Atlantic Yards opponents gain procedural edge in court, with arguments delayed until September

The potential timetable for building the Atlantic Yards arena just got pushed back a bit more, with the 2011-12 season now a more likely best-case scenario.

Without explanation, a state appellate court has rejected the request by the Empire State Development Corporation (ESDC) and developer Forest City Ratner (FCR) that the appellate arguments in the case challenging the Atlantic Yards environmental review be heard before this summer. (The decision, dated Feb. 26, was received today by the parties.)

Instead, the five-judge panel of the Appellate Division, First Department, ordered the petitioners, whose case was denied by Judge Joan Madden in a ruling January 11, to file their legal papers by July 7, in anticipation of the court hearing oral arguments in the September Term.

The defendants, as expected, did see the court deny the petitioners' motion for a preliminary injunction to block the demolition of the Carlton Avenue Bridge.

But the court's timetable for the appeal represented an implicit denial of fervent arguments made by the ESDC and FCR.

Arguments for speed

ESDC attorney Philip Karmel had argued, "Delay in construction would delay completion of the Project, postponing it significant public benefits. It is thus critically important that the appeal be perfected so as to be argued before this Court's customary summer recess."

FCR attorney Jeffrey Braun had written, "The issue presented by ESDC's cross-motion is straightforward: Is the public interest in the Atlantic Yards project of sufficient importance to compel the parties to brief this appeal on an expedited schedule that will allow this Court to hear the appeal this spring? The answer to this question is, resoundingly, yes."

Braun continued, "Petitioners make no commitments as to when they will perfect this appeal. Instead, all that they say is this: Currently, it is anticipated that the appeal will be perfected approximately three to four months after the Notice of Appeal was filed on January 18, 2008."

(That would be, at the latest, May 18, 2008.)

"Even if this equivocal non-commitment is viewed as a commitment, it would mean that, at the earliest, the appeal would be heard by this Court during its September 2008 term, which is approximately seven months from now," Braun stated. "This case should not be treated in such a lackadaisical manner."

Braun pointed to the apparent contradiction in the petitioners' asking for what they believe to be sufficient time to file the appeal and the contention that construction work on the site represents irreperable harm: "If the petitioners truly believed that the work was causing irreperable harm, they would be perfecting this appeal expeditiously and pressing for a prompt determination."

Precedent, or evaluation?

The court didn't offer any explanation for its procedural ruling, so it's unclear whether the judges were simply drawing on precedent regarding similar cases or making a judgment regarding the likelihood of the public benefits, given other factors also causing delay, such as the credit crisis and the difficulty in getting bond financing for the affordable housing.

It's not clear how much the timetable has been pushed back. It might take two years to build the arena, once construction starts, but it would be unwise to open the arena until bridges around it have been reconstructed, a three-year process likely not complete until January 2011.

In a best-case scenario, a ruling on behalf of the defendants next fall or winter, would have to be coupled with the U.S. Supreme Court's unwillingness to hear a challenge to the eminent domain case, as well as a dismissal of the emiment domain plaintiffs' effort to bring the case to state court.

That would have to be followed by condemnation proceedings to acquire remaining property and those buildings would have to be demolished.

Nets to Newark?

In other words, the 2011-12 season in Brooklyn may now be the realistic best-case scenario for the opening of the Barclays Center, leaving the Nets three more years in the Izod Center, where crowds have been sparse.

Could Bruce Ratner and fellow team owners be thinking a bit harder about the option of moving--[updated] at least temporarily--to the Prudential Center in Newark? It would cost them a significant penalty as of now, but state officials in New Jersey, thinking they might have a chance of keeping the Nets, might be amenable to negotiation.

The city's pension funds finally take on "predatory equity"

When in November, I reported on a conference where participants discussed the practice of "predatory equity"--investment funds making speculative investments in rental housing, intending to raise rents significantly--I was astonished that only the grassroots policy publication City Limits had previously covered the story.

After all, housing advocates had discovered that city pension funds had a stake in such investment funds. Politicians like City Council Member Letitia James weren't making a huge case about it, either, apparently waiting to get New York City Comptroller William C. Thompson and the city pension funds on board.

New policies

Yesterday, the above parties, as well as other elected officials and housing advocates held a press conference in which they announced a new residential real estate investment principle:

* Engaging building management to ensure fair treatment of tenants, especially in instances when ownership changes;

* Creating an “investment opt-out,” under which the Pension Funds can decline investing in individual properties that might adversely affect tenants and affordability; and,

* Encouraging new affordable housing opportunities to be presented to the Pension Funds in response to their open RFP for Economically Targeted Investment (ETI) Programs, which would protect and preserve the affordability of buildings. ETI objectives are to provide the Funds a market rate of return that is commensurate with the risk assumed, to fill capital gaps in New York City, and to provide specific quantitative or qualitative benefits to New York City and, in particular, its low-, moderate- and middle-income communities and populations.

It should go without saying that this would have more of an impact on affordable housing than the delayed units promised for Atlantic Yards.

The change in the Senate and the stakes for housing

The special election Tuesday to elect a State Senator in the 48th Senatorial district reduced the Republicans margin to 32-30, with several vulnerable Republicans expected to face tough competition in November. Portrayed in the press as a victory for Gov. Eliot Spitzer--and it is--the ramifications for New York City may be felt most sharply in the area of housing.

"The election today may change how we look at the rent laws," Manhattan Borough President Scott Stringer said at a housing panel at the New-York Historic Society on Tuesday, when the results of the election had not yet surfaced.

Since 1971, the legislature, not the City Council, has held the most power over rent regulation, thanks to the Urstadt Law. A Democratic legislature, with a Democratic governor, will be far more receptive to maintaining and strengthening rent protections, and restoring "home rule."

While rent regulations are always an issue for debate, it's pretty hard to argue against, for example, acknowledging the effects of inflation. Tenants and Neighbors reports:
As a result of changes to the rent laws between 1993 and 1997, landlords can permanently deregulate any rent regulated apartment when it becomes vacant, provided they can push the new rent over $2,000. This provision in the law, called high-rent vacancy decontrol, is an incentive to landlords to push out tenants so that apartments can be removed from rent regulation forever.

$2000 was once a very high rent--not so much today. Had it been indexed to rental inflation when established in 1994, it would be over $3300 today.

AY affordable housing a myth? Better to call it delayed

Like a game of "telephone," in which a message gets mangled as it gets passed from one party to another, the Atlantic Yards affordable housing story grows ever murkier.

The New York Observer's summary yesterday:
Federal funding crunch means Forest City Ratner won't be able to build 3,000 affordable-housing units at Atlantic Yards, fulfilling the prophesies of its opponents. [Brooklyn Paper]

But the Brooklyn Paper article reported only that a federal cash crunch threatens the promised 2250 units of affordable housing, adding some more voices to a story I reported a week ago.

That doesn't mean the promised affordable housing is dead. After all, a Democratic administration in Washington just might allow a state like New York much more capacity to authorize tax-exempt bonds.

The value of delay

And the clogged funding pipeline may make the delay caused by lawsuits that much more palatable, no matter how much Forest City Ratner protests. (Forest City's priority is the arena, which comes with a $400 million naming rights deal.)

Either way, the ten-year plan to build 2250 affordable units almost certainly won't be fulfilled by the 2016 timetable announced when the project was approved. It could take another five years, or ten, or longer, and Forest City is a patient company when it comes to big projects. In fact, if you take December 2003, when the project was announced, as the starting date, the delay stretches further.

Escape clause?

The Brooklyn Paper reported inaccurately (and in an editorial) that Atlantic Yards developer Bruce Ratner could get out of the affordable housing promise by paying a $500,000 penalty.

The Paper's correction: In fact, under the Community Benefits Agreement, there is no penalty if Ratner does not build the units.

That's not the full story. As I reported in September 2006, the CBA provides for binding arbitration, as well as the opportunity to go to court to enforce the agreement.

An ACORN spokesman told me:
I can safely say that if the MOU were not fulfilled ACORN could seek injunctive relief. The legal standard for obtaining this kind of relief is (a) likelihood of success on the merits and (b) irreparable injury if FCR were to proceed without compliance which cannot be satisfied with monetary damages. While courts tend to favor monetary damage remedies, we believe we have a strong legal argument for injunctive relief since the goal of the parties to the CBA is community benefit rather than financial gain and it would be difficult to quantify the damages arising from the breach in financial terms.

That could get complicated, since Forest City Ratner could say it wanted to build the housing but just couldn't get the bonds. And I've been told by Empire State Development Corporation officials that state documentation also would lock in the affordable housing, beyond the CBA--though no such documentation has yet emerged.

Either way, "no penalty" seems to me a significant shorthand for a process that might leave Forest City Ratner with some major obligations.

Driving Miss Brooklyn, a troubled Brooklyn condo market?

Apparently Forest City Ratner's decision to shift flagship Atlantic Yards tower Miss Brooklyn from condos to office space was based on discernible trends in the industry. (Then again, things can change, given that Miss Brooklyn was supposed to be office space when announced in December 2003.)

In yesterday's New York Sun, real estate columnist Michael Stoler suggested that many in the real estate community see a growing divide between the luxury market in Manhattan and some of the more speculative projects in fringe areas.

The Atlantic Yards project wouldn't exactly be located in a "fringe area," but at least one Brooklyn developer offered some general cautions:
A principal of Troutbrook Company, Marc Freud, said: "The past five years has been the era of ever increasing prices of condominiums in downtown Brooklyn, DUMBO, and many parts of Williamsburg. That era has now ended, with the for-sale condos in the 750- to 1,000-square-foot mark stalled, and pricing decreasing by as much as 15% to 20%. The overamenitizing of certain developments in these areas has done little to compel the buyer today to sign a purchase contract."

Fun fact: Freud was the developer of the Atlantic Arts Building, a converted warehouse home to Atlantic Yards uber-opponent Daniel Goldstein.

The UNITY plan expands, and will be up for discussion

The UNITY plan for the Metropolitan Transportation Authority's Vanderbilt Yard was unveiled in September, the project web site was re-launched in mid-January, and there's a public meeting Saturday, from 10 a.m. to 2 p.m., to update people and seek further input on UNITY.

The discussion will broaden to more of the Atlantic Yards footprint rather than just the 8.5-acre Vanderbilt Yard.

Indeed, when the graphic at right was unveiled, it raised some questions. Why was the triangular plot of land west of Fifth Avenue included and planned for park space, given that it's not part of the yard.

Urban planner Tom Angotti of Hunter College, one of the designers of UNITY, responded, "As a practical matter, Forest City Ratner owns most of the land and much of it is vacant. Its location is important, and leaving it out of the plan would lead to questions about what to do with it."

That, of course, would require the developer to both abandon its project and, if so, to give up piecemeal development.

Site 5 too?

Angotti added, "As a side note, I am going to propose that the next UNITY workshop consider incorporating Site 5 (Modell's, P.C. Richard and the Brooklyn Bears Garden) in the park, thereby dramatically changing the character of the area. The two stores could be easily relocated (and are slated for removal anyway)."

"The park would be compatible with the Bear's Garden and relieve it from its isolation," he added. "This is my idea alone; I don't mind it being publicized but it should be attributed to me and not UNITY or anyone else since we haven't discussed it."

Given the traffic surrounding it, I asked, what kind of safeguards regarding noise and pollution would be necessary to make it work as outdoor park space?

Angotti responded, "UNITY calls for traffic reduction on the major arteries that converge there, so the noise and pollution resulting from traffic would be sharply reduced. In addition, design measures can be used to buffer the most actively used portions of the park from traffic and noise. We're calling for bicycle lanes on Flatbush and Atlantic, and they can be part of the solution."

Big contrast

What's clear is that two very different visions have emerged. While the UNITY plan would add significant residential density (1500 units over eight acres would be 187.5 units/acre, compared to 6430 units over 22 acres, or 292 units/acre), it would concentrate the tallest buildings at the east end of the site, near Vanderbilt Avenue.

It would place a park at the congested intersection of Atlantic and Flatbush avenues, while Forest City Ratner's plan would have an Urban Room, which will serve as a subway entrance and an entrance to the arena and arena block buildings, while housing an atrium, retail, and Nets ticket windows.

In the Empire State Development Corporation's General Project Plan (p. 10) suggests that the western-most portion of the Arena Block presents the most significant potential for mixed use and commerical development due to its location on the two major commercial arteries (Atlantic and Flatbush Avenues) and its ability to connect direclty to the Atlantic Avenue/Pacific Street subway station. In addition, Site 5... also has high potential for either commercial or residential development, while providing a transition (in height and scale) to its surroundings.

...The Project would create a new neighborhood context along the Atlantic and Flatbush Avenue corridors in keeping with the stature of these streets as two of the principal (and widest) routes through the borough.

And while Angotti sees Site 5, bounded by Fourth, Flatbush, and Atlantic avenues and Pacific Street (and row houses on the south side of Pacific), as potential parkland, the City Planning Commission, in its 9/27/06 endorsement of minor modifications to the Atlantic Yards plan, wrote:
Site 5, located on a site bounded by Atlantic, Fourth and Flatbush avenues, is proposed for a height of 350 feet and to contain approximately 572,000 zoning square feet. The Commission recognizes the prominence of this site, which is located across from both the Williamsburgh Savings Bank and Building 1 of the Arena block, as well as directly adjacent to the low-rise buildings west along Atlantic Avenue and the terminus of the Fourth Avenue corridor. The Commission believes that Site 5’s height should be carefully assessed within this context. Given this location, the Commission therefore recommends that Site 5 be reduced to a height of 250 feet with a reduction of approximately 180,000 zoning square feet to approximately 392,000 zoning square feet in order to provide a more varied composition of building heights and to provide a stronger transition to the Fourth Avenue corridor to the south.

This was the only cutback recommended that has apparently not been proposed by Frank Gehry nine months earlier.

So, why didn't Forest City Ratner announce the cut planned for Miss Brooklyn?

It seems that the flagship Atlantic Yards tower Miss Brooklyn has been cut in bulk, from 908,144 square feet to either 528,000 square feet or, perhaps, with the addition of a hotel of 164,652 square feet, to 692,652 square feet. (It was originally announced at 1.1 million square feet.)

A reduction in some bulk was inevitable, given that the building, once projected to be 620 feet tall, was cut, as the project was approved, to be a sliver below the 512-foot Williamsburgh Savings Bank building.

So why did Forest City Ratner tell investors but not the public? FCR is smart at public relations, so its leaders had to be waiting. And what might they have been waiting for? I can only speculate:

• Perhaps the building would be even shorter than the anticipated 511 feet, and would no longer block the bank's iconic clock.
  
  
• Perhaps the developer was simply waiting until construction could begin, with the lawsuits cleared. A reduction in bulk might be seen as magnanimous.
  
  
• Given that a less bulky building would be seen as a concession, perhaps Forest City Ratner was waiting until it faced a significant public relations setback, such as a loss in court.
  
  
• Perhaps FCR was waiting to let Brooklyn Borough President Marty Markowitz announce the cut, and the BP's waiting to decide whether it would boost his undeclared mayoral hopes.

Numbers murky

The numbers are still murky, given that the cut in bulk does not seem commensurate with the cut in height.

As I wrote yesterday, a reduction to 528,000 square feet would be a more than 40% cut in bulk, while the height of the building was (seemingly) reduced only 18%, from 620 feet to 511 feet. Include the hotel and the cut in bulk is less than 24%. Maybe the building is getting a little shorter, too.

Then again, there was no cut announced between the figures of 1.1 million square feet and 908,144 square feet, so maybe there's some slack in the building program that was never explained.

So it would be good to get an official word.

Democracy Now? Ratner Plays Hardball When It Counts

I threaded together some reporting and commentary I've done for the blog into a piece for this week's Brooklyn Downtown Star, headlined Democracy Now? Ratner Plays Hardball When It Counts.

It covers the Atlantic Yards gag order, Michael Ratner's political contributions, Forest City Ratner's contribution to the Democratic Assembly Campaign Committee's Housekeeping account, and the New York Times's editorial standoffishness.

Would the AY arena get a billion-dollar subsidy?

Take a look at the long comment posted by lawyer and planner Michael D.D. White, contending that the Atlantic Yards arena would represent a $1 billion subsidy.

I can't confirm it. But I sure think it deserves a closer look.

FCR official: no such thing as too much sharing of information

From today's New York Observer article, Blame It on Eminent Domain! Ratner Pays D'Amato, on Forest City Ratner lobbying, which breaks the news that the firm had hired former Sen. Al D'Amato to lobby [corrected] against anti-eminent domain legislation in Washington:
In a statement, Forest City said it strives for transparency with its lobbying reports, suggesting an explanation for the high numbers. “When it comes to lobbying reports, we definitely err on the side of disclosure, including even law firms that do work for us,” Forest City spokesman Loren Riegelhaupt said in a statement. “When it comes to sharing information with the public and governmental bodies, there’s no such thing as too much, as far as we are concerned.

OK, then, how big would Miss Brooklyn be? And why no comment on the slush fund story?

AY scaleback? Well, at least Miss Brooklyn, apparently

As I wrote yesterday, the evidence from the transcript of Forest City Enterprises' "Investor Day" last October suggested that "the size of the project may have been reduced" and "the flagship Miss Brooklyn tower has apparently been trimmed." But I didn't put them in the headline or lead sections because the evidence was murky.

But the potential scaleback was apparently the news of the day, as Brownstoner declared in a headline, Atlantic Yards Scope Trimmed; Funding Still Fuzzy and commenters piled on, suggesting that the affordable housing would be cut, even though a company executive said in the transcript that "we are committed to creating [the 2250 units] over the life of the project."

Miss Brooklyn cut

And if Miss Brooklyn no longer would contain condos, as Forest City Ratner officials seem to have confirmed, part of a reduction in total bulk as well as a tradeoff for office space. The loss of some 435,000 square feet of condo space suggests a reduction in planned residential units from 6430 to about 6000, assuming an average of 1000 square feet a unit.

That means the project's residential density would go down, as well, from 292 apartments/acre to 273 apartments/acre.

