the money-losing Nets, thanks to new sponsorships and luxury boxes in a subsidized arena. In 2007, the state's powers of eminent domain, and the power to override local zoning to allow an out-of-scale development, apparently can "encourage speculation in bas[k]e[t]ball enterprises."

Rose-colored glasses

Though many Brooklynites, and former Brooklynites, were shattered by the loss of the Dodgers--we could start with Borough President Marty Markowitz--Fetter said that his look at Dodgers-related letters in the Municipal Archives a few decades back didn't show ay groundswell of opinion in favor of subsidies.

Only in the spring of 1957, near the date of the Dodgers' departure but well after the threat had been made, was a "Keep the Dodgers in Brooklyn" committee founded. The massive sense of loss came later.

Jonathan Cohn, who last year cited that letter, wondered if we're better off:
So we lost the Dodgers, but we gained some great neighborhoods. Instead of second guessing the loss of the Dodgers, things could be worse; we could be asking ourselves: “Who lost Brooklyn?”

$300 million

Fetter said there was "widespread resistance to the massive public subsidy" to keep the Dodgers in Brooklyn. How much would it cost? He said the most expensive plan to keep the Dodgers, the establishment of a Brooklyn Sports Authority, would've required about $300 million in today's dollars.

Funny, that's just about the amount the city and state have pledged for infrastructure and land acquisition costs for Atlantic Yards--and far less than the combination of tax breaks, public costs, and tax-exempt bonds that would support the project. (Then again, the amount of private investment today would be much higher as well.)

Asked what Moses's take would be about subsidies today, Fetter said he wasn't sure. Moses was no sports fan, but he was a product of his time, and attitudes toward subsidies have changed, he said.

So could Moses have supported Atlantic Yards? Check here tomorrow for another expert's observation.

FCR announces demolitions; Ward Bakery not yet on list

Forest City Ratner yesterday announced its plans to demolish a dozen buildings within the Atlantic Yards project footprint. Asbestos abatement will commence next week and take at least two to three weeks before the structures are razed.

(The permits have been filed but not yet approved. See CB6 list and CB8 list.)

Notably, despite having filed a permit for demolition of the Ward Bakery on Pacific Street, which preservationists seek to protect rather than see an interim surface parking lot in its stead, the developer did not announce that demolition. Rather, demolitions of four other properties, at the corners of Vanderbilt Avenue and Pacific Street and Vanderbilt Avenue and Dean Street, are scheduled first on the block bounced by Vanderbilt and Carlton avenues, and Pacific and Dean streets.

Those properties, as the map shows, partially surround a building with renters who are part of an eminent domain lawsuit against the project.

However, that doesn't mean that Forest City Ratner intends to spare the Ward Bakery, the largest property marked in red on the map; this is just the first phase and that would be a complicated building to take down.
(Map by NoLandGrab, updated 3/8/07. Click to enlarge)

Confusing press release

Still, the press release, which emphasized the role of minority-owned contractors, was short on details and seemed to confuse at least one press outlet.

Under the headline 12 STRUCTURES TO BE RAZED AS PART OF ATLANTIC YARDS PREP WORK, it stated:
Forest City Ratner Companies (FCRC) today announced that phase one of Atlantic Yards construction will proceed next week with the demolition of 12 buildings owned by FCRC. Demolition will continue at 179 Flatbush Avenue, and abatement of an additional 12 buildings will begin as part of the preparatory work to demolish those buildings.

The New York Post, in an article headlined Ratner Readies Wrecking Ball, took that literally, stating:
Developer Bruce Ratner plans to demolish 12 buildings within a 22-acre footprint next week as he revs up efforts to begin building his $4 billion Atlantic Yards project in Brooklyn.
The developer - who last week began prep work for the Frank Gehry-designed development featuring an NBA arena and 16 skyscrapers - announced yesterday that he will also begin asbestos removal and abatement work on 12 other vacant buildings he controls in the project zone.

But the "additional 12 buildings," according to the press release, appear to be those additional to 179 Flatbush Avenue.

