358 Grove, Bushwick gentrification battles, and the 421-a map

If you want an example of a development that probably pushed Assemblyman Vito Lopez to add all of Bushwick to the "exclusion zone" where affordable housing would be required in exchange for the 421-a tax break, look no farther than 358 Grove, a much-hyped 14-story condo tower. The building also serves as the jumping off point for a Village Voice investigation this week into landlords unscrupulously pushing gentrification in Bushwick.

In promoting 358 Grove, the developer generally plays down its location. The image at right, for example, comes from the Halstead web listing, which states "358 Grove is located in one of Brooklyn's fastest growing neighborhoods; just one block from the L train and 15 minutes into Union Square Station."

And, when the development hit the blogosphere three months ago, most comments on Curbed were withering, pointing out, for example, that the claimed 15-minute access to Union Square is a fantasy and that Bushwick is hardly close to the hipster haunts of Williamsburg.

It's worth noting, however, that the promoters have tweaked the location. Currently, the web site states, "Situated in the heart of burgeoning Brooklyn, 358 Grove offers ultra-convenient access to the myriad restaurants, shops and entertainment options of both East Williamsburg/Bushwick and Manhattan."
(Emphasis added)

In March, as the above graphic shows, the neighborhood was more boldly defined as Williamsburg.

Still, it's a stretch to say that a building near border of Ridgewood, Queens constitutes is "the heart of burgeoning Brooklyn."

The Voice takes a look

In a Voice article this week headlined The Second Battle of Bushwick: Thirty years after the blackout riots, it's getting hot all over again, Tom Robbins, with reporting by students in a class on urban investigative reporting at Hunter College, sketches the changes.

The article begins:
From the top of the spanking new steel-and-glass 14-story condo tower now open for inspection on Grove Street just off of Myrtle Avenue, you can see most of Bushwick—the landmarks of the neighborhood that was, and the one that's fast being remade, the sites of the bad old memories, even of some of the good.

This is the Brooklyn neighborhood's first major luxury residential construction project, but the marketers of the 59 condominium units for sale here steer clear of the name Bushwick as much as possible. Promotional materials aimed at luring hipsters with the means to buy a one-bedroom for $270,000, or a three-bedroom penthouse for $682,000 refer to "ever-expanding Williamsburg" or "East Williamsburg" as the building's locale. This despite the fact that the tower at 358 Grove Street is in deepest Bushwick; look it up on any map.

...What's at work here is straight out of the brokers' handbook: Link the property in buyers' minds to the worldwide cachet of that now-prosperous and booming neighborhood a couple miles west of here. "The Peter Luger Steakhouse is just a couple of blocks away," the agent says, leaning over an unfinished rooftop cabana. Actually, Peter Luger's is a solid eight subway stops away from here on the M train that rumbles along Myrtle Avenue. But no matter. There are some very solid marketing rationales for this approach.

Why? Bushwick burned in 1977, during the blackout July 13, and residents looted the neighborhood, which the Voice describes as such: Pummeled by the loss of its blue-collar, job-generating breweries and knitting mills in the late '60s and early '70s, the neighborhood underwent a wrenching racial transition as low-income blacks and Hispanics replaced fleeing Italian and German families.

Then came drugs--indeed, those at 358 Grove Street can see down Irving Avenue to Maria Hernandez Park, named in 1989 for a heroic local activist who "confronted the local crack merchants," as the Voice puts it, and was shot to death, with no arrests.

There's an excellent exhibit on Bushwick's recovery at the Brooklyn Historical Society, called Up From Flames, through August 27. Public disinvestment fostered the neighborhood's decline, and public investment to rehabilitate and build affordable housing helped stabilize the neighborhood before gentrification.

Gentrification

As in Williamsburg and the Lower East Side, the Voice notes, "artists are the shock troops of gentrification," willing to adapt industrial spaces and to live alongside poverty, they spawn bars and restaurants and soften up the neighborhood for development. It's happening all along the L train.

And gentrification isn't necessarily bad, as the Voice observes:
A neighborhood that ranks in the top 10 poorest areas of the city, that has the highest rate of asthma hospitalizations and the most serious housing-code violations, can use all the help it can get. New investment means new residents, new stores, new jobs. And, whether city fathers choose to admit it or not, it means much closer municipal attention to crime and the quality of local life. For those who already own a modest piece of the rock, and who held on through the bad years, rising real estate values also yield a once-in-a-lifetime bonanza, a hike in net worth that trickles down to the rest of the family, providing a nice cushion against an otherwise fickle economy.

The problem is that some people lose out, those living in buildings of fewer than six units, which are not subject to rent regulation. And, as the Voice points out, even those in buildings subject to rent regulation are under siege:

But those in rental buildings of six apartments and over—roughly half of Bushwick's housing stock—are supposed to enjoy the full protections of the law. They're entitled to basic services like a paint job every few years, regular visits by an exterminator, and a locked front door, not to mention security against illegal rent hikes and harassment. But try telling that to the avid buyers now answering the clarion call of a new hot real estate market in, of all places, Bushwick. In the past two years, residents and community groups say, new landlords have flocked to this once woebegone territory, their apparent mission to empty and re-rent these now valuable properties—regardless of the rules—as fast as possible.

The rest of the article chronicles the "huge displacement going on," and points out that, in some cases, city officials are trying to enforce housing codes to stop unscrupulous landlords.

Up From Flames

The real estate market is in flux, as Adam Schwartz writes on Up From Flames:
One measure of a successful public policy is the extent to which it encourages private investment. By this measure, the redevelopment of Bushwick has been a roaring success.

But such success can also be a danger to itself. It was a mad dash for profit that started Bushwick's burning 30 years ago, just as that same force is sending both rents and buildings sky high in todays hot real estate market.

True sustainability is about balance and public policy is needed once again to provide that balance. Bushwick currently needs affordability, zoning and historic preservation laws to maintain the community's neighborhood feel.

In the New York Observer this week, Matthew Scheurman's article, headlined Grinding Sausage Late at Night: Albany Reforms 421a Program, explains why certain neighborhoods were added to the exclusion zone:

An old-school politician who understood that housing was a bread-and-butter issue for his working-class Hispanic constituents, Mr. Lopez held an unusual amount of power both as the head of the Assembly’s Housing Committee (meaning that any bill would have to go through him) and as the new head of the Brooklyn Democratic Party (meaning that he had particular pull with fellow legislators from his borough).

The 421a reform was an easy sell for his colleagues, especially those who represent poor and minority areas that the Sunday New York Times real-estate section was calling the next hot neighborhoods. To these legislators, the 421a program appeared to symbolize the government’s complicity in gentrification, for it gave developers an incentive to tear down tenements and replace them with new, higher-priced apartment buildings. The fact that the people who voted for these Assembly members were the ones being driven out made the point all the more clear.

When Mr. Lopez asked for input on the bill a few months ago, he said he received responses from 17 legislators who wanted some or all of their districts to be added to the exclusion zone; these would be neighborhoods where the 421a tax break would be reserved only for new buildings that included low-income housing. Three of those legislators later changed their minds, Mr. Lopez said.

The 14 legislators who asked to be included did not necessarily represent neighborhoods that were far enough along in gentrifying that market-rate housing needed no boost to take root. Rather, they represented that swath of minority neighborhoods where displacement fears raged most fiercely. The exclusion zone that Mr. Lopez offered in his bill extended north in Manhattan through Harlem, Washington Heights and Inwood; east through central Brooklyn to encompass large parts of Crown Heights, Ocean Hill, East New York and Mr. Lopez’s entire district. The northern shore of Staten Island, and small spots in Queens and Bronx, were also mapped.

And why weren't areas like Riverdale or Corona added? The legislators didn't ask.

AY echoes?

In the Atlantic Yards context, Forest City Ratner hasn't had to withdraw services from the buildings it owns that are slated for demolition. For one thing, the large developer is subject to more public scrutiny than some shadowy investors in Bushwick. More importantly, Forest City has the ultimate hammer; the state will exercise eminent domain.

However, a property owner just two doors down from the AY footprint, at 499 Dean Street, last fall bricked up the building and allegedly withdrew services to get a rent-regulated tenant to leave. (That threat seems to have passed, as there are now new windows.)

And gentrification in the area around the Atlantic Yards site has already begun. In some cases, investors are building on empty lots. In others, buyers are jacking up rents.

The Prospect Heights/Crown Heights area, as Brooklyn College sociologist Aviva Zeltzer-Zubida pointed out, is ripe for displacement. Maybe that's why Lopez's bill, however flawed, extended the 421-a exclusion zone to Crown Heights. His argument was the public should not, as with 358 Grove, subsidize luxury development without getting something in return.

The new 421-a map certainly does not, as the Observer suggests, represent the best balance to nudge the housing market along. Then again, the City Council reform, with a more modest "exclusion zone," isn't necessarily the solution.

It all shows the difficulty of trying to predict the housing market. And there are other factors; "Up From Flames" points out that the zoning in Bushwick allows larger buildings, which are another incentive for profit.

Bloomberg calls for 421-a veto, says Ratner "doesn't need" tax break

Mayor Mike Bloomberg offered his first public criticism of the "Atlantic Yards carve-out" during a radio interview today, saying developer Bruce Ratner "doesn't need" a special tax break that could be worth $300 million.

The criticism came almost as an aside while Bloomberg made the larger argument that Governor Eliot Spitzer should veto the 421-a reform passed by the legislature.

Listening in

At about 20:45 of the mayhor's weekly appearance on the John Gambling Show, the host raised the question of 421-a, subject of an extensive article in today's Times.

Bloomberg responded: Well, I hope the Governor vetoes it… You want people to build affordable housing, but you don’t want it to be so onerous that they won’t, and there are places they’re going to build anyway, so there’s no reason to give them tax breaks... Our City Council… came up with a good balance of building affordable housing and also building the market-rate housing that we need. We consulted with everybody, it was an extensive study, it was done totally on the merits. It gets to Albany and, with some pressure from one real estate group here who ought to be ashamed of themselves, all of a sudden it applies to a much bigger area, which will really keep housing from being built there. It’s going to hurt the very people that everybody talks about helping. And gives some tax breaks to a developer that doesn’t need ‘em, which we didn’t have to do. I can only hope the governor stands up and vetoes it, because it really should not become the law of this state.

Arguable

As noted, it's arguable that the City Council balance is perfect. And the Real Estate Board of New York (REBNY) didn't pressure the state to expand the "exclusion zone;" rather REBNY acceded to the map proferred by Assemblyman Vito Lopez in exchange for a six-month extension of the current law and, apparently, the special deal for Forest City Ratner.

Slam?

The Brooklyn Paper broke the story earlier this afternoon with a story headlined Bloomy slams the “Ratner carve-out”. It wasn't quite a slam, but, given that the mayor is a vigorous supporter of Atlantic Yards, it is notable.

When I asked Bloomberg Wednesday about 421-a and the carve-out, he declined the opportunity to comment on FCR's special deal. Apparently things are heating up.

Yassky and James ask Spitzer and Bloomberg to withhold aid

Council Members David Yassky and Letitia James, in a letter to Governor Eliot Spitzer and Mayor Mike Bloomberg, have asked the state and city to withhold previously pledged direct subsidies for the Atlantic Yards project, citing the "Atlantic Yards carve-out" in the state's revision of the 421-a tax break.

They write:
The most egregious aspect of the carve-out is the amount it will cost taxpayers. New York City has already approved $205 million for the project, and the State has pledged $100 million. The rewrite of the 421a legislation will cost taxpayers at least an additional $100 million and could reach $170 million in forfeited tax revenue.

Because of the size of the 421a tax break for Atlantic Yards, we ask that the money previously set aside for land acquisition aid--$100 million from the City and $100 million from the State—be withheld. This $200 million should not have been allocated in the first place—there is no justification for the government to subsidize a developer’s bottom line—and now, with this latest development, any distribution of this money is inexcusable.

Note that city officials told the Times that the tax break could be worth $300 million.

City says "Atlantic Yards carve-out" worth $300 million; will Spitzer veto?

Previous estimates have valued the "Atlantic Yards carve-out" in the state's revision of the 421-a tax break at up to $170 million. Now the New York Times, in a post-mortem on the much-criticized closed-door negotiations, reports the figure could be nearly double that.

Today's article, headlined City’s Plans for Housing Flop in Albany, focuses on decisions made by Assemblyman Vito Lopez, the chair of the Brooklyn Democratic Party and of the Assembly Housing Committee, in negotiation with Steven Spinola of the Real Estate Board of New York.

The Times reports:
But the bill would also provide what the city estimates are an additional $300 million in tax breaks for the vast Atlantic Yards complex being developed by Forest City Ratner Companies, the development partner with The New York Times Company in the Times’ new Midtown headquarters, without getting any additional affordable units in return. Mr. Lopez said it was a concession sought during negotiations with Mr. Spinola and the Senate over his bill.

State Senator Martin J. Golden, a Republican from Brooklyn, who sponsored the bill in the Senate, acknowledged yesterday that Mr. Spinola “may have had a little bit more of a role than most,” in negotiating the bill. But, he added, “Everybody was checked with.”

Yet, State Senator Frank Padavan, a fellow Republican, contends that the Senate bill was rushed through with little discussion of the special deals for developers like Forest City. “It didn’t pass the smell test,” he said.

Real estate developers say that the real estate board, whose leading members are active in Manhattan, was principally concerned with extending the 421-a program beyond Dec. 31, and had little interest in the impact of the bill on development in the other boroughs. Mr. Spinola was on vacation this week and unavailable for comment.

Golden, of course, is an Atlantic Yards supporter and Lopez has received campaign contributions from developer Bruce Ratner's brother and sister-in-law.

City objections

More significant to city officials critical of the state bill is the size of the "exclusion zone," where developers would be required to build affordable housing in exchange for the tax break. The City Council extended it to Brownstone Brooklyn, Greenpoint/Williamsburg, the Queens waterfront, TriBeCa, and parts of Harlem. The state bill extended it to neighborhoods in all five boroughs.

I think there's room for debate on the outline of that zone, and I'm not sure it would "scuttl[e] the city’s efforts to build middle-class housing at Queens West on the East River," as the Times reports. (Could the city just readjust the income mix, as it already has apparently done, substituting 40 percent market-rate units?)

The zone was expected to expand, given Lopez's concerns about gentrification around the Bushwick/Williamsburg area he represents. But it appears that Lopez got the map he wanted in exchange for the six-month extension of the current law, rather than via sufficient public deliberation.

The Times reports:
“We thought we had the makings of a good deal, and we thought it would get modestly better in Albany,” said Brad Lander, director of the Pratt Center for Community Development. “Instead it emerged with a bunch of loopholes.”

So the question remains: Will Gov. Eliot Spitzer spend some political capital, veto the bill, and thus fulfill the reformer role he claims?

A rally against eminent domain abuse, four City Council members and the "Willets Point effect"

As the fight against eminent domain abuse heats up, maybe it's time to start talking about "the Willets Point effect." The coalition fighting the Atlantic Yards project has gathered savvy from a high-profile battle lasting more than three years. Those challenging Columbia University's West Harlem expansion have a clear David vs. Goliath fight. And the two homeowners on Duffield Street in Downtown Brooklyn have strong suggestions of a link to the Underground Railroad in the face of denial by the city agency that wants their land.

(Photos by Jonathan Barkey; here's the full portfolio.)

But the 225 businesses operating in the “Iron Triangle” of Willets Point, Queens, employing some 1800 workers, have the manpower and muscle to mount a very public fight against the city’s plans for an upscale development that would include some 5500 housing units, a hotel and convention center, a million square feet of retail and 500,000 square feet of office space.

So, as the four disparate groups gathered yesterday on the steps of City Hall to join in a rally as New Yorkers Against Eminent Domain Abuse, the Willets Point contingent was the largest and the loudest, wearing hats and t-shirts indicating their protest, arriving by bus with signs in tow.

And given that a good number were white guys who do physical labor, the group in some ways echoed the contingent of construction workers who flooded Atlantic Yards public hearings last summer to argue for, rather than against, condemnation.

More than 100

The rally, hosted by Lumi Rolley of NoLandGrab (who has honored me here and here) and promoted by Develop Don’t Destroy Brooklyn (DDDB), drew more than 100 protesters, including City Council Members Letitia James and Charles Barron of Brooklyn, Tony Avella and Hiram Monserrate of Queens, plus the chief of staff of Council Member John Liu, also from Queens.

The gathering occurred just a few days after the second anniversary of the Supreme Court’s controversial 5-4 Kelo v. New London decision, which reaffirmed the right of governmental entities to take private land for economic development, again saying that tax revenues do constitute an example of “public purpose”—as opposed to “public use” as eminent domain was originally defined.

The decision generated a backlash around the country across the political spectrum, beyond the right-wing and libertarian groups that have long opposed eminent domain. (Several people yesterday carried signs produced by the Institute for Justice, a longtime opponent of eminent domain.)

Many states—though not New York--have passed laws to narrow the use of eminent domain. Still, most states have not tightened the definition of “blight,” which was not affected by Kelo, and has been used to pursue condemnations, including in the Atlantic Yards case.

“The legal definition of blight is so absurd,” Rolley said, leading off the rally. Her web site is mainly a portal cataloging and critiquing Atlantic Yards-related news and information, though it does extend to other issues related to eminent domain.

Council Members speak

“We cannot engage in the subjective definition of blight,” James (right) declared, after leading the crowd in a chant of “Hell no, we won’t go.” “It must be based on deteriorating buildings, not just blight created by the developer. Forest City Ratner should not be rewarded.”

James said eminent domain was “stealing property for individuals in high places,” adding that “the Mayor cannot talk about [PlaNYC] 2030 and support eminent domain.” She said she hoped the Atlantic Yards case challenging eminent domain—currently pending appeal in federal appellate court—goes all the way to the Supreme Court.

“It’s probably the only time I agree with Clarence Thomas,” said the generally liberal Council Member, contrasting herself with the right-wing justice. Both are African-American.

The firebrand Barron, after criticizing eminent domain, also made reference to the special deal for Atlantic Yards inserted into the state legislature’s reform of the 421-a tax break. “If you get the information an hour before… you need to vote no,” he said.

Avella, a candidate for mayor in 2009, hearkened back to the traditional notion of eminent domain, which took homes for highways and other clear public use. “Now we’re taking private property so we can turn it over to private developers,” he said. “That is so un-American.”
(At right, Avella, with James and Barron behind him.)

Actually, it is legal—the question is whether states will narrow the powers.

Willets Point

Dan Scully of the Willets Point Industry and Realty Association (WPIRA) said that business owners had been ignored. “For 30 years, we’ve been telling the city we need sewers and we need streets. For 30 years, they’ve ignored us,” said Scully, who's in the top photo.

WPIRA aims for “owner development” of the area. “We’re not blighted. “We’re neglected by the city,” said Scully, a vice-president at Tully Construction. (Here's Tom Angotti's May article, A Sustainability Test at Willets Point, from Gotham Gazette.)

Joe Ardizzone, a crusty 74-year-old who’s the only legal resident of Willets Point, declared, “It’s so un-American. It’s too much to even explain.”

(Now there's a Coalition for Willets Point arguing for community benefits if eminent domain proceeds.)

Other voices

Nellie Hester Bailey of the Harlem Tenants Council, talking about the fight against Columbia, said, “We have to look at the elected officials who are not here today,” pointing to Mayor Bloomberg.

Ron Shiffman, founding director of the Pratt Center for Community Development and a longtime consultant to community planning groups, said, “if we want New York City to grow, the only way to do it is with a diversity of jobs, not just FIRE [Finance, Insurance, and Real Estate] but also manufacturing.”

Eminent domain, he said, must be used “only for public purpose, not to make the rich richer.” Shiffman’s on the DDDB Advisory Board.

Council Member Monserrate showed up in the middle of the event, and declared, “We should never use eminent domain to enrich others.”

(At right, Monserrate, with Rolley next to him and Bailey and Henry Weinstein, a major property owner in the Atlantic Yards footprint, behind him.)

Simeon Bankoff, executive director of the Historic Districts Council, called eminent domain “the thermonuclear warhead of city planning.”

Who’s responsible?

Joy Chatel, a Duffield Street homeowner, asked, “Governor Spitzer, where are you?" He hasn't spoken out against eminent domain abuse.

Closing the rally, DDDB spokesman Daniel Goldstein (right) declared, “When they say it’s a public use just because they say it’s a public use, it doesn’t mean it’s a public use.” He offered the same mantra substituting the word “blight” for “public use.”

“The mayor says often, ‘you can’t let one guy’ stand in the way of development,” Goldstein continued. “We’re not ‘one guy.’”

He pointed out that eminent domain does seem to be an official policy, citing the June 2001 Group of 35 report, organized by Sen. Chuck Schumer, that identified condemnation as a tactic to assemble sites for office space.

(Note that Mayor Bloomberg made fighting federal curbs on eminent domain a priority last year; meanwhile, his law department stresses a principled approach, as with development of Melrose Commons.)

What to do

There were only a handful of reporters at the rally, plus various observers, including some from the New York City Economic Development Corporation, keeping tabs on the opposition.

At the end, with most people drenched in sweat, there was only one question: what should the legislature do?

Goldstein pointed out that bills to reform eminent domain had languished in the legislature. “When it comes to blight, we need a strong definition,” he said, suggesting that government neglect, cracked sidewalks, and underused properties—all cited or hinted at in the state’s Atlantic Yards Blight Study—should be struck in favor of “genuinely unsafe and unhealthy neighborhoods.”

“I have a joke,” he continued. “What’s the definition of blight? Yours.”

Bloomberg on subways ("not that crowded"), Doctoroff, and 421-a

The topic of Mayor Mike Bloomberg's address yesterday morning at a breakfast presented by Crain's New York Business was education, but he answered questions about a range of issues, from his presidential ambitions to congestion pricing.

On the latter topic, Bloomberg improbably--and not too convincingly--deflected criticism that took off from the disturbing announcement from New York City Transit that certain subway lines, notably the numbered ones, are at or over capacity and can't add trains.

The event, held at the Sheraton New York was in Midtown, was broadcast yesterday on the Brian Lehrer Show, and the issue came up at about 17:09 . Crain's editor Greg David posed the question:
The Transit Authority said this week there’s no room on the numbered subway lines for any new riders that would head to subways if congestion pricing went into effect. Doesn’t that lend support to the opponents’ view that we’re just not ready for congestion pricing?

Bloomberg responded: So we’ll do nothing about improving mass transit, and they’ll say that’s the solution to the problem. I don’t think so.

The audience, mostly business people, clapped.

In denial

Then the mayor embarked on his own twist of reality. (He did similarly in 2004 when talking about Atlantic Yards financing.)

Bloomberg continued: If you want to fix the problem…If the subways are that crowded—and, incidentally, I take the Lex most days, and it’s not that crowded. So you stand up next to people, get real, this is New York, what’s wrong with that?

The mayor similarly told the New York Times Magazine last September: “I take the subway. My attitude is go earlier if the train’s crowded.”

Except that now there are statistics--which Bloomberg ignored. The statistics came from New York City Transit, an agency of the Metropolitan Transportation Authority (MTA), but Bloomberg acted as if a government agency were being criticized by some outside gadflies.

He continued:
…I protected Con Ed, now I’m gonna protect the MTA. When I come to New York City in 1966, the subways were filthy, there were panhandlers, there was graffiti all over the place, they broke down, they weren’t air conditioned. I would suggest all of you take the subway with me today or tomorrow. You will find every one of those things different. It’s a great ride, it gets you where you want to go, quickly, safely, cleanly. And I can think of only once somebody ever yelled at me on the subway, this guy yelled at me, “Fix the Knicks.” OK, I can do a lot of things.

He got laughs and claps, but he'd avoided the question. And subway capacity is a very big deal if the Atlantic Yards project goes forward, since the environmental review stated that the lines serving the project site were under capacity. Congestion pricing may be a very good idea, but the city can't avoid the math.

The Post today pointed out that Bloomberg generally travels before the rush hour. The Daily News today quoted congestion pricing critic David Weprin as saying the F train in Queens is overcrowded.

Streetsblog notes that New York City Transit head Howard Roberts said that congestion pricing revenues could be used to improve the transit system, in time, notably via the Second Avenue subway. In other words, Bloomberg could've endorsed, rather than denied, the reports of crowding.

On Doctoroff

Continuing, Bloomberg endorsed a pilot program for congestion pricing, and said he expected that the State Legislature would eventually act on it, rather than micromanage. And in doing so, he suggested that Dan Doctoroff, the Deputy Mayor for Economic Development, would find a place in history.

He stated:
That’s why the pilot is the right answer. We’ll do the best we can and then see what happens. Y’know, if you take a look—history will write a book--somebody will write a book—[Robert Moses biographer Robert] Caro or somebody like that and will say, Doctoroff had a bigger impact on this city than the last big builder that came through, who lived, incidentally, in an awful lot easier time. Didn’t have the courts, didn’t have the community boards, didn’t have all of the visibility that we have today.… Dan’s done the study. He’s had experts. We’ve included every single advocacy group, whether it’s traffic or environment, pros and cons, left and rights, outer borough, inner borough. Everybody. They’ve come up with a plan that we think has a reasonable chance of working and I think we need to do it.

Doctoroff in February presented himself as a planner who'd learned the lessons of the Robert Moses era. Majora Carter of Sustainable South Bronx disagreed.

On 421-a

After his speech and the public interview conducted by David and Lehrer, Bloomberg took some questions from the press. I asked his views on the reform of the 421-a tax break passed by the State Legislature, specifically the expansion of the "exclusion zone" and the special break for the Atlantic Yards project.

In his answer, he ignored the Atlantic Yards question but simply said that the reform passed last December by the City Council struck the right balance.

Note that the city bill, which would require 20% affordable housing in all buildings in the exclusion zone in exchange for the tax break, would not have affected the dozen or so rental buildings planned for Atlantic Yards.

However, assuming that three or four of the 16 towers would be primarily market-rate condos, the city's reform might have cost developer Forest City Ratner more than $100 million, the value of the special break. That's an impact that I and others writing about the city's bill last December seem to have missed.

The 421-a map emerges--shocker?

So this is what the New York Daily News, City Council Speaker Christine Quinn, and some others are so shocked by.