Indeed, as I should've pointed out yesterday, just before Atlantic Yards was approved in December 2006, Miss Brooklyn was reduced in height from 620 feet to shorter than the 512-foot Williamsburgh Savings Bank. That implies some reduction in square footage. I kept asking about the revised bulk, but never got an answer.

And it's not clear whether the building would still contain a hotel, as originally planned.

(Update) To clarify, FCR officials described the building as 528,000 square feet "of zoning rights." It was to have 908,144 square feet. A hotel would add 164,652 square feet to 528,000 square feet of condos, but the use of the term "zoning rights" implies an overall cap. Then again, a reduction to 528,000 square feet would be a more than 40% cut, while the height of the building was reduced only 18%, from 620 feet to 511 feet. Include the hotel and the cut in bulk is less than 24%. Maybe the building is getting a little shorter, too.

Crain's confirms, sort of

Later in the day, Crain's New York Business weighed in, in an online article headlined Atlantic Yards quietly scaled back? A representative of the developer asserted that the project had not been scaled back but acknowledged that Miss Brooklyn had been cut.

There's a gap there. As I commented on the Crain's site, If "the square footage adds up to what was previously projected" and Miss Brooklyn has "smaller square footage," then where has the developer *added* square footage to stay at square one? The evidence suggests there's been a reduction of a couple of hundred thousand square feet, but until full dimensions of the project are released, we can't be certain.

A company rep confirmed that, as I had suggested, the discussion in October had omitted the portion of the project at Site 5, hence the omission of one building and a significant amount of square footage.

Signed agreements?

According to the transcript, FCR Executive VP MaryAnne Gilmartin said, “In June of 2007, we received [a] favorable decision on the Federal eminent domain lawsuit, in September of 2007, executed critical funding agreements with the City and State of New York, which allow us to be reimbursed for investments made in infrastructure and land to date on the project.”

That seems to contradict some public statements, as I noted. Crain's followed up:
Yet company sources suggested to Crain’s last month that said no such funding agreements had been completed because litigation against the development was still pending.

A source familiar with the agreements says they were indeed signed by Forest City Ratner last fall but are still waiting for approval by the city and state comptrollers.

OK, so they've been signed, but not completed. But the term "executed" sure sounds like the process is finished.

Yassky come lately on AY costs, which still need a thorough accounting

Term-limited Brooklyn City Council member David Yassky, running for the citywide position of Comptroller, has decided to target subsidies for Atlantic Yards, part of a tougher line he's shown lately regarding the project.

Among the tactics he recommends in an article in this week's Gotham Gazette is ending corporate tax loopholes:
Of course, the single biggest example of corporate welfare is the proposed Atlantic Yards development. The Bloomberg administration has agreed to give the project's developer at least $100 million in direct subsidies, plus another $400 million to $500 million in tax breaks. In the current financial climate, this handout is impossible to justify.

While some significant increases in subsidies--including a doubling of the city's contribution and the "Atlantic Yards carve-out" for 421-a benefits--have surfaced in the past year, there was a longer list worthy of concern before that.

And Yassky did not raise the issue of AY subsidies in his comments during the Atlantic Yards approval process. In his 8/23/06 letter to the Empire State Development Corporation, he expressed "grave concerns" and requested "substantial changes," but those regarded the size of the buildings and plans for traffic and transit.

He concluded, in his mend-it-don't-end-it posture:
Again, I do believe that development of an arena and housing at the Atlantic Yards site would have genuine benefits for Brooklyn. The current GPP [General Project Plan], however, imposes an unacceptable cost to achieve those benefits.

When Yassky ran for Congress that summer, he tried to steer $3 million in job-training funds to AY Community Benefits Agreement signatory BUILD. He took a distinctly moderate position, refraining from bringing up issues like corporate welfare, while rival Chris Owens needled him for not asking tough questions.

$500 million, $3 billion?

Would the total in tax breaks be $500 million, as Yassky says, and the total in government benefit be $3 billion, as Develop Don't Destroy Brooklyn suggests (right)?

Well, it depends how you do the math. Yassky, I believe, is adding direct subsidies and the 421-a tax break. DDDB's chart suggests that the bonds for the arena--to be repaid by payments in lieu of taxes--represent a complete subsidy, but the Independent Budget Office (IBO) does not agree, because it assumed that the railyard portion of the land would've remained tax-exempt anyhow.

And tax-free bonds valued at $1.4 billion do not represent savings of $1.4 billion, but rather the spread--perhaps 15%--between taxable and tax-free bonds.

New analysis needed

Still, if DDDB's numbers don't fully stand up, neither do anyone else's. The IBO, in its September 2005 report, did not attempt to assess the full fiscal impact of the Atlantic Yards project, just the arena. The New York City Economic Development Corporation and the Empire State Development Corporation, in their analyses, focused on costs rather than benefits.

So there's still a significant need for a government-sponsored, fully-vetted effort to analyze Atlantic Yards costs and benefits. Maybe Yassky, or even fellow Comptroller candidate Jim Brennan--who's pushed to get Atlantic Yards financial information but hasn't made AY a rhetorical centerpiece of his candidacy--can put the issue on the agenda.

LeBron James to the Brooklyn Nets? A marketing bonanza, both ways

In an article Monday headlined Jay-Z, James relationship should worry Cavs, Adrian Wojnarowski, the NBA columnist for Yahoo! Sports, suggests that the hip-hop star, a part owner of the New Jersey Nets, may be manuevering to lure the superstar LeBron James from the Cleveland Cavaliers once he can opt out of his contract in the summer of 2010.

That would be the right before the fall when the Nets, as announced, intend to move to Brooklyn, thought construction schedules suggest an arena opening in early 2011 is a best-case scenario.

Wojnarowski noted that James wants to become "sport’s first billionaire athlete," hence the appeal of a larger platform. Says noted sports marketer Sonny Vaccaro, "Jay-Z is the one person that I can put in a parallel universe with LeBron from where they started and where they are now."

He suggests James will be on a "marketing roll" after he leads the United States basketball team to victory this year in the Olympics.

No tampering

Two years ago, Jay-Z, according to the writer, paid no mind to league tampering rules and gushed, “How amazing would that be? I tell people all the time, he’s my friend first. If Cleveland is building a championship team around him then my advice is to stay there. If it’s the Nets who are building a championship team that could be around him then my advice is to come to the Nets.”

There was no fine for tampering, and Cleveland didn't complain. And James, suggests Wojnarowski, may get his endorsement deals increased if he comes to New York.

Nets' flexibility

The front-office moves by the Nets are part of the peculiar NBA game called clearing salary cap space. Wojnarowski writes:
James is the unmistakable target. So much so, the Nets have an internal business plan for the move into the new Brooklyn arena that includes a modest section on his eventual recruitment, estimates of his marketing worth and the salary-cap space that needs to be cleared for his signing.

Wojnarowski suggests there will be "a fascinating story line" between now and 2010, with Jay-Z competing for James's heart and mind against the owners of the Cavaliers, who signed a hometown star to a huge first contract.

For the savvy owners of the Nets, playing a high-stakes game with flexibility, there could be a huge payoff.

The project could stall, with the arena delayed even past 2011. But if it proceeds, the Nets will try to get James. If so, even if the Nets alienate fans in New Jersey with a mediocre team for a couple of years, King James could change the equation across the river.

There's no great push for the Nets in Brooklyn right now, as Borough President Marty Markowitz recognized earlier this month. But good marketing can create momentum, and a star like James wouldn't be good marketing, it would be great marketing.

[Updated]

And the reality...

The Record's Ian O'Connor writes today:
Last night, in a 102-92 loss to the Magic, it took some straining to see past the empty banks of Izod Center seats and toward a meaningful future either here or in Brooklyn. Kidd breathed life into the building, and then slowly but surely sucked the life out.

As for the James deal, O'Connor suggests it's not impossible:
They want Jay-Z to help make that free agent signing happen.

"Pretty much a pipe dream," one high-ranking official called it.

It wasn't long ago that the same was said about Thorn's stated goal of building a winner in the Meadowlands. Then the Nets' president completed the Stephon Marbury-for-Kidd trade, and his team hasn't missed the playoffs since.

Forest City to investors: more AY office space, slowed railyard, less upfront cash than city & state

Last October 9, Forest City Enterprises (FCE) held an Investor Day meeting at the New York Times Tower, built by subsidiary Forest City Ratner (FCR) in tandem with the New York Times Company. The developer shared several important pieces of news about the Atlantic Yards project that have not been aired publicly.

Among the highlights, thanks to the transcript (for sale):

• The developer has apparently signed funding agreements with the city and state, despite reports that it has not done so
  
• It would take 4½-5 years to build a new railyard, not 3½ years, as promised in the Atlantic Yards environmental review
  
• The size of the project may have been reduced
  
• The flagship Miss Brooklyn tower has apparently been trimmed, and would have more office space
  
• The number of planned arena suites has been reduced from 170 to 130
  
• Additional arena sponsorships were supposed to be announced in January, but that didn’t come to pass
  
• The developer has invested $250 million in the $4 billion project, its largest single investment, but that's only 25% more than its developer fee, and less than the direct public investment of $305 million
  
• The residential project at 80 DeKalb is a test run for Atlantic Yards.

Representatives of the developer stressed the importance of flexibility in reacting to changing markets. “Atlantic Yards is different than what we thought,” declared FCE CEO Chuck Ratner.

Funding agreements signed

FCR Executive VP MaryAnne Gilmartin said, “In June of 2007, we received favorable decision on the Federal eminent domain lawsuit, in September of 2007, executed critical funding agreements with the City and State of New York, which allow us to be reimbursed for investments made in infrastructure and land to date on the project.”

That seems to contradict the (anonymously sourced) New York Post article published January 29, which said that “the developer never signed binding contracts for the project.” AY ombudsman Forrest Taylor, asked last month if funding agreements had been finalized, said, “There’s a city part and a state part. I think the state is done.” However, it’s one agreement, so “until both are done, neither are done.”

Yesterday, I asked the Empire State Development Corporation if Gilmartin’s statement was accurate and whether it contradicted or complemented the statements made in the Post and by Taylor. I didn’t get a response.

Five years for new railyard

It seems that the developer’s construction consultant low-balled the time it would take to create a temporary railyard and then finally a new railyard. Robert Sanna, FCR’s Executive Vice President and Director of Construction & Design Development, said, “We have been working with about 20 different operating divisions of the Long Island Railroad over the last 24 months to redesign and relocate that storage facility all the way down at [block] 1127. And that project itself is about a four and a half to five-year build.”

(The Construction Schedule attached to the Final Environmental Impact Statement indicates 10 + 18 + 14 months = 42 months, or three-and-a-half years, as opposed to Sanna's estimate. Click to enlarge.)

“But in order not to encumber the arena site proper, we've devised a plan to create a temporary yard, which we're in the process of constructing now and will complete so that we can begin construction on the arena site in earnest on that project. The temporary yard work is underway at the moment as we speak.”

Only 6.5 million square feet?

Joanne Minieri, FCR President and Chief Operating Officer, said, “Atlantic Yards Development Company, LLC is the entity in which Forest City owns 58.2%. That entity will be the owner of the master plan for the real estate development of over 21 acres in downtown Brooklyn with 6.5 million square feet of residential and commercial development rights.”

That’s very tantalizing, since Atlantic Yards is supposed to be 8 million square feet over 22 acres. Add the 850,000 square foot arena to the figure Minieri mentioned and the total is 7.35 million.

It’s possible that another entity, in which Forest City is a partner, owns the development planned for Site 5, now the home of P.C. Richard/Modell’s, which was subject to a second Memorandum of Understanding (because there were two investment groups). (Gilmartin described the project outside the arena as “15 buildings,” which again seems to be excluding Site 5.

Then again, maybe they've cut a building.

Site 5 was not part of the FCR-created Atlantic Yards financial projections unearthed as a result of the lawsuit filed by Assemblyman Jim Brennan and State Senator Velmanette Montgomery. Nor was it part of the KPMG report. Site 5, once to be 400 feet tall, was cut to 350 feet tall, with 572,000 zoning square feet.

The City Planning Commission recommended that Site 5 be reduced to 250 feet and about 392,000 zoning square feet; that was accepted. Added to 7.35 million square feet, that would make 7.75 million square feet. Also, there would be some space for community facilities, including a school.

It’s possible there's no significant cut, but Miss Brooklyn has been reduced. And there may be a discrepancy between "square feet" and "zoning square feet." It's time for someone to come clean on what the dimensions of the project would be, as currently considered.

(Graphic from 12/14/06 ESDC memo to PACB.)

Miss Brooklyn: more office space, and smaller

Gilmartin described “the buildings that surround the arena and then what we call Phase 1." She apparently was pointing to Miss Brooklyn: "That is a commercial building with plus or minus 528,000 square feet of zoning rights. And there are three residential buildings that comprise what we call Phase 1.”

According to documents unearthed in the Brennan lawsuit, Miss Brooklyn, or Building 1, was to have 308,801 zsf (zoning square feet) of office space, 164,652 zsf of hotel space, and 434,691 zsf of condo space, for 908,144 zsf. Apparently there’d be no more condos, which makes some sense, because the financial projections suggested that the office space would be highly profitable, with a 17% internal rate of return on top of development fees.

Meanwhile, the condos in that building were projected to lose money. Brennan suggested last July that that was an argument for reducing the size of the project; the current plan for that building suggests both a cut in size as well as a shift in function.

What’s not clear is whether the building has been cut to 528,000 sf or to 692,652 sf or to some other number. Either way, it would be a lot smaller than the total of more than 900,000 sf as contemplated in late 2006, not to mention the 1.1 million sf as initially contemplated.

Maybe the office market is picking up, despite setbacks early last year. An 11/8/07 article in the New York Sun, headlined Downtown Brooklyn Finally Arrives, suggested that demand for office space is growing:
An executive director at Cushman & Wakefield, Glenn Markman, said: "In my 20-plus years of representing landlords and tenants in downtown Brooklyn, I have never seen the demand for office tenants be stronger than today. The interest is coming from Manhattan office tenants, such as advertising agencies, media companies, law firms, and consulting companies."

130 suites, not 170

Minieri explained that Forest City owns 21.5% of Nets Sports and Entertainment, LLC. (There are numerous individual investors. “That entity owns the Nets franchise and will be the owner of the new state-of-the-art arena, The Barclays Center. The arena will be an 18,000-seat arena with 130 suites, 12 of which will be bunker suites and be the home to over 200 new events.”

(Photo of Nets billboard at 553 Waverly Avenue at Atlantic Avenue, one block from the eastern edge of the Atlantic Yards footprint, by Tracy Collins.)

A December 2006 audit conducted by KPMG on behalf of the Empire State Development Corporation noted that Forest City Ratner projected 170 suites, “a combination of first ring suites, second ring suites, courtside suites, and log boxes.” KPMG suggested that the total number of suites and the average price “appear to be on the high end,” given that NBA arenas average about 90 suites, and that only six offer more than 125 suites, and five of those six host both NBA and NHL teams.

Sponsors for the Nets

Brett Yormark, President & CEO, Nets Sports and Entertainment, explained how the team has vaulted from $5 million in sponsorship sales to more than $15 million, as sponsors and marketers “understand that they need to get involved now, build some equity with the franchise in route to Brooklyn.”

On the heels of the Barclays Center deal announced in January 2007, Yormark said, the team aims for “14 totally integrated partners, Barclays of which will be the lead.” He added, “And I think in January, we'll be able to announce half of those partnerships that we've been able to come to an agreement on.”

That has not come to pass. Nor has there been a public announcement yet of the Barclays Center Showroom in the Times Tower, which Yormark said should open “some time in January.” Perhaps the delay in the project arena opening has pushed things back.

Still, Yormark said suites had already been sold: “This past summer, we went out on a bit of a private sale to friends and family. And the response has been overwhelming. We're different. We're special. Frank Gehry, Brooklyn, the whole Brooklyn story in general is providing us with a different story that we can tell in the marketplace, and people are responding. “

$250M is "risk-appropriate"

An audience member asked what the total equity investment was in Atlantic Yards. Minieri responded, “ Us and our partners together, approximately $250 million invested in the Atlantic Yards Development Company, LLC. As it relates to the future equity levels, we'd like to keep it as low as possible and hopefully, that $250 million will be our peak equity. That's as much as I can tell you right now.”

An “unidentified company representative” added, “That's a very direct answer, huh? It's a large investment. It's clearly the largest investment we've made in any project of scale or not of scale. But it, we think, is a risk-appropriate investment. The opportunity here is... unlike an opportunity we've had probably anywhere else.”

Indeed, the developer, as the New York Times first reported, would get a 5% development fee, or $200 million, though over a longer period of time. And the city is spending $205 million upfront, the state $100 million.

As for the financing, Gilmartin said, “So, as we proceed and we move forward with both the construction of the arena and each of the towers, we will allocate similar to what we do on all our master plans, the land and infrastructure costs out of that LLC into its individual single-asset entity, which will then have its level of construction costs, vertical builds as well as equity in connection with the single-asset development.”

Arena financing

FCR Executive VP and Director of Finance Andrew Silberfein explained arena financing, “We are working closely with Goldman Sachs and Barclays Bank, who are our advisors on the financing of the arena. And we expect the structure to be somewhat similar or actually very similar to what was done on the Yankee Stadium as well as on the Jets/Giants deal where we're going to be issuing a combination of tax-exempt and tax-exempt bonds for -- to pay for the construction of the arena.”

[I’m assuming that the transcript is in error and he said “taxable and tax-exempt.”]

“In addition, we're also exploring the possibility of doing a separate securitization of the naming rates contract that we signed with Barclays Bank. Obviously, given the credit and long tenure of that contract, it lends itself pretty nicely to that type of a financing on that.”

[I'm assuming he meant "naming rights."]

The Beekman Tower

Gilmartin spoke of the Frank Gehry-designed Beekman Tower in Lower Manhattan: “We have not gone public with any images of the tower. It's a striking design again rising 865 feet in the air. It's about as aspirational I think as this building you're in was -- it's the residential equivalent of what the New York Times Building was for us in 1999/2000.”

