Tuesday, May 13, 2008

In Yonkers, the feds investigate aspects of Ratner's Ridge Hill deal

What critics consider a sweetheart deal regarding Atlantic Yards hasn't provoked investigation into any wrongdoing. It was presented as a fait accompli fast tracked by the Empire State Development Corporation, rather than debated in public by local officials. In Yonkers, however, the curious twists and turns of Forest City Ratner's $630 million, 1000-apartment, 81-acre Ridge Hill project (above) have generated a federal investigation.

A New York Times article May 5, headlined U.S. Investigates Yonkers Development After Official’s Surprising ‘Yes’ Vote, described how Yonkers City Council Member Sandy Annabi once pronounced that developer Forest City Ratner was “probably richer than God” and was “robbing the city blind,” and served as the lead plaintiff in a 2005 lawsuit objecting to the city's approval process--but then did an about-face in 2006, providing "the crucial fifth vote" on the project.

Now, reported the Times, federal prosecutors are investigating the development deal and leaning toward indicting Ms. Annabi, a 37-year-old Democrat, on corruption charges or other misconduct, according to a person involved in the investigation.

The feds are investigating not just Ridge Hill but other city decisions and deals, and perhaps others in Westchester County, including Zehy Jereis, the former Republican Party chairman in Yonkers and former FCR lobbyist Albert J. Pirro Jr., estranged husband of the county's former district attorney and a lawyer who saw his license suspended after committing tax fraud. (It's been reinstated.)

Annabi's lawyer said she's clean. A spokesman for Forest City Ratner said they're cooperating. Pirro told WNBC:
"I have absolutely no reason to believe that I am a target of any investigation since I had absolutely nothing to do with the vote," he said. "I had not worked on the aspect of the project that had to do with the Yonkers City Council vote after Dec. 31, 2005."


Benefits and process

The Times reports:
Promoters say it will create 4,000 permanent jobs and generate some $20 million a year in property, sales and income tax revenues for Yonkers. But from the start, some questioned the way the project was fast-tracked.

The same questions have been raised about AY.

Vote justification

The Times reported:
In a news release at the time of her vote switch, Ms. Annabi cited 11th-hour negotiations with Ratner over property taxes, in which she said she was able to wring out millions of additional dollars. Later, it became clear that some of the promised riches had little chance of being paid because of fine print in contracts that Ms. Annabi said she never saw.

Well, many of the riches projected by Atlantic Yards backers were vastly overstated, given flaws in the cost-benefit analysis, increased public costs, and delays in the project.

Payoffs possible?

The Times hinted that there might be payoffs:
People involved in the inquiry said that the authorities had expressed curiosity about how she could afford multiple mortgages and drive a white Mercedes convertible on her hospital salary and the $41,000 she earns as a council member. One person interviewed, who insisted on anonymity to avoid angering prosecutors, said that the first question the assistant United States attorney, Perry Carbone, asked him last month was, “Where does Sandy Annabi live?”

Annabi faces possible indictment on mortgage fraud charges, the Journal News reported May 8.

Ratner tactics

The Journal News on May 6, in an article headlined Forest City Ratner lobbying campaign for Ridge Hill detailed, reported some additional details:
The outcome of that night's vote in 2006 on Ridge Hill seemed a foregone conclusion: The zone change required for the disputed $630 million complex already had the support of a fifth member of the City Council needed for its approval.

That made the call from then-Republican Party Chairman Zehy Jereis, offering a meeting with the developer on the afternoon of July 11, so unusual, Councilman John Murtagh, one of two holdouts, recalled yesterday.

One month earlier, Sandy Annabi, an opponent of the plan, had announced she would support the development when Forest City Ratner agreed to make an additional $10 million in payments to Yonkers over three years.

"They spent the better part of an hour - primarily Zehy - trying to convince me that I should vote in favor of the project because Sandy was going to vote for it. (They said) 'It's going to pass anyhow,' so I should get on board," Murtagh recalled of the previously unreported meeting, which also included Forest City Executive Vice President Bruce Bender. "I thought it was strange."

Strange on multiple fronts, said Murtagh, R-5th District: The developer did not propose anything new to make the plan more palatable; Murtagh previously had sued to overturn an earlier approval of the project; and his vote was no longer needed.


FCR, the newspaper reported, would not talk about or confirm the meeting. So much for, as DDDB likes to point out, the developer's not-so-reliable pledge of sharing information with the public and governmental bodies.

Murtagh also told the newspaper he'd been to three Ridge Hill-related meetings with Pirro in 2005 and in 2006. (Remember, Pirro said he was not involved after 2005--or maybe that careful statement allows for such meetings.) At the second and third meetings were other Forest City Ratner representatives. The article stated:
Typically the meetings amounted to Pirro asking the council members about their concerns and what would be needed for them to support the project, he said.

"The one thing I can tell you is I didn't see anything that they discussed that was going to change my vote," Murtagh said, "but I can tell you I didn't see anything untoward."


A lobbyist involved?

The Journal News reported May 10 that prosecutors have issued a grand jury subpoena to Assemblyman Michael Spano:
After he left the Assembly in 2004, Spano worked for the Patricia Lynch Associates lobbying firm, which has Forest City Ratner as a client. He said he was asked in 2005, because of his knowledge of Yonkers, to speak to city officials to gauge their views and objections to the project. He said he spoke to council members Annabi, Dee Barbato and John Murtagh.

His dealings were "strictly informational," he said. He did not lobby them, he said, but just relayed the information to his firm.

"No one at any time did anything inappropriate that I am aware of," Spano said.


When we look at Forest City Ratner's record as number eight in state lobbying in 2007, Ridge Hill has to be part of the equation.

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