The New York Observer yesterday published the map of the proposed expansion of the 421-a exclusion zone--where developers would have to construct 20% affordable housing (for households with incomes up to 60% of area median income, or AMI) in exchange for tax breaks. The map comes via the Pratt Center for Community Development.

The maroon area, in Manhattan, was added in the 1980s to require affordable housing (achievable via a certificate program in low-income neighborhoods, typically in the Bronx) as a tradeoff for new construction The rust color indicates the areas--notably Brownstone Brooklyn, Greenpoint/Williamsburg, the Queens waterfront, Lower Manhattan, and parts of Harlem--added last December by the City Council (which eliminated the certificate program).

And the zones in yellow were added by the State Legislature. Missing from the map, of course, is the outline of the Atlantic Yards project, which gets a special exemption.

The expansion

Several members of City Council wanted the so-called "exclusion zone" expanded citywide, and Assembly Housing Chairman Vito Lopez, who also chairs the Brooklyn Democratic Party, also wanted the zone expanded.

It's notable that Lopez did not expand the zone to middle-class neighborhoods in central Queens, southern Brooklyn, and Riverdale, where 421-a probably distorts the market. Clearly he was particularly concerned about the areas around his Bushwick/Williamsburg base.

As I wrote, I think it's a victory to have continued to expand the zone. Still, critics who point to the absence of transparency--on both the boundaries and the "Atlantic Yards carve-out"--deserve attention from Gov. Eliot Spitzer before he signs the bill. It's not too late to order a revamp.

Development effects

The Observer noted:
The new policy is likely to slow development in the earth-toned areas and keep it pretty much as it is in the gray parts.

That may well be true, but there are numerous other factors--zoning, cost of materials, etc.--that affect development. So the question is not so much whether the absence or presence of the tax break would affect development, but whether it would distort appropriate development.

If Spitzer signs the bill, it would go into effect July 1, 2008. That gives the real estate industry, which apparently cared much more about the six-month extension (from a planned end-of-2007 deadline passed by City Council) than the expansion of the exclusion zone, to take advantage of the tax break at sites in Manhattan.

NYCT contradicts ESDC, saying subways are too crowded

Today's New York Times reports, in an article headlined Some Subways Found Packed Past Capacity, that crowding on the subways, "especially the heavily used numbered lines," leaves little or no room to accommodate riders, according to the president of New York City Transit, Howard H. Roberts.

(Graphic from the Times--note that the 2/3/4/5 trains would serve the Atlantic Yards project.)

Contrast that with the sunny predictions of the Empire State Development Corporation in its Atlantic Yards environmental review, predictions that were criticized again and again by transportation analysts Brian Ketcham and Carolyn Konheim.

From the Atlantic Yards Final Environmental Impact Statement (Response 13-2): The DEIS includes a detailed subway line haul analysis based on 2005 NYCT passenger counts that show that all subway routes serving the project site would continue to operate below capacity in the peak direction in the AM and PM peak hours at their maximum load points in both the 2010 and the 2016 future with the proposed project. As described in detail in the EIS, the proposed project would also include a major new on-site entrance and internal circulation improvements at the Atlantic Avenue/Pacific Street subway station complex to accommodate new demand from the proposed project. As also discussed in the EIS, during the weekday 10-11 PM and Saturday 4-5 PM post-game periods, when surges of subway trips generated by an event at the arena would be arriving on the subway platforms, the potential may exist for crowding on the platforms at the Atlantic Avenue/Pacific Street subway station complex under certain post-game conditions. Such crowding, if it were to occur, would constitute a significant adverse impact, which would be addressed by providing additional subway service (i.e., more trains) during post-game periods.

Emphases added. Apparently the statistics were a little bit out of date.

Two years later, flashback to Times Magazine interview with Bruce Ratner

Bruce Ratner doesn't talk much to the press--and when he does, he's protected--so it's worth another look at excerpts from his 6/26/05 New York Times Magazine interview conducted by Deborah Solomon, headlined Stadium, Anyone?.

Note that then-Public Editor Byron Calame criticized the Times for failing to disclose the parent company's business relationship with Ratner, but the Times never printed a note or a letter about the issue. Also note that the headline refers to a stadium, not an arena. They're not interchangeable.

Arena revenue

Q: How do you explain the sudden vogue for stadiums and arenas? So many teams want a new home -- the Mets in Queens, the Yankees in the Bronx, the Jets with their doomed project in Manhattan. And you're building a new arena for the Nets in Brooklyn.

A: It has to do with the economics of sports. The high salaries of athletes drive the whole thing, because it creates a need for revenue. In the case of the Nets, we need an arena that has suites and luxury seating, and where you can put up advertisements all over the place.

Ratner was being reasonably candid here, warning that the issue was maximizing revenue. He also could have said that the price of the team--the tail wagging the much larger Atlantic Yards dog--was a component. And he also could have explained that naming rights to the arena might pay much of its costs.

Brooklyn and hoops

Q: You and your fellow investors bought the Nets last August for $300 million. Have you always loved basketball?

A: I was never a basketball fan, but I wanted to bring a team to Brooklyn, a team that could be like the Brooklyn Dodgers. There's something intangible that a team contributes, something as intangible as a soul.

No team could be like the Brooklyn Dodgers, as agent Keith Glass and Brooklyn activist Scott Turner have observed. Fifty years later, professional athletes earn much more than their predecessors, and are far more divorced from the public. Sports franchises leave little dead air for contemplation; a game is one continuous marketing opportunity.

Real estate interests

Q: When did you get so spiritual? I would think the arena serves your interests as a real-estate developer and will boost the value of the apartments, condominiums and stores that make up your development in progress, the Atlantic Yards.

A: Not necessarily. Your friends who have bought brownstones in Park Slope and Fort Greene have inflated neighborhood values more than an arena would.

Here's where interviewer Solomon really missed the boat. While Ratner may be right that the arena itself may not do much for neighborhood values--who wants to live acrss the street?--but the arena certainly serves Ratner's interests as a developer.

Without the arena, he wouldn't have gotten public and political backing, including the exercise of eminent domain and override of city zoning, for the 16-tower development project involving what Chuck Ratner of Forest City Enterprises called "a great piece of real estate."

Nets social value?

Q: How would you define the social value of the Nets?

A: The players are terrific. They are of good character. They are incredibly charitable. They are family-oriented. They have integrity.

Ratner should have stuck with observing that they are excellent basketball players. Jason Kidd is far from a role model and Vince Carter is also going through a divorce.

The bottom line

Q: Well, you and your fellow investors did acquire a whole team. Was that a complicated process?

A: We were the highest bidder for the team. Like so many things in life, it was just a matter of money.

Enough said.

City Limits explains the 421-a changes

There's no map (yet) of the exclusionary zones added to the 421-a reform legislation passed by the State Legislature last Thursday (but not yet signed by Governor Eliot Spitzer), but City Limits has a good article, headlined REDRAWING THE 421-A FORMULA FOR TAX BREAKS AND HOUSING, summarizing the law's multiple factors.

Along with the expansion of the zones where developers would be required to build affordable housing in exchange for a tax break, the bill features the notorious "Atlantic Yards carve-out" and, crucially for the real estate industry, an extension of the current law for six months--which should spark a frenzy of building, especially in Manhattan north of 96th Street and south of 14th Street, boundaries of the current exclusionary zone.

City Limits points out that some "healthy real estate markets," including Riverdale in the Bronx and downtown Flushing and Forest Hills in Queens are oddly left out of the zones and explains that city officials oppose some expansion of the exclusion zones because some neighborhoods would be taken off the list of those targeted for benefits.

More details

A summary of other details:
• A reduction in the AMI income threshold to 60 percent from the city’s 80 percent to qualify for affordable units (for every place other than Atlantic Yards);
• Reserving 50 percent of affordable units for "community preference," meaning for existing residents within the community board district;
• Building all affordable housing on the actual site where a building is being developed, thus eliminating the "certificates" granted to developers allowing them to build their required affordable component offsite;
• An extension of the certificate program for six months before ending;
• Rent stabilization of such units for 40 years; and
• Bolstering the city and state’s monitoring and enforcement practices.

And some criticisms:
State Senator Liz Krueger, the Upper East Side Democrat and ranking member of the Senate housing committee who had sponsored her own legislation, criticized several aspects, including: that only 20 percent of created units were required to be affordable instead of the 30 percent included in the original legislation; that they'll remain affordable for 40 years rather than in perpetuity; the special terms for Atlantic Yards; and that the certificate extension “allows the real estate industry to continue to operate under old, flawed rules during that time.”

So, will Spitzer ask for changes, including an elimination of special benefits for Atlantic Yards developer Forest City Ratner?

The 'Blight' Excuse for eminent domain

From the weekend edition (June 23/24) of the Wall Street Journal, in an op-ed headlined The 'Blight' Excuse (subscribers only), Carla Main observes that, two years after the controversial Kelo v. New London decision, which affirmed the use of eminent domain for economic development, states and courts have responded by curbing that option--but another remains:

Armed with a blight exception, private property in nearly all of the loophole states may still be condemned and ultimately used for economic development...

But what is blight? A half-century of experience has demonstrated only that it is in the eye of the beholder, or perhaps more to the point, in the eye of the power holder.

Now New York's blight law may not be as bad as, for example, that in New Jersey, where courts have begun to reform it. But it's still arbitrary.

The question, as Supreme Court Justice Joan A. Madden must face in the pending challenge to the Atlantic Yards environmental review, is whether it's so arbitrary that it violates state law.

Will the Times advise Spitzer to veto 421-a?

Will Gov. Eliot Spitzer veto the 421-a reform passed by the legislature, one that includes some worthy reforms as well as a handout to developer Forest City Ratner? According to NY1:
The governor tells us he needs time to review the legislation before he decides if he will sign it.

A veto shouldn't kill the measure for good. If there's to be a summer session to deal with outstanding legislation, there's no reason the legislature couldn't revisit 421-a.

In an article Friday headlined 421-a extension will spur construction, Crain's New York Business reported that the six-month extension contained in the 421-a reform will lead to a surge in condominium and apartment construction, as developers will rush to build market-rate projects before a lucrative tax break expires.

Here's the key paragraph:
The bill approved by the legislature has the support of the Real Estate Board of New York, the powerful lobbying group that represents developers. Insiders say it is unlikely that Gov. Eliot Spitzer will veto it.

Now why is that? Could it be that Spitzer, via his surrogates, already gave his blessing to the "Atlantic Yards carve-out" contained in a reform bill that otherwise spreads broad benefits and costs? That would be curious, indeed, given that legislative supporters of the broad reform, such as Assemblyman Hakeem Jeffries, were not told of the special provision.

The Times opines

The New York Times has taken some strong stands against pork-barrel legislation--but not regarding legislation that would help its parent company's business partner, Forest City Ratner, even though the "Atlantic Yards carve-out" that is so egregious that Ratner and Assemblyman Vito Lopez are unwilling to defend it.

(Remember how the Times punted when Atlantic Yards was before the Public Authorities Control Board?)

In an editorial yesterday headlined Mr. Spitzer’s First Round, the New York Times criticized special deals but omitted the one benefiting Ratner:
Mr. Spitzer insists that for all of the fighting over campaign finance, the real problem has been the Legislature’s, and particularly the Senate’s, insistence on pushing through a capital spending plan heavy on pork — “dripping with fat,” in his words. He is right to try to hold the line on the worst of these old-style handouts.

The Legislature will almost certainly be back in a few weeks for a special session on congestion pricing and possibly campaign finance. That would be a good time to winnow out the unnecessary items now packed into the capital spending plan.

The Times, should it choose, could focus on one specific beneficiary of legislation. After all, the newspaper on Friday did so regarding a federal bill. In an editorial headlined Home Depot Amendment, the Times opined:
Squatting beside the bulk of the Senate immigration bill — a once-in-a-generation attempt to change millions of lives and the direction of the nation — you will find a squalid little amendment. It was placed there by Senator Johnny Isakson of Georgia to benefit an Atlanta-based corporate constituent, Home Depot.

The amendment would prohibit state and local laws that required big home-improvement stores to provide rudimentary shelter for day laborers. There aren’t any such laws yet, but the City Council in Los Angeles, where Home Depot wants to open 13 stores, is considering one. Mr. Isakson’s pre-emptive strike would be an extraordinary intrusion of federal power into a local land-use matter.

The AY carve-out

It would be a no-brainer for the Times to criticize the "Atlantic Yards carve-out" in an editorial; all it would take would be some cutting and pasting. It will be their shame if they take a pass.

The Daily News and the larger issue

Today's Daily News, in an editorial on 421-a headlined A threat to N.Y. nabes, takes a pass on the carve-out (who would guess?) but declares the expansion of the Geographic Exclusion Area--where developers would be required to build affordable housing--a threat to middle-class housing. (More likely, it's a threat to luxury housing.)

Council Speaker Christine Quinn, noting that the city approved a more narrow exclusion zone, thinks the bill should be vetoed. Now there's room for debate about the scope of the zone--surely it should be larger in Queens than approved by the City Council--and the Daily News is right that the state law was approved with limited public discussion. (There was a hearing, as I wrote.)

Perhaps Governor Spitzer will exercise some leadership on the micro and macro issues.

Hakeem Jeffries explains his 421-a vote

So how could Assemblyman Hakeem Jeffries support (and sponsor) legislation to reform 421-a, then vote against it? Below, the press release from his office, and then a further explanation.

Press release issued Friday

Assemblyman Jeffries today voted “No” on A.9293, legislation introduced by Vito Lopez that would treat the controversial Atlantic Yards project more favorably than other developments as it relates to the 421-a tax abatement program.

“The Atlantic Yards project has feasted on government funds for far too long. Enough is enough. There is absolutely no justification for treating Atlantic Yards better than any other development project in New York, when Forest City Ratner has already received $300 million in government subsidies.”

Joining Assemblyman Jeffries in voting against the bill is Assemblywoman Joan Millman, who represents the neighboring assembly district. The legislation passed 105-6 on the floor of the Assembly. It will now be sent to the Senate for consideration.

Assemblyman Jeffries (D-Brooklyn) represents Prospect Heights (the site of the Atlantic Yards project), Fort Greene, Clinton Hill, parts of Crown Heights and Bedford-Stuyvesant.

Further clarification

I asked for a further clarification this morning, and got this response from Chief of Staff Daisy James:

Assembly bill 4408-A is the original 421-A legislation that was introduced in the Assembly several months ago, and amended shortly before it hit the floor to include the Atlantic Yards carve-out provisions. This bill, 4408-A, was passed in the Assembly on Thursday, June 21.

Assemblyman Jeffries did not get the opportunity to vote on 4408-A since he was in the district that morning attending graduations for P.S. 11 and P.S. 20, and serving as the keynote graduation speaker for P.S. 9 and M.S. 353. He returned to Albany that afternoon, but the vote had already taken place. Assemblyman Jeffries supports the bill since it dramatically expands the 421-A affordability requirements to low and middle-income neighborhoods throughout New York City.

On Friday, June 22, a chapter amendment, A.9293, that clarifies the Atlantic Yards 421-A carve-out provisions, came to the floor. Assemblyman Jeffries voted against this bill, and was joined by at least two colleagues from Brooklyn, Joan Millman and Rhoda Jacobs. He could not support a bill that related solely to treating the Atlantic Yards project in a more favorable way than any other development in New York City, without justification.

One more update

(9:55 pm)

Here's the account from the New York Observer, and another statement Jeffries gave me:
I still support the main thrust of the 421-A reform effort in 4408, notwithstanding the Atlantic Yards poison pill, given the dramatic expansion of the affordability requirement to working class and middle-income neighborhoods throughout New York. Standing alone, however, the Atlantic Yards carve-out provisions in 9293 are unacceptable.

A p.r. man's fate: fighting the West Side Stadium, flacking for the Brooklyn Arena

When you're a public relations professional, you often go where the work is, but consider the mental whiplash that Forest City Ratner spokesman Loren Riegelhaupt must experience--especially this week.

He used to work for the investor relations company Sloane & Company, which worked with Madison Square Garden owner Cablevision. So less than three years ago Riegelhaupt worked on the "grassroots" coalition New York Association for Better Choices, which opposed the construction of the West Side Stadium. (One critic said Cablevision had "hijacked" the opposition.)

Indeed, an 8/20/04 Associated Press article, headlined Mayor: Stadium could be used for protesters stated:
Loren Riegelhaupt of the New York Association for Better Choices, which opposes the stadium, criticized the mayor's comments: "Whether it is the most expensive football stadium ever or the most expensive protest area ever, the West Side Stadium is a colossal waste of $600 million in taxpayer resources and that's what the vast majority of New Yorkers are really protesting against."

Hate the stadium, love the arena

Now Riegelhaupt flacks for Forest City Ratner, which is building the most expensive arena ever, as part of a "civic project" using a yet-unspecified amount of taxpayer resources.

In the recent issue of City Limits Investigates, he parried legitimate questions about the timing of Atlantic Yards by calling it "ridiculous speculation by opponents whose only goal is to stop the project."

On Wednesday, faced with clear evidence that a reform of the 421-a tax break contained a special section to benefit Forest City Ratner, Riegelhaupt, contacted by the New York Observer, would not comment on the legislation itself but offered something we already knew, that the developer intends to “have a mix of market-rate and affordable units in all of the rental buildings.”
(Emphasis added)

After that, Forest City clammed up completely. Remember former executive Jim Stuckey's claim of "tremendous transparency"?

I know Riegelhaupt's just doing his job (though he's never answered any of my queries) and that Forest City Ratner is not unlike other companies in trying to feed and spin the press. But I suspect he could easily argue against himself if there were a Brooklyn version of Cablevision in the Atlantic Yards fight.

On 421-a: FCR won't comment, ACORN calls it "bad public policy," & Lopez gets cover

In a column today headlined Atlantic Yards gets a deal so sweet it's sick, Daily News columnist Juan Gonzalez bores in on the special carve-out in the 421-a legislation. The deal could be worth [updated/corrected] $100-$170 million in tax-exemptions for the condos.

(Still, I'd like someone in government to break down the math, since I don't think the bill will, as Gonzalez writes, allow Forest City Ratner to charge an extra $350 a month for affordable units; I think that might apply only to a subset. Doesn't legislation come with official analysis?)

The issue, Gonzalez suggests, is a test for Governor Eliot Spitzer.

ACORN speaks

Gonzalez put Forest City Ratner on the spot. They wouldn't comment.

He asked their partner in housing, ACORN, which had lobbied for an expansion of 421-a, didn't know of the special provision. NY ACORN's Bertha Lewis called it "bad public policy," which is remarkable because it 1) involves ACORN's first public criticism of the developer's machinations and 2) ACORN is required is required by the Housing Memorandum of Understanding, to "take reasonable steps to publicly support the project," including appareances before community organizations. (In this case, ACORN wasn't needed, so Lewis's criticism is after the fact.)

Assemblyman Hakeem Jeffries illustrates the difficulty of voting on principle:
"It's unfortunate that this developer seems to have an addiction to the government's cookie jar," Jeffries said. Still, Jeffries voted for the overall tax exemption bill. He did so, he said, because it will expand a decades-old incentive program for developers, known as 421-A, to some minority neighborhoods and create more affordable housing.

Little other coverage

Only the Times covered the carve-out today besides Gonzalez. The Times, which covered it yesterday online in the City Room blog, included some of those paragraphs in a broad round-up that mentioned 421-a.

Cover for Lopez

In yesterday's piece, Assemblyman Vito Lopez defended the carve-out, which allowed some of the 20% lower-income affordable housing at Atlantic Yards to be built in separate buildings and to include residents at 70 percent of Area Median Income (AMI) rather than 60 percent, as the law otherwise says. Forest City Ratner, he said, wanted the exemption to be 100 percent.

Not only would that have been way out of line, they didn't need 100 percent; all they needed was 70 percent. The 100 percent number was just to give backers some cover.

$100 million (?) for Ratner as Assembly passes 421-a bill

The Times, on the City Room blog, reports that the 421-reform bill with the Atlantic Yards carve-out has passed the Assembly.

To the Times, Brad Lander of the Pratt Center for Community Development estimates that the tax break, which could exempt four buildings with condos from including onsite affordable housing. would cost taxpayers $100 million. (The other 12 Atlantic Yards towers would have mixed-income housing.)

That's just an estimate, however, and a closer accounting would be worthwhile. Developer Forest City Ratner saves by not having to provide another 380-plus units of very affordable housing. (The 1930 condos would have to be matched by 20 percent affordable housing.)

Moreover, the state law--though not the carve-out--requires affordable housing at 60 percent of Area Median Income, or AMI, while less than half of the Atlantic Yards affordable housing would meet that qualification.)

There's another benefit for the developer. Condo owners won't have to share their buildings with their poorer brethren. The condo buildings at Atlantic Yards, like other ones under construction (or recently opened) in the Brooklyn "renaissance," are for one-class only. (That should help with pricing, right?) That might seem to be market capitalism, except they all get a tax break too.

How the 421-a reform is being tailored for Forest City Ratner

The reform of the 421-a tax break about to be passed by the state legislature would require developers in the Geographic Exclusion Area to include 20 percent affordable housing onsite in exchange for the tax break. Affordable housing is defined as being geared to households earning up to 60 percent of Area Median Income, or AMI.

The special clause for developer Forest City Ratner benefits the Atlantic Yards project in two ways (updated):
1) the obligation to provide 20 percent affordable units in the same building will be lifted and instead can be met in the aggregate
2) the obligation to provide 20 percent of the units at 60 percent of AMI will be changed so that the developer must provide 20 percent of the units at an average AMI of 70 percent, so as not to disturb the current plans for Atlantic Yards.

Here's the current bill (A 4408), which has both errors that will be changed and clauses that are being updated:
13. A multi-phase project that includes at least 2,500 dwelling units and (i) is being implemented pursuant to a General Project Plan adopted by the New York State Urban Development Corporation and approved by Public Authorities Control Board or is otherwise set forth in agreements with the New York State Urban Development corporation and (ii) includes a development over a number of city blocks, shall be eligible for benefits pursuant to this section notwithstanding paragraph (e) of subdivision 7 of this section if in the aggregate twenty percent of the units in such development are affordable to and occupied or available for occupancy by individuals or families whose incomes at the time of initial occupancy do not exceed 60 percent of the area median incomes adjusted for family size and the rent for such units does not exceed thirty percent of eighty percent of the area median incomes adjusted for family size.

(Emphases are added)

Revision coming

Below is another version of the clause, as it's been circulating. I can't say this is the final version, but consider it an example of changes being tailored for a specific client. (It's possible that the revision won't be posted until the bill passes.)

(Update: Here it is, as part of A9293)

13. A multi-phase project that includes at least 2,500 dwelling units and (i) is being implemented pursuant to a General Project Plan adopted by the New York State Urban Development Corporation and approved by Public Authorities Control Board or is otherwise set forth in agreements with the New York State Urban Development corporation and (ii) includes a development over a number of city blocks, shall be eligible for benefits pursuant to this section notwithstanding paragraph (f) of subdivision 7 of this section if in the aggregate twenty percent of the units in such development are affordable to and occupied or available for occupancy by individuals or families the average of whose incomes at the time of initial occupancy do not exceed {60} SEVENTY percent of the area median incomes adjusted for family size and the rent for such units does not exceed thirty percent of eighty percent of the area median incomes adjusted for family size.

They were so sloppy they changed the word but not the numeral.

Paragraph (e) regards the length of rent-stabilization, while paragraph (f) regards the onsite requirement.

Doing the math

Atlantic Yards, as currently planned, would include 6430 units, including 1930 condos (200 of them affordable, but unlikely at a low AMI) and 4500 rentals, half of them subsidized and thus affordable to low-, moderate-, and middle-income families.

Of the total, 20 percent, or 1286, would have to be affordable--under the 421-a definition of affordability--to meet the law's requirement. The law sets affordability for projects other than Atlantic Yards at 60 percent of AMI.

For Atlantic Yards, as currently planned, there would be 225 units at 40 percent of AMI, 675 units at 50 percent of AMI and 450 units at 60-100 percent of AMI.Under the initial wording of the bill, Atlantic Yards wouldn't qualify, because only 900 units would be under 60 percent of AMI.

Under the revised wording of the bill, which adds the average and nudges the requirement up to 70 percent, Atlantic Yards would easily qualify. Even if those 450 units were rented to households at 100 percent of AMI, that would make 1350 units averaging 65 percent of AMI.

If the AMI in the Atlantic Yards carve-out were kept at 60 percent, the project could still qualify under the averaging option, as long as those 450 units at 60-100 percent of AMI were under 80 percent of AMI.

So a 70 percent average would allow those units in the middle "band" of affordability to be rented to somewhat higher-income families. And that middle "band," as I've written, has already been changed, as the Atlantic Yards income mix nudges upward.

Two men in a room, no transparency, and a bonus for Forest City

The state's revision of the 421-a tax break, as I perhaps overemphasized yesterday, significantly adds to the exclusion area where developers won't be able to get a tax break for building market-rate housing without including affordable housing.

That's a significant advance, but it comes with a cost. The final version of the bill apparently came down to two men in a room, Brooklyn Assemblyman Vito Lopez (and surrogates) and Real Estate Board of New York (REBNY) executive Steven Spinola (ditto), each deputized by the two men who control their respective legislative bodies, Assembly Speaker Sheldon Silver and Senate Majority Leader Joseph Bruno.

And in those backroom negotiations emerged a nice plum for Forest City Ratner's Atlantic Yards project. (The lack of an obligation to build affordable housing in AY condo buildings adds to the developer's bottom line in multiple ways.)

Kept in the dark

Assemblyman Hakeem Jeffries, a sponsor of the bill (A 4408), wasn't even told (according to the Observer0 what was being inserted regarding his own district, which includes Prospect Heights.

When Lopez in March held an important hearing where he and others stressed that market-rate housing shouldn't be subsidized so much, REBNY offered polite testimony about why the city's less aggressive bill should be adopted by the state. There was no mention, of course, of Atlantic Yards.

The city's bill at least derived from a task force and much public discussion and debate. The state bill went to the backroom, under the radar. (Did the $3100 campaign contributions to Lopez last September from Michael Ratner, brother of FCR CEO Bruce Ratner, and his wife make a difference? They couldn't have hurt.)