Demolition list

Block 1119
Lot 1 622 Atlantic Avenue (old U-Haul site, not noted in red on above map)

Block 1127
Lot 10 193 Flatbush Ave
Lot 11 191 Flatbush Ave
Lot 12 189 Flatbush Ave
Lot 18 618 Pacific Street
Lot 22 626 Pacific Street
Lot 30 644 Pacific Street
Lot 54 465 Dean Street

Block 1129
Lot 45 814 Pacific Street
Lot 46 818 Pacific Street
Lot 50 542 Vanderbilt Avenue
Lot 54 546 Vanderbilt Avenue

Times, News still ignore the AY financials

Journalistic neglect of the Empire State Development Corporation's (ESDC) sketchy release of Atlantic Yards financials matters, and here's why: the ESDC needs reform.

A supporter of the Atlantic Yards project recently offered a backhanded criticism of the ESDC under the predecessor administration of Chairman Charles Gargano, appointed by Gov. George Pataki, for whom he served as chief fundraiser.

The Real Deal, in its March issue, reported:
"The primary point is that the Spitzer administration is going to be proactive rather than reactive to developer-driven deals," said Kathryn Wylde, president of Partnership for New York City, a nonprofit group of business leaders.

So if we're concerned about developer-driven deals, shouldn't we take a careful look at the Atlantic Yards project? Well, Assemblyman Jim Brennan had to go to court to get the ESDC to release financial documents regarding the project, and he declared the three pages inadequate.

Times/News whiff

That would seem to be news, at least as important as, say, developer Bruce Ratner's pronouncements of affection for Nets stars Jason Kidd and Vince Carter. (Yeah, I know, the Sports desk isn't the Metro desk.)

Indeed, yesterday, the New York Sun covered the bases on the ESDC's release of Forest City's cash flow projections. The New York Post covered it irresponsibly, failing to get a comment from any outside analyst or advocate, much less Brennan, and misleadingly proclaiming an "exclusive." The New York Times and the New York Daily News passed on the story, and do so again today.

Journalists like to be first. Sometimes they think that, if another news outlet already has the story, they're embarrassing themselves by reporting it late. And in the well-linked information universe in which reporters are immersed, it may seem like this topic has gone through much discussion.

However, the public consumes information differently. Many people only read the Times, or the Daily News. So if the story doesn't appear, it doesn't exist.

(In its daily roundup yesterday, the New York Observer's blog The Real Estate mentioned only the inadequate Post story, not the more thorough Sun article. Brownstoner got it, calling the "lack of coverage and analysis... pretty astounding.")

Following up

And there are ways to transcend that putative embarassment. The "second-day lead" means the news outlet can reframe the story or add some analysis or reaction, thus making it seem fresher.

Now, it seems, we're waiting for a "third-day lead" from the Paper of Record and the largest circulating daily newspaper in Brooklyn. (We're also waiting for news of the planned demolitions.)

That, simply, is brutally weird.

Post follow-up

The Post today offered a somewhat cryptic follow-up, quoting no source by name, in its article based on a Forest City Ratner press release about planned demolitions:
New financial projections for the development, published by The Post yesterday, raise more questions than answers about the massive plan, critics say.

A Post analysis of the documents found that Ratner and smaller investors stand to make close to $700 million in profits by 2015 should the developer ever decide to sell the arena and residential and office space slated to be built.

But sources familiar with Ratner's financing told The Post yesterday that he is taking a big risk - putting up $1.2 billion in equity - although he obviously believes that Atlantic Yards is a sound long-term investment.

Actually, we don't know how much of a risk Ratner's putting up.

Three pages of mystery: FCR's cash flow documents leave questions unanswered

Assemblyman Jim Brennan’s effort to get the Empire State Development Corporation (ESDC) to release the Atlantic Yards business plan provided by developer Forest City Ratner reaped some results yesterday, but not nearly enough to evaluate the project.

The ESDC released three pages dated 10/10/06 and 10/11/06, but with no explanation for the assumptions behind the numbers. I showed them to David A. Smith, an affordable housing expert in Boston, who’s paid close attention to the Atlantic Yards plan. "These cash flow schedules are like a Japanese landscape watercolor; fascinating and evocative in their own right but only lightly drawn,” he wrote in response. “They make one hungry for more detail, without which it is impossible to have a properly informed opinion about either the expected profit the developer may make relative to the risk, or whether the public is receiving fair public benefit for the public resources contributed."