“It's architecturally significant. It's an iconic addition to the lower Manhattan skyline and it holds the promise of redefining the standards of luxury rentals in New York City. The good news is that it's priced to perform within its competitive set. We're not assigning any premium to the Gehry component, the star power of his architecture both outside the building and inside each of the units.”

“The building has we believe tremendous upside because nobody has ever built a rental building in New York City with this type of aspiration. And so Gehry will design, not only the curtain wall, but inside of the units, including the bathrooms and the kitchens and the hardware. And so this building as I said is 100% designed and we started some activity on the site to preserve the very valuable 421-a tax benefit, which allow us to insure the receipt of that benefit through the life of the project.”

Gehry is not designing interiors for Atlantic Yards.

The 80 DeKalb example

Gilmartin said “we think the critical mass of new residential construction along Flatbush Avenue validates the corridor as a thriving and desirable residential location. This is important not just for 80 DeKalb… but for all that we intend to do with Atlantic Yards.”

Indeed, the transformation of Flatbush—a spine of towers—makes Atlantic Yards less anomalous, even as the latter would extends well beyond major thoroughfares and extend the boundaries of Downtown Brooklyn.

Gilmartin described the 80 DeKalb project at the border of Fort Greene and Downtown Brooklyn as “the first opportunity for our company to capitalize on… the residential renaissance that we see in Brooklyn. And it allows to sample the market firsthand as a preview for Atlantic Yards. So in many ways it will inform the rollout of our residential product for the Atlantic Yards project. And so this is a 365-unit rental apartment building located in downtown Brooklyn, again, a stone's throw away from the Atlantic Yards.”

“It is the redevelopment of a vacant portion of a piece of property, an asset that we already owned. It will have doorman/concierge services, a 150-car garage, a lifestyle center that includes a gym, a library and a lounge and retail at the ground floor level.”

The plan is to open in 2009.

Flexibility & "chaos theory"

Executives emphasized the importance of flexibility. “This is a project that has, as we've mentioned, a ten-year horizon,” Gilmartin said, apparently on message that it won’t take 15 years, as Chuck Ratner once indicated.

"[T]he division between rental and condominium is flexible so long as we create the 2,250 affordable housing units, which we are committed to creating over the life of the project," she said. "And even the commercial space here, 528,000 square feet, there is some flexibility there as well to respond to the ever-changing markets within which we operate. And you can see that there are eight acres of publicly accessible open space, 200,000 square feet of retail, and the arena itself is 850,000 square feet.”

FCR Chairman and CEO Bruce Ratner similarly emphasized flexibility: “It's not like acquiring buildings. It takes a long time, a lot of dedication. There's constantly changing times. You have to remain flexible. I'm a person that believes a little bit in the chaos theory and if you're not flexible, you cannot overcome chaos.”

Chuck Ratner said that he was a “pessimist” about the real estate downturn, though “New York is clearly an exception to that… and perhaps will remain.” Bruce Ratner commented, “I don't want to make predictions, because I think the New York market as so many markets really at the end of the day depends a lot on the overall economy and the job market.”

Echoes in Chicago

Chuck Ratner also wanted to tell attendees about the Central Station project in Chicago, which would contain 8500 residential units, 2.5 million square feet of commercial space, and 500 hotel rooms—over 80 acres, far less dense than Atlantic Yards: “Let's put the picture up for just a minute. I want you to think about this when Bruce and Joanne and MaryAnne are walking you through Atlantic Yards. I want you to think about what this is."

(Graphic from Central Station site.)

He continued, "What you see outlined in yellow is the Illinois Central Railroad Yards empty 18 years ago, other than the railroad tracks. Next to it, you see an arena, a stadium in this case, Soldiers Field. We, together with a partner in Chicago, bought that land. We thought it was going to be all office buildings. You see it's right south of the Loop…. We thought this was going to be the next great office building market."

Instead, it became a residential project, over and near railroad tracks, "exactly what Atlantic Yards is. And we will make the same thing happen here that happened there and it will be even better because Brooklyn is a fabulous place to do business."

Actually, strict building guidelines regarding Central Station protect the view corridors of Lake Michigan and Grant Park. In Brooklyn, there are no such strictures regarding blocking the clock the Williamsburg Savings Bank, though maybe Forest City Ratner has a surprise for us.

A 30-year plan?

Later, Gilmartin showed a slide of the existing conditions on the Atlantic Yards site, though it’s not clear whether it was the whole site or just the Vanderbilt Yard.

An “unidentified company representative,” according to the transcript, said the slide was “almost identical” to one concerning the Chicago project: “It's taken us 15 years there, and we're only halfway through. That's both good and bad news. It's good news, because you have tremendous opportunity over a long time. And you -- obviously, the challenge is to keep your money moving through there so that it doesn't eat you up alive.”

Actually, it’s taken 18 years, since the project began in June 1989.

A 9/23/90 Chicago Tribune article gave a large range: “Development of all the Central Station land is expected to take 10 to 30 years, depending on economic conditions.”

However, the Tribune reported 1/12/89 that lead developer Gerald W. Fogelson, when announcing the land purchase, said that “he hoped the project could be completed in seven to eight years.”

Would AY be done in the ten years projected? Doubtful.

MetroTech

Gilrmatin described success at MetroTech: “The interesting thing about our office strategy in Brooklyn is that we are now through some of the original leases and so our leases have started to roll and we've been very successful in retaining the tenants that were early pioneers to MetroTech so Bear Stearns, Morgan Stanley and KeySpan all have opted to stay for the next cycle in Brooklyn. And again that is one of the best indicators of success."

Then again, last year The Real Deal reported that JP Morgan Chase and Empire Blue Cross were vacating space.

Gilmartin added, "And the vacancy rate is 2.6% which is a very nice number and is expected to continue." (It's not clear, but I think she was talking about housing, not office space.)

"A lot of the construction we see in downtown Brooklyn is condominium construction but we see that the rental market is robust. We see changes in the 421-a tax programs, which means that the barriers to entry are higher than ever making it more difficult to bring on new supply.”

Lawsuits

FCR General Counsel David Berliner said that “we did get a good decision” in the eminent domain case and the appeal, heard that morning, “went very well.” (He was right.) “And the last one is the challenge to the Environmental Impact Statement. I think that we expected a decision any day now…. We feel good about that one as well.” (He was right.)

And when will construction start? Chuck Ratner quoted Gilmartin: “I think her phrase was, begin construction in earnest on the arena and some of the adjoining stuff by the middle/end of '08, maybe earlier than that hopefully.”

That’s very much in question.

Later, Chuck Ratner said, “Our objective here is to create the 6 million square feet of FAR at a land cost that will enable us to make profit on the buildings. And as you've seen, it's been a market that's grown and we should be able to do that.” (Was "6 million" just an estimate?)

Mystery investor

If Forest City owns only 58.2% of Atlantic Yards Development Company, who owns the rest? Unclear.

But Minieri said, “And to the extent that our outside partners choose not to proceed with each individual building, we have the opportunity to increase our ownership percentage as we spin off each building. At this point in time I think that it is our outside investor's intention to go and invest in each building as we proceed, but they do have a right to decline as we move into the individual asset development.”

New York thriving

Bruce Ratner gave his thoughts on New York’s rebirth: “I've never seen anything like what's happened in New York in the last ten years, I never could have predicted that it would be this strong. I will say that you have to look at some underlying factors in New York that make it particularly good, I think first and foremost is security. The change in crime, the positive aspect of security in this city has made new neighborhoods.”

"The second thing is the importance of intellectual capital… I think obviously the issue of immigration… So I'm very bullish on New York. You do have to look at the long cycle aspect always in New York, we may hit a national [recession], hopefully that won't happen. But the long-term prospects, I think, for this city are just so strong."

Historic preservation, elsewhere

Forest City has a history doing historic preservation, and Chuck Ratner brough that up. He noted that the Westfield San Francisco Centre would be opening in a few weeks, the largest “urban center of its kind… But the important lesson here is it's all the strategies we talk about. It's an urban strategy, it's a historic rehab, it's a public-private partnership, it's all of the things that make these projects work and presented all of the challenges that they present.”

“We took a dome inside, you see it here, this was from the early 1900s and we lifted it 60 feet in the air, built a new property underneath it and set it back down,” he continued. “The same sort of thing Bruce and his team did… on 42nd Street with the Liberty Theater all those years ago… It's a historic facade, as you saw in the earlier photo. We preserved that facade. That was necessary in order to get the public support for the project. The same thing's happening again and again to Forest City.”

In Brooklyn, Forest City Ratner is demolishing the Ward Bakery for interim surface parking. It apparently wasn't necessary to get public support, given that the governor and mayor had already signed on.

Bruce learns accessibility

Bruce Ratner may not be so accessible to the press, but for business colleagues he’s there. He said, “It's great to see investors, analysts, friends and I'll try to sort of meet everybody at lunch and so on, who hangs around and say hello. And I want to be very accessible and you can talk to me during lunch or you can call me sometime, email me. And the real issue, and I learned it from Brett Yormark who runs our Nets, always be accessible. So I want to be that.”

Learning from Katrina

Chuck Ratner cited a discussion by FCE board member Scott Cowen, president of Tulane University, about reacting to Hurricane Katrina: “What does it take to succeed. And he said the trick is to be resilient. And he defined three aspects of resiliency. One is the ability to make sense out of a situation, the ability to analyze the options. And that's what we've been talking to you about all day. That's what we did at Beekman is we considered the options we have. That's what we're constantly doing at Atlantic Yards as the project and the dynamics in the market keep changing.”

"The challenges are immense and the obstacles and barriers are high," he continued. "That provides for a larger return if you're able to overcome those obstacles and surmount those barriers. But it requires a real skill for improvisation. These things change dramatically, Central Station is different than what we thought, Stapleton is different than what we thought, Atlantic Yards is different than what we thought and you have to have the ability to improvise as you go. And you have to have the liquidity in the balance sheet and most importantly the talent to do that.”

Core values

He closed, "And the third was a set of core values that guide you. We spent no time on that today. I hope that our core values come out as we share with you our business. We've actually articulated them. They're on everybody's wall. We've lived them every day. Integrity and openness, performance ethics, sustainability, diversity and inclusion, community involvement, all of these are crucial to our success.”

Well, there must be some flexibility there, since the Atlantic Yards saga also includes lying in court papers, making large contributions to what's essentially a slush fund for Assembly Democrats, and fudging the project's timetable.

"Bulldozed": on the Kelo eminent domain case and beyond

Despite the title, Carla T. Main’s recent book Bulldozed: “Kelo,” Eminent Domain, and the American Lust for Land tells the story of eminent domain by focusing on a particularly heavy-handed (but little-known) case in Freeport, TX (population approx. 13,000), a Gulf Coast city some 50 miles south of Houston. Freeport officials wanted to take waterfront property from the salt-of-the-earth Gore family operating a longtime shrimp business to create a low-risk deal for a wealthy developer to build a private marina. The Gores fought back, fiercely, with more resources than the typical eminent domain plaintiff, and the story includes numerous twists and turns.

The case is striking enough that even the liberal/populist Texas Observer, which, in its review says Main "relentlessly hawks her mantra" against eminent domain and criticizes her for black-and-white portrayals of the antagonists, considers the Gores are sympathetic characters, albeit unusual among those faced with eminent domain, since they could afford to fight back. The Wall Street Journal review is mostly approving.

The battle in Freeport is ongoing, but the aftermath includes the election in May of a new mayor who opposes eminent domain; he survived a recall vote in November.

The background

In other chapters, Main also explains the background of eminent domain, and even mentions Atlantic Yards. She suggests that eminent domain law in the 20th century “is largely the story of idealism gone haywire;” the law broadened with the 1954 Berman v. Parker case, allowing the razing of both rundown housing and solid businesses in Washington, DC, but producing far less housing than was replaced.

(As I noted, Justice William O. Douglas wrote with eloquent outrage about a situation that didn't sound much like Prospect Heights:
Miserable and disreputable housing conditions may do more than spread disease and crime and immorality. They may also suffocate the spirit by reducing the people who live there to the status of cattle. They may also be an ugly sore, a blight on the community which robs it of charm, which makes it a place from which men turn.)

She tells the story of the controversial 2005 Kelo v. New London case as well as bookend cases in Michigan, Poletown, which in 1981 expanded eminent domain in the state, and Hathcock, which in 2004 narrowed it. While state governments have responded to the post-Kelo backlash, she, as do conservative scholars like Ilya Somin, remain skeptical that eminent domain abuse will be reined in.

The evolution of eminent domain

Main suggests how eminent domain has evolved:
Nominally, the term “highest and best use’ is employed in determining the value of land for purposes of compensating the owner when the land is taken from him. But the words also describe a change in American culture, the tendency of courts and communities to think about property in a different way. The modern approach to eminent domain in the mid-twentieth century essentially evaluates whether owners are deserving or undeserving of their land, based on factors such as tax revenue and the physical appearance of the property… The current owner is viewed in comparison with another potential owner and found deficient, because the property is not being put to its “highest and best use.” This is wholly different from taking a property, with regrets—no matter what its conditions—because it stands in the way of a necessary public project.

…The municipality can make the owner out to be a slacker by measuring the current real estate taxes (and, if the land is occupied by a business, payroll taxes and other secondary economic benefits to the community) against the limitless dreams served up on a platter by the white-knight developer or big-box retailer.

Timothy Sandefur of the libertarian Pacific Legal Foundation, who filed a friend-of-the-court brief supporting the Gores, reviewed the book in the Recorder and suggested that Main should have tracked "the Progressive origins of eminent domain abuse." In other words, the evolution of the concept of “public use,” while it has roots in the antebellum era, more properly dates back to judges like Louis Brandeis and the New Deal.

He wrote:
One problem with Progressivism is that it assumed that government can allocate property more justly than the market. Yet the power to redistribute wealth and opportunity will invariably fall into the hands of politically sophisticated lobbyists who stand to make a buck by exploiting that power. This is why wealthy, white neighborhoods are rarely condemned, while blue-collar or minority towns frequently are.

Sketching the debate

Encounter Books has a conservative bent, thus indisposed to eminent domain--though Kelo, as Main points out, galvanized a wide range of opponents concerned that endorsing eminent domain for economic development would advantage the wealthy and political powerful.

Still, I think the book could give more credence to the arguments by municipal officials and urban planners about the importance of eminent domain, still, in repairing certain urban neighborhoods.

For example, New York City officials say it was crucial to the successful—and noncontroversial—Melrose Commons development, achieved with much community input. Another argument is that condemnation is needed for “site assemblage,” to achieve significant mass for major projects.

The legitimacy of that argument deserves more discussion.

What about AY?

And what about Atlantic Yards, which Main in the book erroneously calls an “economic development taking” rather than one justified, according to the Empire State Development Corporation, by several public purposes, including removal of blight, creation of open space, and the building of affordable housing. (Critics argue that some of those public purposes, especially the removal of blight, were only added later to ease the process.)

It’s not easy to assemble land for a sports facility. But whether a sports facility is a public use is in question; in the Atlantic Yards eminent domain case, plaintiffs' attorney Matthew Brinckherhoff, arguing in court 10/9/07, called it "a private, money-making enterprise,” not different from a hotel that offers public access. While the Atlantic Yards arena would be nominally publicly owned, it would be rented to a private owner for $1, who would pay for construction (via tax-advantaged bonds that are repaid as payments in lieu of taxes, or PILOTs) and collect hundreds of millions of dollars in naming rights.

In its dismissal of the appeal February 1, the Second Circuit Court of Appeals noted "a publicly owned (albeit generously leased) stadium."

A twist regarding Kelo

One of the bedrock arguments in the Atlantic Yards eminent domain challenge is that, unlike in the New London case, city and state officials did not create a comprehensive plan but instead anointed developer Forest City Ratner from the start. But Main suggests that the Supreme Court was making a shaky summary.

She writes:
Justice [John Paul] Stevens wrote in essence that the city would not be allowed to “take property under the mere pretext of a public purpose” if its real intent was to benefit a specific private party. But New London, said Justice Stevens, had a “carefully considered development plan.” If only Justice Stevens could have been a fly on the wall at all the city council meeting where the New London Development Corporation and council members were at each other’s throats over the ever-evolving plans, with the NLDC demanding money and the council repeatedly seeking further explanations of what the devil they intended to do.

Indeed, several months after the 2005 Supreme Court decision, the New London Day reported that, despite denials by Pfizer, the main private beneficiary of the redevelopment, that the project wasn't its idea, "the company has been intimately involved in the project since its inception."

So, perhaps any legal challenge based on Kelo—as with the Atlantic Yards eminent domain challenge—is based partly on a chimera. Then again, there's even less evidence that Atlantic Yards was the product of a “carefully considered development plan”

Yes, the Empire State Development Corporation (ESDC) compiled an extensive record. But did state and city officials do sufficient due diligence?

As I noted, former New York City Economic Development Corporation (NYC EDC) President Andrew Alper said that it "is not really up to us then to go out and find to try to a better deal." Also, the ESDC and governor's office both on 3/4/05 issued press releases relying on revenue projections made by the developer’s paid consultant, Andrew Zimbalist, rather than conducting their own analyses. And both the ESDC and the NYC EDC conducted fiscal impact analyses without looking at a range of costs.

AY as poster child

In another mention of Atlantic Yards in the book, one passage suggests that Public Advocate Betsy Gotbaum is a prime example of a politician caught up in contradictory statements about eminent domain.

Main writes:
Not to be outdone by their neighbors across the Hudson, the challengers in the New York City primary race for public advocate, always a slugfest, were also slinging mud over eminent domain. In the post-Kelo world, it seems to be de rigueur for politicians to at least appear as if they despise eminent domain. The incumbent public advocate, Betsy Gotbaum, was attacked for publicly supporting the highly controversial Atlantic Yards redevelopment project on Brooklyn’s waterfront—in which eminent domain had been threatened but not yet deployed—while at the same time insisting she was opposed to such takings. Among Gotbaum’s critics was a city councilwoman who introduced a bill to prevent the use of city funds to facilitate such takings. Gotbaum reasoned that the powerful and well-funded developer was still negotiating buyouts with the holdout residents, and besides, the developer had told her “he didn’t want to use eminent domain.” That’s a bit like saying that robber who puts a gun to a man’s head and takes his wallet did not obtain it by force, since he never actually pulled the trigger.
(Emphases in the original)

The project, of course, is not on the waterfront, but otherwise Main nails the issue. Gotbaum's record, and the failure of major media outlets to hold her accountable, represent a notable mini-chapter in the evolving saga of eminent domain.