ACORN, FCR change their tune

Both the advocacy group ACORN and developer Forest City Ratner have previously pledged equal treatment. At an affordable housing information session last July, Acorn's Bertha Lewis was quoted, as I reported:
“When we started to talk about it, there was a principle,” she said. Every building would be mixed affordable housing and market-rate housing. “If the elevator works for them, the elevator’s gotta work for you,” she said, to some healthy applause, probably the high point of the night for project proponents. It’s a worthy point; many other affordable housing programs are relegated to separate buildings or other neighborhoods.

And, in a May 2005 City Council hearing, FCR executive Jim Stuckey stated:
...it qualifies for 421A tax abatements for residential projects. So, if anyone else, anybody, not us, any developer, developed on this site as of right, they would be entitled to 25 year tax abatements to get phased in over time, the commercial incentive gets phased in in the beginning of the 15th year, and the residential gets phased in beginning in the 20th year.

Not any more.

WWSD

The Three Men in a Room are, of course, the Assembly Speaker, Senate Majority Leader, and Governor. The first two, apparently, are responsible for the 421-a legislation, while the third, self-proclaimed reformer Eliot Spitzer, must sign the result into law.

What will Spitzer do? Reflecting his ideals, the governor could take a stand against the process that led to such special pleading. Then again, Spitzer has long supported Atlantic Yards, so this might not be the time to expect him to act on principle.

Six-month check: FCR's "initiatives" still murky, but parks funding's a fudge

It's the six-month anniversary (plus a day) of the Atlantic Yards approval by the Public Authorities Control Board, but we still don't know much about the "additional community initiatives and enhanced housing program" announced at the time by developer Forest City Ratner (FCR).

We do know that, when FCR pledged to "invest $3 million to improve existing parks in and around the project," the developer was overstating the case by calling it an "additional" initiative.

After I queried the Empire State Development Corporation (ESDC), the agency confrimed that the sum includes the $1.25 million-plus announced in November to add a comfort station to the Dean Street playground, a partial mitigation for increased noise.

However, a mitigation neither constitutes an enhancement nor an initiative, especially since it surfaced more than a month earlier. (The developer initially offered much less.)

Few details

My January questions to the ESDC hadn't generated details, so a six-month follow-up seemed in order.

There wasn't much more to learn.

FCR announced a reduction to the height of the proposed Miss Brooklyn building, ensuring that no building at the site will be taller than the 512-foot Williamsburg Savings Bank.

What will be that building's revised height and square footage? That has yet to be finalized, according to the ESDC.

FCR announced it will seek to build at least 200 affordable home-owner units on site rather than offsite, making them part of the proposed 6430 units of housing already approved.

When would they be built, and for what income brackets? How is that memorialized? Such details, the ESDC said, will be part of a funding agreement due within the next few weeks and later formalized in project documents before site acquisition.

And what about the "new 21st Century Brooklyn Tech High School"? Would Forest City have any option to acquire the existing Brooklyn Tech building? (Remember, according to the Brooklyn Daily Eagle, any plan to convert the current Brooklyn Tech is off the table.) The ESDC said only that the issue is under discussion.

The Atlantic Yards gift slipped into the 421-a reform

[Updated 10:40 pm] As details emerge today about the contours of the state’s planned reform of the 421-a tax exemption, a bonus for developer Forest City Ratner's Atlantic Yards project appears hidden in the verbiage.

That bonus appears unclear according to the current version of the legislation (A 4408). But a bigger gift is coming. Instead of requiring the condo buildings--perhaps four of the 16 towers--at Atlantic Yards to include 20 percent affordable units, as the tax break reform would require, the developer would be allowed to spread the affordability over the project as a whole—as long as the project met some requirements that would apply only to... Atlantic Yards.

Brad Lander of the Pratt Center for Community Development, who’s reviewed the legislation and has followed the discussion swirling around the bill, thinks that's wrong. "There shouldn't be special side deals for particular developers. Buildings that include 20 percent affordable housing should get a tax break and all market-rate buildings should pay their taxes,” said Lander, who was part of a mayoral task force that recommended reforms last year.

Moreover, the bill would allow this project to violate the spirit of affordable housing. Affordable housing is defined as 30 percent of household income. However, the “Atlantic Yards carve-out” would allow lower-income residents of affordable apartments to be charged a higher percentage of their rent—perhaps 35 percent rather than 30 percent.

The New York Observer reported:
Steven Spinola, the president of the Real Estate Board of New York, the leading industry trade group, told The Observer that he lobbied legislators for the special exception.

“It is similar treatment to what would happen in Greenpoint-Williamsburg,” said Mr. Spinola, referring to the the 2005 rezoning of those Brooklyn neighborhoods. “I had no problem advocating for it.”

Not quite, given that the rezoning occurred through a public process rather than a secret one, that the affordability burden has apparently increased, and that a bill passed in 2007 should build on recent experience.

How it would work

Under the current law, developers of market-rate housing in certain Geographic Exclusion Areas (GEA) must provide 20 percent low-income housing in exchange for the tax break. A bill passed by the City Council in December extended that GEA to Brownstone Brooklyn and elsewhere, but the state still had to pass its reform.

That state bill would extend the GEA even further, but in doing so, offers a bonus to Atlantic Yards. No, it doesn’t name the project specifically, but cites “a multi-phase project that includes at least 2,500 dwelling units and (i) being implemented pursuant to a General Project Plan adopted by the New York State Urban Development Corporation and approved by Public Authorities Control Board.”

There’s only one such project that would qualify.

20 percent lower-income units?

According to the bill, projects would be “eligible for benefits… if in the aggregate twenty percent of the units in such development are affordable to… families whose incomes at the time of initial occupancy do not exceed 60 percent of the area median incomes [AMI]...”

That AMI will become 70 percent today, apparently.

But how could Atlantic Yards have 20 percent of its units affordable to families earning 70 percent of AMI? As currently configured, Atlantic Yards would have 4500 rentals, with 20 percent of them low-income, up to 50 percent of AMI, and perhaps another 5 percent up to 70 percent of AMI. But the 1730 market-rate condos, and 200 affordable for-sale units, would skew the balance upward.

Pay more rent

So the project, and the bill, may undergo some adjustment, but one way of meeting the new goal would be to rent apartments to tenants whose incomes are 70 percent of AMI but to charge them more. The bill states that “the rent for such units does not exceed thirty percent of eighty percent of the area median incomes adjusted for family size.”

Translation. If you earn 70 percent of AMI, you might get an apartment, but you'd have to pay rent as if you earned 80 percent of AMI.

Some of those numbers may change before the bill passes Thursday. The process has not exactly been transparent. After all, as Prospect Heights Assemblyman Hakeem Jeffries told the Observer, he didn't even know of the Atlantic Yards carve-out.

Benefits long expected

A look at the KPMG memo prepared last December for Empire State Development Corporation suggests that the developer was expecting to benefit from 421-a.

The memo states (p. 22):
The development's residential Property is eligible to receive a tax abatement on the new value created by the construction. The abatement starts at 100.0 percent and is phased down to zero. Atlantic Yards is committing 20.0 percent of its apartment housing to low income families and there should receive a twenty-five year abatement of taxes at 100.0 percent of assessed improvements for years one through twenty-one; the abatement would then decrease 25.0 percent in each of the years twenty-two through twenty-five. In addition, the condo unit buyers would receive a pass through savings for the full amount of the increased assessment for years one through eleven, decreasing by 25.0 percent in each of the years twelve through fifteen.

It's the condos that were jeopardized by the reform of the law--and, apparently, now saved.

State revision of 421-a "corporate welfare" subsidy repudiates Doctoroff’s “nothing gets built” warning

It was front-page news last December 20 when the New York City Council passed a reform of the 421-a subsidy law, which offers "corporate welfare" (in State Sen. Liz Krueger's words) to developers in thriving neighborhoods thanks to a 1971 law that long outlasted its usefulness.

So it should be front-page news again, given that the state will further tighten the subsidy. The city's reform increased the Geographic Exclusion Area (GEA) where developers would be required to build 20% affordable housing in exchange for the subsidy, extending it to Brownstone Brooklyn, among other places. (Update 5:50 pm: More details are emerging about this bill, so it may not be as much of a reform as initially assumed.)

(Graphic of 12/21/06 Times front page from New York Magazine's Daily Intelligencer.)

But that wasn’t the end of the story--and now even fewer luxury condos will get that free ride, which lasts ten to 25 years. The New York State Legislature had to approve its own reform and legislators, as Crain’s New York Business reported yesterday, have apparently agreed on a bill demanding more from developers. The state revision, to be finalized on Thursday when the legislative session ends, apparently adds a dozen more outer-borough neighborhoods to the GEA. (Update: Still, it's not over until all parties sign off, so we can't be certain.)

The result suggests that Brooklyn Assemblyman Vito Lopez, chair of the Housing committee, had more sway than the real estate industry and lobbyists for the city, who wanted the state to endorse the bill the City Council passed. And if the city’s reform was to add 20,000 affordable apartments over the next decade, the state effort likely would bring more.

The result suggests that the “market” is a shifting beast, dangerous to predict. It also signals a defeat for the Bloomberg administration’s stance that, if a more stringent state bill was passed, we faced the risk that “nothing gets built.”

It’s also a reminder that affordable housing is a product of complex governmental policies and decisions, and that this legislative change will deliver far more such subsidized housing—and to a less economically-advantaged group of people—than the Atlantic Yards project.

Compromise issues

Note that the affordable housing provided by the 421-a revision would go to families with household incomes up to 60% of Area Median Income, or $42,540. Most of the Atlantic Yards affordable units—1350, or 60%—would go to families above this level, as the affordability scenario has already been tweaked upward.

The law still on the books requires developers building within the GEA to make 20% of total units affordable to families making less than 80% of AMI. The city’s revision set the bar for most units at 60% of the AMI. The state’s bill follows that, and may go further. (We'll see Thursday.)

Still, the results apparently represent a compromise from Lopez’s original proposal. Lopez and allies wanted the market/affordable mix to go from 80/20 to 70/30, but the former percentages will remain, according to a Lopez aide.

Also, as Crain’s reported, the implementation date of the new law will be pushed back six months, to June 2008 instead of December 2007. (The Real Estate Board of New York, or REBNY, had asked for a year.) That gives developers another chance to get as-of-right buildings started; indeed, as the New York Observer recently reported, developers had been working feverishly to get buildings started to beat the anticipated December deadline.

(Update: Will that affect Atlantic Yards? I'll deal with that later.)

The state law also would require a prevailing wage for workers at buildings receiving the tax breaks unless they contain fewer than 50 units or a certain percentage of affordable units.

Doctoroff’s defense

The state's revision has happened mostly under the radar. The contour of the subsidies and the effect on gentrification was the subject of a remarkable Assembly Housing Committee hearing on March 16, in which Deputy Mayor for Economic Development Dan Doctoroff squared off against Lopez; the former essentially argued that any construction was good, while the latter countered that taxpayer-supported market-rate developments distort poor neighborhoods.

(As far as I can tell, the only other media outlets to cover that hearing were the Brooklyn Downtown Star/Queens Ledger, to which I contribute, and, later, City Limits Investigates.)

Doctoroff cited the city’s steady and expected growth, with the addition in the 1990s of 700,000, setting up a situation in which the “demand for housing is far outstripping supply” Now, nearly 29% of renter households pay 50% of their income in rent, while affordability is defined as 30% of income.

The city has launched a multi-prong effort to increase the supply of housing, including rezoning to add density and policies like 421-a, initiated in 1971 when no one was willing to build. In the 1980s, the city established a GEA between 14th and 96th Streets in Manhattan, but clearly that wasn’t enough. It was extended to Brooklyn with the 2005 rezoning of the Greenpoint/Williamsburg waterfront.

Doctoroff called the law passed by City Council last December “a delicate compromise,” as it extends the GEA to encompass parts of Harlem, Brownstone Brooklyn and the waterfront strip of Queens. (Graphic of previous GEA extension from New York Times; I'm waiting for a map of the new extension. Click to enlarge.)

It would establish a new $400 million citywide fund for housing, eliminate the opportunity for developers to fulfill their affordable housing obligation by buying certificates to build housing in low-cost areas like the Bronx, and establish a “luxury cap” so only units will receive abatements for no more than the first $650,000 in value.

It also eliminated 25-year as-of-right benefits for market-rate construction in certain low-income neighborhoods, offering the extended benefit only if affordable housing on-site is included. And it created a commission to review the GEA boundaries.

“We’re trying to strike the right balance,” Doctoroff declared.

Lopez bites back

Lopez set out a different vision. “The big dilemma we have, with federal government getting out of public housing and Section 8, it puts a real burden on the underclass, people who earn $15,000, $18,000 a year.” (Lopez used the term “underclass” as a description of very low incomes, rather than an indicator of entrenched poverty or even pathology, as it’s also been used.)

“Affordable—it’s a relative thing,” Lopez said, noting that, while the AMI for a four-person household in New York is $70,000—since the figure is calculated by including wealthier suburbs—“the AMI in Bushwick is $22,000. In Brooklyn, it’s $37,000.

“When we talk about affordable housing, maybe that’s great for Manhattan, that mindset,” Lopez said. “You can build all the $70,000 homes in the South Bronx and Bushwick, it will only go to people out of our neighborhoods.” Later, he said simply, “Regional AMI is a joke.”

He called it “the worst thing in the world” for taxpayers to subsidize luxury condos in Bushwick that are marketed in Manhattan. “I really believe, no construction is better than that,” he said. “You say, we need middle-income houses. That need is great but it shouldn’t be at the expense of people in Bushwick or Williamsburg.”

In the 1970s, he said, the need was different, but Bushwick has since grown by 28,000 units. (Note: a fascinating exhibition on Bushwick at the Brooklyn Historical Society, Up From Flames, points out that land worth nothing in the 1970s might now be worth $500,000, and that developers are responding not only to tax incentives but to zoning that allows some fairly large buildings.)

Doctoroff replied conciliatorily. “Our goals are exactly the same,” he said. “The only thing I’d raise a question about: the sense that it’s better not to build than to build without affordability.”
Lopez pointed out that, after the City Council passed its bill, a local store closed so the property could be redeveloped before the new law kicked in. “No one benefits, except you say the city does.”

“It’s overall pressure on the market as a whole,” Doctoroff responded. “We have a fundamental supply problem.”

(That mantra has so penetrated the discourse that the New York Times last Sunday, reporting on the controversial Ariel towers on the Upper West Side, observed that “[t]he greatest need is for affordable apartments, but even luxury buildings like the Ariel towers relieve pressure on the housing market,” without acknowledging that the buildings benefited from tax breaks.)

Assemblymembers weren’t convinced, in part because the question is whether and how subsidies should be directed to increase the supply. (For example, the Forté condos in Fort Greene, according to a 1/17/07 article in the Brooklyn Daily Eagle, would not have been built without 421-a. But something else might have.)

A free-market oriented critic of the city’s housing policies, Nicole Gelinas of the Manhattan Institute, argues that the city should instead invest in expansion of public transit, thus generating new incentives to build. I’ll discuss her ideas more at a later date.

Gentrification issues

At the March hearing, Assemblyman Hakeem Jeffries, who represents Prospect Heights and environs, described his district as “ an area I believe is ground zero for gentrification in the city,” said he though that 80% of AMI was too high to be deemed affordable. (The city’s mixed-income 50-30-20 program, which would include the 4500 rentals at Atlantic Yards, involves 50% market, 20% low-income, up to 50% AMI, and 30% middle- and moderate-income, 60% to 160% of AMI.)

Shaun Donovan, the commissioner of the city’s Department of Housing Preservation and Development, said the city couldn’t challenge the federal AMI standard. “We agree we need low-income housing, but we need more middle-income housing,” he said, noting that most of the city’s efforts do go to low-income housing.

Lopez said the state should do more. “Somebody has to say, ‘how does 421-a impact Brooklyn?’” He reported that clergy offer stories of elderly congregants displaced from their apartments because they can’t afford to stay in their apartments. (For more, see Jim O’Shea’s comments.)

Whatever the benefits of gentrification, such shifting markets can fray community ties. Williamsburg activist Phil DePaolo, president of the New York Community Council, commented, “Instead of hardware stores, affordable supermarkets and laundromats, the commercial core changes to noisier bars, expensive restaurants, boutique food markets and so on.”

Lopez offered a similar aside about Atlantic Yards: “The stadium in Downtown Brooklyn, it has an impact; it changes the stores, the business, the mentality.”

Doctoroff’s response to Lopez’s take was technocratic. “We are driven by financial analysis, where can we get people to build,” he said. “To the extent you lower that, the risk you’re running is nothing gets built. You’re biting off your nose to spite your face.”

Lopez called the $400 million promise “a good p.r. piece,” but, “at $200,000 per unit, you’re talking about 1000 units.” (Actually, that would be 2000 units, but if the subsidy per unit were less, more units could be produced.) He added, “Four hundred million dollars is not a lot of money when it comes to housing.”

Doctoroff couldn’t resist a mild jab: “Is the state going to match it?”

Lopez: “The state should not only match it, but double it.” (Such a match has not been announced.)

“Just for the sake of building”

Brooklyn Assemblyman Karim Camara also challenged Doctoroff. Owning a house, he said, leads to community stability, pointing out that a member of his grandmother’s generation could buy a houses on a domestic worker’s wages. How, he said, “I have friends working in finance; they can’t afford to live in New York.”

Doctoroff, Camara noted, “said that we don’t want to cut off our nose to spite our face. That’s what we’re doing, if we’re building just for the sake of building.”

Donovan responded, “It’s not either or—we have to build new housing and ensure that a lot is affordable.”

Lopez returned to the contour of the law. “I think 421-a was great,” he said, “but we’re at the point where we’re running out of land. There isn’t a need for stimulating building… As one of my staff said, we’re giving a benefit for doing nothing.”

City Council Member David Yassky, testifying along with a panel of colleagues, took up the issue: “The city is giving away a lot of money in tax breaks and is getting nothing in return. If it’s expensive housing, the taxpayers shouldn’t be subsidizing it.”

Predicting the market

Yassky offered a crucial observation: “People say, ‘you won’t see development without subsidy.’ That may be true today… but ten years ago people couldn’t predict, and look now, he said. “To try to figure out the real estate market ten years from now, it’s a losing proposition…. We should have a simple statement: if it’s affordable, it gets the subsidy.”

Such a blanket citywide GEA didn’t pass City Council, nor did it emerge from the legislative compromise. Still, Yassky and fellow Council Members Letitia James, Charles Barron, and Gale Brewer, who came before the Assembly to support a stricter state bill, got some of their wish.

And apparently the administration, along with the real estate industry, can deal with it. After all, as Michael Stoler reported last month in the New York Sun:
Another prominent real estate leader who prefers to not be identified said, "As to the reductions in prices for condos, I've never met a market rate developer who wasn't all of a sudden going broke because of any adverse change in the law."

Support for city bill

At the hearing, REBNY had argued for no furthering tightening of the law, citing “the continuing rise in construction costs, with the recent surge in land prices and with a property tax system that imposes significant tax burdens on new development, particularly new condominiums…”

The New York State Association for Affordable Housing, an organization of developers and others involved in the construction of affordable housing in the city and state also endorsed the city bill and expressed concern about the 70/30 proposal.

Hope Cohen, Deputy Director of the Center for Rethinking Development at the Manhattan Institute, described 421-a as “a complication invented to offset the problems of a needlessly complicated and unfair system." She called the City Council compromise reasonable, and said the Assembly proposal would be too burdensome on small developers.

Bonds running out?

The New York State Association for Affordable Housing also pointed to a shift in the pattern of subsidies sought by developers. Given that the certificate program expires next this year, “developers in prime neighborhoods… are instead applying for tax exempt bonds to build 80/20 rental buildings.”

Given the finite amount of bonds available, the organization expressed concern that demand for 80/20 financing would “crowd out the 100% affordable projects that our members hope to use this same financing to build.”

Support for reform

Brooklyn Community Board 8, which includes Prospect Heights, endorsed Lopez’s bill, as did the housing advocacy group ACORN. Robert Furman, chairman of the Four Borough Neighborhood Preservation Alliance, also endorsed the Assembly bill, saying the city reform didn't go far enough.

“Taxpayers are subsidizing the destruction of our neighborhoods by developers of so-called luxury housing,” he said, nothing that the GEA was not expanded to most of Queens, “in most of southern Brooklyn, which is also middle-class, not to mention Staten Island.” Apparently his point got through.

Other issues

Lawrence Brinker of the Building Industry Association of New York City pointed to some other issues. “We believe the single most problematic impediment to affordable housing is the cost of land,” Brinker testified, urging the committee “to examine the true cost of downzoning on affordable housing.”

Brinker also asked the committee “to examine the rising cost of building materials,” which affects housing affordability.

Tax policies & federal support

Jerilyn Perine, executive director of the Citizens Housing and Planning Council, blamed “the City’s tax assessment policies which unfairly tax residential rental property,” noting that elevator apartment buildings have an effective tax rate that is more than five times higher that of condos or co-ops.

Beyond the “inequalities in the tax assessment system which continues to unfairly burden the construction of new rental housing,” Perine also pointed to the declining federal support for public housing and Section 8 rental subsidies, which have had a ripple effect in diminishing affordable housing.

A New Jersey decision on blight, and the echo for Atlantic Yards

A unanimous decision June 13 by the New Jersey Supreme Court, which overruled a loose application of blight in an eminent domain case, doesn’t apply in New York, but it’s still instructive, since state courts often look to trends in other states.

Bottom line: were the lawsuit challenging the Atlantic Yards environmental review transposed to New Jersey, the government would have a much tougher—though perhaps not impossible—task asserting blight.

However, the New York State Legislature and state courts, unlike those in many other states, have been slow to revise eminent domain laws in response to public concern. Blight remains a loosely defined and highly contested issue, as in the hearing May 3 regarding the challenge to the Atlantic Yards environmental impact statement.

A decision is pending in that case. Notably, one of the blight characteristics asserted in Brooklyn--that buildings are unproductive because they don’t fulfill 60% of allowable development rights--likely wouldn't pass muster in New Jersey.

Case history

The summary below is drawn from the syllabus of Gallenthin Realty Development v. Paulsboro, which concerns a challenge brought by longtime owners of a 63-acre plot of land, mostly undeveloped open space, which is bounded by a street, a creek, an industrial facility, and a packaging facility and an inactive British Petroleum (BP) storage site. The state has designated it as protected wetlands. An unused railroad spur traces the property’s western edge and an active gas pipeline bisects the property

At the owner’s request, the Paulsboro Planning Board “rezoned the property in 1998 from manufacturing to marine industrial business park, thereby permitting various commercial, light industrial, and mixed non-residential uses,” according to the syllabus describing the case. (Note that the Atlantic Yards site was not rezoned, though a majority of it, north of the Pacific Street streetbed, sits in the longstanding Atlantic Terminal Urban Renewal Area, or ATURA, which contemplated eminent domain.)

In that same year, the town adopted a new master plan identifying seven broadly defined areas in need of redevelopment. While the Gallenthin property was not included in this plan, in the next year, the board investigated whether several parcels, including the BP site adjacent to the Gallenthin site, could be added to the plan. In 2002, those sites were added.

In 2000, BP and its neighbor Dow commissioned a study of their properties. In 2002, that study suggested adding the Gallenthin property to the BP/Dow redevelopment project, because it provided access routes to the property. The town’s consultant then recommended adding the Gallenthin property to the project, calling it “in need of redevelopment,” thus subject to eminent domain.

Gallenthin challenged that designation, but saw the complaint dismissed in two lower court jurisdictions. However, the Supreme Court held that, because the state authorizes government redevelopment of only “blighted” areas, the Legislature did not intend it to apply in circumstances where the sole argument is that the property is “not fully productive.”

Rather, it applies “only to areas that, as a whole, are stagnant and unproductive because of issues of title, diversity of ownership, or other similar conditions.”

The definition

The court looked to legislative history:
When the Blighted Areas Clause was adopted in 1947, the framers were concerned with addressing the deterioration of certain sections of older cities that were causing an economic domino effect devastating surrounding properties. The Blighted Areas Clause enabled municipalities to intervene, stop further economic degradation, and provide incentives for economic investment. Although the meaning of ‘blight’ has evolved, the term retains its essential characteristic: deterioration or stagnation that negatively affects surrounding properties.

Other states define blight similarly, the court said.

Blight in New York

In New York, the lengthy Urban Development Corporation Act, passed in 1968 with the aim of building low-income housing in the wake of urban riots, uses the term “blighted” as part of a larger definition:
The term "substandard or insanitary area" shall mean and be interchangeable with a slum, blighted, deteriorated or deteriorating area, or an area which has a blighting influence on the surrounding area.

Of course, arguably, the largest contributors to stagnation at the Atlantic Yards site were issues well beyond blight. The state and city never made an effort to market the “blighted” Vanderbilt Yard, as Department of City Planning official Winston Von Engel conceded last year, even though the city, in its PlaNYC sustainability effort, now sees railyards and highway cuts as valuable development sites.

Nor did the city ever seek to encourage development by changing the zoning on the Pacific and Dean street blocks now part of the project footprint; rather, developer Forest City Ratner got a private upzoning, courtesy of the Empire State Development Corporation (ESDC).

Not fully productive?

In the New Jersey case, Paulsboro argued that the state law “permits redevelopment of any property that is ‘stagnant or not fully productive’ yet potentially valuable for ‘contributing to and serving’ the general welfare.

However, under that approach, any property that is operated in less than optimal manner is arguably ‘blighted,’” the Supreme Court observed.

In the Atlantic Yards case, the ESDC identified several blight characteristics, including “buildings or lots that exhibit signs of significant physical deterioration, vacant lots, buildings that are at least 50% vacant, and lots that are underutilized in that they are built to 60% or less of their floor area ratio [FAR] under current zoning.”

Are properties blighted if they exhibit just one blight characteristic?, asked State Supreme Court Justice Joan A. Madden at the May 3 hearing.

“Yes,” replied ESDC attorney Philip Karmel.