Thus, the documents would not help Brennan evaluate whether Atlantic Yards could be downsized without harming the financial viability of the project.

Brennan told the New York Sun, in an article today headlined Critics Deem Atlantic Yards Documents Insufficient, "We will deal with our attorneys, and not silly superfluous dribs and drabs that come through fax machines after press inquiries." He said the document was not the complete business plan he'd sought through a Freedom of Information Law request. He and State Senator Velmanette Montgomery filed suit to get that document.

(The New York Post, in an article incorrectly dubbed an exclusive, oddly ignored all criticism of the documents. Metro acknowledged the controversy in a paragraph. The New York Daily News and the New York Times passed on the story.)

Paying for the arena/Nets

The documents do offer some tantalizing details, for example pegging revenue from suites in the suite-intensive arena at $38 million a year (beginning in 2009-10), with an annual increase of $1 million, slated within five years to surpass the annual arena debt service of $43.8 million. In other words, the suites alone could, as I’d predicted, pay for the arena, the most expensive ever in the country, at $637.2 million.

They also show that the new arena would easily pay for its operations; as sponsorship revenue, starting at $31.2 million annually, would nearly cover operating expenses. (That revenue would include $20 million a year from the Barclays Center naming rights deal.)

Thus, non-basketball events, ticket surcharges, and other revenue would help offset heavy losses currently experienced by the Nets. Develop Don’t Destroy Brooklyn called it “a publicly subsidized golden parachute.”

Beyond that, the documents seem to lowball the developer's revenues. There is no figure assigned to non-box/loge tickets to Nets games--seemingly a significant source of admission revenues. [Update: a reader suggests that that number would be subsumed into cash flow figures, so, while it may be missing information, it doesn't lowball revenues.]

Rubberstamped?

DDDB questioned whether the “ESDC has analyzed and verified the projections released today, or if they simply rubberstamped this submission, just as they have every other aspect” of the project. I asked if the agency analyzed or endorsed the documents. "FCR gave this to us and we released it as is," responded spokeswoman Jessica Copen.

DDDB spokeswoman Candace Carponter suggested that, “Given the vast public subsidies that this project is slated to receive, the public has the right to expect some assurance from the government that the developer's numbers are comprehensive and based upon valid business assumptions.”

IRR isn’t profit

While the total “investment internal rate of return” (IRR) was pegged at 8.4%, that doesn’t mean that Forest City Ratner’s profit would remain, as a percentage, below two figures, since we don’t know how much of the money the developer would put up.

Indeed, as I wrote yesterday, the documents released differ greatly from the financing plan that the Metropolitan Transportation Authority required from bidders for the Vanderbilt Yard, and which Develop Don't Destroy Brooklyn and other organizations tried in vain to see. The MTA required a 20-year analysis, not little more than a decade—which ends just as the revenues start climbing. (Indeed, even project landscape architect Laurie Olin says it would take 20 years to build.) The MTA also required the developer to account for "sources and uses" of funds.

Smith confirmed that: “The schedules omit nearly all of the financing and operating assumptions. They omit any sketch as to how the equity will be raised from five different legal and financial entities (team/arena, condo, rental, hotel, and office), without which one cannot tell what is the cost of external capital versus developer capital. They omit a sources and uses of funds, without which it is impossible to tell what fees (however proper they might be!) the developer and its affiliates may be charging the venture ('off the top', as it were). They do not tell us where the $230 million (and counting) of equity that has already been contributed came from, nor at what current or future cost."

Why fees are important

Smith likened the issue of fees to affiliates—and Forest City has created several corporate entities for this project—to the financing for Hollywood films, where the net revenues are significantly lower than the gross revenues because of fees charged by the studio. “Knowing the net cash flows without knowing the fees is like learning that the Nets scored 89 points last night, without knowing who they were playing, what the other team's score was, and whether they won or lost,” he said.

Smith said that the record-setting recent deal for Stuyvesant Town/Peter Cooper Village was equivalent to a 5% IRR if it's presumed that the net operating income (NOI) won’t rise. Obviously, that NOI will rise, he said, “but I doubt that the unvarnished Stuy Town IRR (before considering debt financing) would be as high as 9.6%.”