HDC head curiously unconcerned about AY funding availability

From yesterday's New York Post, an article headlined ATLANTIC YARD$TICK FOR POOR HOUSING, in its entirety:
A federal-funding shortfall that could hamper affordable housing projects in the city likely won't affect the Atlantic Yards project, a top official said yesterday.

"Given the scale of the project . . . we're not concerned that the money won't be there," said Marc Jahr, president of the city's Housing Development Corporation.

That's curious.

Less than two weeks ago, Jahr wrote in City Hall News, as I reported Friday:
It is only February, but over $960 million in private activity bonds are required for affordable housing deals in HDC’s 2008 pipeline alone, while New York State overall has a pipeline of more than $6 billion. Unfortunately, however, New York State’s yearly allocation of cap is only around $1.6 billion.

And, as I reported, he earlier this month told the Bond Buyer, "It's a pity to have good affordable housing projects in a city that desperately needs affordable housing for virtually all income levels, to have them sitting at the starting line with their engines idling.”

Simple physics suggests that the scale of Atlantic Yards, which would require $1.4 billion in bonds, should make it harder, not easier to find the funds--even if the scale makes AY "too big to fail."

Until and unless additional volume cap is found, thus allowing the city and state to issue more bonds, a lot of projects are going to be at the starting line.

That's not to say it can't happen, if Congress acts. But it hasn't happened yet. And maybe a project that's supposed to take a decade--and might take two decades--could have its housing bonds doled out in many, many stages.

Still, there's a major shortfall right now. Whatever he told the Post, Jahr can't be unconcerned about Atlantic Yards.

The "spirit of the Times," or why there's no editorial criticism of Ratner

Maybe you were wondering why the New York Times editorial board, despite being capable of skepticism about development puffery, has produced confused and lame editorials supporting Atlantic Yards and remained (I speculate) in the gridlock of silence, failing to take a stand pro or con when a questionable process finally reached the Public Authorities Control Board at the end of 2006.

Well, the parent New York Times Company partnered with Atlantic Yards developer Forest City Ratner on the new Times Tower headquarters on Eighth Avenue, and the Times even agreed to guarantee a loan, as Editor and Publisher reported last year.

While that doesn't mean the business relationship influences coverage--though I've long argued that obligates the Times to do a better job--the editorial page is not so insulated. The Times itself has acknowledged publicly that its publisher influences the editorials.

And even clearer explanation of the connection between boss and doctrine came from Editorial Board Member Carolyn Curiel, the main writer of editorials on local issues, interviewed 10/31/07 by "One to One" CUNY-TV host Sheryl McCarthy.

The "spirit of the Times"

At about 1:57, Curiel explained: Our goal is to reflect the spirit of the Times and the opinion of the publisher, Arthur Sulzberger, Jr.

She continued: And a lot of it is driven by the news pages, but we don't consult with the news pages. We arrive at our own opinions, we do our own reporting. It's very time-consuming, for what will end up in the paper to be maybe five, six, seven, eight inches of copy, sometimes days, sometimes weeks have gone into processing all the information. But that's our task... it's the result of 18 people hammering something out.

But reporting in this case didn't extend to, say, attending a board meeting of the Empire State Development Corporation.

Consensus?

McCarthy wanted to know how decisions are reached: So you talk it out, you reach a consensus...?

CC: It's not a democracy. Consensus is often arrived at, sure, but not always.... There is something of a position being hammered out at the table.

At 11:04, Curiel reiterated the point: Again, we're not a democracy. We are reasoned, in how we come to opinion. But no, it's not a democracy; it's reflective of the spirit of the Times.

Of course, every newspaper, from the New York Post to the Brooklyn Paper, reflects the spirit of its owner. It's just that we expect a little more from the Times, that the editorial page's voice of urbane liberalism, tinged with pragmatism--to offer a rough summary--would lead to skepticism about a project such as Atlantic Yards.

The spirit of the Times in the case of AY is a muddled one, undoubtedly reflecting both private as well as civic goals.

Ignoring news broken on blogs

At about 19:20, Curiel sounded like she never learned a thing from a blog:
The industry is changing in ways that no one can really accurately predict at this point...I believe the Times will be forever, in whatever format... it will always be around. People point to all of the online content, and I say it's all derivative, and much of it derives from the New York Times. You will always need quality reporting, quality editing, and presentation that people can actually use.
(Emphasis added)

If only she recognized how many print stories that go into the Times (and other papers) were generated by local bloggers/reporters. Or how many stories the Times ignores.

Will the Times comment on Forest City Ratner's large "soft money" donation to the Democratic Assembly Campaign Committee's Housekeeping account, a gift that has drawn criticism from the watchdog Brennan Center for Justice and from Common Cause, and which generated only silence from the donor and donee?

Don't hold your breath.

AY affordable housing jeopardized not by lawsuits but by funding "crisis"

Forest City Ratner has heavily promoted the 2250 units of subsidized housing in the Atlantic Yards project, and that's been cited as a public use by two courts. However, there's no money available for it right now, more than a half year after a city official cited a "crisis" in the provision of affordable housing bonds.

In arguing for an expedited schedule to hear the appeal in the state lawsuit challenging the AY environmental review, the developer says resolution of the case would dampen uncertainty regarding arena financing and even would help build the project’s affordable housing, according to lawyer Jeffrey Braun.

Yes, the developer must start on the arena block as a whole to build the housing towers that would ring the arena. However, delay may be a silver lining for the housing component of Atlantic Yards. The city and state don’t have nearly enough capacity to allocate bonds for affordable housing projects, an issue highlighted last November by the Independent Budget Office.

Wrote Marc Jahr, president of the New York City Housing Development Corporation (NYC HDC) earlier this month in City Hall News:
It is only February, but over $960 million in private activity bonds are required for affordable housing deals in HDC’s 2008 pipeline alone, while New York State overall has a pipeline of more than $6 billion. Unfortunately, however, New York State’s yearly allocation of cap is only around $1.6 billion.

The AY demand

Atlantic Yards would require $1.4 billion in housing bonds, according to information the Empire State Development Corporation disclosed to the Public Authorities Control Board and made public in the lawsuit challenging the AY environmental reviews.

(The project is officially supposed to take a decade, so it’s not clear what segment of the total bond request would be sought each year. There's no evidence FCR has even applied for the bonds, though HDC officials didn't respond yesterday to a request for confirmation.)

So those bonds would be well behind requests made by many other developers seeking to make use of a very limited pool of affordable housing financing, a situation Shaun Donovan, commissioner of the city’s Department of Housing Preservation and Development (HPD) told Congress last May was a “crisis” threatening 6700 units in the city’s pipeline.

Such bonds allow the developer to borrow money at a lower interest rate, serving, essentially, as a discount mortgage, saving perhaps 15% on a project like Atlantic Yards. Most 80/20 projects, involving 80 percent market-rate and 20 percent low-income, are in Manhattan, and funded by the state agency, HFA.

The NYC HDC, which Donovan chairs, funds projects geared to a greater mix of incomes, such as Atlantic Yards, where the rental units would be 50 percent market-rate, 30 percent middle- and moderate-income, and 20 percent low-income.

Officials hope for the best

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. Two weeks ago, I checked with city and state housing officials whether they expected federal help to deal with the “crisis.”

The answers indicated some optimism but great uncertainty.

HPD spokesman Neill Coleman responded, “We continue to pursue both an increase in the volume cap allocation and proposals to recycle bonds used to finance only the construction phase of multi-family rental housing and retired after two or three years. Congressman Charles Rangel, as Chair of the Ways and Means Committee, and Senator [Chuck] Schumer have been much-needed champions in Washington for the City’s affordable housing needs and are assisting us. We are hopeful we will see progress in the next few months.”

State Housing Finance Agency (HFA) spokesman Philip Lentz responded, “In Washington, there's not been much progress. Congress did not act on either idea Shaun mentioned in his testimony. There was an effort in the last week to put an amendment in the stimulus package to increase volume cap, but it was not successful. Sen. Schumer was one of the leaders in that effort.”

“Going forward, that means the state has virtually the same allocation of volume cap for '08 as '07 at a time when there is more demand for housing volume cap than there is supply. Making things more difficult this year is that most of the excess volume cap that had built up over the last few years (called "carryforward") was used up last year to meet the tremendous housing demand, which means there will be much less carryforward going into '08.”

New pressures

Because volume cap is in such short supply, Lentz noted, last month HFA announced new allocation criteria for 80/20 projects seeking volume cap financing, including projects that maintain affordable rental units for a longer period, “construction readiness and financing readiness;” and compliance with the city’s planning and development goals.

Michelle de la Uz of the Fifth Avenue Committee, a nonprofit developer, told me, "The fact that we're faced with limited volume cap means we're going have to reevaluate how existing and additional volume cap is used. It's seems to me that we've finally woken up that, whatever the volume cap, we have to ensure that it's used for the maximum public utility."

And that would lead to debates about supporting middle- and moderate-income housing versus low-income housing, as well as the reliance on for-profit developers, who typically charge higher developer fees than nonprofit developers, though the former would argue they have additional capacities to accomplish complex projects.

Also, Crain’s reported this week that the state strictures mean that only two or three of some 30 developers now seeking 80-20 housing bonds will get approval.

There are other pressures on affordable housing finance. The Real Deal reported that there’s a lowered market for Low Income Housing Tax Credits (LIHTC), a fallout from the mortgage crisis. The New York Observer reported that HPD has been lowering its estimates of new affordable housing construction, from 11,587 to 8,568 in the current fiscal year from 11,587 to 8,568, with 7,947 for the next fiscal year, beginning in July.

Movement in DC?

Earlier this month, Schumer raised the issue of volume cap. In his February 4 critique of the Bush administration’s budget proposal, Schumer noted that, while the Bush Administration has proposed a $15 billion increase in private activity bond cap over three years to respond to the subprime mortgage crisis, the plan offers too little money, should offer a permanent increase in the cap, and should finance multi-family housing, not just single-family housing

On January 30, the Senate Finance Committee adopted a key part of a proposal offered by Schumer that would allow state governments to issue more tax-exempt bonds to fund new construction of affordable housing. That measure, as Lentz said, apparently failed. Meanwhile, Schumer supports a more long-term proposal, which would provide a $10 billion-per-year increase nationally in the bond cap for 2008 and 2009 and make a $3 billion increase permanent.

That would serve a lot of projects in New York, so city and state officials are undoubtedly watching the issue closely. And so is Forest City Ratner.

AY not at starting line

Jahr, in his City Hall News article, cited increasing demand for affordable housing, a “rapid run-up in construction costs, the effects of rezonings, and changes in the 421-a tax program, as pressures on demand for housing bonds.

Besides the increase in volume cap, the city would like capacity to “recycle” bonds used to finance only the construction phase of multi-family rental housing, a process currently allowed only for single family homes--a policy “unfair to urban areas like New York City."

Jahr earlier this month told the Bond Buyer, "It's a pity to have good affordable housing projects in a city that desperately needs affordable housing for virtually all income levels, to have them sitting at the starting line with their engines idling.”

Atlantic Yards, apparently, isn’t even at the starting line.

Down the EIS rabbit hole: how growing subway ridership was finessed in the AY environmental review

Given that subway ridership in New York City has been growing steadily and just grew 4.2% overall in one year, as pointed out in news coverage February 7, how could the Empire State Development Corporation (ESDC) claim an 0.5% "background growth" rate for transit when it conducted its analysis of the Atlantic Yards project?

(Right: the latest MTA chart on subway ridership growth. It may have mislabeled 2006 as 2007.)

It's another example of the tension between reality and legality, in which a judge just has to agree that an agency's analysis was reasonable, without being able to second-guess it.

Questions raised

The ESDC's analysis, which also factored in numerous other planned projects, was deemed legitimate by Supreme Court Justice Joan Madden in her decision last month, but there are reasons to question it, though the petitioners did not raise all of them before the judge:

1) for baseline "background growth," the ESDC relied on a stock figure last affirmed in 2001, before a growth spurt in Brooklyn, rather than choose the option of developing an "independent estimate"

2) for the purposes of "background growth," the ESDC considered Atlantic Yards to be located in Downtown Brooklyn, which has a lower "background growth" rate than the rest of Brooklyn, even though most of the project--if not the primary subway station serving the project site--is outside Downtown Brooklyn

3) the ESDC punted when commenters on the Draft Environmental Impact Statement (DEIS) pointed out the inconvenient fact that the aforementioned primary subway station, according to the DEIS itself, had experienced leaping subway counts of 12 percent in 2005 and 13 percent the previous year.

The petitioners challenging the legitimacy of the environmental review would have had a stronger case, according to Madden's decision, had they provided solid documentation of the growth in transit. And they didn't even raise the second and third points noted above.

That's not to say that any of them would've been successful, given the judicial standard.

Go to the manual

The ESDC--or, rather, its consultant, the ubiquitous AKRF--was following the CEQR Technical Manual, which was written in 1993 "under a consultant contract" and updated by city agencies in 2001. That consultant was AKRF.

The relevant section is Chapter 3-P, regarding Background Growth Rates (emphases added):

For rail and bus transit analysis purposes, NYCT can be consulted for modeled projections that may be available on a per line, or possibly per station, basis. In the absence of such information for a given transit study area, the following annual compounded growth percentages suggested for use in the traffic and parking analyses may be used or an independent estimate of a reasonable growth rate may be developed.

• Manhattan 0.50%
• Bronx 0.50%
• Downtown Brooklyn 0.50%
• Other Brooklyn 1.00%
• Long Island City 0.50%
• Other Queens 1.00%
• St. George (Staten Island) 1.00%
• Other Staten Island 1.50%

No such independent estimate was developed, though, as the ESDC pointed out multiple times, it factored in a considerable amount of development to produce some sort of blended assessment of total growth, which has not been boiled down to an estimate of annual percentage increase.

A different location?

Nearly all of Atlantic Yards is not located in Downtown Brooklyn but "Other Brooklyn," for which the background growth rate would be twice as large: 1%. Then again, the main subway station serving the project, at Atlantic Terminal, is arguably part of Downtown Brooklyn, though other stations would clearly be in Prospect Heights. That all suggests that an adjusted background growth rate should be higher than .5%.

Indeed, the ESDC's legal Answer in the environmental lawsuit did not claim the project would be located in Downtown Brooklyn (emphasis added):
The Project will be located in the Atlantic Terminal area of Brooklyn. (Atlantic Terminal is a terminus for a major LIRR line serving downtown Brooklyn and, via subway connections, Lower Manhattan.) The project site is situated immediately to the south of Downtown Brooklyn in an area that lies at the junction of several Brooklyn neighborhoods. Portions of the project site are within the Special Downtown Brooklyn District created by the New York City Zoning Resolution.

Those portions are small. Only the segment of the project west of Fifth Avenue--the triangle of land above of Flatbush Avenue, as well as the wedge known as Site 5, which now houses P.C. Richard/Modell's and the Brooklyn Bear's Garden--would be in that special district.

Comments and response

The issue was raised in the FEIS, Response to Comments, Comment 13-6:
The DEIS assumes an annual growth of subway ridership of only 0.5% per year, the standard citywide for background growth in average times. NYC Transit Subway and Bus Rider Surveys report average weekday subway entries has grown in the last five (pre-boom) years at close to 2% a year from Brooklyn outside Downtown, and in 2004 to 2005 began an upward trajectory of 3.3%, which averages 3% for all Brooklyn. (24, 54)

It is not reasonable to assume a 0.5 percent growth rate for the No Build scenario, especially for the Atlantic Avenue Subway Station. In the DEIS, Table 13.3 shows that turnstile counts increased 12 percent in 2005 and 13 percent the previous year so the actual historical growth rate at this stage of ridership is 24 times greater than the growth rate assumes in the DEIS. (24, 299)

(That came from a 9/29/06 letter from then-Community Board 2 Chairperson Shirley McRae.):

The ESDC responded:
Response 13-6: The transportation analyses in the DEIS assume a 0.5 percent per year background growth rate for travel demand during the 2006 through 2016 period. This is the growth rate recommended in the 2001 CEQR Technical Manual to account for background increases in travel demand for Downtown Brooklyn. However, it is important to note that in addition to this background growth, the transportation analyses in the DEIS also reflect the anticipated travel demand from a total of 33 discrete No Build developments in Brooklyn, comprising approximately 6,281 dwelling units, 5.19 million sf of office space, 1.14 million sf of retail space and 2.43 million sf of other space (community facility, academic, hotel, court, etc.). These developments were selected for inclusion as discrete No Build sites based on their size, completion date and proximity to the project site, and include three recent developments not reflected in the DEIS but that have been added to the FEIS analyses. Several developments were included at the request of NYCDOT which was consulted in developing the list of No Build sites. The estimates of future travel demand used for the DEIS transportation analyses therefore reflect not only a 0.5 percent per year background growth rate, but the demand that would be generated by much of the development reasonably likely to be developed in and around Downtown Brooklyn by 2016.

Despite the adjustment, it's hardly clear that the overall estimate takes in increased development in Brooklyn as a whole that would affect such stations.

And, while the growth at the Atlantic Avenue station likely depends significantly on the 2004 opening of Forest City Ratner's Atlantic Terminal mall, a development that the ESDC did include in its list of No Build sites, the agency didn't respond directly to the point about turnstile counts at that station. Those filing the lawsuit should have picked that up.