That would theoretically condemn large swaths of Brownstone Brooklyn as blighted, since they’re not built out to 60% of their development rights. But that likely wouldn't pass muster in New Jersey.

Sufficient evidence?

In the New Jersey decision, the Supreme Court concluded that the Legislature intended the law “to apply only to property that has become stagnant because of issues of title, diversity of ownership, or other similar conditions.”

Not only was it insufficient for Paulsboro to say that the land was not fully productive, the court said, “the record contains no evidence suggesting that the Gallenthin property is integral to the larger BP/Dow Redevelopment Area or that the Planning Board based its determination on anything other than the property not being fully productive.”

In Brooklyn, to be sure, the ESDC prepared—well, commissioned--a much more extensive record, a Blight Study of more than 300 pages. And, as the ESDC said in court papers, only once has a state court overturned an agency determination of blight, but in that case, the agency failed to provide “any substantial data at all.” So it's a tough challenge.

Hearing redux

The ESDC, plaintiffs’ attorney Jeff Baker said in court May 3, would not consider a project limited to the railyard because it wouldn’t eliminate blight. That seems contradicted by reality, given the new construction adjacent to the footprint. Rather, it appears that the ESDC wouldn’t consider a project limited to the railyard because it wasn’t the project presented by Forest City Ratner.

And, even though the ESDC states that diversity of ownership means it’s hard to assemble land for the project and thus is an argument for condemnation, that doesn’t mean it would pass muster under the New Jersey decision. After all, the single largest plot, the MTA’s 8.5-acre railyard, presents a significant development opportunity unto itself.

The diversity of ownership issue arises because of Forest City Ratner’s plan to build over 22 acres. The developer chose the footprint, and “the extent of the blight matches the footprint,” Baker said, calling it “the proverbial putting the cart before the horse.”

Despite evidence of new development in Prospect Heights, and newspaper articles about growth there, the ESDC called it speculative to assume the area would improve. In court, Baker was sardonic: “OK, let’s compare our analysis to the market analysis they did. Sorry, I can’t. They never did.”

ESDC defense

Questioning ESDC attorney Karmel at the hearing, Judge Madden asked why most of Block 1128—between Sixth and Carlton avenues, and Pacific and Dean streets, was excluded. “The blight study concerned the footprint of the project,” Karmel responded.How much latitude, the judge asked, does an agency have to add lots beyond the urban renewal area? It’s not unlimited, Karmel responded. “It’s a question of reason.”

The Blight Study concluded that 51 of 73 parcels, or 79 percent, were blighted. Still, the ESDC did not add an empty lot immediately adjacent to the footprint on Pacific Street just east of Sixth Avenue, while the large grayish building in the right of the photo, at the corner of Sixth Avenue and Pacific Street, is occupied and not considered blighted, but is in the footprint.

Drawing the line

“We now hear they don’t like using 60%” of FAR as a criteria for underutilization, Karmel said. “You have to have a cutoff somewhere.”

The ESDC memorandum of law called the agency’s consideration of underutilization, along with other factors, “a permissible exercise of discretion.”

But how draw the line? Interestingly, an ESDC footnote buttressing that argument cites a 1985 case, G&A Books, Inc. v. Stern, which states, “The FEIS treats the severe underuse of the land in the Project Area’s 13 acres as further evidence of blight.”

It's hard to argue that the buildings on the Atlantic Yards site exhibit "severe underuse." According to a law dictionary, “severe” means “of an extreme degree.” A building that occupies 53% of its allowable Floor Area Ratio would not seem to represent “severe underuse.”

As I wrote last August, that 100-foot plot of land just east of Sixth Avenue is apparently needed less to remove blight at that plot than to supply staging and temporary parking.

One draft map (right) of the project's master plan shows that parking lot remaining through the construction period; another document suggests the building at the site would be constructed midway through the projected ten-year process.

Blighted or not?

While the plaintiffs in the challenge to the environmental review are organizations and the those in federal court eminent domain challenge are individuals, both are organized primarily by Develop Don’t Destroy Brooklyn (DDDB) and share at least one lawyer and a volunteer legal team.

DDDB filed a fierce response to the ESDC’s Blight Study. In the federal case, the plaintiffs did not concede the site was blighted, and U.S. District Judge Nicholas G. Garaufis, in his opinion, apparently misread the stance,

In the state case, however, the plaintiffs acknowledged in a legal brief the “concededly blighted ATURA portion,” as the ESDC points out.

Drawing the boundaries

That inconsistency shouldn't affect the state case. There, the plaintiffs focused on the blight designation outside the longstanding ATURA blocks, the properties on the south side of Pacific Street and the north side of Dean Street.

So the case may hinge on whether the judge thinks there was anything fishy about the map drawn by Forest City Ratner and ESDC.

In defense of the map, the ESDC noted that “blight findings have consistently been upheld where the subject property(s) had not previously been included within an urban renewal area.” Indeed, not all properties must be blighted if, as stated in a previous decision, they are “necessary for effective rehabilitation of an area as a whole.”
(Emphases added)

Later in the memorandum, the ESDC repeated that “the test is as to the area as a unit.” Moreover, the ESDC cited the U.S. Supreme Court, in the Berman v. Parker eminent domain case, which deferred to the legislative judgment that the area “must be planned as a whole.”

That raises the question: is the “area” in the Atlantic Yards case ATURA? The northern blocks of Prospect Heights? Or just the project footprint Forest City Ratner seeks?

In a footnote, the ESDC shows its hand:
Although the issue is not disputed by Petitioners, it bears noting that the FEIS documents the importance of the parcels lying to the south of Pacific Street to the Project…. integral to the construction of a properly designed arena.

In other words, the “area” means the project. Elsewhere in the memo, the ESDC fudges the distinction, arguing that “the focus of the inquiry should be the entire Project area.”

But the Blight Study concerned the footprint, and the footprint only, and it's a rather curious "unit," to use the ESDC's test. That's why the omission of most of Dean and Pacific streets between Sixth and Carlton avenues--the block that contains the Newswalk condos, among other thriving properties--must be something the judge grapples with in her decision.

Seamless transition? FCR's new AY head seen exploring the footprint

Last Wednesday, when Forest City Ratner announced the surprising departure of Atlantic Yards point man Jim Stuckey, the company said in an announcement:
For the past few weeks FCRC has prepared for Mr. Stuckey’s departure to create a seamless transition and named MaryAnne Gilmartin, Executive Vice President and Director of Commercial & Residential Development for FCRC, as head of the Atlantic Yards development team.

The implication was that Stuckey's departure was not precipitous, contra to some prevailing suspicion, given the developer's failure to praise him for his service.

Some confirmation for the latter theory comes from a tipster, who reports spotting Gilmartin at about 8:30 a.m. today, standing at the corner of Dean Street and Sixth Avenue, across from Freddy's Bar & Backroom, the epicenter of the Atlantic Yards opposition. It looked, the tipster said, like she was being briefed for the battlefield.

Had the departure been long planned, wouldn't Gilmartin have gotten her walkaround before Brooklynites had their antennae up?

Note: the above obviously contains some speculation. I don't know if Gilmartin has visited the footprint before, nor the precise reason she was there this morning.

EDC criticizes Coney developer's demand for "huge" $100M+ subsidy

A New York Times article today headlined Coney Island Plan Is Scaled Back, but Critics Are Skeptical discusses developer Joe Sitt's revised proposal, with criticism from Robert Lieber, president of the New York City Economic Development Corporation (EDC).

The Times reports:
“He came in last week and presented a plan that had essentially the same density, but dressed it up with hotels and time shares,” Mr. Lieber said on Friday. “The building heights still exceed the 271-foot Parachute Jump,” a Coney Island landmark. “And he’s looking for a huge subsidy from the city. North of $100 million.”
(Emphasis added)

Would make the $205 million city subsidy for Atlantic Yards "more than huge"?

At the street fair, FCR and the Nets play pretend

Wandering by the Forest City Ratner/Nets booth yesterday at the Seventh Heaven street fair in Park Slope, I was struck by some examples of omission and misdirection.

First, there was no attempt to promote Atlantic Yards, the project. (Is massive Miss Brooklyn, which dominated the cover of Brooklyn Tomorrow, just imaginary?) There's nothing to sell, now, and Forest City Ratner must recognize that the neighborhood is more likely wary of or opposed to the project.

Also, a promotional card for the Barclays Center claimed that "history will be made in Brooklyn in 2009" even though the likelihood of the arena opening by that date is low, as even Forest City Enterprises executives have acknowledged.

Notably, a free keychain with a rubber basketball offered only "Brooklyn" as a logo, with no mention of the team name. (For the purposes of the photo, I placed the keychain on the card.)

I haven't been tracking keychain offerings steadily, but the last time I picked up a keychain, in January 2006, it boasted both "Brooklyn" and "Nets."

Since April 2006, there's been public discussion of a name change for the Nets. Given the keychain trend, I think it's safe to assume that a name change is more likely than not.

(Albert) King and Jason Kidd

There were two hoopsters present yesterday, though only one in person. Brooklyn native and former Net Albert King offered a live link to professional sports. A poster of star point guard Jason Kidd beckoned fans to buy season tickets.

Albert King became a Nets spokesman after his brother Bernard, a fellow retiree who was a bona fide NBA star, was accused of beating his wife and became a p.r. liability. Kidd has also been accused of attacking his wife Joumana, as stated in her divorce filing. And Kidd was arrested in the past for hitting her.

Neither Kidd nor Bernard King did time. King attended marriage counseling to avoid battery charges. Kidd pleaded guilty to a spousal abuse charge in 2001 and was ordered to attend anger management counseling.

"The players are terrific," principal owner Bruce Ratner told the Times Magazine two years ago, well after Kidd's first scrape with the law. "They are of good character." (A poster of Ratner from that Times Magazine interview appeared behind the Develop Don't Destroy Brooklyn table yesterday at the street fair; the DDDB and Forest City tables were more than ten blocks apart.)

Role models

When it comes to sports figures as role models, I think on-court performance counts the most. Still, if the Nets are going to use such an off-the-court yardstick, it's hard to see much difference in the way Bernard King and Kidd treated their wives. The difference, apparently, is that ex-ballplayers are easily replaceable and star point guards are not.

(At right, a page of somewhat hyperbolic warnings pasted on the Ratner poster. Also pasted on were the "lawsuit" stickers left over from the "Pin the Lawsuit on the Ratner" exercise last month at the Ratnerville Singout. Does Ratner kneel to money? Well, he certainly recognizes its controlling importance. He told the Times Magazine, regarding the Nets purchase, "Like so many things in life, it was just a matter of money.")

Remember the Brooklyn Standard? The permanent campaign adjusts

Remember the Brooklyn Standard? It was supposed to be published way more often.

Two years ago, on 6/17/05, Forest City Ratner announced:
FOREST CITY RATNER LAUNCHES THE BROOKLYN STANDARD TO KEEP BOROUGH INFORMED ABOUT ATLANTIC YARDS PROJECT
Forest City Ratner Companies (FCRC), the developer of the Atlantic Yards project over the Long Island Rail Road yard at the intersection of Atlantic and Flatbush Avenues, today announced the publication of The Brooklyn Standard, a periodic publication providing updates on the project and information about other relevant news and events in the borough.

(Of course the project is not simply “over” the railyard.)

Here's the first issue.

"Every few months"

The press release offered a prediction of publication “every few months”:
“We want The Brooklyn Standard to be informative and to the point on issues related to the Atlantic Yards project,” Bruce Bender, the FCRC executive vice president for government and public affairs. “Every few months we will put out a new issue with updates, summaries of meetings, up-coming events and even other activities throughout the borough that people may find interesting.

Of course, that was before the New York Times belatedly trashed the first issue and the second issue, released in October 2005, faced criticism of its content and reports that it falsely attributed bylines to a stringer.

The second issue was never mounted on the web, and no further issue never appeared, so the publisher never printed corrections requested by the stringer cited above.

Questions continue

But Bender recognized that, yes, the public would have questions:
“We anticipate that as the project goes forward there will be questions about traffic and construction – along with others about how to find employment or opportunities for small businesses – and we intend to use this publication as a way to speak directly to the people of Brooklyn about these and other issues.”

As demolitions are planned, the developer has found new avenues--press releases and a Community Liaison Office--to present some calibrated doses of information. The Community Liaison Office, however, has met with widespread criticism, from community groups such as the Council of Brooklyn Neighborhoods and even in the Brooklyn Daily Eagle, which reported 5/1/07 that "whenever this reporter has called that number, only an answering machine is heard."

Brooklyn Tomorrow

Now we have the annual Brooklyn Tomorrow, produced not by Manhattan Media for Forest City Ratner but by the New York Post's Community Newspaper Group (aka Courier-Life) for... well, the advertisers, who most prominently include Forest City Ratner and Barclays Capital.

The tabloid appears in each edition of this week's Courier-Life issues, as well. Consider it another adjustment in the "Atlantic Yards permanent campaign."

As Lumi Rolley of NoLandGrab wrote: Who needs a fake tabloid when the Post will do it for you?

Two from BrooklynSpeaks member groups join Bloomberg's administration

Mayor Mike Bloomberg's administration, as part of its long-term sustainability initiative, has hired some well-respected analysts and advocates who've spent a long time on the outside looking in.

As Streetsblog has reported, Project for Public Spaces (PPS) vice president and transportation program director Andy Wiley-Schwartz will join the Department of Transportation's (DOT) new Office of Long-Term Planning and Sustainability, reporting to new Deputy Commissioner Bruce Schaller. And Jon Orcutt, former director of the Tri-State Transportation Council (TSTC) has joined DOT to serve as senior policy advisor to the new commissioner, Janette Sadik-Khan.

Aaron Naparstek of Streetsblog calls it "totally unimaginable just a few months ago."

Both PPS and TSTC have offered savvy criticism of Atlantic Yards both independently and as part of the BrooklynSpeaks coalition. Should the project continue to move forward, at least some city government officials will have taken a close look at the challenges.

More unimaginings

Another "totally unimaginable" appointment would be an affordable housing advocate from the Fifth Avenue Committee or the Pratt Area Community Council, whose organizations are both members of BrooklynSpeaks, to the city's Department of Housing Preservation and Development (HPD).

There, perhaps, questions might be raised about the devotion of scarce affordable housing resources to one project, and the cost per unit at Atlantic Yards versus other options. However, wholesale revisions in the Atlantic Yards project, as opposed to traffic mitigations and the potential tweaking of open space, are not on the table at this time.

"If the blight comes through": Radio Golf on Broadway, for two weeks more

When I wrote about the script of playwright August Wilson's final work, Radio Golf, in January 2006, the most striking passage was the exchange between two black businessmen about the wisdom of allying with a white multi-millionaire to help the latter get minority tax credits when buying a radio station.

Real estate developer Harmond Wilks, a candidate for mayor, is skeptical about the idea, but his friend and business partner, bank VP Roosevelt Hicks, is more positive about Bernie Smith. For Atlantic Yards watchers, Hicks might evoke former State Assemblyman Roger Green and ACORN president Bertha Lewis, prime movers on the AY Community Benefits Agreement, and Smith might recall Forest City Ratner president Bruce Ratner.

Wilks wonders if Hicks is "just the front," but the latter responds, "I get to get in the door... I don't care if somebody else makes some money 'cause of a tax break. I get mine and they get theirs... The window of opportunity is already starting to close."

"If the blight comes through"

When I saw Radio Golf last night on Broadway, the curtain opened on an office with a rendering on the wall, a ten-story apartment building with ground floor retail, to be occupied, as the characters explain, by the icons of upper-middle-class retail: Barnes & Noble, Starbucks, and Whole Foods. (At right, Wilks and his wife Mame. More photos.)

To get there, though, the Bedford Hills Redevelopment Agency Wilks and Hicks run must get the city to designate certain properties blighted, which as Atlantic Yards watchers have learned since last year, can be an arbitrary designation, at the whims of the powers that be. "If the blight comes through," they say at various times--and when it does, they break into a celebratory dance. (In Brooklyn, the blight issue remains in court.)

Bedford Hills is a prettied-up name for Pittsburgh's African-American Hill District, minutes from downtown, where Wilson (1945-2005) set his one-a-decade cycle of plays. "Radio Golf" is set in the 1990s and, given Wilson's untimely death, seems a bit unfinished--the part, for example, for Mame seems underwritten--and, as the Times suggested, more clearly tags characters as good and evil than in his other plays.

(The Observer's John Heilpern loved it, and took a swipe at the New Yorker's Hilton Als, who didn't.)

Echoes of Kelo

The two professional men are schemers, though one has a conscience, while two scruffier men, hustlers of sorts, are the vox populi, and they get the applause lines. Bedford Hills needs a house owned by Elder Joseph Barlow and, as a another character, Sterling Johnson, observes, "If they got a law that says they can tear down his house, they can make a law to tear down yours."

It echoes the backlash from the Supreme Court's 2005 Kelo v. New London decision, which spanned the spectrum from libertarians to the NAACP, given that poorer neighborhods of color have often been targets of redevelopment.

"I got common sense," Johnson adds later, making a case for the assets of a poor man versus a golf-playing banker like Hicks.

Making the case for the inexorability of redevelopment and the loss of Barlow's house, Wilks offers a line that echoes Lewis's explanation for signing the housing deal with Forest City Ratner: "You have to face reality." Of course, the Hill--demographically, economically--isn't the twin of Prospect Heights, where Atlantic Yards is aimed, but the resonances remain.

Last chance

Despite its imperfections, Radio Golf is good theater, with a good dose of humor, some riveting theatrical moments and even an entertainingly prescient case for congestion pricing. It didn't win any Tonys, so, according to the official web site, it's closing July 1. (Discounts are available; $42.50 tickets are at BroadwayOffers.com; code RGNFP62.)

The discussion of blight--as well as that of stadiums and their economic value--is hardly exhaustive, since it's a play, not a tract (or blog).

Atlantic Yards supporters might take comfort in the strong hints of inevitability, despite moral outrage, with which the play ends. After all, Hicks asks his (now-former) partner if he thought a judge would let a "raggedy-ass house" get in the way of a multi-million dollar project. 

For those opposing the project, probably the most resonant line goes to Barlow, seen at right refusing money from Wilks: "Big boats turn slow, but they turn nonetheless."

Marty Markowitz and the Navy Yard straw man

Brooklyn Borough President Marty Markowitz's recent interview with City Hall News has him waxing indignantly about Atlantic Yards opponents, then offering a straw man about the Brooklyn Navy Yard and some rather selective thoughts about zoning, which deserve a closer look.

Markowitz was asked:
Do you think that mega projects like that are appropriate else here in the city?

MM: Listen, the answer to that is market driven. For all these years, the issue of over development is a serious issue in many Brooklyn neighborhoods. And that’s why I enthusiastically support down zoning those neighborhoods to preserve the residential quality in those communities of Brooklyn that are single or two family homes, detached or semi-detached. For years, in many of those neighborhoods, developers could have built as of right. As of right. But the demand isn’t there. Today, the demand for the people moving into the city has never been higher. It’s incredible the demand of housing. Therefore, it is important that we find locations in New York City that we can grow and of course, because this city is running out of land, we have to consider those areas where we can build vertically and we can build the kind of housing that allows the max amount of open space, that’s very important, and how it knits in into the tapestry of the community of which it’s located. So my initial response to you is, yes there are areas of New York City. There are some areas such as in East New York, for instance, and Brownsville. The church community is building many single-family homes. And that’s a good thing because home ownership is very important in this city. Very important, especially for people of moderate income. To me, that’s the promised land: home ownership and owning a piece of New York. And in other areas it’s appropriate, especially near transit. And by the way, let’s go back to Atlantic yards for a second. The biggest hub of public transportation in Brooklyn and third largest in New York City is Atlantic and Flatbush Avenue. Exactly where Atlantic Yards will be built. Now some of the people that are against it want to move to the Atlantic Yards concept to the navy yard, although, there’s no land that’s available at the navy yard. That’s where they want it to move. And then when we ask them, “There’s no public transportation,” you know what they say? “Let them use their cars.” OK, so the bottom line is that where appropriate in the city, we have to build for tomorrow near public transportation hubs and where the project can be pieced in, because you have to make sure that there’s support services for the new residents, which means schools, which is very, very important.

A bit more context

No one wanted to move the Atlantic Yards "concept"--which is Forest City Ratner's development--to the Navy Yard, though some suggested the Navy Yard suggested that the accompanying arena, a very small component might go there. As Markowitz points out, there's no public transportation, which is why more critics and opponents have suggested that Coney Island might be viable; indeed, Markowitz once supported Coney as an arena location.

Maybe Markowitz wouldn't face all the hostility he cites if he took a more thoughtful approach. One-family homes may be appropriate in parts of East New York and Brownsville, but other parts can support significantly more density. And, as for the area around Brooklyn's busiest transit hub, sure it could support more density.

But that's an argument for a rezoning--an upzoning to assess the appropriate amount of development--rather than a state override of zoning. Developers bid up land speculatively in anticipation of an upzoning, since the city increases the size of buildings they could build. The Atlantic Yards site experienced a huge increase in value--well beyond Forest City Ratner's "generous" buyouts--thanks to the state's willingness to override zoning.

Brooklyn Tomorrow: synergy and puffery

It's a document for our times, a promotional magazine inserted in yesterday’s New York Post, not labeled advertorial though it certainly reads as such. Brooklyn Tomorrow is subtitled “The changing face of the bustling borough’s dynamic communities,” and features advertising and cheery articles mainly about major development projects.

Produced by the Post’s Community Newspaper Group, and written by staffers from the Courier-Life chain the Post purchased, Brooklyn Tomorrow reads like the return of Forest City Ratner's promotional Brooklyn Standard, but under the imprimatur of an actual newspaper rather than as a “publication.”

And, of course, FCR's Atlantic Yards project gets royal treatment. The cover boasts a full-frontal close-up of Frank Gehry’s Miss Brooklyn, which could be described as "massive" or perhaps "striking," rather than “elegant," as stated. On the back cover, another view of Miss Brooklyn, in the Barclays Center advertisement that first appeared in January.

On the inside back cover, another advertisement for the Barclays Center. On the inside front cover, a Forest City Ratner advertisement, stating, “What will Atlantic Yards bring to Brooklyn?” The lead article declares Atlantic Yards “the crown jewel of Brooklyn’s renaissance.”

Looking more closely

The Atlantic Yards advertisement must have been produced a while back, since it promises “6900 units of mixed-income housing,” while, after a trim, the project would include only 6430 units. It promises 15,000 union construction jobs, though of course that’s job-years, meaning 1500 jobs a year over ten years (or fewer annual jobs if the project takes longer, as is likely).

And it promises “a historic, legally binding community benefits agreement ratified by 200 leaders and organizations.” Of course CBAs, especially the Atlantic Yards one, have come in for criticism from many quarters, and the “ratification,” as the New York Observer reported, was a big stretch.

Overview article

Reporter Stephen Witt, whose coverage is often sympathetic to Atlantic Yards, outdoes himself in an overview article that declares Atlantic Yards "the new heart of Brooklyn." It fails to mention that this is the most controversial development in the borough and the subject of several lawsuits, among other challenges.

Witt also offers some revisionist history:
The genesis of the Atlantic Yards project began in 2004 after Forest City Ratner Comoanies led an investment team that successfully bid for the New Jersey Nets with the goal of moving the team to Brooklyn for the 2009-2010 season.

Um, the project was officially announced on 12/10/03 and had been in the works for far longer. As Chris Smith reported last August in New York magazine:
While there was no public hint of Ratner’s interest in either the Nets or the Brooklyn rail-yards site until late July 2003, the developer had been meeting with Bloomberg nearly a year before that, according to Dan Doctoroff, the city’s economic-development czar.

Witt continues:
With this goal in mind, Ratner began looking at sites. He settled on the MTA/LIRR Vanderbilt Yards at the intersection of Atlantic and Flatbush avenues, once sought for a new Dodger Stadium before the ball club went west.

While property near that intersection was sought for a new stadium, the railyards themselves were not. And Ratner had been looking at the site for much, much longer.

Moreover, the developer knew he couldn’t confine his plans just to the railyards, since an arena wouldn’t fit. Witt explains the expansion using Ratnerian language:
The project footprint eventually included the rail yard site along with a remainder of property comprising empty lots, gas stations, auto repair shops, underutilized or vacant industrial and manufacturing buildings and some residential buildings.
(Emphasis added)

Or, perhaps, "a great piece of real estate" (in the words of Forest City Enterprises' Chuck Ratner) awaiting a rezoning that never occurred. The article repeats the $5.6 billion lie and claims a net positive fiscal impact of $1.3 billion.

Bruce speaks

The article does include a quote from FCR CEO Bruce Ratner, who declares, "We are proud to be part of both our borough's past and its future, as we are proud to support Mayor Bloomberg as he prepares us for 2030."

While wags might suggest that 2030 indicates the likely conclusion of the claimed ten-year buildout, 2030 is Bloomberg's sustainability deadline. Forest City Ratner almost surely supports Bloomberg's congestion pricing plan, since it would reduce gridlock already present in and around Downtown Brooklyn before the planned arena is built.

On the other hand, a look at Bloomberg's PlaNYC suggests no endorsement for the process behind Atlantic Yards.

Coney confusion

Perhaps more entertaining is Witt’s article on Coney Island redevelopment, which admiringly describes the condo+timeshare+entertainment complex proposed by Thor Equities’ Joe Sitt, then acknowledges that the plan “does have its critics."

Who? Those who fear Sitt won’t build the amusements he promises and “preservationists” who say that residential development would destroy Coney’s character. Unmentioned is that Amanda Burden, chairperson of the City Planning Commission, has flatly declared that “amusements are incompatible with immediately adjacent residential use.”

Advertising lineup

The advertising in Brooklyn Tomorrow heavily skews to real estate developments, including ones in and around downtown and on the fringes of Williamsburg. Also advertising are several hospitals and banks that likely have longstanding relationship with the Courier-Life chain.

