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Missing from the Blight Study: documentation, as planned, of rents and assessed value trends

Remember the 5/3/07 oral argument in the lawsuit over the Atlantic Yards environmental review? In response to the petitioners' contention, based on newspaper articles and citations of recent and new development, that the area in and around the AY footprint was undergoing redevelopment, the Empire State Development Corporation (ESDC) called that claim speculative.

“OK, let’s compare our analysis to the market analysis they did,” petitioners' attorney Jeffrey Baker said sardonically. “Sorry, I can’t. They never did.”

The ESDC called recent condo conversions "isolated redevelopment" and Supreme Court Justice Joan Madden, in her ruling this past January, agreed, calling it "insufficient to outweigh the ample evidence of blight conditions documented in the Blight Study."

Market study to be included?

Now that the case is under appeal, it's interesting to note that, according to the Contract Scope (PDF, 25MB) for the environmental review to be performed for the ESDC by consultant AKRF, there were, it seems, plans for something of a market study. (I received the Contract Scope via a Freedom of Information Law request.)

The blight study was to:
A. Determine the study area for analysis of blight conditions and prepare and draft criteria that will be used as the basis for the blight study area, in consultation with state and city agencies, including ESDC and DCP.

(Note that there's no evidence the study area changed from Forest City Ratner's map.)

B. Document blighted conditions, including the following:
--Analyze residential and commercial rents on the project site and within the study area
--Analyze assessed value trends on the project site, and compare to sample blocks with comparable uses in the study area, such as the Atlantic Center
--Describe residential and commercial vacancy trends
--Compare current economic activity on the project site, such as direct and indirect employment, with relevant surrounding sites
--Review New York City Police Department (NYPD) crime statistics for the affected area; and
--Identify physical conditions, including New York City Department of Buildings (DOB) building code and other pertinent violations (e.g., New York City Fire Department, Department of Environmental Protection, etc.), and determine Certificate of occupancy compliance on the project site.

Blight characteristics

The Contract Scope states:
The characteristics of blight can include, but are not limited to: Physical deficiencies (insanitary/substandard building conditions, building/housing/fire code violations, site vacancy or underutilization), economic deficiencies (building vacancies, low rents, high rental turnovers) or other deficiencies (incompatible land uses, multiple ownerships that hamper assemblage of properties, traffic congestion, pollution). Taken together, these characteristics may demonstrate that the area under study is substandard, insanitary, or deteriorating.

What the Blight Study said

As far as I can tell, the Blight Study did not analyze rents or assessed value trends, as planned, though the issue was mentioned in one sentence.

For each property in the Blight Study, the status of "Location, Use, Zoning, and Ownership" was described, then assessed under the following criteria of blight:
Unsanitary and Unsafe Conditions
Indications of Structural Damage
Building Code Violations
Vacancy Status
Environmental Concerns

Other sections include a highly-suspect crime study, an extensive projection of the benefits of Atlantic Yards, and some cursory observations about the current site.

Multiple site ownership

From the Blight Study, one paragraph in Section F addressed diversity of ownership and sales/rents:
The condition of multiple site ownership has hindered site assemblage and impeded the sound growth and development of the overall project site. As noted above, the proposed project site contains a multitude of properties where conditions are substandard or insanitary. The diverse ownership of these properties has impeded correction of these substandard conditions for many years, leading to substantially lower sales prices and rents for most properties, and thus lower revenue generating potential for the City.

There's no documentation of sales prices and rents, however, nor any acknowledgement that a rezoning could generate activity and raise revenue as well.

Low density

Section E of the Blight Study noted low residential density:
Together, the 29 businesses and institutions provided approximately 300 jobs. Residential development on the site is also sparse. There are only 171 housing units located on the 22-acre project site. This translates to an average of 13 housing units per acre, compared to approximately 52 units per acre in the ½-mile area surrounding the project site, and an average of approximately 24 housing units per acre in all of Brooklyn.

Well, given that nearly 40% of the site is a railyard, and other chunks of the footprint (e.g., P.C. Richard and Modell's at Site 5) are industrial or commercial and thus not zoned residential, a low residential density is not surprising. Again, the results of a potential rezoning are not suggested.

The Contract Scope pages


  1. That documentation of the trends in real estate values is missing from the blight study even though the contract for the blight study called for it to be part of that study aligns with so many other indicators pointing strongly to what is almost undeniably true: The study was prepared as an advocacy document to promote the developer’s plans rather than as a neutral document prepared for evaluative purposes.

    Think about the way these contracts are executed. This AYR post makes it impossible not to think this through. AKRF’s contract for the environmental review was a $4.78 million contract. Even considering the contract’s “official” lower starting amount of $1.5 million, it was a big contract. Work on a contract like this starts out with a check list. The checklist is essentially a transposition of every nit of the contract. People are probably cutting and pasting the text of the contract using word processing software into the checklist to create it. The checklist is the easy part. Nothing falls off the checklist by accident.

    Yes, the fact that something so important called for by the contract is not provided in fulfillment of the contract is not an accident. If the trends in real estate values actually indicated blight they would have been included in the study. They would not have been “excluded” because they would not have fallen off the checklist. They would also not have been “excluded” because if there was real blight manifesting in this fashion, people visiting the site would have had a sense that this was an important part of the story to remember to tell.

    (As the accompanying AYR post of this same date reports, the scope of the blight study received extra attention when it was revisited with an expansion of work for the blight study that was approved with a contract increase 4/27/2006- In other words, more funding was provided for AKRF to redouble its efforts to find blight. The contract increase at the time was more than one third of the original contract and was quickly followed, not quite five months later (9/20/06) with an even bigger contract increase, almost doubling the already increased contract. One must wonder whether some of that second increase related back to the immediately preceding changes including the redoubled efforts to find blight. Again, what was left out of the blight study was NOT oversight.)

    Leaving the trend information out of the study reflects a tactic of “elision.” “Elision” is what you do when addressing something would be to your disadvantage, and when saying you are NOT addressing it would similarly call attention to a problem best left unaddressed. So you simply “elide” the issue by leaving something out hoping the elision will not call attention to itself. The tactical elision bespeaks the fact that this is an advocacy document, not a neutral study.

    Would ESDC personnel have caught the fact that this part of the checklist was unfulfilled? Maybe not. If there was a sense that real estate values were trending toward blight, an omission would most likely have been caught. If the contract were being administered with checklist precision it would also have been caught. In either of these situations, ESDC personnel would have had to discuss the tactical elision with AKRF. In either such case we would have to infer ESDC’s collusive participation in the tactical elision from the final outcome.

    Perhaps the contract was not administered with such checklist precision. Contracts are not always administered in this careful way, but if it wasn’t administered with this level of care that doesn’t mean that ESDC personnel weren’t supporting production of non-neutral advocacy document. A state agency might have administered the contract from the standpoint that the delivered report seemed generally on target with what was desired. AKRF’s competence might have been assumed together with certain things about AKRF’s motivations. When it comes to keeping track of motivations there is always a ‘vibe’ about what is going on and how people are interacting and relating: It tends to have a lot to do with money flow. What should state personnel have assumed about AKRF’s motivations? Should they have assumed that AKRF was motivated to produce anything other than an advocacy document? Probably not. And that has a lot to do with how this huge and important contract was given to AKRF without bid as a result of Forest City Ratner’s initiative. For more on this see my comment on the other AYR post that went up with this one. (See: Friday, August 15, 2008, “Was AKRF's work for Ratner a hindrance to hiring by ESDC? No, it was a justification.”

    Michael D. D. White
    Noticing New York


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