Post-FEIS comments

As I reported, the ESDC--or, rather, its consultants, AKRF--responded to comments on the FEIS. From the post-FEIS letter from Community Consulting Services:
Wrong Factor for Background Growth
It is a further distortion of CEQR guidelines to assert that the omitted discrete sites are accounted for in the 0.5% annual background growth factor recommended in the CEQR Technical Manual for Downtown Brooklyn. The 20-year-old 0.5% factor in the CEQR Manual is intended to reflect trips generated by the truly small projects in the study area. The Manual specifies 1%/year for Brooklyn outside Downtown for trips generated outside the narrow study area. Since these areas are the principal source of trips within Downtown, a 10% growth over 10 years is more inappropriate [sic] for background growth than the 5% used. This is consistent with the growth in building permits issued in Brooklyn. Anyone who drives around Brooklyn and sees new construction being shoehorned everywhere knows using the 0.05% [sic]/year background growth rate used in the FEIS is irresponsible. The higher background growth would profoundly change all FEIS conclusions.

The ESDC response:
The FEIS's transportation analysis included reasonable assumptions with regard to the projects likely to be built in the future without the proposed project. The rationale for the development of the list of the No Build projects is detailed in the memorandum... provided in Appendix C. As indicated in that memo, the background growth assumed in the FEIS (0.5 percent per year) would be roughly equivalent to the travel demand generated by 19,000 new dwelling units or 9 million square feet of new office space in Downtown Brooklyn....

The FEIS utilizes the background growth factor of 0.5 percent per year called for in the CEQR Technical Manual for Downtown Brooklyn. This background growth factor was approved by the New York City Department of Transportation and New York City Transit.

It would've been interesting to hear those agencies defend that decision.

The lawsuit

According to p. 58 of the petitioners' complaint:
The FEIS estimates impacts on and demand for mass transit by utilizing a background growth factor of 0.5% per year in subway ridership included in the 2001 CEQR Technical Manual.
The FEIS ignores actual recent data from the past five years that showed growth factors in Brooklyn of almost 2% a year and even higher trajectories for 2004 and 2005 of almost 3% a year.
The FEIS understates the present conditions of dangerous overcrowding on subway platforms and the likelihood such conditions will be exacerbated upon Project completion particularly during arena events.
The FEIS assumes that the problems will be mitigated by the provision of additional trains by the MTA to accommodate the increased passenger loads without any analysis of MTA's ability to meet that demand or commitment to do so.

The ESDC's Answer (p. 80) essentially repeated responses already made:
As with the traffic analysis, the FEIS assumed a 0.5 percent per year background growth rate to estimate future transit demand in the absence of the proposed project (the No Build conditions), as recommended by the CEQR Technical Manual. In addition, the FEIS also considered the substantial transit ridership from No Build development projects expected to be completed by the 2010 and 2016 analysis years. Thus, in addition to the 0.5 percent per year background growth rate, the transit analyses also include the travel demand from a total of 33 discrete development projects in Brooklyn, comprising approximately 6,254 dwelling units, 5.19 million sf of office space, 1.15 million sf of retail space and 2.43 million sf of other space (community facility, academic, hotel, court, etc.). Through the inclusion of a very significant amount of development in the No Build conditions, in addition to the 0.5% general growth factor, the FEIS took a hard look at this issue [and] did not underestimate the background transit growth that will occur by 2010 and 2016.

The decision

From Justice Joan Madden's decision:
As to substantive compliance, the court must review the record to assure that the agency identified the relevant areas of environmental concern, took a "hard look" at each one, and "made a reasoned elaboration of the basis for its determination.'

Petitioners argue that in assessing the adverse impact on public transit, the ESDC relied on a "faulty assumption" as to an annual subway ridership growth rate of 0.5%, which is suggested in the CEQR Technical Manual. To support this argument, petitioners point to a single generalized comment on the DEIS, Comment 13-6, which stated that "NYC Transit Subway and Bus Rider Surveys report average weekday subway entries has grown in the last five (pre-boom) years from Brooklyn outside Downtown, and in 2004 to 2005 began an upward trajectory of 3.3%, which averages 3% for all Brooklyn." Petitioners' reliance on this single reference to "surveys," without supporting documentation, such as copies of actual surveys or an expert's affidavit, is insufficient to raise a material issue as to the ESDC's reliance on the CEQR Manual's 0.5% annual growth rate.

Madden also cited the ESDC's statement that the analysis took into account demand from other development.

What's missing

CCS's Brian Ketcham, in a 9/21/06 submission , was the source of the claim that NYC Transit subway and bus rider surveys showed a growth rate of 2% and then 3%. There's no reason to doubt it, but he did not, as far as I can tell, attach documentation, nor did the peititioners in the lawsuit.

He made larger points (right) that the numbers in the ESDC analysis couldn't hold up unless more information was provided, and in a timely manner.

He added:
Alternatively, the NYC transit model can be recalibrated with the latest Brooklyn data and elimination of an arbitrary ceiling for each borough of growth of jobs and population.

The ESDC's analysis may be lawsuit-proof, given the limits on judicial scrutiny. But there's increasing evidence it's in tension with reality.

On WFAN: Brooklyn delay fosters rumor of Nets sale and move to Newark

Yesterday on sports talk radio WFAN, Mike Francesa and Chris "Mad Dog" Russo had as one guest New Jersey Nets President Rod Thorn. Near the very end of the conversation, they brought up a new angle on the Nets-to-Newark option--a team sale, rather than a move under the existing ownership.

Newark remains an obvious option as an interim home under current management, given that the new Prudential Center opened last fall and the Barclays Center has yet to break ground. While such a rumor about a sale may be circulating among some in the sports world, I can't say I've heard it before.

Thorn responded with homespun aplomb, maintaining October 2010 as the target date for the Brooklyn move, even though 2011 is likely the best-case scenario.

Nets brass have a pattern of overpredicting the arena opening date. Brett Yormark, President & CEO, Nets Sports and Entertainment, last September confidently asserted on WFAN that the arena would be open for the 2009-10 season.

More agnostically, Newsday NBA writer Ken Berger suggested yesterday the move could be "2010 or 2011 or sometime in the future. (Maybe.)"

The exchange

CR: And Rod, Mike and I were discussing it, what is going on with this arena? I mean, it's been delayed, we haven't heard anything about it. Are the Nets still thinking full force ahead to Brooklyn? Can New Jersey and Newark and the Prudential be in the mix? What's going on for the arena for the Nets here down the road?

RT: We're, y'know, it's full bore ahead. We expect to be in Brooklyn start of the 2010 season, and--

Russo wasn't convinced.

CR: --How about shovels in the ground, Rod, when are we going to see that?

RT: Well, shovels aren't in the ground yet, Chris.

Thorn chuckled a bit, as if recognizing that he couldn't bluff too far.

MF: How about these rumors that someone could buy the team and put it in Newark, we've been hearing those rumblings.

RT: Y'know something, Mike, if that's true, then I don't know anything about it.

Even though the Nets are losing money, I suspect that the promise of the Barclays Center naming rights deal, as well as the Atlantic Yards project as a whole, means the Nets aren't for sale. I also suspect that any rumors out there quickly find their way to Thorn.

More commentary

Meanwhile, as predicted, the Nets page on the Atlantic Yards web site has been updated. The page as of Sunday is above, while the page as of yesterday is below, with Vince Carter up top, replacing the Carter/Kidd/Richard Jefferson/Nenad Krstic panorama, and Jefferson replacing Kidd in the right column. A bit like... checkers.

In the Times today, sports columnist William C. Rhoden cites Nets coach Lawrence Frank's comparison to a failed marriage, and disagrees:
I’m not sure I buy that. Marriage, ideally, is a rain-or-shine, till-death-do-us-part commitment. Professional sports is a different animal: owners move coaches like checkers, coaches run out on teams, players who are in position to do so use their talent as leverage to get rid of an undesirable coach or change undesirable circumstances.

NoLandGrab collects some Kidd links; here's Filip Bondy of the Daily News:
Ratner should be very thankful these days for James Dolan, who has stolen all of the owner's bad thunder. Without the Knicks to kick around, area fans might notice that Ratner's plans for Brooklyn continue to stall, that he has turned his back on Newark and that he has locked himself into a morgue-like location where no self-respecting superstar would ever want to dunk basketballs for long.

Documents clarify FCR's obligation to state, but not city, if AY abandoned

Last month the New York Post reported that developer Forest City Ratner can pull out of the $4 billion Atlantic Yards project without penalty, because the developer has not yet signed binding contracts or drawn on direct subsidies. Develop Don't Destroy Brooklyn picked up the news.

What exactly does that mean? After all, the developer has already spent a chunk of its own funds, and would have to pay for the completion of the Carlton Avenue Bridge, for example. The General Project Plan (GPP) does address a reimbursement obligation to the state, but not to the city.

The GPP is a state document, so it's not surprising that city officials didn't sign it. Does that mean that the city has side contracts, as with the bridge, that require reimbursement if the project does not go forward? Or was there a gap in the documentation? It's unclear to me.

The official language

According to p. 27 of the General Project Plan (emphasis added):
Except as hereinafter set forth, in the event that prior to the completion of the Initial Development the Project is discontinued, abandoned, terminated or permanently enjoined beyond all right to appeal, for any reason whatsoever, including, without limitation, FCRC's voluntary decision to abandon the project, FCRC's and ESDC's inability to negotiate mutually acceptable terms for definitive Project documentation, or requirement to modify the terms of this General Project Plan which are not approved by ESDC and are not acceptable to the City, FCRC shall be obligated to reimburse (the "Reimbursement Obligation") the ESDC in an amount equal to the sum of all funds advanced by the ESDC under the Funding Agreements (excluding amounts advanced on behalf of the City) plus interest thereon calculated at the borrowing rate of ESDC. The Reimbursement Obligation shall also apply, and FCRC shall be obligated to make such repayment to ESDC, in the event the Arena construction is not commenced within one year after ESDC delivers vacant possession of the Project Site to FCRC (subject to up to four years of delays resulting from force majeure events or material adverse changes affecting the financing of the Arena) as required to construct the Arena including staging and necessary infrastructure. In the event the Arena construction is timely commenced by is not completed within six (6) years after ESDC's delivery of vacant possession of the Project Site to FCRC (subject to force majeure delays), FCRC will be required to remit agreed upon portions of the Reimbursement Obligation to ESDC for each year of delay.

Nothwithstanding the foregoing, in the event the State and the City elect not to proceed with the Project despite FCRC's willingness to proceed in accordance with the terms of this General Project Plan, and such election on the part of the State and the City is not the result of an inability of the parties to reach agreement on terms after negotiating in good faith, FCRC shall not be liable for the Reimbursement Obligation and any contracts to purchase land from FCRC shall be terminated.

Has the ESDC advanced any funds under the Funding Agreement? Apparently the state's $100 million has not been transferred. The city has begun spending some of its $205 million on project-related infrastructure, however.

"Substantial legally enforceable penalties"? FCR's claims about CBA raise doubts

In the pre-appeal papers in the legal case challenging the Atlantic Yards environmental impact statement, Forest City Ratner Executive VP MaryAnne Gilmartin makes a curious claim about the Atlantic Yards Community Benefits Agreement (CBA), repeating a claim made last April in legal papers by her predecessor, Jim Stuckey:
These commitments are only a handful of those contained in the Agreement, but all of the Agreement's commitments have teeth in the form of substantial legally enforceable penalties for a failure by FCRC to fulfill its obligations.
(Emphasis added)

Those penalties aren't necessarily substantial. Rather, the CBA sets up binding arbitration and then the possibility of litigation, acknowledging that "monetary damages may not be an adequate remedy for defaults under this Agreement by Developer."

Only in one instance are monetary damages specified: $500,000 to be used by BUILD (Brooklyn United for Innovative Local Development) to fund the Pre-Apprentice Training initiative should the developer default.

Despite some discussion and press coverage that suggested that the developer could pay ACORN $500,000 to get out of the affordable housing obligation, that's not the case. Then again, it's not clear if ACORN could force performance of the commitment.

An ACORN spokesman has said that "we believe we have a strong legal argument for injunctive relief," meaning fulfullment of the obligation. Then again, as noted, the CBA signatories acknowledge that monetary relief may not be adequate.

Other CBAs

Note that the enforcement provisions of other CBAs are not necessarily any more stringent. The enforcement section of the Staples Center CBA in Los Angeles--which on the whole is more of a model given the diversity of groups and real negotiations--is vague.

The enforcement section of the CBA regarding the Los Angeles Airport contains some language similar to the AY CBA, but it does not acknowledge that monetary relief may not be adequate. Rather, it states that courts can't award money damages, but can order the airport to expend funds to comply with its obligations under the agreement.

AY CBA

The enforcement section of the AY CBA is below.

60-day Right to Cure

First, the developer would get 60 days:

If, after review of the ICM report by the Executive Committee, the Coalition members believe that a Developer is in default of this Agreement, the appointed Coalition Representative shall provide written notice to Developer of the alleged default; offer to meet and confer in a good-faith effort to resolve the issue; and provide Developer sixty days to cure the alleged default commencing with the date of the notice (unless additional time is specifically provided for in this Agreement).

Mediation

Then the Independent Compliance Monitor (ICM), about which nothing has been heard since the March 2007 announcement that one was being sought, would pick a mediator:

To the extent that there is any disagreement regarding a Default by a Developer of its obligations under this Agreement, the Coalition members and the Developer will first attempt to resolve the disagreement at a special meeting of the Executive Committee. If the parties are unable to resolve the disagreement(s) at the meeting, either of the parties may request mediation by notice to the ICM, who shall pick an appropriate, independent mediator. Developer shall pay the reasonable costs of a mediator for the dispute resolution, and each party will bear its own fees and other costs, if any. The mediation period shall not exceed the sixty-day cure period referred to above.

Remedies

In the event that Developer is allegedly in Default under the terms of this Agreement, the Coalition members may elect, in their sole and absolute discretion, to waive the Default or to pursue either binding arbitration, or judicial remedies, each as described in this Section. These remedies may be pursued only after exhaustion of processes described in Section XII, Part A(i) and B above, except where an alleged default may result in irreparable injury, in which case the Executive Committee may immediately pursue the remedies described in this Section X.(C).

The Coalition members may act jointly to enforce or individually regarding the specific areas for which they are responsible.

Binding Arbitration

Each party would pay their own fees, but the developer would pay for the arbitrator:
Any Coalition member, as provided in Section XII, Part (C) 1 above, may seek binding arbitration to enforce any term of this Agreement that has allegedly been breached by Developer. Arbitration shall be conducted in Brooklyn, New York, conducted by a single arbitrator selected by the Brooklyn Bar Association under the rules of the American Arbitration Association. Developer shall pay the costs of the arbitrator. Each Party shall bear its own fees and other costs. The Coalition members may seek arbitration relief ordering, and the arbitrator shall have the power to order, affirmative equitable and/or affirmative injunctive relief, temporary or permanent, requiring Developer to comply with this Agreement or monetary damages.

Court Action

If they go to court, however, the CBA signatories would have to pay their own way:
Any Coalition members as provided in Section XII, Part (C) 1 above, may, alternatively, file a claim in a court of competent jurisdiction in Kings County, New York to enforce any term of this Agreement that has allegedly been breached by Developer and Developer consents to the jurisdiction of such court. The Coalition members may seek judicial relief ordering, and the court shall have the power to order, affirmative equitable and/or affirmative injunctive relief, temporary or permanent, requiring Developer to comply with this Agreement or monetary damages; it being acknowledged that monetary damages may not be an adequate remedy for defaults under this Agreement by Developer. Each Party shall bear its own fees and costs of court enforcement.
(Emphasis added)

Is the CBA part of the public interest? FCR says yes, but it's barely part of ESDC findings

Is the Atlantic Yards Community Benefits Agreement (CBA) something the courts should take into account to speed the appeal of the case challenging the AY environmental review?

A Forest City Ratner attorney says yes, but an attorney for the petitioners points out that the CBA was not part of the Empire State Development Corporation's (ESDC) decisionmaking process.

FCR attorney Jeffrey Braun, in an 1/25/08 affirmation, contends:
In addition to the foregoing public benefits, the project will be a powerful engine of economic growth.... Furthermore, pursuant to an innovative Community Benefits Agreement (Exhibit D hereto), the FCRC affiliates that sponsor the project are contractually bound to provide a wide array of far-reaching benefits to the historically most disadvantaged segments of Brooklyn's communities, including (but not limited to) contracting and employment opportunities, job training for permanent employment and job placement services, and affordable housing preferences. For example, the Agreement obligates FCRC's affiliates to "use good faith efforts" to cause at least 35% of the construction workers in the project to be members of minorities and at least 10% to be women, with 35% of each category to be "journey level" workers (§ IV(B)).

Not a basis?

Jeffrey Baker, attorney for the petitioners, responds in a 1/31/08 affirmation:
Finally, there is no grand or pressing public interest that warrants severely curtailing Appellants' rights to proceed in a deliberate manner on appeal. Mr. Braun's reference to the Community Benefts Agreement (CBA) is completely inappropriate. The CBA was not a basis for determination by either ESDC or MTA in the approval of the project. The only reference to the CBA is ESDC's findings for the project in a single reference that FCRC has provided additional relocation assistance to tenants displaced by the taking of their homes. ESDC does not acknowledge or rely on the alleged promises purportedly made in the CBA.

The relocation plan is on page 19 of the General Project Plan (GPP), which does mention the CBA. Actually, the GPP (p. 18) also mentions a health care facility and an intergenerational facility, though it doesn't say that they are part of the CBA. While the affordable housing is not described as part of the CBA, such below-market housing is declared by the ESDC to be one of the public purposes for the project. There's no mention, however, of hiring and contracting.

ESDC: CBA is separate

The ESDC's Final Environmental Impact Statement (FEIS) generally ignores the CBA. In the Response to Comments section (1-49) of the FEIS, several people comment pro and con about the CBA.

The ESDC's response offers some support for the petitioners' case:
The CBA is an agreement between the project sponsors and certain community-based organizations and is separate from the GPP [General Project Plan]. The DEIS included elements of the CBA to the extent that they relate to the program elements that are part of the GPP.

CBA signatory transition: from All-Faith Council to Faith in Action

The pending litigation over the Atlantic Yards environmental review offers some intriguing detail about the apparent transition of one Community Benefits Agreement (CBA) signatory group.

Perhaps the most obscure of those signatories, if ever extant, was the All-Faith Council of Brooklyn (AFCB), which was described in the CBA as not quite formed:
AFCB will form and facilitate an All-Faith Council, which shall be representative of the religious diversity within the Community, to establish an ongoing mechanism for community input for referrals to the jobs, housing and other programs created by this Agreement.