Full-page advertisers include:
--Maimonides Medical Center
--Toll Brothers City Living (three projects)
--Long Island College Hospital of Brooklyn
--Belltel Lofts
--Forte Condominiums
--One Hanson Place
--Forest City Ratner Companies
--Prudential Douglas Ellman Real Eastate
--Abigail Kirsch Caterers
--New York Methodist Hospital
--Marine Florists
--L Lofts
--Number 20 Bayard
--New York School of Career and Applied Studies
--Waste Management
--Valley National Bank
--Marine Park Luxury Rentals
--Ridgewood Savings Bank
--110 Livingston condos
--Capital Paint & Decorating
--Amex/Heart of Brooklyn
--Kings Plaza Diner

Half-page:
--The Brooklyn Hospital Center
--R&H Realty & Home Sales
--Aria condos
--Oro condos
--Cosmetic & Laser Center of Bay Ridge
--Pedulla Ceramic Tile
--United Homes
--Metropolitan Paper Recycling
--Atlantic Design Center
--The Maids Home Services
--Deno’s Wonder Wheel

"Stop Payment": Groups say city's $100M shouldn't buy Ratner land

Maybe it was a little quixotic, since the City Council and Mayor Mike Bloomberg had come to a budget agreement on Monday, but a somewhat unusual coalition of Brooklyn community groups gathered yesterday to protest the apparent allocation of $100 million of city funds to buy land for the Atlantic Yards project.
(Photo by Shane Miller)

"'Stop Payment' for private property acquisition," read the oversized checks displayed at the press conference outside City Hall, organized by the BrooklynSpeaks coalition, which has called for significant changes in Atlantic Yards but has avoided litigation opposing the project. Likely because of the budget agreement, City Council Members Letitia James and David Yassky, who have criticized the city's allocation decision, were not present at the press conference.

The $100 million is part of $205 million in city support for Atlantic Yards, which is $105 million more than contemplated in a February 2005 nonbinding Memorandum of Understanding (MOU). While $105 million will go to infrastructure, the $100 million apparently has no strings attached, though officials of the New York City Economic Development Corporation (NYCEDC) have said that it will be used to acquire land.

Better spending

The city money, protesters said, should go to mitigating the impacts of the oversize project on city services, as well as for infrastructure. Moreover, they said, it should not be delivered until a governance structure is established that incorporates public input. BrooklynSpeaks has called for such a structure since it was launched last September.

"We're calling on the mayor to ensure accountability and transparency," said Michelle de la Uz of the Fifth Avenue Committee (above), representing BrooklynSpeaks. Even though the budget passed, the groups said, the city could still redirect the funds and push for more project oversight.

Broad coalition

Also appearing at the press conference were representatives of two groups that have not formally allied with BrooklynSpeaks in the past, an indication of rapprochement in both directions, at least on certain issues.

The Council of Brooklyn Neighborhoods (CBN) is officially neutral on Atlantic Yards but organized the most thorough criticism of the Draft Environmental Impact Statement and has joined a lawsuit challenging the environmental review.

"Land acquisition should be the sole responsibility of the private developer," said CBN's Jim Vogel, who noted that CBN identified several issues needing mitigation, including traffic congestion, overcrowded schools, and an overloaded public transit system.

Also speaking was Daniel Goldstein of Develop Don't Destroy Brooklyn, which has spearheaded lawsuits challenging the project. After detailing the various government benefits accruing to Forest City Ratner, he noted that $100 million represents the developer's cash payment to the Metropolitan Transportation Authority for the Vanderbilt Yard. In other words, if money's fungible, taxpayers could be said to be paying for that valuable site.

Unlike the other speakers, Goldstein carefully used the conditional--"if it's built"--regarding the project's prospects.

Where the money goes

According to p. 5 of the MOU, "the City's capital contribution may also be used to fund a portion of the costs of acquisition of the Arena Site (other than the MTA Properties)." However, that entire contribution was supposed to be $100 million, suggesting that some smaller segment would go to buy land. "We don't believe any money should go to land acquisition," de la Uz said.

While Forest City Ratner has already acquired some 85 percent of the project land through negotiated sales, the rest must be acquired through such sales, or via the exercise of eminent domain.

The EDC has said that the city funding will not be used for eminent domain but through future negotiated sales. Given that eminent domain purchases are at fair market value, it's not unlikely that such negotiated sales--efforts to avoid eminent domain--would be at a somewhat higher cost.

Hearing exchange

The May 8 hearing of the City Council Committee on Finance/Economic Development included this exchange between Council Member James and NYC EDC's Seth Pinsky:

COUNCIL MEMBER JAMES: The other $100 million, which is unspecified and is basically one big pot; what is that $100 million for? Does anyone have any idea?

MR. PINSKY: The $100 million will be exclusively for acquisition of land, to reimburse or pay for new acquisition of land for the project. None of it will go towards condemnation.

COUNCIL MEMBER JAMES: So this acquisition of properties that's located within a footprint which will be the subject of eminent domain, yes?

MR. PINSKY: The money, the $100 million will not go to any property that's the subject of eminent domain.

COUNCIL MEMBER JAMES: So, these are properties that you will acquire as a result of private negotiation?

MR. PINSKY: Correct.

Goodbye, Mr. Stuckey; Atlantic Yards head departs for "new challenges"

Jim Stuckey, president of the Atlantic Yards Development Group for Forest City Ratner and the developer's point man for more than three years on the project, has resigned from the company, "effective immediately, citing personal reasons and a desire to pursue new challenges."

(Photo from PBS Newshour.)

Atlantic Yards, the company stated in a press release (below) issued today via spokesperson Howard Rubenstein, "remains on target."

That's of course a relative term, given that parent company Forest City Enterprises has acknowledged a myriad of factors, including ongoing negotiations with governmental authorities, environmental remediation, various lawsuits, increasing construction costs, scarcity of labor and supplies, the difficulty in obtaining tax exempt financing, and increasing rates for financing.

Stuckey will be succeeded by MaryAnne Gilmartin, the developer's executive VP and director of commercial & residential development. An observer I spoke to described her as a more charming salesperson than the rougher-edged Stuckey, who has other strengths, given his long history in public-private developments.

(Here's the Crain's article.)

Fired?

Was Stuckey fired? Well, we can't be certain, and Stuckey did lead Atlantic Yards past some significant challenges (though others remain). Still, whenever an executive leaves without a new job, seeking "new challenges," and when the accompanying press release makes no effort to honor him for his accomplishments, there's no celebration going on.

(Stuckey's bio, which disappeared this afternoon from the developer's web site, had seven admiring paragraphs.)

Still, even if Stuckey was forced out, the issue may be internal to Forest City Ratner rather than connected to the progress of Atlantic Yards and the roadblocks that remain.

Different stylings

Stuckey certainly did what he was hired to do, shepherd the project through City Council hearings in 2004 and 2005, other public meetings, the preordained approval last December 8 by the Empire State Development Corporation (ESDC) and some potentially touchy moments before the December 20 final approval by the Public Authorities Control Board. Forest City and the ESDC have won a significant, though not final, victory in the Atlantic Yards eminent domain case.

In her book on Times Square redevelopment, Times Square Roulette, author Lynne Sagalyn described Stuckey's attitude toward deal making, while at the city's Public Development Corporation, "more closely matched the maxim 'the ends justify the means.'"

As pre-construction demolition proceeds and the project moves toward a new phase, Stuckey's departure may be politically advantageous for the developer. Just as the new administration of the Empire State Development Corporation can disavow some of its predecessor's decisions, a new Forest City point person might distance herself from--if not exactly disavow--some of Stuckey's statements.

Here's a May 2006 interview on the Brian Lehrer Show. Here's another Brian Lehrer interview, in July 2006. Here's Stuckey last January on WFAN. And here's perhaps one episode Stuckey's bosses didn't like, when Laurie Olin, the landscape architect on Atlantic Yards, in February told the New York Observer the project might take much longer than announced.

The press release

The press release came not from Forest City's internal public relations department nor Dan Klores Communications, the developer's prime outside public relations consultant on Atlantic Yards. Rather, it came from Rubenstein Associates, the city's premier strategic p.r. firm, whose head, Howard J. Rubenstein, was described by The New Yorker as "a kind of gentle fixer for those who run New York."

Rubenstein told me, when I inquired, that he'd been advising the developer for more than a year, but hadn't previously sent out press statements.

FCRC Management Change; Gilmartin To Head Atlantic Yards

Jim Stuckey, Executive Vice President and head of the Atlantic Yards development group at Forest City Ratner Companies (FCRC), has submitted his resignation, effective immediately, citing personal reasons and a desire to pursue new challenges.

For the past few weeks FCRC has prepared for Mr. Stuckey’s departure to create a seamless transition and named MaryAnne Gilmartin, Executive Vice President and Director of Commercial & Residential Development for FCRC, as head of the Atlantic Yards development team. The Atlantic Yards development, which includes over 6,400 units of mixed-income housing and the Barclays Center, remains on target.

MaryAnne Gilmartin Bio

MaryAnne Gilmartin currently manages Forest City Ratner Companies’ Commercial & Residential Development division, including the development of two of the company’s most prestigious new projects: the 1.6 million square foot New York Times Building in midtown Manhattan designed by Pritzker Prize winning architect Renzo Piano, and the Frank Gehry designed Beekman Residential project in lower Manhattan. Ms. Gilmartin has been responsible for the development of several major entertainment and commercial office projects. She led the development of the 42nd Street mixed-use project and the development of the Battery Park City retail complex.

Prior to joining Forest City in 1994, Ms. Gilmartin served as Assistant Vice President for Commercial Development at the New York City Economic Development Corporation (EDC) during the Koch and Dinkins administrations, managing the City’s multi-million-dollar corporate retention program which kept Bear Stearns, Morgan Stanley, Chase Manhattan Bank and other vital businesses in New York City.

Boombox: race, class, and real estate

Gabriel Cohen’s second novel, Boombox, is set in Boerum Hill, but as the title suggests, it echoes Spike Lee’s Bed-Stuy-based Do the Right Thing (remember Radio Raheem?) as much as the ur-gentrification novel, Jonathan Lethem’s The Fortress of Solitude, also set in Boerum Hill. When a black teenager blasts gangsta rap, and a white yuppie hits the boiling point, reaching for the firearm acquired after he was victimized by a mugging, well, we all know Chekhov’s dictum about guns.

Despite the denouement, Boombox is a snappy and engaging read. Though it lacks the depth of character description and neighborhood texture that makes Lethem’s book enduring literature, to her white neighbors, Boombox captures a tension perhaps most peculiar to post-millennial Brooklyn, yuppies and "urban youth" sharing streets that have ever-precious brownstones on one side and ever-permanent housing projects on the other.

(Cohen's reading tonight in Park Slope, as The Gowanus Lounge reports.)

Borough changes

In fast-changing Brooklyn, Boombox even feels a tad out of date. The Brooklyn House of Detention is a looming presence, a potential destination for some youth from the Wysocki (read Wycoff) Houses, though it actually closed in 2003. Now officials say the jail will reopen, but in a sign of shrinking opportunities to build, the city has invited developers to propose a mixed-use complex.

(These days, land is so scarce that the city will build middle-income subsidized housing on various properties owned by the New York City Housing Authority; a New York Times reporter, venturing to a site in East New York, recently quoted a man calling himself “Keeping It Real,” who pointed to three adjacent projects and declared, “Anyone with common sense wouldn’t live out here.”)

So, in Boombox, when Wall Streeter Mitchell Brett and wife Kristin, transplants from the Upper East Side, regret that they had to settle for Boerum Hill rather than more pricey Brooklyn Heights, it seems a little precious. A decent apartment in Boerum Hill these days, however close to the projects, is hardly a bad deal. (Indeed, author Cohen recently told the Brooklyn Paper that he moved to Ditmas Park after his landlord sold his Boerum Hill rental.) In the book, a stretch of Smith Street “retains a Third World feel,” but, increasingly, the Third World comes packaged in a tasting menu.


Kaleidoscope

Beyond the Bretts, a kaleidoscope of characters share a courtyard: Jamel Wilson, the teenaged rap aficionado, lives in a row house his ever-stretched mom Melba tries to maintain; Carol Fasone, an Italian-American, who clashes with her old-school mother who bemoans how the neighborhood has changed; and Grace Howard, a Caribbean-born black woman who’s had a friendship with Carol and is seen as haughty by Melba.

In short scenes, Cohen sketches the shaping of his characters’ psyches. At the Fulton Street Mall, which one of Jamel’s friends calls “B.P.W.” (“Black People’s World”), Jamel, already a teen single father, seeks a stereo system so booming that the project kids nearby--his sometime antagnoists--will give him respect. Prodded by his mom to get a job, Jamel feels demeaned working at a fast food restaurant, but embraces equally hard work, as long he has some non-uniformed autonomy.

Mitchell, hearing the vernacular camaraderie of two black men at the gym, is surprised to learn that their “going to court” reference means they’re lawyers. Grace, overhearing casual racism at work, then passed over for a promotion, finds her racial allegiances re-forming. Melba, fearful that Jamel will get drawn to the drug trade like his friend Tree, offers to pay for the stereo her son covets as long as he stays off the streets.


Coming to a crash

In New York City, more so than in most American places (remember, in Los Angeles, it takes a Crash to bring people together, combustibly), public space is shared, and contested. Noise, however, is tough to police, because the cops have to gather evidence. In Boombox, the deafening music becomes a proxy for racial (and class) allegiance, and a trigger for reflection—unresolvable reflection—on responsibility, short- and long-term, indidvidual and collective, in a changing Brooklyn.

“Used to be, a black family wanted to work hard and move up a little, they could buy a house ‘round here,” Melba observes, watching the row houses snapped up by newcomers. One of those newcomers, Mitchell, listens to gangsta rap and wonders, “Is this what the civil rights movement achieved: the opportunity for black people to denigrate themselves?” Carol finds herself arguing with her mom that black Americans aren’t like other immigrants, for historical reasons.

Grace’s beau Charles, an older black man, watching project kids toss bottles at cars, laments, “In my day, those boys would never have gotten away with just did. There would have been neighbors look out who knew them, and those neighbors would’ve disciplined them just as if they had been their own.”

Grace points out that the factory jobs of yore are gone; Charles says, "Making excuses for this behavior can only harm our people." And Grace responds, "Why would you expect that--living in that situation--those boys would miraculously come up with middle-class ideas about personal responsibility and choice?"

Her answer makes her feel ashamed, though; she shouldn't be lecturing Charles. (Implied: she knows that people both exercise individual responsibility and are influenced by their environment. Unmentioned: what's the role of government?)

Thinking about Boombox's central conflict, Grace raises the question, in an unspoken message to her white neighbors, that lingers for anyone--including those exercised about Atlantic Yards--who must pick and choose their issues: “Is this what you choose to get upset about, when just around the corner there is a giant housing project sinking under the weight of poverty and crime and your neglect?… Who is organizing about that?”

The battle over Queens West: the developer, the process, and the income mix

The process behind a huge affordable housing development planned for Queens West, a 24-acre site the city plans to buy from the Port Authority, presents some interesting contrasts to Atlantic Yards, as well as some potential portents.
(Graphic from New York Times)

First, the city announced plans for the project without anointing a developer, though it has had "secret talks" (in the Times's phrase) about a sole-source process regarding a nonprofit arm of the powerful Real Estate Board of New York (REBNY).

Secondly, the city's initial plan for an all-subsidized project geared to moderate- and middle-income families was criticized for bypassing low-income families. Now the city is considering making 40 percent of the project market-rate.

It's another sign that the numbers behind an affordable housing project are constantly shifting; if costs (or pressures for profit) go up, something has to give, and it can be the amenities in the project or, most easily, the income mix, as has already occurred with Atlantic Yards.

No profit development?

In a 5/16/07 article headlined Plan for Middle-Class Homes on Queens Bank of East River Prompts Ideas and Protest, the Times broke the news:
[REBNY President] Stephen M. Ross wants some of the wealthiest developers in the city to come together to build 5,000 apartments for nurses, teachers, firefighters, construction workers and other middle-class employees on the bank of the East River — at no profit.

Later in the article, however, the Times acknowledged that, not only might it not be easy to get other developers to become nonprofit builders, It is unclear whether nonprofit means that there will be no developers’ fees.

There are all kinds of ways to build in profit, and developers' fees are the most likely.

Community criticism

Community criticism apparently staved off an announcement, predicted for May, of REBNY being awarded the Queens West project. In the Times, both Ross and Deputy Mayor Dan Doctoroff said that the partnership would go forward only if it would provide more affordable housing than another deal.

Criticism, however, pointed out, that an open bid process would produce the best result. And Queens Council Member Eric N. Gioia of Queens, according to the Times, criticized an “absolute lack of community outreach” regarding issues of education, library service, and transportation.

An emphatic letter

A 5/14/07 letter to Doctoroff from the Queens for Affordable Housing (QFAH) coalition raised several criticisms of the process:
A leading role for REBNY would be inappropriate and could jeopardize the project
We were enthusiastic when the City announced its intention to purchase the Queens West site from the Port Authority in October, 2006 with the goal of developing several thousand units of permanently affordable housing. We were also pleased to learn from staff of EDC, HPD, and City Planning that there would be a transparent and participatory planning process to inform decisions about the project. Especially in light of recent large-scale projects where these decisions were made by private developers and presented to the public only after plans had been developed, we were pleased to hear that there would be a process – on this City-owned site – that genuinely took public and community interests into account.
(Emphasis added)

That sounds like a not-so-veiled criticism of Atlantic Yards.

The coalition pointed to a different way forward:
Our preference would be for a process like the excellent one the City recently conducted for The Brig in Fort Greene, or the processes currently taking place for the Kingsbridge Armory or E. 125th Street site. The City should guide an inclusive, public planning process of community and other stakeholders to determine the appropriate zoning, design, infrastructure, affordability, and subsidy mix, and then issue requests for proposals to select developers (perhaps with a community advisory group involved in reviewing proposals). If it is necessary to have a not-forprofit entity own the land in order to use 501c3 private activity bonds, we are confident that it is possible to find one both more experienced and more neutral than REBNY.

What's wrong with REBNY?

QFAH offered several criticisms of the apparent REBNY plan. First, it would preclude the public process regarding issues of design, density, mix of uses, zoning, infrastructure, transportation, affordability, and subsidy. Second, it would bypass the city’s capable affordable housing development community.

Third, REBNY's one previous effort at such a development, Tibbetts Gardens, a Bronx project in the late 1980s, failed, as the Times reported, because of escalating costs.

The affordability mix

The Queens West project was announced as serving 5000 households with incomes of $60,000 to $145,000. By contrast, the 2250 affordable units at Atlantic Yards would go to a lower range of incomes, from $21,270 to $113,440. Affordable housing may be less profitable than market-rate housing, but it does remain profitable. And developer Forest City Ratner would gain additional revenue from the 4180 market rate units.

The QFAH coalition pointed out from the start that, given the income mix, Queens West would not be affordable to most Queens residents, as the median income in Queens if $45,000. (That may not be the goal; REBNY's Ross has called for "workforce housing," so it may be to viewed as a place for suburbanites or new New Yorkers to live closer to jobs in Manhattan. The median income in Brooklyn, by the way, is little over $35,000.)

Bait and switch?

QFAH also pointed out that the city seemed to be switching the income mix:
The City’s press release of October 19, 2006 made it appear that all of the up-to-5,000 units would be affordable to middle-income households earning between $60,000 and $145,000 per year. Now we understand that the project could be 40% market-rate, and 60% middle-income.

The city's press release did leave some wiggle room, stating:
Up to 5,000 units of housing primarily designed to be affordable to families earning from $60,000 to $145,000 for a family of four is expected to be developed on the site.
(Emphasis added)

Later, the release was less conditional:
The City plans... construction of a middle-income, mixed-use community including up to 5,000 residential units targeted to families earning between $60,000 and $145,000 for a family of four.

It all depends on what the word "primarily" means.

Doctoroff's defense

The Times reported:
Mayor Bloomberg initially indicated that all 5,000 apartments would be subsidized for middle-income families earning $60,000 to $145,000. Now, the city is considering setting aside 60 percent for middle-income families, while the remaining 40 percent would be sold at market rates.

Mr. Doctoroff argues that the city cannot solve every problem at one site. “This is a great opportunity to make a significant impact on middle-income housing problems,” he said.

Lessons

That offers at least two lessons for Atlantic Yards observers. The planned income mix may change, as it has already changed. Also, the justification for the project's size--the provision of housing--is but one of many factors that should be considered, which is why a public process helps clarify the issues.

It's not unimaginable that the Atlantic Yards plan could shrink, for several reasons, among them the scarcity of tax-exempt financing. And it's not unimaginable that the attendant decrease in the amount of affordable housing would be blamed on critics who've long been saying the project is too big. (Consider: Queens West would be 5000 apartments on 24 acres, while Atlantic Yards would be 6430 apartments on 22 acres, plus office space and an arena.)

However, the challenge to provide affordable housing, as Doctoroff has said, can't be met just at one site. The maximization of affordable housing is part of a balance of goals, including provision of subsidy and the available infrastructure.

Should more subsidies be allocated, the Queens West project could contain 100% affordable units, and be available to a broader income mix. That's a political discussion, and a political decision. At the very least, the city administration should be clear about its intentions, and the process for getting there.

REBNY and affordable housing

In March, I asked Brad Lander of the Pratt Center for Community Development, which has organized the QFAH coalition, about the Queens West plan, and he responded:

If they are seriously interested in creating and preserving affordable housing, here are a few suggestions they might consider:
--Commit that REBNY members will not remove any more units from affordable housing programs like Mitchell-Lama or Section 8, or remove more units from rent regulations.
--Commit that all REBNY members will accept Section 8 certificates in their buildings.
--Agree not to lobby to undermine the reforms to the City's 421-a property tax program in Albany (they are currently lobbying to reinstate the "negotiable certificate" program, under which their members pay 15 cents toward affordable housing instead of $1 in taxes).
--Add the creation & preservation of affordable housing to their Code of Ethics.

Those changes, of course, are unlikely.

And they parallel criticisms of Atlantic Yards developer Forest City Ratner, which last July held an Affordable Housing Information Session in cooperation with its partner ACORN, an affordable housing advocacy group. The session concerned only the Atlantic Yards project but didn't inform attendees about other reforms that might create more affordable housing.

Beyond that, a Forest City Ratner brochure argued that Atlantic Yards would help "solve Brooklyn's housing crisis" but didn't deal with any of the other issues. And the call for "Affordable Housing Now!" on posters at the 8/23/06 public hearing was limited to housing at Atlantic Yards.

In other words, when for-profit developers turn to affordable housing, there's often an ulterior motive. As Julia Vitullo-Martin of the Manhattan Institute said in January, "Affordable housing is the Trojan Horse these days on big bad projects that shouldn’t get built."

Developer Ross on the undertaxed rich, 421-a subsidies, and "workforce housing"

Stephen M. Ross, one of the city’s leading developers, is bullish on New York real estate, pointing to continued demand for high-end condos and office space. At the same time, as the chairman, CEO, and founder of Related told an audience at New York Law School (NYLS) three months ago, the market is pressed by escalating land and construction costs, and the city can’t keep pace in building middle-income “workforce” housing.

And Ross (right), who became chairman of the powerful Real Estate Board of New York (REBNY) in January, identified a new bogeyman in the quest to build affordable housing. He criticized the phase-out of 421-a subsidies—long seen by critics as fueling market-rate construction in city neighborhoods that need no incentives—as jacking up the cost of new buildings.

“The burden of the real estate tax system is placed on new construction,” he said in his March 13 speech, suggesting that residents on tony blocks like Park Avenue, Fifth Avenue, and Central Park West get are taxed too little. “REBNY is working with the state and city for a fair solutions,” said the billionaire Ross in a bit of auto-class warfare, “so we are not subsidizing the wealthiest people in New York any longer.”

Indeed, as the New York Observer recently reported, “Property-tax assessments for condos and co-ops would be as much as 5.2 times higher in fiscal year 2007 if the city used sales price rather than nearby rental comparisons as the measure, according to the [city’s Independent] budget office.

Affordable housing

Ross Sandler, director of the NYLS’s Center for New York City Law, pointed out that, a century ago, affordable housing was created by extending the subway. Now, he asked, where could new lines and land be developed?

Ross suggested that the extension of the 7 subway line, as well as the belated constructoin of the Second Avenue subway would add new capacity and support new housing. But he didn’t suggest transportation enhancements to increase density in the outer boroughs. (See, for example, Alex Garvin's suggestion about boosting development in the Bronx via light rail or bus rapid transit.)

Asked if he’d like to see the real estate industry step up to create more affordable housing, Ross suggested that that the city needs both “low income housing and workforce housing,” but dubbed the latter most critical. In 60 days, he promised, “You’ll see some announcements,” predicting that the plan “will be a national model.”

So Ross was predicting news in mid-May, apparently involving Queens West, which did surface in the face of some criticism, but has not been officially announced.

Happy days

“It’s a great time to be a seller of real estate,” Ross said at the outset. “I don’t know if I want to be a buyer.” His company, with a $15 billion portfolio, developed the TimeWarner Center and the Bronx Terminal Market, among others. He cited low interest rates and high liquidity as contributing to “the greatest moment for real estate in U.S. history,” though he suggested housing had peaked, with more defaults coming nationally.

What makes New York the global capital of real estate? He cited unprecedented construction, infrastructure improvements, a reduction in crime, and an improvement in schools.

He described a Manhattan-centric reality that diverged from Brooklyn. For example, developers can rent offices space for $60 per square foot in older buildings, and $100 per square foot in “trophy buildings.” (Meanwhile, in Brooklyn, as the Real Deal reported, office space goes for under $34 per square foot.)

Financial firms, Ross said, lack big blocks of space with large floor plates. (Actually, such space has recently been vacated at MetroTech in Brooklyn.) Picking up the slack, he suggested, would be massive developments around Penn Station and the Hudson Yards.

Ross said he didn't think the World Trade Center development wouldn’t depress the commercial market. Out of ten million square feet, he said, government would use two million, leaving eight million square feet, of which some would be be residential. “New York City needs the additional office space,” he said.

Residential market

He called the residential market “exceptionally strong, though we’re finding a lot of slowness in demand when prices exceed $1500 a square foot.” (Condos at Atlantic Yards would be $850 a square foot, according to a KPMG report prepared last December for the Empire State Development Corporation and released as part of the Public Authority Control Board's defense of the lawsuit challenging the AY environmental review.)