A long process

In other words, Atlantic Yards might offer dramatic returns—and for good reason. “At the same time, large-scale investors may well find a project like Atlantic Yards more risky, so the premium over a safe rate that they would demand could well be higher,” Smith said. “In short, I don't know whether 9.6% is a rich or poor rate even for the raw equity capital considered in the abstract, much less what equity could be raised from outside, nor how the deal pencils for the sponsor.”

Forest City Ratner has already invested $230 million. "The $230 million of capital already invested is a jaw-dropping sum, especially since we are four years into the transaction and it has not closed,” Smith observed. “Very few entities could put up that much capital for that long. Setting aside whether one likes or dislikes the process or the property, no one should underestimate how few sponsors could attempt it, nor how many fewer would attempt it.”

(The city and state have pledged at least $305 million in direct subsidies for infrastructure and other costs, and the state has agreed to override zoning and take property by eminent domain, significant boosts for the developer.)

Smith called the lag between first outflow of capital, in 2004, to net inflow, in 2013, a dramatic one. “A tremendous amount is riding on expected residual value in a decade,” he said. “I cannot imagine the developer will not have tried to lay a large portion of that off on outside capital sources."

Affordable units faster?

The documents also show that the developer expects $1.15 billion in subsidized loans, via the New York City Housing Development Corporation (HDC), for the rental housing, in accordance with HDC’s 50/30/20 plan: 50% market rate, 30% moderate/middle income, and 20% low income. And the developer expects $1.04 billion in condominium construction loans.

The first housing units built, in 2009, would be 551 condos. In the next year, another 312 condos would open, along with 1658 rental apartments. If half of the rentals are affordable as pledged, that suggests 829 affordable units in Phase 1, a significantly larger number than the 550 cited in a letter from the City Planning Commission last September.

Given that there has been no public promise of 829 affordable units, the numbers seem, as stated at the bottom of the Combined Returns Summary released yesterday, “For discussion purposes only. Actual results may vary.”

Unexplained gaps

There are several unexplained gaps in the documents. For example, there’s no cost and value assigned to the retail space developed. Nor are there numbers for the hotel. Smith speculated that the hotel might be “fully net-leased to an outside party,” but noted the absence of any terms explaining that.

Also, there’s no revenue assigned to parking until the 2012-13 season, even though the arena is expected to open three years earlier. Even if the interim surface parking, rather than underground garages, would supply parking over that stretch, surely there would be revenues. The projected revenue of $238,000 for the 2012-13 year is paltry. Smith conjectured that it might come from a contemplated lease/operator agreement.

Glasnost at ESDC: criticism of AY oversight aired at board meeting

Comment from the public is now welcomed at board meetings of the Empire State Development Corporation (ESDC), a policy change instituted by the administration of Gov. Eliot Spitzer that marks a significant step toward glasnost.

Yesterday, critics of the Atlantic Yards development took advantage of the opportunity to warn the ESDC board that, given the recent water leak and difficulty in contacting responsible officials, oversight of the site preparation and construction work was urgently needed.

The opportunity came at the end of a brief board meeting held to discuss the ESDC’s Moynihan Station project. The board members, several of them on the phone from Albany, quickly discussed an amendment to the project, asked for comment, and prepared to vote.

"Urgent concerns"

Then Michelle de la Uz, executive director of the Fifth Avenue Committee and representing BrooklynSpeaks—which earlier blew the whistle on the oversight issue—asked to be heard, saying she had “certain urgent concerns” regarding Atlantic Yards.

ESDC Downstate Chairman Patrick Foye, on the speakerphone, asked her to be brief, noting that the agency had not yet set rules for public comment regarding issues not on a meeting agenda. He added that he’d be happy to schedule a meeting with de la Uz and others.

De la Uz briefly explained that the organizations in BrooklynSpeaks “have been troubled by the absence of visible public oversight” and said that work shouldn’t begin without such a mechanism.

ESDC is supposed to announce an environmental monitor in less than two weeks. BrooklynSpeaks has favored a local subsidiary to oversee the project.

Foye thanked her for the summary and again encouraged her to set up a meeting. He demonstrated neither resistance to the request nor any special sympathy for it. But he was cordially professional, and de la Uz, who had come to the meeting backed by four other BrooklynSpeaks members, said she would, indeed, follow up.