Little has been heard from the AFCB other than a statement in the original 6/27/05 press release:
The Reverend Walter J. Morris, Co-Chair, of the All-Faith Council of Brooklyn, said, "For those who say that communities have not had a say in this process, we say look not just at the process, which was inclusive, but at the results. They reflect community needs because community groups were involved in their development."

The Reverence Orlando Findlayter, the other All-Faith Council of Brooklyn Co-Chair, added, "When a developer says 'help make this a better project,' we say yes. This process was open and thorough and the results speak volumes about the developer and we believe the end result."

Nor has contact information been available.

From AFCB to Faith in Action

The AFCB, with Morris at the head, has apparently gone through a transition. A 4/16/07 affidavit from then-FCR executive Jim Stuckey offered a list of the heads of CBA signatory groups, with Morris leading the list. (Click on graphics to enlarge.)

A 1/17/08 affidavit from Stuckey's successor, Maryanne Gilmartin, offers a similar list (below), but substitutes in Morris's place the Rev. Lydia Sloley.

A 12/19/07 Real Estate Weekly article described Sloley as representing "CBA Coalition member group Faith In Action Inc." I'm assuming that Faith In Action," about which I've seen no official announcement, has either replaced the never-organized AFCB or is just the AFCB renamed.

Who's Sloley? She heads a Pentecostal church, Life in Its Poetic Form Christian Ministries, on Washington Avenue near Atlantic Avenue, with 100 congregants, that was one of more than 200 organizations and individuals that backed the CBA.

CBA connections

That's one long block from the project footprint, but likely more important to her role is her presence as clergy liaison to the 88th Precinct Community Council, headed by CBA Chair Delia Hunley-Adossa.

The latter's organization, the obscure Brooklyn Endeavor Experience, still lists the All-Faith Council of Brooklyn on its infrequently updated web site. The official Atlantic Yards web site now tells us that Faith in Action is one of the CBA signatories, though the story is a bit more complicated.

As Nets finally trade Kidd, Carter steps in spotlight

Now that star point guard and Nets team captain Jason Kidd has finally been traded, after a brief stall following the announcement Wednesday, we can expect some editing of the Atlantic Yards web site to reflect his departure.

Some other players will have to praise the new development in Brooklyn. Most likely candidate: Vince Carter. Already, as I predicted, Carter has become the face of the franchise, at least according to the Nets store.

Not an error but a "minor imprecision"

This is the third of three articles (first, second) on "Atlantic Yards corrections fatigue."

In the annals of "Atlantic Yards corrections fatigue," which I defined as "the disturbing realization that we too often make errors in covering Atlantic Yards," the failure of the New York Times to correct an error published 1/31/08 is a relatively minor matter.

Still, it still provides a window into the thought process of editors who don't take Atlantic Yards seriously enough.

The article, headlined Scaffold Falls, Killing Worker in Brooklyn, concerned an accident at a site in Clinton Hill and offered this context:
It is in a section of Brooklyn that is being swept up in new development, with the huge Atlantic Yards entertainment, residential and commercial complex planned on rail yards a few blocks to the west.
(Emphasis added)

Of course, only 8.5 acres of the 22-acre project would be rail yards, so the distinction is important. If all of Atlantic Yards were to built on public land, there would've been no battle over blight and eminent domain.

As I noted in March 2006, the Times has published multiple versions of this error, and corrected it inconsistently. However, when the Times had a beat reporter assigned to Atlantic Yards, he wrote more precisely that the project "would rise over a railyard and adjacent land...."

The Times responds

On January 31, I emailed Karin Roberts, Assistant to the Metropolitan Editor, with a link to my blog post pointing out the error. I didn't hear back, so on February 9, I wrote to another Times editor.

On February 11, I got this reply from Roberts:
We are not publishing a correction. It was a fleeting reference in an article that had nothing to do with Atlantic Yards, and it was at worst a minor imprecision, not an error. And before you cite chapter and verse of the Times ethics guidelines to me, please be aware that Times editors are trusted to use their best judgment. In mine, no correction is warranted. Thank you for writing.

She was referring to my periodic citation to the seemingly unambiguous 2004 Ethical Journalism handbook, which states:
The Times treats its readers as fairly and openly as possible. In print and online, we tell our readers the complete, unvarnished truth as best we can learn it. It is our policy to correct our errors, large and small, as soon as we become aware of them.

My response

I responded:
I'll agree that it was a fleeting reference in an article that had nothing to do with AY. And I recognize that editors are trusted to use their judgment.

However, I can't agree it was "a minor imprecision;" after all, the Times has previously corrected such an imprecision.

Hierarchies of errors

Interestingly, the Times did publish a correction regarding that January 31 article:
A picture caption in some editions on Thursday with an article about the death of a construction worker, Jose Palacios, who fell 12 stories from a collapsing scaffold in Brooklyn, misstated, in some copies, the relationship between Mr. Palacios and Jasmine Solas, who said he came to the United States from Mexico to find work. He was her uncle, not her cousin.

So, while this was a minor error, it was directly related to the subject of the article.

While the Atlantic Yards error was not directly related to the subject of the article, it was a major imprecision. Why major? Because unlike many other errors and not-minor imprecisions the Times corrects regularly, it has public policy implications.

It should be corrected because people do keyword searches regarding subjects like Atlantic Yards. It's possible that even a fleeting reference--if no correct reference is found elsewhere--will lead the reader astray.

Judgment calls

The Times corrects all kinds of minor errors. I collected a few.

A correction February 12:
An article in some editions on Dec. 18 about a Bronx woman who received financial help through The New York Times Neediest Cases Fund after she was mugged misspelled her surname. She is Laura Pinto, not Pintos. The Federation of Protestant Welfare Agencies, the agency that helped Ms. Pinto, pointed out the error in an e-mail message late last month.

Another correction February 12:
Because of an editing error, an article in The Arts on Thursday about a proposal for an urban farm that was chosen in a competition to transform the courtyard of the P.S. 1 Contemporary Art Center in Long Island City, Queens, for a summer misstated the number of years the annual competition has been held. It is eight years old, not seven.

A fleeting reference

I did a random search of Times corrections that used the word "imprecisely" and found that, yes, most concern references more central to the story than the Atlantic Yards error I found. Then again, sometimes fleeting references are corrected.

A correction February 2:
The On Education column on Jan. 16, about overcrowding at Richmond Hill High School in Queens, described the status of a nearby high school, Franklin K. Lane, incorrectly, and because of an editing error, referred imprecisely to its location. It is scheduled to be phased out over four years; it has not closed. And although Franklin Lane is near the Queens border, it is in Brooklyn, not in Queens.

The article focused almost completely on Richmond Hill High School. Only one sentence referred to Franklin H. Lane:
Just across the border in Brooklyn, Franklin K. Lane is scheduled to be phased out, too.

Those who monitor city schools obviously care where this high school is located, and want the record to be accurate. And those who monitor the city's most controversial development project want the record to reflect that Atlantic Yards, despite the ingenuity of its name, would be built mostly on what was once private property and city streets, not rail yards.

Will the Times correct the "same site" error? Not quite

This is the second of three articles (first, third) on "Atlantic Yards corrections fatigue."

The New York Times on multiple occasions has suggested that Atlantic Yards would be built on the "same site" Walter O'Malley wanted for a new Brooklyn Dodgers stadium.

That's not true, as I pointed out in an extensive analysis last May. And, while the Times last December made the same error online, apparently because of a reliance on the existing and erroneous clip file, it will not publish a correction for the previous articles.

Why? It's a judgment call, Times editors told me, given that they can't publish corrections for all the "old articles" that deserve them. However, as I argue below, if there is a hierarchy for such corrections, "old articles" that are part of current controversies should be the priority. Indeed, the error gets repeated periodically by project supporters like Mayor Mike Bloomberg.

Moreover, the Times does periodically correct older articles than the ones I cited, including articles that have no relevance to any controversy.

Conclusion: it's another case of "Atlantic Yards corrections fatigue," which I defined as"the disturbing realization that we too often make errors in covering Atlantic Yards."

Pointing out the error

On 12/8/07, I wrote to three Times editors:

The Times on multiple occasions (in articles, an op-ed, and an editorial) has indicated that the arena planned for the Atlantic Yards project would be on the "same site" as the location Walter O'Malley sought for a successor to Ebbets Field.

That's not so; he sought a site across the street, as I explained:

The errors are as follows:
A 1/16/04 article, headlined Yo, Dodgers? No Way! Brooklyn Is Betting on the Nets for Revival, stated:
"Coincidentally, the Nets would be based at the same site that Walter O'Malley wanted as a new home for the Dodgers before moving the team to California."

A 1/22/04 article headlined Nets Are Sold for $300 Million, and Dream Grows in Brooklyn, maintained the error:
"There is no guarantee that Mr. Ratner will be able to fulfill his vision in Brooklyn, where sports fans are still haunted by memories of the Dodgers' departure to Los Angeles after the 1957 season. The arena would be built on the same site the Dodgers were rebuffed from buying."

A 7/1/04 editorial, headlined The Brooklyn Nets, similarly erred:
"There is also, of course, the dream of giving back to Brooklyn some of the luster it lost when Robert Moses killed Walter O'Malley's vision of building a domed stadium for the Dodgers at the same site nearly 50 years ago..."

Former Brooklyn Borough Historian (!) John Manbeck, in an 11/13/05 op-ed headlined The Project That Ate Brooklyn, wrote:
"At the core of the Atlantic Yards plan is an arena for the New Jersey Nets on the very site that was denied the Brooklyn Dodgers 50 years ago."

[I left out an 8/8/03 article, headlined YankeeNets Is on the Verge of Splitting Apart, which stated: "The site, which includes a rail yard and public and private land, strikes a historical echo in Brooklyn. In the 1950's, Walter O'Malley, the owner of the Brooklyn Dodgers, wanted to build a stadium there to replace Ebbets Field."]

Why is a correction important?

Because the Times last week made the same error online, and then published a correction:
"An earlier version of this article misstated the location of Walter F. O’Malley’s proposed Dodgers stadium from the 1950s in relation to the current-day Atlantic Yards site. It would have been adjacent to, not within the modern footprint of, the Atlantic Yards development. The article has been corrected."

The Times's print coverage got it right:
"Just across Atlantic Avenue from where Mr. O’Malley wanted to build his stadium, the developer Bruce Ratner is developing a $4 billion complex, the Atlantic Yards, featuring a basketball arena."

However, until the archive is corrected, future errors are likely to recur.

A note, not a correction

Senior Editor Greg Brock responded promptly:

[Correction 4/5/09: I previously referred to Brock as Corrections Editor]

On Monday, I will ask our researchers to attach a note to each of the 2004 articles that will say that this is site is across the street. This note will guide reporters who go to the archives to look up information on this project. Though I would hope they would use articles much more recent than 2004 as a guide, since there have been so many developments since then.

As you noted, we had this correct in print. The City Room blog ran its own correction. (We do not correct Web articles in the print editions.)

I am not going to run a print correction for the 2004 news articles. If the editorial editors choose to run a print correction on their 2004 editorial. that is their decision. We have nothing to do with those articles or decisions about corrections on those pages.

There is a limit to how many old articles we can correct in print. If we start that, it would take about 2 open pages every day for a year to correct all the old errors. And I doubt that would be enough. But the note will be placed in our internal archives for future reference.

Op-Ed desk

I got a similar response from an unnamed member of the Op-Ed staff:
Thank you for your note, which Mr. Brock has passed on to us. After consultation with Mr. Manbeck, we have decided to follow Mr. Brock's lead and append a correction to the archive on the Op-Ed article from 2005. Thank you for reading The Times.

My response

I responded to Brock:

I appreciate your prompt reply and agree that appending a note to the archive may be part of a responsible response.

However, I do not think it goes far enough, for the following reasons.

1) It does not conform to the Times's policy.

As in a Q&A last year on the Times's Correction Policy May 10, 2006, your predecessor, Bill Borders, stated "The key principles are to be totally honest and totally transparent. To level with the readers 100 percent."

According to the Stylebook cited:
"Because its voice is loud and far-reaching, The Times recognizes an ethical responsibility to correct all its factual errors, large and small (even misspellings of names), promptly and in a prominent reserved space in the paper. A correction serves all readers, not just those who were injured or who complained, so it must be self-explanatory, tersely recalling the context and the background while repairing the error.
A complaint from any source should be relayed to a responsible editor and investigated quickly. If a correction is warranted, it should follow immediately. In the rare case of a delay longer than a month, the correction should include an explanation (saying, for example, how recently the error was discovered, or why the checking took so long). If the justification is lame or lacking, the correction should acknowledge a reporting or editing lapse."

That Stylebook does not, so far as I can tell, provide an exception for articles of a certain vintage. The policy appears to be inconsistent; indeed, in 2005, the Times corrected errors in an obituary published more than 12 years earlier:

2) As far as I can tell, the note appended to the archives affects only in-house access by the Times. (If that interpretation is wrong, please let me know.) If a correction is not published, it will not be appended to the versions of those articles (and op-ed/editorial) that appear in numerous databases. Thus, other researchers and reporters drawing on those pieces may be misled.

3) If there must be triage regarding the number of "old articles" you can correct in print, I would suggest that print corrections should be prioritized for "old articles" about ongoing controversies, such as Atlantic Yards, especially if the errors all favor "one side" of a controversy.

The Times, through its lapses, five times reinforced the misguided notion that the Atlantic Yards arena might be, in its way, a restoration of Walter O'Malley's dream. That merits correction in print.

Consider a set of "old articles" from two or three years ago that misrepresent the stance of a public official, now a candidate for president, toward an ongoing controversy. Surely those articles would merit correction in print?

An incomplete response

On 12/10/07, Brock responded:
We do in fact correct older articles from time to time. But it's a case-by-case call, not a blanket rule.

The best way to get an article corrected is to report the error at the time it occurs.

Old corrections

Brock's formulation seemed arbitrary, so I kept my eye open for old corrections and, soon enough, found them.

On 12/14/07, however, the Times published this very old correction in the main news section:
Because of a transcription error, a brief art review in Weekend on May 8, 1987, about an exhibition of paintings by Charles G. Shaw at the Richard York Gallery on East 65th Street, misstated the location of a small painting from 1942, whose date did not fit with those of the other paintings, which were made in the 1930s. It was displayed in the vitrine near the receptionist’s desk, not the latrine. (The reviewer called the error to editors’ attention this week while doing research.)

Of course that reviewer is on staff. Curiously, that correction has not been appended to the electronic archive.

On 12/16/07, the Times published a correction in the Sunday Styles section:
An article on Feb. 19, 2006, about people who relocate to Washington, D.C., and keep their hometown cellphone area codes for a sense of regional identity, misspelled the given name of a California woman with a 714 area code who works for a San Francisco congressman. She is Puja Patel, not Punja. (Ms. Patel pointed out the error in an e-mail message on Dec. 7.)

On 12/20/07, the Times published a correction in the main news section:
An obituary on June 30, 2000, about Tobin Rote, a championship quarterback for the Detroit Lions in the 1950s, misstated his full name, referred incorrectly to a relative in the list of survivors and omitted the names of two others. He was Tobin Cornelius Rote Sr. — not Jr. Julie Struble Rote was Mr. Rote’s wife, not a daughter. Two survivors — a daughter named Robin Rote Kirk, of Plymouth, Mich., and a previous wife named Betsy Bobo Todd of Bloomfield Township, Mich. — were omitted. (A family member pointed out the errors in an e-mail message on Tuesday.)

On 1/28/08, the Times published this very old correction: A Sports of The Times column on May 21, 1999, about the vocal presence of New York fans at the Georgia Dome in Atlanta for an N.B.A. playoff game between the Hawks and the Knicks, misspelled the surname of a fan from Howard Beach in Queens. He is Constantin Manta, not Marta. Mr. Manta pointed out the error in an e-mail message this week.

Again, curiously, the correction has not been appended to the electronic archive.

Trivial errors

And then, of course, are the many trivial errors that the Times readily corrects. Yesterday the Times offered:
A picture caption on Friday with an article about Representative John Lewis’s possible shift of support from Hillary Rodham Clinton to Barack Obama misstated, in some editions, the day that the photograph of Mrs. Clinton holding boxing gloves was taken. It was Thursday, not Wednesday.

And today the Times published this correction:
A report in the “Big Deal” column last Sunday about the recent sale of a town house on East 75th Street whose ornate living room has been used for scenes in a television series misstated the name of the series. It is “Gossip Girl,” not “Gossip Girls.”

No one reading the Times would have been seriously misled about the identity of the television series. But some powerful New Yorkers still erroneously believe that the Atlantic Yards arena would be built at the site Walter O'Malley wanted for Ebbets Field.

The Daily News grudgingly prints a letter in response

So, in response to the New York Daily News's February 5 editorial about Atlantic Yards, Abuse of process, Develop Don't Destroy Brooklyn legal director Candace Carponter sent a letter to the newspaper in response. It took a week to get published (and was cut), appearing yesterday, in the Saturday paper, which typically is the least read of the week.

DDDB has the original letter. While DDDB wouldn't speculate about the delay, I'd say that circumstantial evidence sure suggests the Daily News is not too welcoming of such criticism.

(The editorial, as I noted, was quickly distributed as part of Forest City Ratner's "Atlantic Yards News.")

The Times resists correcting the arena setbacks error

This is the first of three articles (second, third) on "Atlantic Yards corrections fatigue."

When, last November 24, the New York Times published the scoop (first online November 21) that the Atlantic Yards arena would be only 20 feet from the street, it essentially corrected a previous article in which it had estimated--and seemed to declare more definitively--that the arena would be at least 75 feet from the street.

No official correction was published, however. Given the Times's policy, a correction should be in order, I thought. I requested one of the Times on January 2 and soon got a response saying no, given that the Times used "the best available data."

However, as my response below indicates, the Times misinterpreted available plans, thus failing to use "best available data."