Steady profits on Wall Street, and the attendant bonuses, fuel all this high-end market. Still, Ross lamented, “a lot of inexperienced developers are not delivering the right kind of packages,” which he said include services, fixtures, and great architectures. “Buyers want classic design, not glass, unless the latter have great views.”

New rental buildings are projected to rent at $60 to $80 per square foot—again dwarfing projects for Atlantic Yards, where market-rate apartments are estimated by KPMG at $45 per square foot.

The storm clouds

After mentioning the strong market for retail and hotels—“I wish I could freeze it,” Ross said of the current milieu—he cited “some great storm clouds on the horizon.” Land prices have soared over 300% in the last three years. Construction costs have more than doubled in the last five years.

Condos in the “worst locations” in Manhattan must earn over $1100 per square foot just to break even, he said. (If the Atlantic Yards condos would sell for $850 a square foot, either Brooklyn’s a bargain, or the KPMG report was low-balling it.)

He cited the lack of “affordable housing for middle class,” citing the Empire State Development Corporation’s new plan for 5000 units at Queens West. “It is incumbent on us as an industry to help them built it efficiently,” he said, in apparently a bid of foreshadowing.

The city’s reform of 421-a has also stymied development, except for buildings that include 20% affordable units, he asserted, but neither the city and state have nearly enough bonding capacity to support such buildings. (Indeed, the deficit threatens Atlantic Yards.)

Then he launched into his criticism of the tax burden on new development and the light ride others get.

Other issues

Ross was asked if buildings should be “green.” He responded that it should become “a standard in all buildings” and that costs would go down if it were uniformly required.

Sal Galletta, chair of the American Engineering Alliance, noted that his group has promoted the concept of a Deputy Mayor for Infrastructure and asked if REBNY had a position on it. “Everyone recognizes the need to rebuild our infrastructure,” Ross responded, and suggested that the city’s new Office of Sustainability will be extended. But he didn’t endorse the Deputy Mayor concept.

CBA questions

Commentator Ross Moskowitz of the law firm (and breakfast sponsor), Stroock, Stroock & Lavan, mentioned the ongoing reassessment of Robert Moses, and cited the emergence of Commmunity Benefit Agreements (CBAs), which raise questions about the role of government in developments such as Atlantic Yards, Yankee Stadium, and the Bronx Terminal Market

Although CBAs “may be a necessary component,” he said, “many questions remain, primarily: Who is the community? Who defines what those needs are?” (Indeed, such questions have been raised regularly in Brooklyn.)

The success of a CBA may depend on the sophistication/expertise of the groups negotiating it, Moskowitz said, adding that it’s unclear how they fit into the city’s Uniform Land Use Review Procedure, or ULURP. (Note: Atlantic Yards bypassed ULURP because it’s a state project.)

Since then, others have criticized CBAs, notably at a panel in May on reforming city environmental review.

The income mix for AY affordable units already changed; could it change again?

The inaugural issue of City Limits Investigates, which focuses on affordable housing, points out that, with some construction costs rising 1% a month, a lack of cheap land, and limits on governmental contributions, Mayor Mike Bloomberg's New Housing Marketplace Plan may "never get to 165,000 units--or if it does, that the housing produced will not meet the most pressing needs."

Indeed, to get there, city housing officials acknowledge, the cost pressure "could change the complexion of the affordable housing they are delivering." (Or, perhaps, more funds must be sought from other sources, including borough presidents.)

Does that mean that the complexion of Atlantic Yards--the profile of the affordable units--might change? Maybe, but the important thing to realize is that it has changed already.

Original promise

The projected income mix in the Atlantic Yards affordable housing changed considerably in little more than a year.

The Housing Memorandum of Understanding, signed by ACORN and developer Forest City Ratner in May 2005, contemplated three scenarios. In each of the three, 20% of the rentals (and thus 40% of the affordable units, or 900) would be assigned to low-income households, defined as earning up to 50% of Area Median Income, or AMI.

However, there was much wiggle room for the other 1350 units, for moderate- and middle-income households. In the first scenario (above), 450 units would go to households with 60%-80% of AMI, 450 to 81%-100% of AMI, and 450 to 101%-140% of AMI.

(Note that in the chart above, the household size goes up to six, while the one below, from the Atlantic Yards Information Session last July, only contemplates a four-person household.)

Changing gears

From April through June of last year, Forest City Ratner on its web site promoted the first, most inclusive scenario, as I wrote last July. By the time of the information session, however, the first two scenarios were jettisoned, and the affordable units at Atlantic Yards--at least the ones not low-income--would be geared to higher-earning households.

The current chart, as noted below, contemplates 450 units going to households with 60%-100% of AMI, 450 to 101%-140% of AMI, and 450 to 140%-160% of AMI.

To put it more plainly, there were once 900 units aimed at moderate-income families earning 50%-100% of the AMI; now there would be only 450. Beyond that, the top tier under the first scenario, 101%-140% of AMI, would now be the second-to-top tier, given that 450 units would go to households earning 101%-140% of AMI.A time-old tactic

CLI observes:
When rising costs begin to squeeze an affordable housing project during its planning stage, that income mix is a key component with which developers can tinker. Subsidy programs have income guidelines but there is usually room to manuever. The malleability is a handy tool when it salvages projects that otherwise might be priced out of existence. But it also means that the final affordable housing product could serve a different set of New Yorkers than originally intended--in other words, that there will be winners and losers.

It's not clear how much that might affect Atlantic Yards at this point, because there appears to be little wiggle room with the rentals. The wiggle room that remains concerns the 600 to 1000 for-sale subsidized units, onsite or offsite, which are in the MOU but not part of the General Project Plan issued by the Empire State Development Corporation. (Upon approval by the Public Authorities Control Board last December, Forest City Ratner announced that 200 such units would be onsite, but no further details emerged.)

The MOU states:
It is currently contemplated that a majority of the affordable for-sale units will be sold to families in the upper affordable income tiers.

The percentage in that majority, and the tiers associated with it, might increase. (100% of AMI or 160% of AMI? More?)

Potential change?

Even with the rentals, there may be wiggle room, if it's crucial to get the project done. CLI reports:
The RFPs to which housing developers respond often require units for certain income levels. But if it's a matter of life or death for a project, requirements can budget, developer's say. "Nobody wants to see a project fail," says [the Housing Partnership Development Corporation's Daniel] Martin. If costs become a major issue, all the players get together to crunch the numbers, sometimes upward. "For example, let's say the target was 80 percent AMI. Can we support moving up to 110% AMI? For the developer, that's a 20 percent increase in sales price on certain units, and it's enough to put him over the top."

One example in which a change helped affordability concerns the Fifth Avenue Committee's planned Atlantic Terrace development just north of Atlantic Avenue and east of the Atlantic Center Mall, across from the Atlantic Yards footprint. Sales prices on some moderate-income units went down because the market-rate units in a hot market can bring in more revenue. (In this case, the market-rate units explicitly subsidize the affordable units; the Atlantic Yards deal is more murky.)

Still, ultimately, there's a tradeoff, as CLI reports:
"The city must choose between building the most units and getting the deepest affordability," [Lucille] McEwen of [Harlem Congregations for community Improvement] says. "That's a tough call."

The most stringent requirement is that 20% of the rentals go to low-income households earning under 50% of the AMI. Perhaps the upper income bound will be adjusted to 175% of AMI, which is permitted under city subsidy programs. Even though that would seem to violate the Housing MOU, it's hard to imagine that ACORN, which hasn't criticized delays in the project and other impediments to affordable housing, would raise a stink.

Still, if we don't have an inkling for Forest City Ratner's development fees, costs, and profits, it's hard to tell whether a tweaking of the income mix is needed to get the project built or just to drive the return FCR's parent company wants for its shareholders.

The moving target of affordable housing, and a borough president's boost

The City Limits Investigates (CLI) inaugural issue on affordable housing points out that, because increasing costs squeeze budgets, some housing developers "are using community support to convince borough presidents to contribute crucial funds."

CLI points to an ACORN project called The Rockaway in Brownsville, built on former city-owned land, with 64 units and $16.6 million development cost. The $500,000 from Borough President Marty Markowitz "is really the difference between affordable and not affordable," ACORN's Ismene Speliotis tells CLI.

Markowitz, a former tenant advocate, has begun to allocate more funds to housing projects. Last November, according to a press release, he gave $250,000 to an 80-unit project for seniors in Sunset Park called Sunset Gardens. The money will be used for landscaping, an emergency generator, and electronic entry doors, which are not covered by the federal grant for the project.

In May 2006, according to a press release. Markowitz contributed $500,000 to Schermerhorn House, a 217-unit supportive housing development in Downtown Brooklyn, to ensure that all the units remain affordable. (Presumably, without the grant, some of the units would be market-rate.)

A moving target

This all reminds us that affordable housing is a moving target. More subsidy means more amenities, or units made available to households with lower incomes. Less subsidy means the opposite. Affordable housing developers look to whatever sources possible to lower their costs.

Note that, despite Markowitz's fervor for the Atlantic Yards project, his budget is way too small to boost the project, more than one-third of which would be financed by scarce--at this point, too scarce--tax-exempt bonds.

It might seem that nonprofit developers have the edge over for-profit developers because they don't have to deliver a return to shareholders. Indeed, for-profit developers are hardly clamoring to build projects that contain only affordable units.

Then again, for-profit developers often build mixed-income housing--as planned for Atlantic Yards--rather than 100% affordable housing. And for-profit developers might argue that nonprofit organizations would have trouble building at a site as complicated as the Metropolitan Transportation Authority's Vanderbilt Yard; indeed, the only competing bidder after Forest City Ratner had been anointed was another for-profit developer, Extell.

On the other hand, were Atlantic Yards footprint, or simply the Vanderbilt Yard, divided into several parcels, and different goals were set, for-profit and nonprofit developers might compete for different projects.

The 2007 list

Markowitz's 2007 budget includes a $3 million Housing Development Fund, "which helps create additional units in affordable projects or adds amenities to affordable projects," according to a press release.

I asked his office for a list of this year's projects. The notes come from the list provided to me.

Bridge Street Development Corporation/Myrtle Avenue Project; $500,000; 85 units, Myrtle Avenue in Bedford-Stuyvesant.

Cypress Hills Local Development Corporation/Glenmore Gardens; $250,000; 48 units, Miller and Glenmore.

Fifth Avenue Committee/Atlantic Terrace; $300,000; 80 units, Atlantic and 6th avenues.

Sherlock Parkway; $400,000; 41 units, Atlantic, Eastern Parkway and Sherlock. (Also, $219,000 as an out-year commitment in FY08.)

Lutheran Healthcare/Sunset Gardens; $250,000; 81 units of senior housing, 44th Street and 5th Ave.

Ridgewood Bushwick Senior Citizens Council; $192,000; 16 units, Melrose and Jefferson Streets; money will maintain affordability.

LDC of East New York/New Lots Plaza; $250,000; 90 units, New Lots and Barbey.

Forest City Ratner defends the process, but that's government's job

We've heard it before, and we'll hear it again, but developer Forest City Ratner offers a standard explanation of its community outreach, most recently in a New York Law Journal article yesterday headlined Brooklyn Lawyers Dodge "Manhattanization".

But the explanation is irrelevant; the responsibility is that of government.

(The article concerns the highly unusual volunteer effort of lawyers who've formed the Develop Don't Destroy Brooklyn legal team, providing crucial backup to the attorneys who've been engaged.)

Lawyer vs. flack

The article states:
"The fact that we weren't involved in the discourse was insulting," said [volunteer attorney] Mr. [Troy] Selvaratnam. "If they'd just not been so insulting, our activism could have been assuaged."

But Loren Riegelhaupt, a spokesman for Forest City Ratner, said the developer held "hundreds of meetings" with the community.

"Not everyone is going to agree with us," he said. "But we've tried very, very hard to be as amenable and as open to the community as we possibly can."

Nearly all of the meetings have been with allies, not potential opponents, and the Community Benefits Agreement coalition has defined "community" by invitation. Also, of course, the developer has famously shielded architect Frank Gehry from meeting with the community.

By comparison

More importantly, the process behind Atlantic Yards differs significantly from that behind other major development projects. For the Willets Point plan, the city issued a request for proposals before anointing a favored developer.

And Mayor Mike Bloomberg's PlaNYC sustainability effort describes a much more consultative process for building over railyards and highway cuts:
Building communities requires a carefully tailored approach to local conditions and needs that can only be developed with local input. We will begin the process of working with communities, the agencies that operate these facilities, and other stakeholders to sort through these complicated issues.

Kelo comparison

And, more importantly, does the Atlantic Yards process sufficiently match the process in New London, CT that Supreme Court Justice Anthony Kennedy, in the Kelo case, declared legitimate for the purposes of eminent domain? Among other things, Kennedy noted that the "Kelo taking 'occurred in the context of a comprehensive development plan meant to address a serious city-wide depression.'"

There has been a longstanding Atlantic Terminal Urban Renewal Area that covers a majority of the Atlantic Yards site. On the other hand, as Winston Von Engel of the New York City Department of City Planning said in March, 2006: "We didn't decide to take a look at the yards. They belong to the Long Island Rail Road. They use them heavily. They're critical to their operations. You do things in a step-by-step process."

U.S. District Judge Nicholas G. Garaufis, in his opinion Wednesday dismissing the case, erroneously called the yards "dormant" and neglected to assess the issue of a "comprehensive development plan."

And Andrew Alper, then president of the New York City Economic Development Corporation, told City Council in May 2004, ""So, they came to us, we did not come to them. And it is not really up to us then to go out and find to try to a better deal."

That, according to one analyst, could run afoul of Kelo. But that will be an issue for the appellate court, and the defense will be offered by the Empire State Development Corporation more than by Forest City Ratner.

Two years later, rechecking a Times article

Two years ago, on 6/9/05, the New York Times published a Metro front article headlined Unlike Stadium on West Side, an Arena in Brooklyn Is Still a Go. It's worth a second look.

A geographic conundrum:
In announcing the plan, Mr. Ratner described a $2.5 billion project designed by Frank Gehry atop the Atlantic Terminal railway hub.

A stunning understatement:
Others noted important differences between the West Side stadium and the Brooklyn arena. For example, the Brooklyn arena would require a $200 million public investment as opposed to the $600 million investment the West Side plan was calling for.

A Markowitzian generalization:
Brooklyn, still smarting from the loss of the Dodgers nearly 50 years ago, is generally more welcoming to projects that could help put it on the national map.

A description that begs elaboration:
They also hired Joe DePlasco of Dan Klores Communications, a former top aide to Mark Green, to handle public relations.

For more, see the outraged critique from Scott Turner of Fans for Fair Play, which hangs together more than not, though he was way off on office space.

Downzonings, density, and context

There's a lot to mine from the inaugural issue (Spring 2007) of City Limits Investigates (CLI), the quarterly offshoot of City Limits, which concerns the challenges of building affordable housing in a time of steadily rising construction costs.

One issue is the city's capacity for density, and the attendant context.

Even as the city has began upzonings, increasing opportunities for density in former manufacturing zones and near transit hubs (and, in the case of Atlantic Yards, letting the state override zoning without a similar public process), other neighborhoods have pressed for downzonings, ensuring against out-of-scale development.

For example, in his 2005 State of the Borough address, Brooklyn Borough President Marty Markowitz stated, "But smart development is not destroying the lovely character of Brooklyn’s most suburban neighborhoods. Southern Brooklyn has many neighborhoods that are primarily residential and dominated by single family detached homes. I am committed to the down-zoning of these neighborhoods, because we must preserve the community pride that makes Brooklyn great."

Going too far

There's certainly a logic to that, but it can also go too far. As CLI explains, some 40 percent of Staten Island has been downzoned, including some segments near the Staten Island Railway:
Developers who built the cheap, unattractive housing that fueled neighborhoods' demands for the new zoning restrictions have to take some of the blame. But there's little doubt that the city's tighter rules are suppressing not just ugly, out-of-scale buildings but also quality housing development that could be affordable. "They've driven the cost of land through the roof because of downzoning," says Randy Lee, a developer on Staten Island. "The problem you have is in a lot of new zones, they wanted to eliminate two-family houses, so you eliminated the rentals and those rentals represented an affordable housing stock. Almost all zoning that allowed townhouses was eliminated. There is no zoning left for garden apartments, condo housing, senior aparments... And the upzonings don't make up for it, he says. "You can't punch the pillow down in Staten Island and people to pop up on the Upper West Side or Williamsubrg. They pop up in Rockland County or New Jersey."

That also increases the pressure to build as big as possible elsewhere in the city, including projects like Atlantic Yards. Similarly, as I've noted, not-so-dense developments near transit, such as the Atlantic Commons in Fort Greene and the Nehemiah Houses in East New York, in hindsight appear unwise. But they were the only developments the market would support at the time.

Density and balance

CLI cites the city's new push for density:
In his April speech unveiling PlaNYC, however, Mayor Bloomberg announced a push for new zoning rules to increase housing in areas near mass transit lines. Even harsh critics of the Bloomberg administration acknowledge that zoning requires a very delicate balance. "You've got to be careful with density," notes one former political opponent of the mayor's. "How dense a city do you really want to live in?"... And zoning for more density can strain public services and alter the character of beloved neighborhoods.

That's one of the questions presented by Atlantic Yards. Urban planner and Develop Don't Destroy Brooklyn Board Member Ron Shiffman has repeatedly argued that the project would strain the local infrastructure.

In a more optimistic take, Atlantic Yards landscape architect Laurie Olin told the New York Observer in February that the challenges culd be overcome: "It’s the future: how to live wisely and well in close quarters with good spaces and environmental conditions and with the highest qualities. What a project!"

Regional challenge

Markowitz and some other Atlantic Yards supporters have backed the project, at the size proposed, because "we need" the affordable housing. While the city suffers a huge deficit of affordable housing, and Atlantic Yards might make a small but not insignificant dent in that (but also might lead to the demise of affordable housing nearby), there is an argument for a larger context.

As noted, at some point, density strains livability. And the context is not only within the city, it's regional. As CLI points out:
"Some of this should be a regional issue," Bill Carbine, HPD's Assistant commisisoner for Neighborhood Preservation, said at a recent conference. "If there's affordable housing in Jersey City or in Yonkers, that helps all of us with this problem."

Meanwhile, the combination of the housing crunch and low incomes means there's a lot of de facto affordable housing in New York, where several families cram into apartments and houses, living in substandard conditions, sometimes violating the zoning code,

The Lovgren Award & Atlantic Yards

Last night, at the Park Slope Civic Council (PSCC) annual meeting, I was honored with the Lovgren Volunteer Award, named for George Lovgren, a Park Sloper who helped save a firehouse from closing in the early 1960s. Lumi Rolley, a PSCC trustee and the main force behind NoLandGrab, introduced the award, along with outgoing PSCC President Lydia Denworth.

(There are two Lovgren awards given annually. Kim Maier of Old Stone House won the Lovgren Professional Award.)

George Lovgren, 2007?

I had wondered whether there was any connection between the Lovgren's activities and my efforts to examine Atlantic Yards. At first, I didn't think so, but I found a thread.

As I said:
I didn't know much about George Lovgren until I learned about this award and went to a panel at Borough Hall--about Brooklyn in the 1970s and 80s--and heard [activist and former Assemblyman] Joe Ferris talk about how he and Lovgren and some others challenged the conventional wisdom and helped save Park Slope.

My work may not be in the direct tradition of George Lovgren. I'm not trying to save a firehouse. And I'm not trying to 'save' a neighborhood.

But I am challenging some complacency and conventional wisdom. My service is in-depth watchdog journalism that the market is not providing.

(More, including a photo, from the Gowanus Lounge.)

Conflict note

I've been a member of the PSCC for several years, which means I get the newsletter and volunteer on the annual Park Slope House Tour, but haven't participated in any of their policymaking regarding Atlantic Yards, one-way streets, or other issues. I think I've reported on PSCC deliberations fairly. But I'll add a note about this award to my "About me" page.

Judge dismisses federal eminent domain lawsuit; appeal planned

In an emphatic yet potentially questionable decision, U.S. District Judge Nicholas G. Garaufis yesterday dismissed Goldstein v. Pataki, the federal lawsuit challenging eminent domain that Atlantic Yards opponents have considered their best hope for stopping the project.

In his decision, Garaufis ruled that even if public benefits—including new tax revenues, housing, jobs, and the elimination of blight—are less than promised, they’re sufficient to overcome allegations that the project is a sweetheart deal benefiting developer Forest City Ratner.

“Because Plaintiffs concede that the Project will create large quantities of housing and office space, as well as a sports arena, in an area that is mostly blighted, Plaintiffs’ allegations, if proven, would not permit a reasonable juror to conclude that the 'sole purpose' of the Project is to confer a private benefit,” Garaufis wrote. “Neither would those allegations permit a reasonable juror to conclude that the purposes offered in support of the Project are 'mere pretexts' for an actual purpose to confer a private benefit on FCRC.”

Despite the setback, the plaintiffs, 13 owners and renters whose properties lie in the southern segment of the 22-acre footprint, outside the longstanding Atlantic Terminal Renewal Area (ATURA) that encompasses the Vanderbilt Yard, vowed to appeal.

Appeal issues

“We have a nice issue for an appellate court to decide,” said plaintiffs’ attorney Matthew Brinckerhoff. “Undisputed facts lead to an inference that this was driven for Ratner’s benefit. It’s undisputed that no other developer was considered to do this project, that the genesis was Forest City Ratner, that they identified my clients’ properties [for eminent domain], and that the government, broadly speaking, agreed to do exactly what [the developer] asked for. If those facts don’t give rise to a claim under the public use clause, it’s definitely a dead letter, for anybody.”

Beyond that, unmentioned by Brinckerhoff, the judge apparently misread the plaintiffs’ position on blight. “Plaintiffs assert either that the Takings Area is not blighted or that whatever blight may exist was caused by FCRC,” Garaufis wrote. “But Plaintiffs do not dispute that the majority of the Project Area–which encompasses the Takings Area – is blighted, and in fact they seem to concede that it is.”

[More than half of the Atlantic Yards footprint, including the railyard, would fall within the boundaries of ATURA. In the map above, anything in red (including a grayish red, but not the gray alone) is within ATURA. The blue-and-red striped areas between Atlantic Avenue and Pacific Street are within both ATURA and the Atlantic Yards footprint. The blocks in solid blue, which continue down to Dean Street, are within the Atlantic Yards footprint but not ATURA. Note that they seem narrower than the blocks just above them because the ATURA boundaries include the streetbed of Pacific Street but not the buildings on the south side of the street.]

Actually, the plaintiffs challenged the analysis in the Blight Study: “Even accepting the six characteristics of blight described by [consultant] AKRF for each lot in the Blight Study, only 27% of the 73 parcels examined, at most, could be considered blighted," they said in the amended complaint. (That doesn't fully compute, since AKRF asserts a large majority of parcels blighted. Develop Don't Destroy Brooklyn's blight response challenges AKRF's analysis by questioning the application of the blight characteristics.)

Indeed, DDDB which organized the case and whose spokesman Daniel Goldstein is the lead plaintiff, has also questioned the Blight Study as part of a pending state lawsuit challenging the Atlantic Yards environmental review.

In the federal lawsuit, the plaintiffs pointed to the “Takings Area,” the blocks on the south side of Pacific Street and the north side of Dean, near where new construction proliferates. “Indeed, far from being ‘blighted,’ the Takings Area rests smack in the middle of some of the most valuable real estate in Brooklyn.” (The site as a whole was described in March by Chuck Ratner, an executive with the developer's parent company Forest City Enterprises, as “a great piece of real estate.”)

Garaufis also described the Metropolitan Transportation Authority’s (MTA) “Vanderbilt Rail Yard” as “ dormant part of the blighted ATURA area,” which isn’t accurate, given that it was and remains a working railyard.

Defendants comment

The Empire State Development Corporation (ESDC) , the main defendant along with the developer and city and state officials, issued a statement: "We are pleased by the decision, which reaffirms the Atlantic Yards project's many public benefits: affordable housing, a world-class sports venue, improved transportation and increased economic activity. This is yet another instance in which the project has stood up to legal scrutiny, and we remain confident that the project will continue to prevail in the courts."

Forest City Ratner CEO Bruce Ratner said in a statement, "This decision means we are one step closer to creating over 2,200 units of affordable housing, thousands of construction and office jobs and bringing the Nets to Brooklyn."

(The developer faces many other hurdles, including the scarcity, at least for now, of tax-exempt bond financing for the housing.)

Winding road

The plaintiffs based their case, filed in October, on the evolving notion of public purpose, drawing on the Supreme Court’s 2005 5-4 Kelo v. New London decision, which upheld the city’s use of eminent domain for economic development, but noted that the taking came out of a carefully considered development plan.

Beyond that, Justice Anthony Kennedy wrote a concurrence in which he observed that a “court confronted with a plausible accusation of impermissible favoritism to private parties should treat the objection as a serious one and review the record to see if it has merit, though with the presumption that the government’s actions were reasonable and intended to serve a public purpose.”

The Brooklyn case has been the subject of a significant volley of legal briefs and two lengthy and contentious oral arguments. The initial argument was held February 7 before U.S. Magistrate Judge Robert M. Levy, to whom Garaufis referred the defendants’ motions to dismiss the case.

While Levy seemed fascinated by the question of when the balance of public and private purposes behind a project is so wrong that a court must intervene, on February 23 he dismissed the case on procedural grounds, citing a case called Burford, rather than addressing the merits of the case, assessing whether the plaintiffs had stated a claim sufficient to go forward.

Levy's ruling would've sent the plaintiffs to state court, but they'd vastly prefer to stay in federal court, where they’d have more power to extract information from the defendants via discovery. They appealed Levy’s recommendation to Garaufis, who held his hearing on March 30.

Overturning Burford

In the hearing, Garaufis seemed receptive to the plaintiffs’ challenge to Levy’s Burford decision and, indeed, yesterday he overturned it. “The court declines to abstain under Burford,” he wrote. “Such abstention would be inappropriate because federal-court review of the questions presented in this and similar cases will not disrupt New York’s effort to establish a coherent eminent-domain policy.”

In doing so, Garaufis rejected arguments that the state’s Eminent Domain Procedure Law sets out the exclusive policy for considering eminent domain challenges. “This court must abstain only if 'exercis[ing] of federal review of the question in [this] case and in similar cases would be disruptive of state efforts to establish a coherent policy with respect to a matter of substantial public concern,'” Garaufis wrote, citing a previous case.

“My concern, therefore, is with the EDPL’s coherence, not with any of its other virtues, such as reducing litigation and promoting efficiency.” Scoffing at an ESDC argument, he wrote, “The court is not aware of any danger of 'piecemeal adjudication' that may result if the court hears this case.

Hinting at the boundaries

In his 66-page opinion, Garaufis devoted the single largest segment, 31 pages, to Burford, as if enjoying the legal workout of a complicated jurisdictional issue. In chiding the defendants in that section, he offered a strong hint of the ruling to come several pages later.

He wrote, “But this court is not being asked to evaluate the political questions underlying the Project. This case simply does not require the court to consider whether the Project is a good idea or whether it can be achieved only by taking Plaintiffs’ properties as opposed to other properties or no private properties at all. Instead, the issue before this court is whether the taking of Plaintiffs’ properties is rationally related to a conceivable public use, as required by the United States Constitution... This is a question of federal law, not local policy, and I am obligated to address it.”

Staying in federal court

Levy also had recommended rejection of two other grounds for dismissal posited by the defense, one based on a case called Younger and the other because the case was allegedly not yet ripe for review. Garaufis upheld those recommendations.

Thus the plaintiffs achieved one of their goals, convincing a judge that their case belonged in federal rather than state court. That procedural but hardly ultimate victory got prominence in DDDB’s press release, which secondarily acknowledged the judge’s ruling that the complaint was insufficient.

"We will continue to pursue every single legal option available to the plaintiffs, wherever they lead us, to stop what we believe is a private taking in violation of the U.S. Constitution," said DDDB legal team coordinator Candace Carponter.

Public use

In a coda to his 2/23/07 ruling , 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."

Garaufis may have considered the questions serious, but his opinion suggests he did not find them difficult.

In addressing the issue of eminent domain for public use—which today means “public purpose” rather than such clear public uses as parks or highways—Garaufis discussed not only Kelo but two seminal predecessor cases, the Washington, DC case Berman v. Parker (1954) and the follow-up Hawaii Housing Authority v. Midkiff (1984).

In Midkiff, he noted, the court cited Berman, in saying that the judiciary has an “extremely narrow” role “in reviewing a legislature’s judgment as to what constitutes a public use.” And the Supreme Court set out a standard: “When the legislature’s purpose is legitimate and its means are not irrational, [Supreme Court] cases make clear that empirical debates over the wisdom of takings–no less than debates over the wisdom of other kinds of socioeconomic legislation–are not to be carried out in the federal courts.”

Kelo standard?

In Kennedy's Kelo concurrence, Garaufis noted, the justice acknowledged that there may be eminent domain cases that demand stricter scrutiny, but that Kelo wasn’t that case because “(1) the Kelo taking 'occurred in the context of a comprehensive development plan meant to address a serious city-wide depression,' (2) 'the projected economic benefits of the project cannot be characterized as de minimis,' (3) '[t]he identity of most of the private beneficiaries [of the Kelo project] were unknown at the time the city formulated its plans,' and (4) '[t]he city complied with elaborate procedural requirements that facilitate review of the record and inquiry into the city’s purposes.'”

Oddly enough, after citing Kennedy’s standard, Garaufis did not grapple with it. Earlier in his ruling, he offered a factual description of the case. He noted that the MTA had before September 2003 said—according to the plaintiffs—that it had sold Forest City Ratner rights to the Vanderbilt Yard, then later retracted it. Also, he noted that, on 5/25/05, the MTA issued a request for proposals for the railyard. As plaintiffs have noted, that was some 18 months after the project was announced, a sign of favoritism.

Garaufis, however, didn’t examine whether that sequence “occurred in the context of a comprehensive development plan” or whether the private beneficiaries were unknown, as stated by Kennedy. Nor did he address whether the ESDC, whose board is appointed by the governor, constitutes a legislative agency, as seemingly required.

Rather, Garaufis focused on the clear language in the Supreme Court opinions in Kelo and Midkiff, which stated that a “taking fails the public use requirement” only if the “uses offered to justify it are ‘palpably without reasonable foundation,’” if the “sole purpose” is to transfer property to a private party, and if the announced purpose is a “mere pretext” for a private benefit.

Those standards were not met by the plaintiffs. Garaufis pointed to claims that Atlantic Yards will generate no or minimal economic benefits, will not create jobs, and will not materially increase affordable housing. Moreover, he noted, plaintiffs claim the area is not blighted.

Degree of benefit, not absence

“That conclusion is baseless and may be rejected even at this early stage of the litigation,” Garaufis wrote. “Each of the four allegations just listed, when examined carefully, concerns only the measure of a public benefit – as opposed to its existence – or otherwise fails to state a claim.” He pointed out that plaintiffs conceded some public benefit--though, as noted above, he may have misread the plaintiffs’ “concession” regarding blight.

Even if the plaintiffs’ own properties are not blighted, non-blighted properties may be subject to eminent domain, according to Berman, “if the redevelopment is intended to cure and prevent reversion to blight in some larger area that includes the property,” Garaufis wrote. The plaintiffs, however, argue that the map was drawn by the developer, so the question may be just how much could be added to an area deemed blighted.

Political judgment?

What if Atlantic Yards doesn't fulfill the goals regarding housing and jobs? Garaufis noted that it wasn’t the court’s role to examine whether the project will achieve the objectives stated, citing language in Kelo that notes that such a requirement “would unquestionably impose a significant impediment to the successful consummation of many such plans.”

Also, citing the plaintiffs’ criticism of the affordable housing planned, Garaufis wrote, “Whether these units are sufficiently affordable may be an important political question, and if the citizens of Brooklyn are unsatisfied with the answers, then elected officials and their political parties may pay the price at the polls. But the Constitution does not enshrine Plaintiffs’ value judgment that a taking lacks a public purpose if it results in ‘luxury’ as opposed to ‘affordable’ housing, and the constitutionality of this taking does not depend on the relative numbers of planned housing units priced at, above, or below market rate.”

That statement echoes one made in the February oral argument by ESDC attorney Douglas Kraus, who said of Brinckerhoff, “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."

However, none of those officials actually had jurisdiction over Atlantic Yards, which went from the ESDC to the Public Authorities Control Board, whose votes last December were controlled by then-Governor George Pataki, Assembly Speaker Sheldon Silver, and Senate Majority Leader Joseph Bruno.

In March, affordable housing analyst David Smith commented on Kraus’s statement, “[I]f the project is terrible, and the sole remedy is electoral relief, then there is no check in law to a development agency run amok.”

What’s a pretext?

During the March eminent domain hearing, ESDC lawyer Kraus set out a formulation that apparently the judge found convincing. “The plaintiffs don’t say there won’t be jobs here,” he said. “You have to say that there’s no proper public purpose or that if there is one, the project has no conceivable relationship.”

Garaufis acknowledged that the Second Circuit, the appellate court he looks to for initial guidance, “has not yet had the opportunity to articulate the standard according to which this court should measure whether an asserted use is merely pretextual.”

He went on to examine Kennedy’s concurrence. He wrote, “Justice Kennedy therefore instructed that ‘[a] court confronted with a plausible accusation of impermissible favoritism to private parties should treat the objection as a serious one and review the record to see if it has merit, though with the presumption that the government’s actions were reasonable and intended to serve a public purpose.’”

That, Garaufis wrote, the plaintiffs have not done. They may be alleging “that the purported purposes of the Project are dubious,” but Kelo requires an allegation that the “actual purpose” is “to bestow a private benefit” on the developer, he wrote.

“Therefore, even if Plaintiffs could prove every allegation in the Amended Complaint, a reasonable juror would not be able to conclude that the public purposes offered in support of the Project are ‘mere pretexts’ within the meaning of Kelo, i.e., mere pretexts for an actual purpose to bestow a private benefit,” he concluded.

That emphatic ruling may be in tension with both Kennedy’s concurrence and the sequencing alleged by the plaintiffs. The resolution will emerge in the appeal, which could take four to six months.

Huge deficit in tax-exempt bonds suggests Atlantic Yards delay

Atlantic Yards may have been approved by the Empire State Development Corporation (ESDC) and the Public Authorities Control Board (PACB) last December, but the project faces a significant hurdle over which the agencies had no control. Nor did they apparently consider it in their deliberations.

The city and state agencies that fund affordable housing are drastically oversubscribed with developers seeking to draw on a limited pool of tax-exempt bonds. Testifying on May 24, city Housing Preservation and Development (HPD) Commissioner Shaun Donovan drew a stark picture before the House of Representatives’ Ways and Means Committee:
New York City is facing an immediate crisis in private activity bond volume cap, which we expect to deplete before the end of June. Without additional volume cap, 6,700 units of housing in our pipeline will not be built.

And those units precede the 2250 units promised for Atlantic Yards, involving $1.4 billion in bonds, a figure developer Forest City Ratner and government officials didn't reveal until after the project was approved.

Congress is considering proposals that would increase the “volume cap,” which limits the amount of bonds that can be authorized by state and city agencies around the country.

For now, a warning from Forest City Enterprises, parent of Atlantic Yards developer Forest City Ratner, grows in importance. In its latest annual report, the developer acknowledged several factors contributing to potential “increased costs and delays to the project,” including “our inability to obtain tax exempt financing or the availability of financing generally.”

Negotiations unfinished

Forest City Enterprises' annual report also acknowledged that “final documentation of the transactions are subject to the completion of negotiations with local and state governmental authorities.”

The ESDC's General Project Plan states:
Affordable housing is expected to be financed through tax-exempt bonds provided under existing and proposed City and State housing programs, such as the City’s 50-30-20 program.

Affordable housing in the city and state is furthered by low-cost mortgages, thanks to tax-free bonds issued by the New York City Housing Development Corporation (HDC) and the New York State Housing Finance Agency (HFA). In New York City, the state generally funds projects with 80% market-rate housing, while the city agency funds projects geared to a greater mix of incomes, such as that planned for Atlantic Yards.

About volume cap

Volume cap is allotted nationally on a per capita basis, $85 per person. The federal government limits the amount of bonds a city or state can authorize, because the tax-exemption represents foregone federal revenue.

In New York State, it adds up to about $1.6 billion a year, distributed by four agencies, two state and two city, two of which support economic development and two of which support housing. The issue was first raised by the New York Observer's Matthew Schuerman, who reported in March on the stress facing the HFA, which has an even deeper pipeline than the city's HDC.

The Observer reported last week:
The state and the city [housing] agencies say that, together, they are facing about $6 billion worth of requests for tax-exempt bonds over the coming years, and normally receive just $560 million to $900 million a year in bond cap.

In the city’s pipeline alone, there’s $1.8 billion in projects, which precede the yet-unrequested $1.4 billion for Atlantic Yards. Given the scarcity of city funding for such developments, some affordable housing supporters have begun to express dismay that Atlantic Yards would suck up a significant portion of the pool.

While HDC’s volume cap has ranged from $178 million to $708 million in recent years, this year the agency was assigned $195 million in volume cap, and expects it to be depleted by the end of June, according to HDC spokesman Aaron Donovan. (It’s possible some volume cap can be transferred from state agencies later in the year.)

Given that Forest City Ratner has not yet applied for financing, it could, for example, also take advantage of HDC's taxable financing, Donovan said. Such bonds would offer a break compared to the open market but likely would not be as attractive as tax-exempt financing.

Possible reform

Before Congress, HPD’s Shaun Donovan offered two proposals to increase funds available to the city; one would “allow for 'recycling' or 'refunding' of multi-family bonds after principal repayments or pre-payments of the bonds.” The second would involve “raising the allocation of volume cap for high cost areas” like New York. (As HPD commissioner, Donovan also serves as chairman of the HDC.)

The Ways and Means Committee seemed receptive to the technical fix involved in the first proposal, which could provide an additional $500 million immediately, according to The Bond Buyer's 6/4/07 report . (After that first year, Youssouf told the Observer, the fix could provide $200 million a year after that.)

Those additional sums could help the city and state housing agencies fulfill more of the pending requests, but not, apparently, all of them.

Raising the allocation, however, would be tougher, The Bond Buyer reported, because Congress would have to find new revenue to offset lower tax receipts. Then again, it costs more to develop housing in New York City than elsewhere, and not all states use up their volume cap, so there’s an argument for adjusting the volume cap.

This is a challenge for New York developers in general, so representatives of the city's real estate industry, along with city government officials, are already lobbying in Washington. Forest City Ratner, with so much at stake, may be especially watchful--and participatory.

Privately financed? Court documents finally specify the housing bonds behind Atlantic Yards funding

For years, developer Forest City Ratner and governmental allies have danced around an essential fact: more than half of the funding for the Atlantic Yards project depends on government resources, both direct aid and a limited pool of tax-exempt financing.

And while CEO Bruce Ratner may have said at the outset that the project "will be almost exclusively privately financed," that was always a fudge.

The Empire State Development Corporation's (ESDC) General Project Plan released to the public (right and below) offered hard numbers regarding the uses of project funding but offered only a general outline of the sources of such funding. (Click on graphics to enlarge.)


It was made clear--though government officials wouldn’t reveal number--that Atlantic Yards, given the substantial affordable housing component planned, would rely significantly on scarce tax-free bonds authorized by the New York City Housing Development Corporation (HDC). Such bonds allow the developer to borrow money at a lower interest rate, serving, essentially, as a discount mortgage.

Before the project was approved by the ESDC board on 12/8/06, specific funding amounts were never enumerated by government agencies, including the ESDC.
Indeed, New York City's Department of Housing Preservation and Development (HPD) refused to provide such information when I filed a Freedom of Information Law request. HPD works closely with HDC, and HPD Commissioner Shaun Donovan serves as HDC chairman.

Curiously, the memo prepared for the ESDC meeting simply refers to funding for the apartments as "private financing," as at above right. The memo surfaced as part of the lawsuit challenging the environmental review of the project.

Sources specified

When the project hit crunch time, however, before the Public Authorities Control Board's (PACB) 12/20/06 vote, the ESDC gave the PACB some confidential information The ESDC finally offered a more granular explanation of the financing for the $4 billion project: more than half would come either directly from the government or from government-assisted resources:
--$637.2 million in tax-free bonds to finance the arena
--$100 million from New York City (city expenditures are now $205 million)
--$100 million from New York State
--$1.4 billion in tax-free bonds to finance the affordable housing

That represents more than half the project financing. While the $2 billion-plus in government-authorized bonds (housing bonds via HDC and arena bonds via ESDC) wouldn’t represent a direct grant to Forest City Ratner, the bonds would back low-cost mortgages, at a far more attractive interest rate than the developer could find on the open market. That thus would lower the developer’s costs and add to profit.

(How much lower? Perhaps 15%--see below. As the New York Observer reported last week, the privately issued bonds "can save developers 1 to 1.65 percentage points a year in interest.")

Such bonds are so scarce, in fact, that HPD Commissioner Shaun Donovan on May 24 told Congress the city faced a “crisis” threatening to stall some 6700 affordable housing units in the city’s pipeline. And that pipeline precedes the 2250 units promised for Atlantic Yards. (More on the delay.)

Document surfaces

The key sources-and-uses document surfaced as part of the lawsuit filed by Develop Don't Destroy Brooklyn and 25 other groups challenging the Atlantic Yards environmental review. It was attached to an affidavit filed by Todd Scheuerman, Assistant Chief Budget Examiner in the New York State Division of the Budget, supporting the PACB's opposition to the lawsuit.

(The document given to the PACB and excerpted above offers more details than a previous document released in March by the ESDC, which offered project cash flows, in response to pressure from Assemblyman James Brennan. Analyst David Smith had criticized the cash flow document for failing to provide sources and uses.)

Scheuerman's affidavit was the subject of a brief interchange between Supreme Court Justice Joan A. Madden and Assistant Attorney General Peter Sistrom during the 5/3/07 hearing.

“There is no piece of confidential information not in Mr. Scheuerman’s affidavit,” Sistrom told the judge.

“The confidential information he reviewed is no longer confidential?” Madden asked.

“Yes,” Sistrom replied.

Had that hearing been covered by more than two journalists, and had more people read the documents in the lawsuit, the details in this article surely would've surfaced a lot sooner.

Who fudged? Ratner, or the Times?


Both press accounts and Forest City Ratner public relations material have long fudged the issue. A press release the developer issued 12/10/03 explained that the arena would be mostly financed privately, but left out the question of the project as a whole:
The Arena will be primarily privately funded. Incremental revenues will be derived from sales taxes on tickets, food and merchandise sold at the new Arena.

Press accounts expanded on that. The Times reported 12/11/03:
"This started with basketball, a Brooklyn sport," Mr. Ratner said. "This was always the site. But it became clear it was not economically viable without a real estate component...
Mr. Ratner said that the project "will be almost exclusively privately financed," although taxes derived from elements of the project will be diverted to help pay for it.

In other words, he was suggesting a model for arena financing.

Without access to the original transcript, we can’t tell if Ratner was fudging--conflating the arena with the project as a whole--and the Times let him get away with it, failing to press him on the funding for the project as a whole. Alternatively, the Times may simply have misunderstood Ratner, extrapolating his words about the arena to the project as a whole. (The Times did err regarding Frank Gehry’s statement.)

According to video of the press conference, Ratner was emphatic about protecting the taxpayer but elusive about details. He said, "Another major concept here is: we understand the city’s position and the state’s position and the taxpayer’s position. And it is our goal—in fact we will only use taxes that are generated out of this arena from the public. We do not want to go and get taxes from elsewhere, from the existing base.”

Neither Ratner's statement nor the press release encompassed the direct government aid and tax-exempt bonds.

Bloomy, Ratner both mislead

In other cases, however, the city and the developer clearly misled the public. Mayor Mike Bloomberg, in a 1/23/04 radio interview, claimed that the developer had to raise the entire project funding (then $2.5 billion) on his own:
Look, if you listen to every “but,” you would never do anything. “Well, this guy Ratner should do this, that, and the other thing.” He’s gotta raise $2.5 billion.

A 2004 flier (right) mailed by Forest City Ratner to Brooklynites promised that Atlantic Yards--the entire project--"will be funded primarily by private development dollars, and with a small portion of the very large new tax revenues generated by the project."

That may be technically accurate, given private investors buy the tax-free bonds, but it doesn't indicate that the bonds represent a scarce government resource.

The AtlanticYards.com web site also fudges the issue:
The City and State of New York have each agreed to contribute $100 million to Atlantic Yards, representing less than six percent of the total investment in the development. These monies will be used to fund infrastructure improvements and site preparation on and around the arena site (including streets, sidewalks, utility relocation, environmental remediation, open space improvements and public parking garages).

Certain as-of-right tax benefits may also be available to FCRC as they would be for any other developer, including: tax-exempt financing; real estate tax abatements through the Commercial ICIP program; the residential 421a program; the exemption from the mortgage recording tax for construction and permanent financing for the development; and the exemption from sales taxes for construction materials and fixtures for the arena.
(Emphasis added)

Actually, the tax-exempt financing is a scarce resource and thus not necessarily available to "any other developer.".

Flexibility, and savings

A 12/22/06 article in the Bond Buyer, headlined Atlantic Yards' Developer Filed Preliminary Paperwork for Up to $2.17B, reported that the developer had filed nonbinding paperwork for 19 potential buildings, thus allowing for flexibility rather than adding buildings, adding up to $2.17 billion. (The more accurate document provided to the PACB, as noted above, indicated a sum two-thirds of that.)

In the article, the Bond Buyer offered some context for how Ratner might benefit:
By comparison, the New York Yankees and New York Mets together sold about $1.4 billion of tax-exempt bonds for their new ballparks and are expected to save $160 million to $200 million over 40 years.

That apparently represents a saving of up to nearly 15 percent, thanks to public subsidies, for the Yankees and the Mets together, and also, perhaps, for the project involving the Nets.

The (non-inclusionary) Fourth Avenue rezoning, affordable housing, & CB 6

The recent shakeup of Community Board 6 may have been mostly about Atlantic Yards, but it also, apparently, was about affordable housing on the changing fringe of Park Slope.

As City Council Member Bill de Blasio told the Brooklyn Paper, the CB did not fight the City Planning Commission's 2003 rezoning of Park Slope, which protected the scale of side streets from Union Street to Fifteenth Street and allowed increased density along Fourth Avenue, but did not require affordable housing as a tradeoff.
(Rendering of the new Argyle from the New York Post. I originally tagged it as a photo.)

While CB 6 didn't embrace affordable housing, it was hardly the only responsible party. The Bloomberg administration at the time firmly opposed such inclusionary zoning. Meanwhile, affordable housing advocates had not begun their citywide efforts to enact such policies.

But CB 6 was the only target over which de Blasio has power and, as the community board begins to consider the rezoning of Gowanus, he’s put an affordable housing advocate, Brad Lander of the Pratt Center for Community Development, on board to chair the housing committee. (Lander’s been a critic of Atlantic Yards.)

In hindsight, unwise

In hindsight, the rezoning of central and northern Park Slope seems an unwise move, favoring some powerful constituencies—homeowners in an affluent district, real estate developers, and an unbending city administration—without requiring commensurate equity. Now luxury buildings have sprung up along Fourth Avenue, replacing light industrial buildings and three-story apartments, and previous residents have been displaced. Developers—and the people from whom they bought property—have reaped the benefit.
(Photo of Hotel LeBleu from The Gowanus Lounge.)

Moreover, the paltry $6 million the city announced in 2003 to support affordable housing has not apparently been used yet, according to Community Board 6 District Manager Craig Hammerman and Michelle de la Uz, executive director of the Fifth Avenue Committee.

And the city learned its lesson; 2005 rezonings in Greenpoint/Williamsburg and the South Slope (below 15th Street) did include incentives, but not requirements, for affordable housing.

The shifting landscape

And in hindsight, the city’s failure fostered political support for Atlantic Yards. Advocacy group ACORN, mindful of the lack of affordable housing elsewhere in and around Downtown Brooklyn, chose to sign a private deal with developer Forest City Ratner rather than go through a more public process.

Forest City, recognizing that publicly-owned land experiencing a vast increase in density would have to include affordable housing, took the issue off the table . (And, when convenient, the developer switched its promise from 50% affordable units to 50% of the rentals.) Politicians like de Blasio supported Atlantic Yards because of the housing, before they could assess the project as a whole.

Sure, a fairer Park Slope rezoning would not have provided nearly as many subsidized housing units than are promised at Atlantic Yards. And, given the other losses of affordable housing—such as units leaving the rent-regulated system and Mitchell-Lama conversions—the pressures for housing in Brooklyn would remain, as Lander has pointed out. But it would have indicated that the load was being shared.

Eight stories, or 12?

In its 2003 description of the rezoning, the City Planning Commission (CPC) emphasized scale rather than economic diversity or a sharing of the wealth. It stated:
The goals of the rezoning are to preserve the historic scale of the brownstone neighborhoods, and provide increased opportunities for residential and commercial development on Fourth Avenue.
(Photo of Novo from Brownstoner.)

A 2/26/03 Daily News article headlined KEEPIN' PARK SLOPE REAL quoted Lander, then head of the Fifth Avenue Committee, as arguing that the city should allow buildings on Fourth Avenue to reach only eight stories, not 12, unless they contained some affordable housing.

City Planning Commissioner Amanda Burden, whose concerns have always been esthetics over equity, was dismissive: "What you don't want to do is freeze the district at eight stories, and then come back at a later date with a nebulous plan that probably won't get through.”

The agency that should’ve supported affordable housing, the Department of Housing Preservation and Development (HPD), also opposed inclusionary zoning, Lander told me recently. “And we were told at the time that Deputy Mayor [Dan] Doctoroff was unhappy with how affordable housing requirements had delayed development at Queens West, and he was not open to linking zoning and affordability.”

Indeed, Bloomberg's New Housing Marketplace plan, announced in December 2002, offered an array of strategies, including rezonings, to produce new housing, but did not embrace inclusionary zoning.

CB support

CB 6 voted 32-4 to favor the change. CB 6 Chairman Jerry Armer, who was axed apparently because of his leadership in the board’s dissection of the Atlantic Yards plan, said the board didn’t want the inclusionary zoning argument to stall a long-delayed effort to stave off increasing out-of-scale development on the residential blocks.

The Daily News quoted Armer, "Our concern is that this rezoning isn't caught in the politics of the day, because we've waited long enough for it and we don't want to see it get stranded."

Hammerman told me affordable housing at the time was viewed as more of a citywide than neighborhood problem, and that the CB was hoping for a citywide solution--which in fact, began brewing the next year. Those who were lobbying and stood to gain the most from the new zoning, he acknowledged, saw their priorities reflected in the board’s vote.

Then Courier-Life columnist Erik Engquist reported 5/19/03:
Incidentally, Community Board 6's Pauline Blake had earlier denigrated as "political" the politicians' call for an affordable housing component in the rezoning plan.
(Indeed, the resistance to affordable housing was equally "political.")

Borough President Marty Markowitz, a former tenant leader, supported the FAC’s affordable housing plan. But he didn’t make a public stink when the Community Board, and the city administration, shot it down. Nor did he attempt to remove board members, as he did after the Atlantic Yards vote.

Lander recalled that the Land Use Committee and CB 6 as a whole “were totally lukewarm to the inclusionary zoning effort" and, when City Planning threatened to pull the rezoning if the community pushed for inclusionary zoning, the community board backed off. "This enabled City Planning to say that they were heeding the community's wishes.”

The debate thickens

But the rezoning had to pass both the CPC and City Council. The New York Times, in a 4/2/03 Metro section article headlined Highs and Lows in Park Slope Rezoning Plan, quoted Burden as pointing out that the rezoning would preserve the neighborhood's "extraordinary" building stock and prevent the "increasing number of sore thumbs -- one after another -- that have over and over violated the context of Park Slope. And that erodes its value."

Hammerman told the Times that the "canyon of housing” could be a new Park Avenue, but de Blasio pointed out, "We just can't do enough to create affordable housing in this neighborhood.”