My response was ignored. It's another example of "Atlantic Yards corrections fatigue," which I defined as "the disturbing realization that we too often make errors in covering Atlantic Yards."

Initial letter

I wrote: On Nov. 7, the Times reported, in a Metro article headlined "Security Study Urged for Atlantic Yards",
"Plans for the Brooklyn arena, though preliminary, seem to show it set back farther from the street than the Newark arena, the Prudential Center. The Prudential Center is about 25 feet from both Edison Place and Mulberry Street in downtown Newark, while renderings of Atlantic Yards show the arena about 75 feet back from Atlantic Avenue and about 150 feet from Flatbush Avenue."

On Nov. 24, the Times essentially corrected that previous article, in a Metro article headlined A Brooklyn Arena and the Street: What’s the Right Distance?:
"This month, a spokesman for Forest City Ratner, in response to inquiries from The New York Times, directed a reporter to a rough site diagram. The reporter multiplied the distances from arena to street by the scale of the plan and determined that the diagram showed the arena set back about 75 feet from Atlantic Avenue and 150 feet from Flatbush Avenue.
After this calculation was published in The Times on Nov. 8, Atlantic Yards watchdogs said that it was not realistic and that the arena was going to be much closer to the street, citing architect’s renderings and language in plan documents...
On Wednesday, a spokesman for Forest City, Loren Riegelhaupt, offered an updated response to a reporter’s inquiries: At its closest point to the street, the arena will be set back 20 feet from both Atlantic and Flatbush Avenues."

The Times's Ethical Journalism handbook states, "The Times treats its readers as fairly and openly as possible. In print and online, we tell our readers the complete, unvarnished truth as best we can learn it. It is our policy to correct our errors, large and small, as soon as we become aware of them."

In this case, the reporting/editing staff of the Times initially erred in calculating that the arena would be 75 feet from the street. While the follow-up report added valuable clarity to the record, the original error was not officially acknowledged. Without the publication of a correction to the earlier article (and thus the attachment of a correction to that article), those who find only the earlier article will be misled.

Times response

Karin Roberts, Assistant to the Metropolitan Editor, responded:

Please take another look at the language used in the Nov. 7 story (my emphasis in boldface): "Plans for the Brooklyn arena, though preliminary, seem to show it set back farther from the street than the Newark arena, the Prudential Center."

The reporter based his initial calculations on the best available data at the time, and it was written this way precisely to avoid having to publish a correction. I'm sure that as a journalist yourself, you are familiar with the common practice of "hedging" to avoid stating something as fact when the truth cannot be determined before deadline.

I think our readers are intelligent enough to realize that the sentence quoted above is absolutely not saying that the Brooklyn arena would definitely be set back farther on the street than the Newark arena. It is saying that it "seems" to be, based on a "preliminary" plan.

In the follow-up article, the reporter explained more fully how he arrived at that number, reported the doubts of Atlantic Yards critics, then included an updated figure from a Forest City spokesman. I believe we have been sufficiently forthcoming and transparent on the matter of the setback distance, and are confident that no reasonable reader could be misled by the earlier article.

For these reasons, we are not publishing a correction. I am sorry if this decision displeases you, but it is final.

My response

I responded:
Thanks for your reply. I would strongly encourage you to reconsider your decision, based on the clear evidence set out below.

While plans may be "preliminary" in the sense that they may change when/if the arena is built, there was no change in the plans between the publication of the two articles at issue.

Rather, there was a change in the interpretation of the plans, and, unfortunately, a failure to use best available data, despite your assertion below.

For the first article, the reporter, using an imprecise document provided by the developer, misinterpreted the plans. (He was not helped by the apparent unwillingness of anyone in an official capacity to provide precise numbers.)

The reporter estimated the arena was 75 feet from the street by calculating the distance from the arena oval to the street. On first impression, that seems reasonable; the space shaded green does seem to be a "moat" between the arena and the street. However, that was an error.

The space shaded green is actually rooftop green space, which extends close to the street rather than rings the arena. The rooftop green space is more precisely delineated in this Empire State Development Corporation document/graphic from the Final Environmental Impact Statement issued in November 2006.That was the best available data.

Not that easy

Note that I, and others when writing/commenting about the setbacks issue, had not initially used the graphic above. On November 8, I used a graphic without the shading that indicated the roof. I published the above graphic on November 13, though it been available for a year.

But that certainly was enough time for the Times to clarify the "best available data" assertion in its November 21 and November 24 articles that did not quite acknowledge errors.

Down the EIS rabbit hole: Why does Fairway get counted for traffic impact but not Whole Foods?

Delving into the rabbit hole of traffic and transit projections for the Atlantic Yards project leads to a glaring discrepancy revealed only in the Final Environmental Impact Statement (FEIS) and not cited in the unsuccessful lawsuit challenging the AY environmental review.

The Empire State Development Corporation (ESDC) belatedly added the new Fairway market in Red Hook to its list of sites that should be analyzed regarding future travel demand in the area around the Atlantic Yards site. However, the ESDC continued to exclude the coming Whole Foods Market in Gowanus because it was deemed "distant from study area."

That's absurd. As the graphic shows, Fairway is about twice as far as the Whole Foods site from the westernmost point of the Atlantic Yards footprint, the corner of Fourth, Flatbush, and Atlantic Avenues.

Any impact?

Would this have made a difference had it been included in the lawsuit? (The issue was not raised by post-FEIS commenters.) It's doubtful, given that Supreme Court Justice Joan Madden punted on addressing the dubious crime statistics in the suit. But it's another sign that the volumimous ESDC review, conducted by ubiquitous consultant AKRF, still contains glaring omissions obvious to the layperson.

A selective response to comments

In response to the Draft Environmental Impact Statement, one Brooklyn resident raised the issue of Whole Foods, but the response was incomplete. See Comment 12-1 of the Response to Comments chapter of the Atlantic Yards FEIS:
Large projects such as the Brooklyn Bridge waterfront development and the expansion of the Red Hook Cruise Ship Terminal, IKEA in Red Hook, the new Fairway and the Whole Foods supermarket in Gowanus were not included. Large buildings such as those at 9 MetroTech, the new Federal Courthouse, and the Marriott Hotel Expansion were simply left out.

The ESDC's response:
In addition to background growth, the EIS transportation analyses include the travel demand from a total of 33 discrete No Build sites in and around the project site and Downtown Brooklyn that are expected to be developed by the proposed project’s 2016 analysis year. (For the 2010 analysis year, 14 discreet No Build sites were included.) These projects, which comprise approximately 6,254 dwelling units, 5.19 million sf of office space, 1.15 million sf of retail space and 2.43 million sf of other space (community facility, academic, hotel, court, etc.), include the anticipated development resulting from the Downtown Brooklyn Development project, Brooklyn Bridge Park, Pier 12, the new IKEA store in Red Hook, the Atlantic Center development, and the new Federal Courthouse and the Marriott Hotel expansion in Downtown Brooklyn. Three developments (a charter school on Waverly Avenue, residential development at 306-313 Gold Street, and the Fairway market in Red Hook) totaling 517 D.U. and 310,000 sf of office, retail and other space have been added to the transportation analyses in the FEIS in response to recent information and agency and public comments on the DEIS. Much of the additional development cited in the comments can be attributed to projects that (1) were completed prior to Fall 2005 and are therefore already reflected in the EIS 2006 traffic baseline condition; (2) fall below minimum threshold densities for inclusion as discrete No Build sites; (3) are distant from the Atlantic Yards project site (such as the Greenpoint-Williamsburg Rezoning project which includes sites located up to four miles from the project site); or (4) are speculative sites.
(Emphases added)

What about Whole Foods?

So why was Whole Foods excluded? It wasn't completed, nor too small, nor speculative. Rather, according to the background memo regarding "No Build" assumptions, Whole Foods would be "Distant from AY study area."
(Click to enlarge)

Though the distance is less than a mile, it's outside the study area, which was defined as "¾ mile of the project site," according to Chapter 2, Framework, of the FEIS.

However, Fairway is much farther away, so obviously "recent information and agency and public comments" caused some change in the ESDC's analysis. They just chose to be inconsistent when it came to Whole Fods.

Fair comparison?

Yes, Fairway is bigger, with nearly 120,000 square feet of retail, plus 91,500 square feet of office space, while Whole Foods would have 46,000 square feet, according to the FEIS memo. (Whole Foods says 52,000 sf.)

But the 60,500 sf Pathmark in the Atlantic Center mall already generates a lot of traffic. And Whole Foods, for now would have a bigger parking lot than Fairway. It recently rejected a request to reduce its 420-space parking lot, leaving it more than one-third larger than Fairway's 300-space lot.

So it's hard to disregard Whole Foods.

Mum's the word on FCR's gift to Democratic "slush fund"

A couple of news outlets have tried to get some answers after I broke the news Monday that Forest City Ratner, after not giving state political contributions for at least nine years, had given $58,420 to the Democratic Assembly Campaign Committee's Housekeeping account.

They haven't gotten far. WNYC reported:
A spokesman for the company wouldn't comment on the reason for the gift...

The top Democrat in the Assembly, Sheldon Silver, has supported Atlantic Yards in the past, and his continued backing could play a role in securing tax-exempt financing for the apartments and the basketball arena. His office would not return phone calls or an e-mail.

The Brooklyn Paper tried both sides of the deal:
The executive director of the Assembly Democratic Campaign Committee, Kathleen Joyce, said she could not comment for this story, but promised to find someone who could. That person never called The Brooklyn Paper.

A spokesman for Forest City Ratner said only, “No comment.”

Common Cause Executive Director Susan Lerner told the newspaper:
“But in practice, housekeeping accounts are a political slush fund controlled by the speaker,” she said. “Money given that way is money that gets dispensed and used by the party bosses rather than by an individual candidate. It gives much more bang for the buck."

So, will the New York Times and the other dailies acknowledge this story?

Goodbye (?), J-Kidd, you helped sell Atlantic Yards

First Jim Stuckey, now Jason Kidd. Assuming that the Nets' announced trade yesterday of point guard Kidd to the Dallas Mavericks will go through after a stall, the two most public faces of the Atlantic Yards project--the executive who shepherded the project, and the star used to sell the team/arena--will have left the scene.

The deal, which would bring guard Devin Harris and several other players, plus two first-round draft picks and cash, seems like a savvy move for the Nets, as commenters on NetsDaily and ESPN columnist John Hollinger suggest. Indeed, if the Nets are rebuilding, they have until at least 2011 (by my estimation) to prove it in Brooklyn.

Fungible parts

In developer Forest City Ratner's "Atlantic Yards permanent campaign," a Kidd trade is a reminder that the players, as in sports, are ultimately fungible. Kidd was deployed to mouth bromides at an 8/23/06 press conference (at right, with teammate Vince Carter, principal owner Bruce Ratner, and Borough President Marty Markowitz) before the public hearing on the AY Draft Environmental Statement and similarly at the 1/18/07 Barclays naming rights extravaganza.

Kidd's much-publicized record of spousal abuse has nothing to do with his basketball skills, but still Ratner, in a 6/26/05 New York Times Magazine interview, went out of his way to puff the team:
The players are terrific. They are of good character. They are incredibly charitable. They are family-oriented. They have integrity.

Assuming Kidd departs, we'll see no more stories about his tempestuous divorce, his churchgoing, nor his image rehabilitation via Take a Net to School. No more Kidd posters selling season tickets at Brooklyn street fairs.

It'll be time to step up, Vince Carter.

Quinn calls for task force to address housing crisis

In coverage yesterday of City Council Speaker Christine Quinn's State of the City speech, only the New York Sun, among the dailies, noticed her attention to the housing issue. In an article headlined Quinn Positions Herself For Mayoral Race, the Sun reported:
The biggest applause of the speech came when Ms. Quinn announced the creation of a task force that would recommend ways to expand the city's supply of middle-income housing and develop "a citywide Mitchell-Lama plan for the 21st century," as she put it.

..Asked about Ms. Quinn's new housing task force, [Manhattan Borough President Scott] Stringer said that while he was not sure if it would ultimately succeed, the city needed to look for ways to add more affordable housing units. "In our borough, right here in Manhattan, the housing crisis is now out of control," he said. "Somebody's got to step up with new ideas."

$110,000 and struggling?

Here are some excerpts from Quinn's speech:
Now, the single biggest complaint I hear from New Yorkers is the syrocketing cost of housing and the devastating impact it’s having on our middle class.
The reality is, if you are a teacher and firefighter, raising your kids in Clinton Hill and together make $110,000 a year, it’s hard to find a decent place to live.

Note that, under the guideline that people spend 30% of their income for affordable housing, the annual rent for such a household would be $33,000 and the monthly rent $2750. Also note that $110,000 is within the top range of households eligible for Atlantic Yards affordable housing.

Quinn is right that affordable housing is a challenge to many people. (Still, there are apartments in Clinton Hill well under $2750.) But Atlantic Yards was endorsed by the low-income group ACORN because its members thought it would help them.

Some progress

Quinn continued:
Talk about untenable. We can’t expect to keep a strong middle class here in New York or provide opportunities to immigrant families if we make the city literally uninhabitable for them.

...We have made some progress on this score. Last year, the Council passed several historic pieces of legislation to preserve and upgrade the limited supply of affordable housing we already have. And by the end of this month, we’ll pass Dan Garodnick and Melissa Mark Viverito’s antitenant harassment bill into law.

Also, the Mayor’s New Housing Marketplace and Commissioner Shaun Donovan are creating tens of thousand of new housing units. This year, to help ease the squeeze on working families who don't own their homes, we will continue our push to pass a Renter's Tax Credit. After all, it's only fair if we're going to give a rebate to homeowners to do the same for renters.

This refundable credit of three hundred dollars will give an immediate boost to more than one million New Yorkers.

It's worth noting that she spent more time on the renter's tax credit than praising the Bloomberg administration (or criticizing it).

New focus

She continued:
But if we are going to hold onto our middle class and those striving to join it for the long term, we have to expand our focus and even the definition of affordable housing.

What we really need, as many of you have heard me say before, is a City-wide Mitchell-Lama plan for the 21st Century – a comprehensive approach to creating housing that is affordable to our middle class and stays that way permanently.

One of our top priorities this year will be leveraging all the great expertise and energy across the city to help us develop just such a blueprint. We will convene a high-level task force and will charge them with coming back to us in six months with detailed and doable recommendations on how best to deal with this complex challenge.

...Our goal will be to unveil our next generation Mitchell-Lama plan this fall and to have the commitment and resources next year to begin implementing it. But in the short-term, we are going to look for realistic opportunities this year to make an immediate difference in increasing the supply of affordable housing.

New partnership

She continued:
One of our best allies in this fight has been and will always be the city’s unions and workers. They have a record of stepping up to help the city in tough times. Don’t forget, these were the same folks who offered up their pension funds during the 1970s and helped bail out our city. Today, to help make sure that we continue to preserve and expand affordable housing even in these challenging times, our Central Labor Council has committed to an innovative new partnership with the City Council.

The CLC will be forming a new non-profit organization – collaborating with its local unions – to use a combination of pension funds available through the AFL-CIO's Housing Trust Fund and private equity to expand the supply of housing available to middle-income New Yorkers. Together, we’ll identify housing at risk of being sold or deregulated and between the union's resources and the City’s leverage we'll make competitive bids that will keep tenants in their homes.

We’ll also partner with developers to build new middle-income housing – with the CLC providing financing and the City offering tax incentives.

Starrett City, the CLC, and ACORN

Interestingly, the CLC last year tried to buy Starrett City to capture the development from an investor opposed by affordable housing advocates, but ran into trouble with ACORN, because it thought the rents would be too high.

(Is the tension between low-income affordable housing and middle-income affordable housing what Quinn meant by expanding the definition of affordable housing?)

As the New York Observer reported last September:
But the labor council ran into resistance from Acorn, an affordable housing advocacy group, which objected to parts of the labor council’s future plans for the 5,881-unit complex, he said. Under those proposals, a copy of which was obtained by The Observer, nine-tenths of the tenants would be transferred to a federal program that would cap the rent they paid to 30 percent of their income. But once those tenants left or died off, just 30 percent of the apartments would be preserved for low- or very low-income residents; another 20 percent would be sold to tenants making up to $85,080 for a family of four.

That threshold struck housing advocates and elected officials as too high, particularly in the far-out stretches of Brooklyn, where the median income was a lot lower.

The median income of the folks who attended Atlantic Yards public hearings/meetings in search of housing was a lot lower, too, as ACORN's Bertha Lewis discovered at a July 2006 affordable housing information session.

Pintchik development sites: the future face of Flatbush

Last Thursday's New York Sun article about the Pintchik family of hardware store fame, headlined Brooklyn Family Sitting on $100M in Property, Air Rights, described big plans for the family's properties along Flatbush Avenue between Pacific Street and Grand Army Plaza, including new retail, rooftop additions and other expansions, then "as many as four new, mixed-use buildings on the sites of small commercial properties and lots along the avenue over the next three years."

And where might they be? The Sun reported: The family is planning a 22,000-square-foot retail space at one of the new buildings planned for Flatbush Avenue and Sterling Place, which could hold a large national tenant.

Photographer Tracy Collins has filled in the blanks regarding those development sites. Above and at left are the two buildings that make up 342-354 Flatbush Avenue, on the south side just east of Sterling Place. The top photo shows the low-slung Nephrology Foundation of Brooklyn, where numerous people come daily for dialysis.

Other properties along Flatbush closer to Fifth Avenue (and the Atlantic Yards site) contain medical offices connected with New York Methodist Hospital. I've been told those and other medical properties along Flatbush signed long leases decades ago, when the shopping strip was moribund. Assuming an arena and further development arrive, those sites would become much more lucrative for retail and entertainment.

Other sites

Along with the site above, the Sun reported that the Pintchiks plan new buildings at 162-170 Flatbush Avenue just east of Pacific and across from the planned Miss Brooklyn (right), 250-258 Flatbush Avenue just east of St. Marks Avenue (below), and perhaps another building nearby on Bergen Street:
Preliminary plans have already been drawn up for the buildings, which [Matthew Pintchik] said would be designed in a "seaport cast-iron" and "great brick" style.