In a subtle bit of juxtaposition that suggested support for the advocates’ case, the Times reported:
But city officials say that the approach is unsuited to the unique configurations of the New York housing market. Inclusionary zoning has been tried in the most dense residential zones in Manhattan, Ms. Burden said, but has failed to produce many moderately priced apartments. Advocates and developers say that is because there are more attractive tax incentives available for constructing low-cost housing that do not exist in the other boroughs, and not because the concept is flawed.

Lander was quoted:
''Landowners on Fourth Avenue are essentially seeing their land value doubled,'' he said. ''It's reasonable to ask for some percentage of affordable housing.''

Indeed, unmentioned was that developers would have another incentive to build, the 421-a tax abatement.

Some dismay

A 4/6/03 Daily News article, headlined PARK SLOPE REZONE PLAN OK'D, reported an 11-2 vote by the City Planning Commission. Burden offered a quote she probably regrets: "We are very confident that this will build affordable housing."

The Daily News added a caution:
But City Planning Commissioner William Grinker, who has lived in Park Slope for 25 years, said more needed to be done. "I will vote no, knowing that this is a very good plan, but a very flawed plan," said Grinker. "We are looking forward to the Council to amend this plan and to make it even better."

The only amendment was the assignment of $6 million for subsidized housing.

A 4/29/03 New York Sun article headlined Compromise Reached Over Brooklyn Housing portrayed Burden, yet again, as insisting that the pump must be primed:
"What we're trying to do is get construction on Fourth Avenue," the chairwoman of the City Planning Commission, Amanda Burden, told a subcommittee of the council's land use committee. "The 12 stories will incentivize that. Any additional burden, and maybe no housing will get built."

City Council passage

The City Council passed the resolution on 4/30/03. The vote was unanimous, with even de Blasio avoiding a protest vote. Lander recalled that then-Speaker Gifford Miller made it clear that neither he nor the administration would support changes at the Council level. The compromise was that yet-unspent $6 million.

The effects

Soon after, the real estate pages were reporting the effects. A 6/6/03 Times Real Estate section article, headlined Rezoning Spurs Park Slope Condos, noted that four new projects just off Fourth Avenue would add 150 condos by the end of the year.

The article stated:
The Brooklyn office of the city's Planning Department has projected that 1,100 residences could be built along Fourth Avenue under the new zoning, 440 of them in the next decade.

The article mentioned the $6 million fund:
Carol Abrams, a spokeswoman for the city's Department of Housing Preservation and Development, said the $6 million was expected to be allocated through several existing housing programs and to take different forms, including tax-exempt bond financing and low-interest loans. In return, developers would reserve at least 20 percent of the units for residents whose incomes do not exceed a specific earnings ceiling. Estimates are that the public money would generate at least 130 below-market-rate units, Ms. Abrams said.

Learning from Park Slope

A September 2003 City Limits article, headlined The growth dividend: the city opens Williamsburg and Greenpoint to redevelopment--and won't promise affordable housing, cited the dispiriting experience of Park Slope as driving a community coalition to ask that subsidies for 40 percent of the housing developed under the rezoning be required.

Still, city officials, in this case Regina Myer of DCP, resisted required inclusionary zoning. City Limits reported:
"We're very, very concerned that a requirement for inclusionary housing might possibly discourage housing production," says Myer."It essentially becomes another burden on the developer."
If the city imposed inclusionary zoning, Myer adds, it would also have to allow developers to build bigger projects. "An inclusionary requirement would require more density--taller buildings," she says. "That's not something the community wants."

Such density, of course, is what happened in the Atlantic Yards plan, though it was negotiated privately.

Ron Shiffman, former director of the Pratt Institute Center for Community and Environmental Development, pointed out that land prices had already gone up, because of speculation about future rezoning, and if the inclusionary zoning rule burdened developers, they could sell their, “land values will go down so that other developers can do it.”

Movement broadens

The effort broadened, leading to citywide movement for inclusionary zoning, City Council resolution in 2004 and a new emphasis by the mayoral administration for voluntary inclusionary zoning, offering bonus density in exchange for affordable housing. Lander cited the role of the community groups in the Greenpoint/Williamsburg and Hudson Yards rezonings, as well as efforts by Shaun Donovan, who became HPD Commissioner in March 2004.

Notable is that some other observers have offered cautious support for inclusionary zoning. Two years ago, the Furman Center for Real Estate and Urban Policy, in Chapter 11 of its lengthy report, Reducing the Cost of New Housing Construction in New York City: 2005 Update, offered some market-sensitive modifications to the existing inclusionary housing program and cautioned against a mandatory version. In August 2004, Julia Vitullo-Martin of the Manhattan Institute, in Thinking about Inclusionary Zoning, also warned against mandatory inclusionary zoning but suggested tweaks in existing programs.

Rezoning victims

A 7/5/05 Village Voice article by Paul Moses, headlined Poor Excuse: Rezoning plan for Brooklyn's Fourth Avenue forces lower-income neighbors out, tells the story of 76-year-old-pensioner Ann Thompson, who had leave the $550-a-month apartment she'd rented for 20 years:
"The result of this rezoning is they're kicking all the minorities out of here—I can give it to you in two words," said Thompson, who is black. "And my God, they're giving the seniors hell."

Moses pointed out the "housing opportunities on Fourth Avenue" promised by Burden were "far from 'opportunities' for Thompson and her neighbors."

Moses noted:
There is a trickle-down argument to be made for rezoning land for big luxury housing developments in hopes that simply having more housing will lead to lower rents. But it means that the wealthy get theirs now, and the poor take their chances.

Landlord Shahn Andersen, who had applied to demolish a four-story, eight-unit rent-stabilized building to build a luxury condo building (and is now working on Broken Angel, said he would have wanted to include middle-income housing--not low-income housing--had there been subsidies. Moses thinks DCP had made a mistake, and should grandfather in the inclusionary zoning:
It can be done as part of a rezoning now being devised for southern Park Slope. But that would still come too late to help Ann Thompson.

Now, new buildings and reform

Last December, writing in response to the city's proposed reform of 421-a tax breaks, Moses pointed out that the city had evolved:
The Council, prodded by Mayor Michael Bloomberg and City Planning Commission Chairwoman Amanda Burden, voted in 2003 to re-zone Park Slope with little regard for the need to develop affordable housing. The re-zoning protected brownstoners in the wealthy section of Park Slope by preventing out-of-scale (read: ugly) new developments. But it cleared the way for construction of 10- and 12-story luxury buildings along Fourth Avenue, the area where the Slope’s poorer residents lived. That’s lived, in past tense, since the ensuing real estate boom has driven many of them away.

Indeed, now real estate brokers and investors, at least, applaud the newly shiny, Fourth Avenue. The New York Post published a 5/17/07 article headlined FANTASTIC 4TH: ONCE-GRITTY STRETCH OF PARK SLOPE BOOMS WITH NEW CONDOS & HOT SPOTS, which mentioned the rezoning and even the Fifth Avenue Committee's move near Fourth Avenue, but not the group's effort at inclusionary zoning.

An oddly pessimistic June 2007 article in The Real Deal is headlined Slope slowdown on Fourth Avenue: Transformation of gritty stretch in Brooklyn's Park Slope slow to arrive. There's actually a lot of transformation, but the article cautioned that it might not continue, because of traffic congestion (including from Atlantic Yards), environmental hazards from the nearby Gowanus area, and the 2008 modification of the 421-a tax break, which subsidizes market-rate developments.

Unmentioned is what the change in what 421-a will do: require some affordable housing in exchange for the tax break. In other words, developers will have had well over four years of increased density plus a tax break. And the battle continues to ensure that rezonings that add value to land also result in sharing the wealth.

Within CB 6, the upcoming rezoning of Gowanus includes several blocks along Fourth Avenue and undoubtedly will involve a call for affordable housing. "It creates an opening for City Planning, should they choose to exercise it," Hammerman observed, "of revisiting the entire Fourth Avenue corridor."

The greening of blighted Dean Street

What a difference a year makes on Dean Street just east of Sixth Avenue, a curious 100-foot segment in the Atlantic Yards footprint. In the photo at right, from the Blight Study conducted last summer by the Empire State Development Corporation (via consultant AKRF), 493 Dean Street, at center, looks like it needs a paint job, and 491 Dean Street, at left, lacks window boxes.

Actually, 493 Dean was not considered blighted but its neighbors were. While 491 Dean was observed to have no structural damage and fulfilled more than 60% of the allowable development rights--the state's somewhat arbitrary (as argued in court) cutoff--it was considered blighted because it was vacant at the time. It's not vacant any more, however, and its owner is among the 13 plaintiffs challenging the state's pursuit of eminent domain.


In the photos at left taken yesterday, the day of the Brownstone Brooklyn Garden District Walk, the buildings look more sprightly, with flowers at 491 Dean and a new paint job next door. (I'm told the flower boxes were there last year, just not when the Blight Study photo was taken.) The two-story 495 Dean, at far right and owned by the same plaintiff who owns 493 Dean, is considered blighted because it doesn't fulfill 60% of allowable development rights.

But it shares the same backyard garden, which yesterday was the site of not merely some pleasant plantings but a display of renderings--somewhat rough compared to slightly less dramatic renderings produced by Atlantic Yards architect Frank Gehry--that show the jarring juxtaposition planned, the 272-foot Building 15 planned for that corner. The project would not simply ensure that buildings on the block fulfill the allowable Floor Area Ratio; it would override zoning to vastly exceed them.

Actually, several of the properties on this rectangle of land are not deemed blighted, but needed for the assemblage of a large, contiguous site, which is permitted under evolving eminent domain law. But why does developer Forest City Ratner need this plot, 100 feet wide? Arguably, it's less for an additional tower than for a plot of land that will supply parking and staging for the arena being built across the street.

Backyard views

Below, some views from the backyards of the three Dean Street buildings.



The tour map yesterday offered a plaintive question: "Why should such sweet gardens have to appear in court for the right to stay in this peaceable place...?" (The answer from project backers likely would be that extremely dense development should go near transit hubs; the justification for the project, and the state's process behind it, indeed will be resolved in court.)

Future buildings, flower power

Patti Hagan of the Prospect Heights Action Coalition, as much a gardener as activist, set up the banner below, and helped organize the participation of these gardens. Hagan also helped write Develop Don't Destroy Brooklyn's (DDDB) response to the Blight Study. (DDDB yesterday had a table down the block, outside Freddy's Bar and Backroom.)

Below, Post-It notes on renderings displayed yesterday identify the location of the Dean Street buildings.

Would rising costs delay affordable housing? Ratner won't say

The inaugural issue (Spring 2007) of City Limits Investigates (CLI), the quarterly offshoot of City Limits, concerns the challenges of building affordable housing in a time of steadily rising construction costs. The issue isn't online, so it's worth reading in hard copy, but there is an intriguing passage about Atlantic Yards.

A sidebar headlined PINCHING THE PUBLIC PURSE describes how public agencies and private developers react to rising costs. The Metropolitan Transportation Authority explains that it has included rate escalation clauses in its contracts. The Port Authority has called for "value engineering" in redesigning its projects. And Forest City Ratner--well, the developer won't comment.

CLI reports:
The development by Forest City Ratner Companies (FCRC) is supposed to make 50 percent of its rental units affordable, but the first phase of project--scheduled for completion in 2010--is only required to designate 30 percent of the units that way. Members of Develop Don't Destroy Brooklyn and City Councilmember Letitia James claim rising costs could postpone or derail the second phase of the project, which is due to end in 2016, thus endangering the unusually high affordable housing benefits that the construction promised to provide. Loren Riegelhaupt, a spokesman for FCRC, wrote in an email that he would not comment on "ridiculous speculation by opponents whose only goal is to stop the project."

Going to the record

CLI could have gone beyond the "opponents" and pointed out that much milder critics have questioned the promise, and representatives of the developer have given fuel to doubts. For example, BrooklynSpeaks requests:
Ensure that the proportion of affordable units built in the first phase of the project is the same as the overall proportion of affordable units in the whole project.

Assemblyman Jim Brennan has also questioned the promise, calling for specific guarantees. Those are apparently still unresolved, given questions about the availability of tax-exempt financing. Forest City Enterprises' most recent annual report acknowledges that final documentation of the transactions are subject to the completion of negotiations with local and state governmental authorities...

The annual report also acknowledges:
There is also the potential for increased costs and delays to the project as a result of (i) increasing construction costs, (ii) scarcity of labor and supplies...

And then there's FCE executive Chuck Ratner, who has estimated that the project could take 15 years, not ten, and offered a not very convincing clarification.

Could ACORN, signer of the Housing Memorandum of Understanding, enforce the promise? They'd have to go to court. (No, the developer couldn't simply pay $500,000 and walk away.)

At Atlantic Yards site and environs, a shifting and ghostly landscape

Yesterday, I helped lead a tour of bloggers and photographers around the Atlantic Yards footprint and beyond. (It was the brainchild of Lumi Rolley of NoLandGrab.) You can see some photos at the Flickr Atlantic Yards photostream. In trying to explain the evolution of the site and its environs, it's important to consider what came before.

As I wrote in March 2006, Forest City Ratner’s Atlantic Yards proposal must be seen in context with other nearby projects, many of which did not come into fruition until the past decade, after the area rebounded economically. The blocks north and west of the the railyard--the Atlantic Terminal Urban Renewal Area (ATURA)--have been in various stages of decline, clearance, and renewal.

As the photo above (taken sometime in the late-80s to early 90s, and part of a Forest City Ratner presentation to City Council) suggests, large lots of land north of Atlantic Avenue (the northern border of the railyards) were scars themselves, decades after urban renewal began. Then came the Atlantic Center and Atlantic Terminal malls, and housing developments like Atlantic Commons. Land had to become scarce and costly enough for a developer to target the railyard, which requires a platform for construction. Also, the railyard function must be moved.

Vacant lots

Also, the project site contains several vacant lots, and the number increases as buildings are demolished. In December 2005, a few months before Forest City Ratner gained permission for "emergency" demolitions (a contested issue) of five properties it owned, I took a picture of this building at the northeast corner of Dean and Carlton avenues. The interior, according to the analysis performed by Forest City Ratner's engineer, was in dangerous condition. A judge rejected a challenge, saying the decision by the Empire State Development Corporation to approve the demolitions didn't have to be confirmed. Now, it's a field of rubble, "facts on the ground" that argue for some kind of development.

Fortunately, several photographers have been taking pictures of the Atlantic Yards site and environs. They include Tracy Collins, Adrian Kinloch, Dave (Dope on the Slope) Kenny, Jonathan Barkey (notable for these dramatic photosimulations), Nathan Kensinger, Amy Greer, and Bob Guskind. One of the earliest collections--which captures several long-gone ghosts--was done by Kevin Walsh of Forgetten NY in December 2005.

Arbitrary blight

One contentious issue involves the outline of the Atlantic Yards footprint, notably the 100 feet of the block between Pacific and Dean streets, just east of Sixth Avenue. Is that because the buildings are, in fact, blighted, and the rest of the block is in much better shape, as a lawyer for the Empire State Development Corporation argued last month in court? Or is it because the developer needs that plot of land for parking and construction staging?

I took the photo at right last August. Today, visitors on the Brownstone Brooklyn Garden District Garden Walk will get a chance to see gardens in the backyards of two properties slated for demolition.

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

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

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

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

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

The costs

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

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

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

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

How it works

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

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

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

Coming to a charitable event near you

From the Gowanus Lounge, Forest City Ratner joins a local lineup in supporting the Festival of the Giglio in Williamsburg.

The Ratnerville Singout: targeting Bruce, sampling Stuckey, rhyming Markowitz

Among the many byproducts of the Atlantic Yards project has been a surge of creativity and satire. The Ratnerville Singout, held May 24 before some three dozen people at Freddy's Backroom, was a good example.

Slow and speedy, tuneful and at times spoken word-y, the show comprised an original song cycle devoted to Atlantic Yards and often Forest City Ratner CEO Bruce Ratner.

Perhaps the most subversive tactic was the sampling of one Jim Stuckey, president of the Atlantic Yards Development Group, whose utterances in radio interviews gained a whole new context.

"What do you think of Freddy's?" asked one member of the group Atomic Grind Show, which hosted the show and backed the individual performers. "This is a blighted area," came back Stuckey's sampled response. Also put to use was Stuckey's justification of the developer's right to pursue a profit: "It is, after all, America."

It should air on Brooklyn Versus Bush in a few weeks.

Mostly about Bruce

Chris Owens (political candidate and talented singer) sang a Mellencamp-esque "Do Not Go Gently," Scott Turner (of Fans for Fair Play) rockingly mourned "Brooklyn Is Dying." Atomic Grind Show played a ditty titled "Freddy's is an Escalator Now," a reference to manager Donald O'Finn's prediction of what would replace the bar should the arena be built.

But most of the songs managed to take off on the developer's name, which, of course, is no fault of his own.

The titles included:
"It's a Ratner Day"
"Mr. Ratner"
"Rat King"
"Doctor Bruce Comes to Town"
"Get the Rat Out."

Steve deSeve offered a deft capsule description of his song, "It's a Ratner Day" (sample lyric: "The sun is blocked/by all the buildings"). Citing the infamous "no towers" brochure the developer mailed to hundreds of thousands of Brooklynites, he observed, "If you play the brochure backwards, this is the song."

Some songs worked better than others--there's only so far you can get with a Mad Overkiller-esque lyric like "You bypass the community boards."

Three "Pin the Lawsuit on the Ratner" interludes featured a blow-up of the casual image (above) from the 6/26/05 New York Times magazine interview with Ratner (which lacked any Times-Ratner disclosure).

A single?

Guitarist John Pinamonti's a pro, and his haunting song "Burrow" (as in the magazine) was the most likely to break out into the mainstream.

"They say change is good/and the time is right/but they're the ones/creating urban blight," he sang, continuing, "They don't need no laws/don't need no permits/they just shake the hand/of Marty Markowitz."

The lyrics alone don't do the tune justice, so perhaps Pinamonti will put it up on his web site. Markowitz's opponents in his next political race might find it tempting.

Update June 12

Pinamonti has sent me the "definitive lyrics" (and title), which differ from my notes and, likely, what was performed:

The Burrow

I came up to have a look around
Heard about what they were tearing down
In the Burrow

Some of my friends had to move away
Just to give the Nets a place to play
In the Burrow

Now I don't mind a little basketball
But I do mind when they try to take out all
of the Burrow

Makes me sad, yea it's such a pity
They're trying to rename Brooklyn "Forest City"
No more Burrow

-----------------------------------------

Come on in and see
How it is - how it should be
Don't destroy when you don't know
What lies below, or how deep it goes
In the burrow

-----------------------------------------

They think they're smart, they try to ban our art
But they don't know that we're the heart
Of the Burrow

They say "change is good" and "the time is right"
But they're the ones creating urban blight
In the Burrow

No one seems to notice what they're doin'
Making all this money out of what they ruin
In the Burrow

They're doing more than what the law permits
While they're shaking hands with Marty Markowitz
In the Burrow

-----------------------------------------

Come on in and see
How it is - how it should be
Don't destroy when you don't know
What lies below, how deep it goes
We're the burrow

-----------------------------------------

The guy down the street says he's cashing in
He'd like to stay and fight but there's not way to win
In the Burrow

I said it's not about you and it's not about me
It's about what we do collectively
In the Burrow

-----------------------------------------

Come on in and see
How it is - how it should be
Don't destroy when you don't know
What lies below, how deep it goes
We're the burrow

The unexpected housing boom in Downtown Brooklyn, some curious statistics, and an Errol Louis misreading

The Downtown Brooklyn redevelopment story suggests that markets can be very hard to predict and that the city has prioritized development over equity.

The Downtown Brooklyn Development Plan certified by the Department of City Planning on 12/1/2003, revised slightly five months later, and approved 6/28/04 by City Council, was supposed to give Brooklyn a dramatic boost in competing for back offices lured to New Jersey from Manhattan. The plan was mostly about jobs:
The public investment provided for in this plan would act as a catalyst to generate an estimated 4.5 million square feet of new commercial office space, creating 18,500 office jobs and 8,000 construction jobs. It would add some 1,000 new housing units and result in the addition of new, vibrant public spaces and cultural resources.

Since the plans were formulated at the turn of the decade, however, the regional economy has shifted, and developers instead have found the rezoned Downtown Brooklyn, with new opportunities for density, prime territory for luxury condos. Only about one-third the original amount of projected office space, 1.584 million square feet, is planned, and only one-fifth of that is currently under construction. Oddly enough, Downtown Brooklyn Partnership (DBP) documents count Atlantic Yards office space as already under construction.

Meanwhile, more than 7500 housing units are in process, according to press reports. However, a 4/11/07 summary distributed by the DBP indicated 565 units completed, 1515 units undergoing approval/review, and 8473 units under construction. The latter number, according to the DBP, includes the 6430 units at Atlantic Yards, which, under the best-case scenario, would take a decade and still face legal hurdles; the AY territory is actually outside the area that was rezoned but DBP considers the project within its bailiwick.

The Village Voice, echoing the views of some businesses facing eviction and activists seeking more public benefit, points to the contradictions in the city's plan. Joe Chan, president of the DBP, looks on the bright side, suggesting that there are opportunities for new "creative" industries. And Daily News columnist Errol Louis, ignoring the contradictions, sees only positives, a posture reminiscent of his Atlantic Yards cheerleading.
(At right, the future Willoughby Square, according to the Department of City Planning.)

Pointing to the irony

Neil deMause's Voice article, headlined On the Outs in Brooklyn: The city's complicity behind the borough's soaring eviction rate, points out the irony:
"There was no constituency that had a vision of downtown Brooklyn as a high-rise bedroom community," notes Robert Perris, the district manager of Brooklyn's Community Board 2, which covers Brooklyn Heights, downtown, and Fort Greene. "Even people that were pro–economic development are disappointed that what we've gotten instead are 40-story residential buildings."

That's because, however much such buildings contribute to short-term construction jobs, additional retail customers, and street life, they don't produce the nearly the economic boost that jobs do (see, for example, the fiscal impact of slicing office space from Atlantic Yards plans).

Also, the city didn't think to try to extract affordable housing as a tradeoff for giving developers more space to build. The failure to do so makes the privately-negotiated affordable housing component of Atlantic Yards seem more enlightened, though arguably any public process regarding the Metropolitan Transportation Authority's Vanderbilt Yard would have included some affordable housing, and would have publicly tried to balance the tradeoff between increased density and stress on local infrastructure.

Office space challenge

As has been previously reported, the office market is in trouble, and the Voice follows up:
The Brooklyn commercial market has stubbornly refused to rebound; MetroTech itself saw both JP Morgan Chase and Empire Blue Cross move out last year, leaving some 350,000 square feet of vacant floor space. Chan, looking on the bright side, told the Real Deal recently that this presented "a real opportunity to draw in new industries." Chan tells the Voice that the "renaissance" of the surrounding neighborhoods of Brooklyn Heights, Boerum Hill, and Fort Greene presents special possibilities, creating "a residential base that translates well to the employee base" of "creatively driven industries" like graphic design and architecture.
(At right, a revamped Flatbush Avenue median, according to the Department of City Planning.)

deMause also points to "the incestuous nature of the planning process," involving public-private organizations led by staffers who worked for Deputy Mayor Dan Doctoroff or Borough president Marty Markowitz.

Defending development

Council Member David Yassky defends his vote for the plan, saying it was to keep businesses from moving to New Jersey. The changes in Downtown Brooklyn, he says, have less to do with zoning than market forces.

However, deMause points out the hand of government:
It's a market, though, that was largely created—or at least abetted—by the city's own rezoning. "We had a significant jump in developable floor-area ratio in some of these areas, so some of these buildings would not have gone up without that incentive," says CB2's Perris. "When you increase the size of the building by 50 percent, it changes all the numbers."

The city's ability to create tremendous wealth for landowners simply by tweaking a few floor-area ratio numbers is one reason many urban-planning advocates have pushed for something called "inclusionary zoning," in which developers must agree to provide a certain percentage of affordable housing in order to exceed the existing height limits.

Activists in Williamsburg and Greenpoint later got inclusionary zoning as part of the rezoning there, but there was no organization to push for it in Downtown Brooklyn--arguably, few were anticipating housing--and Brad Lander, then head of the Fifth Avenue Committee (and now of the Pratt Center for Community Development) tells deMause that a Downtown Brooklyn Council official suggested the city wouldn't buy it.

(At right, another example of how plans change; the Department of City Planning included a rendering of the Brooklyn Public Library's planned Visual and Performing Arts Library, aimed for the wedge of land just west of the Williamsburgh Savings Bank, and part of a planned Brooklyn Academy of Music cultural district. That library plan is on hold, and does not even appear on the DPB's map at top.)

Louis's take

In the Daily News yesterday, columnist Errol Louis wrote Yes, in my backyard: Atlantic Yards is one plan that will boost jobs & housing downtown:
Almost lost in all the hoopla over Atlantic Yards - the junk lawsuits, futile protests and other antics of the project's publicity-hungry opponents - is the fact that an even larger, more dramatic cluster of homes, office towers and hotels is already rising a mile away, in downtown Brooklyn.

(Perhaps he can't be blamed for the headline that refers to Atlantic Yards rather than Downtown Brooklyn, but his disparagement of "junk lawsuits" might be news to the state judge and federal judge who seem to be taking them seriously.)

He writes of the new development:
That's far more than the $4 billion sports arena and housing complex planned for Atlantic Yards. And plans call for more than 7,700 residential units and 1,253 hotel rooms, dwarfing the 6,430 condos and apartments slated for Atlantic Yards.
The explosion of new development, set off by a sweeping rezoning approved by the City Council years ago, will alarm those who'd like to freeze the area's rent, income, building heights, shopping choices and quality of life where they are right now.

While more than 7700 residential units may be planned by developers, they certainly weren't part of the city's plan and projections, as detailed above. And Louis sets up a straw man, suggesting that critics and opponents of the Downtown Brooklyn plan are NIMBYs living in the past; the challenge is equitable development.

Without pointing to the issue of inclusionary zoning, Louis points to one downtown project that will provide 200 housing units for the formerly homeless and another, with 50 low-income units in Bedford-Stuyvesant, as part of a deal to build a luxury building downtown. The question, again, is the balance.