"They will not be modern buildings," he said. "They will be crisp, with great light and air, but fitting the neighborhood."

Last September, when the $13 million listing for the property near Pacific Street appeared on Corcoran.com (it's now gone), Gabby at Brownstoner observed that the listing only includes a passing mention of the fact that the site is right across the street from “the proposed Forest City Ratner Project spanning a large area around and over the Rail Yards.” Perhaps brokers are shying away from using AY’s ginormous mish-mash of out-of-scale towers, constant construction and blaring traffic as selling points.

Thus ensued a barrage of comments on what effect (and for whom) Atlantic Yards might have.

Brennan Center: FCR donation points to need for campaign finance reform

NYU's Brennan Center for Justice, which has called for campaign finance reform in New York, took off yesterday from my story about Forest City Ratner's $58,420 "soft money" donation to the Democratic Assembly Campaign Committee's Housekeeping account, noting how that circumvents the typical $5000 corporate contribution limit.

Wrote the Brennan Center's Larry Norden:
We're sure this very large check has nothing to do with the ongoing legal and political battles surrounding Atlantic Yards. And we're sure that this large check will not influence any politicians should they need to consider controversies around Atlantic Yards in the coming months and years. All the same, wouldn't it be nice if we had real limits on corporate campaign contributions, so that we could avoid even the appearance of buying influence?
(Emphasis in original)

The Brennan Center, in a report issued last month, cites the Housekeeping accounts among the issues waiting for reform:
* Reducing contribution limits in all categories;
* Closing the corporate subsidiary loophole and the housekeeping account loophole;
* Ending personal use of campaign funds by candidates;
* Introducing thoughtful restrictions on contributions by state contractors and lobbyists;
* Enhancing enforcement by increasing fines and penalties and properly funding the Board of Elections; and
* Providing meaningful public financing to executive and legislative candidates.

The new Community Advisory Committee has a seat for the CBA, but the ESDC won't say why

The Empire State Development Corporation (ESDC) has begun to recruit a reconstituted and expanded Atlantic Yards Community Advisory Committee (CAC), to meet quarterly and provide comment on the project, and is asking local elected officials for nominations.

Only the chair of the Atlantic Yards Community Benefits Agreement (CBA) Executive Committee gets an automatic seat, but the ESDC hasn't explained why.

(The letter at right refers to an "Executive Board," but the CBA calls it a committee.)

According to the letter from project Ombudsman Forrest Taylor, the CAC will have 17 members, a distinct increase from the six-person board that petitioners in the lawsuit challenging the AY environmental review have called toothless.

Appointee process

The new CAC would include one member selected by each one of the ten elected officials representing the area; two members each from Community Board 2, 6, and 8, to be selected by the respective board chairs; and the chairperson of the CBA board.

Two of the elected officials, Borough President Marty Markowitz and Rep. Yvette Clarke, are enthusiastic supporters of AY, while two, Council Member Letitia James and State Senator Velmanette Montgomery are opponents; the rest have expressed support mixed with criticism. The Community Boards have generally expressed mixed to negative views of AY.

So it's likely that the CAC would tilt somewhat toward a critical posture. That suggests that a reserved seat for the CBA would counteract that tilt slightly.

The other elected officials are State Senator Eric Adams; State Assemblypersons Jim Brennan, Joan Millman, and Hakeem Jeffries; and City Council Members David Yassky and Bill de Blasio.

That CBA seat: why?

Why does the CBA get a seat while other organizations, such as the Council of Brooklyn Neighborhoods (CBN), not get one? CBN produced an extensive critique of the environmental impact statement and has open meetings, unlike the CBA. Then again, CBN is a plaintiff in the pending lawsuit over the environmental review.

When I spoke with Taylor on Monday, February 4, he said he'd get back to me with a statement. Three days later, he said I should contact the ESDC press office, which I did, twice, with no response so far.

At a meeting last month, when Taylor was asked if CBN would get a representative, he responded, “You know your elected officials just as well as I do.” Indeed, it's likely that an elected official critical of the project would appoint a representative from CBN.

Then again, it's likely that an elected official supportive of the project would appoint a representative from the CBA. After all, for the six-member CAC that barely met during the consideration of Atlantic Yards, Markowitz appointed Delia Hunley-Adossa, who chairs the CBA Executive Committee.

A legal document prepared by the ESDC in the environmental lawsuit merely said (p. 27) that Hunley-Adossa "has many ties to the local community," without citing her role in the CBA.

CBA role and schedule

According to Taylor's letter, the CAC's role will be to provide comment as the Project moves through its various phases as well as provide ESDC and the developer the opportunity to regularly update a group of community representives.

It is anticipated the CAC will meet quarterly, with each meeting including a discussion of the work having occurred, work that we anticipated occurring in the next quarter, and responses to questions having arisen out of our discussions.

Our goal is to have the first CAC meeting in late February to early March.

The Ward Bakery demolition will finally begin soon

After weeks of pre-demolition asbestos abatement at the Ward Bakery on Pacific Street, and weeks of "mobilization for demolition," the Atlantic Yards Construction Update issued yesterday by the Empire State Development Corporation puts it plainly:
• Demolition will begin at 800 Pacific Street (block 1129, lot 25) within this two week period.

The process is expected to take several months. It wasn't inevitable, since Forest City Enterprises has a history of historic preservation--just not in Brooklyn.

Photo by Tracy Collins.

From Forest City Ratner, CBA grade inflation

Developer Forest City Ratner, never shy to tout the Atlantic Yards Community Benefits Agreement (CBA), has been getting more bold, even as city officials back away from the concept.

From then Forest City Ratner executive Jim Stuckey's 4/16/07 affidavit last year in the lawsuit challenging the environmental review, regarding the CBA:
We believe it may set a standard for future projects in the City.

From the 1/17/08 affidavit of Stuckey's successor, Maryanne Gilmartin:
We believe it may set a standard for future projects in the City and around the country.
(Emphasis added)

A more critical view comes from Amy Lavine, a staff attorney at the Government Law Center of Albany Law School, who has been researching CBAs and wrote in a 1/29/08 post:
Moreover, fears that the Atlantic Yards CBA will establish “bad precedent” for future CBAs have died down somewhat. The Atlantic Yards CBA has been so thoroughly criticized (see here and here) that other New York CBA negotiators have expressly chosen to avoid “the Brooklyn model.”

Scorning no-donation policy, FCR gives $58K to Assembly Campaign Committee (which doesn't need it)

Forest City Ratner, playing hardball in court and public relations, has now apparently reversed a pledge to refrain from campaign contributions, with a major unrestricted "soft money" donation last month: $58,420 to the Democratic Assembly Campaign Committee's Housekeeping account.

The donation--allowed via a campaign finance law loophole Common Cause has decried--may be payback to Assembly Speaker Sheldon Silver and an effort to ensure sympathetic legislators as Atlantic Yards proceeds, given that the Democrats are not about to lose their grip on the Assembly.

FCR consistently spends a lot of money on lobbying, but CEO Bruce Ratner years ago "sharply cut back" on campaign contributions, as a 2004 article from Newsday reported, quoting Ratner's friend Henry Stern: “He decided this was getting him into trouble, because every time he won a project, people would say it was because he gave money."

Then again, as I reported, brother Michael Ratner and sister-in-law Karen Ranucci, both Greenwich Village residents, have readily supported the Brooklyn Democratic machine, apparently doing Bruce Ratner's bidding.

"Soft money" for the Dems

A search on "Ratner" in the state campaign finance database shows that the company hadn't given any state political contributions in at least nine years until January 7, when the latest check was written. (The database only goes back to 1999.)

It was the third-largest contribution received since July, representing more than ten percent of the commitee's take for the Housekeeping account.

The "Housekeeping" loophole

And what's a Housekeeping account? As Common Cause reported in August 2006, it offers donors--corporations, organizations, etc.--a loophole, allowing unlimited donations for the vague concept of "party building" (aka "soft money"), despite a general $5000 annual limit on corporate contributions.
(Here's a list of contributors the New York Observer compiled at the time.)

Common Cause observed:
The size of these contributions, their origin and the fact that current or hopeful elected officials are involved in soliciting them raise serious concerns about the potential for corruption or its appearance.

The second major problem is that while the theory behind our state’s soft money loophole is that these funds will be used only for party building purposes and not for candidate elections, this legal barrier does not hold up in practice.

Common Cause's conclusion:
The potential it creates for corruption or its appearance means that New York State leaders must ban soft money.

Payback or pay forward?

Given that the Democrats have long controlled the Assembly and are in no danger of losing their majority, the contribution might be seen as payback to Assembly Speaker Sheldon Silver, who produced a crucial December 2006 approval vote for Atlantic Yards as a member of the Public Authorities Control Board.

The crucial test for Democrats in New York is control of the State Senate, long held by the Republicans in New York's peculiar "three men in a room" tradition of political spoils. The Republicans' three-seat edge is now in jeopardy. Will Forest City Ratner donate to the New York Democratic Senate Campaign Committee?

Then again, the contribution may be aimed to ensure that state subsidies, including housing subsidies, are made available, and that the Assembly be willing to consider future support for the project. (Extraordinary infrastructure, anyone?)

City contributions

A check of the city campaign finance database shows that Forest City Ratner gave contributions to candidates in city elections as late as 2002: the two most recent contributions were $4500 on 11/21/01 to Public Advocate candidate Betsy Gotbaum and $4500 on 1/10/02 to C. Virginia Fields, running for Manhattan Borough President. Gotbaum notably claimed to be against eminent domain while supporting AY.

From Cleveland, Forest City shows Spitzer some love

While Bruce Ratner hasn't made any political contributions lately (though Forest City Ratner has done so), the state campaign finance database also shows that five executives from parent Forest City Enterprises have gotten in on the act. Charles Ratner, Ronald Ratner, Brian Ratner, Deborah Ratner Salzberg, and James Ratner on 10/2/07 each gave $1000 to the 2010 campaign of Gov. Eliot Spitzer, who has readily supported Atlantic Yards.

All but Ratner Salzberg, who's based in the Washington, DC-area, work in Cleveland.

A law firm comes through

The law firm Bryan Cave, which has defended the Empire State Development Corporation in the case challenging the Atlantic Yards environmental review, contributed nearly $10,000 to Spitzer in 19 installments, all on 12/17/07.

Bryan Cave has contracts worth more than $6 million to provide legal services regarding the Moynihan Station project and had been paid, according to a report at least several months out of date, nearly $1 million for its work on Atlantic Yards. The figure is undoubtedly much larger.

In New Rochelle

Also, each of the Forest City Enterprises quintet on 8/21/07 gave $1000 to the campaign of New Rochelle Mayor Noam Bramson. A Forest City affiliate is working on a $500 million project, Echo Bay, in New Rochelle.

Atlantic Yards Camera Club shows up in force

Despite snow and cold, some two dozen photographers converged yesterday on the Atlantic Yards footprint to take pictures, one week after videographer Katherin McInnis was stopped by an MTA officer. Details and photos at No Land Grab.

Connecting the dots between a politician and AY

A little digging turns up the identity of the Brooklyn machine politician who wanted something from Forest City Ratner in exchange for his support: former State Sen. Carl Andrews.

Nicole Brydson of the New York Observer wrote Thursday about working in "central Brooklyn politics, commuting south every morning from my apartment in Greenpoint to a state senator's office on Flatbush Avenue near Lincoln Place. The district "includes Flatbush, Park Slope, Crown Heights and Prospect Heights."

While Brydson doesn't mention Andrews by name, he held the seat in the 20th District when the Atlantic Yards plan was announced. (Others have confirmed that she worked for Andrews.) She writes:
Then the first inklings of Bruce Ratner's stadium came up. His representative paid a visit to my office. “What are you going to do for my support?” my boss asked. I sat there, my stomach in knots. I quit soon after.

(Graphic from the web site for current State Sen. Eric Adams.)

What was it?

And what did Ratner's representative do? We can't be certain; Andrews did not receive any political contributions from the Ratner family, which has supported Brooklyn machine politicians. Then again, the Brooklyn machine, as noted below, has been very good to Andrews, so maybe the benefits aren't to be found on paper.

Andrews, who later ran unsuccessfully for the Congressional seat vacated by the retiring Major Owens, offered consistent though hardly passionate support for Atlantic Yards. He endorsed the developer's $6 billion lie. He absented himself and his staff from the meetings of Borough President Marty Markowitz's Atlantic Yards Committee.

Under Spitzer, everything changes?

Andrews, despite having been flayed by the Village Voice's Wayne Barrett for his ties to disgraced and convicted Brooklyn Democratic Chairman Clarence Norman, receiving hundreds of thousands of dollars of campaign fees and leading the borough in patronage court appointments in the 1990s, has landed on his feet--or, rather, in a comfortable chair.

He's now "Director of NYC Intergovernmental Office" for Gov. Eliot Spitzer, whose reformist tendencies could go only so far.

The lingering issues

Brydson's post (Brooklyn, The Borough: A Personal Wire) was an attempt to raise issues of race and class:
I watched helplessly as men and women fought to get drugs off their streets, yet were unable to voice concerns in community meetings for fear of reprisal; while schools deteriorated and landlords let homes go into disrepair to force tenants into further squalor elsewhere in order to renovate and flip apartments in advance of the next gentrification wave; as convicted felons were dropped back into their home borough with nothing, to find nobody waiting for them. I watched while community members were riled up for elections and soon after ignored. I watched while homeless families struggled with the decision to enter shelters to speed up potential housing placements. All the while trying to figure out how to use this broken system to some menial advantage.

Then she mentions Ratner's project and her departure.

One reasons why some groups offered support for Atlantic Yards and its narrowly "negotiated" Community Benefits Agreement is that it promises some response to the pressures Brydson cited: affordable housing, minority contracting, job training for locals. Whether that's commensurate with the benefit to the developer is another story. But it does point to the failure of government to respond, as well.

Would there be no way to rebuild Carlton Avenue Bridge? FCR says no

One issue in the legal jousting over the appeal in the lawsuit challenging the Atlantic Yards environmental review is whether the public would be left without a new Carlton Avenue Bridge should the project be stalled.

According to Forest City Ratner, the claim is overblown, though the petitioners' attorney disputes whether completion would be timely.

From a 1/18/08 affirmation by Jeffrey Baker, attorney for the petitioners:
The irreparable nature of the injury caused by the closing of the bridge is not only due to the closing itself, but the planned demolition. If, as expected, Appellants are successful on the appeal, they could be faced with a bridge that has already been demolished without the financial means for its replacement or an extended period of time before it is replaced. That will result in extended significant unmitigated traffic impacts and increase of fire department response times into the indefinite future.
(Emphasis added)

From the 1/25/08 reply (p. 13) by Forest City Ratner attorney Jeffrey Braun:
The Carlton Avenue bridge is being closed and dismantled in accordance with a contract between FCRC and the City of New York. FCRC is contractually obligated to the City to rebuild the bridge, and that obligation is guaranteed by FCRC's publicly owned affiliate, Forest City Enterprises, Inc., which, according to its most recent SEC filings, has total assets of nearly $10 billion. Therefore, petitioners' contention that, were they to prevail on this appeal, there would be no ability to rebuild a bridge, is misguided speculation.

Baker's 1/31/08 response focused on the issue of "extended time" rather than "financial means":
Respondents do not contest that if the bridge is removed and the approvals are annulled, that there is any means to assure that the bridge will be replaced in a timely fashion.

Knowing the landscape: how Miralles outpaced Gehry

Starchitect Frank Gehry gets some faint praise in an article headlined Making Waves (subscriber-only) in the Feb. 13 issue of The New Republic, while the lesser-known architect Enrique Miralles, according to critic Sarah Williams Goldhagen, deserves more respect for his effort to privilege landscape over wavy sculpture.

Goldhagen writes:
For well over a decade now, we have been flipping through glossy photographs and watching videos of Frank Gehry carefully studying crumpled wads of paper, selecting which one to slide across some large drawing table to an assistant-in-waiting, who will scan it into the computer and, with Gehry, endeavor to make and call it architecture.... In different iterations we have seen it all before, and before, and before, in the Guggenheim Bilbao, the Disney Concert Hall in Los Angeles, the Ray and Maria Stata Center on the MIT campus, the Fisher Center for the Performing Arts at Bard College, the Experience Music Project in Seattle, the Pritzker bandshell in Millennium Park in Chicago, the American Center in Paris, the proposed skyscraper for the controversial Atlantic Yards project in Brooklyn, and the proposed Guggenheim museums in New York City and Abu Dhabi.

That's the only mention of Atlantic Yards (above), so her criticism below can't be directly applied to AY. Then again, Atlantic Yards is clearly driven by the scale of the project rather than an approach to landscape, as shown in the Gehry rendering below.

As the New York Observer reported, in a 1/25/07 article headlined This Guy Wants You to Love Atlantic Yards, Gehry brought in landscape architect Laurie Olin four or five months into the process. Only by demapping Pacific Street to create a superblock could the ratio of open space to population in the neighborhood nudge up rather than go down:
Mr. Olin admits that the site plan was put together to establish the parameters of the project—the ratio of open to built space—to go through the approval process.

Skin vs. function

While Goldhagen praises Gehry for his innovative use of new digital technologies, she suggests the buildings have their flaws:
As riotous sculptures, Gehry's wavy buildings look impressive from the street--although even this is partly a matter of taste: to an artistically trained eye, he is far less compositionally talented than he, his clients, and the worldwide publicity machine that promotes his designs would have us believe. But even if one appreciates these buildings' exterior views, they often fail to reconcile their fancy skins with the demands of habitable, functional, enlightening interiors and outdoor spaces. Gehry's titanium-clad buildings (such as Bilbao and some others) convert sunlight into blazing heat. Many of these buildings have flowing opaque skins that discourage apertures to admit and sculpt and control natural light indoors. His overall approach to design suggests nothing about how to make a plan that resolves or stimulatingly interprets the building's program, makes spatial sequences, or folds into or works with its site.

Beyond the exterior

Other major architects now using digital technologies, like Gehry, "concentrate a large percentage of their design wattage on the exterior envelope," while Goldhagen points instead to to some other taking the next step:
These firms are using the computing power and the manufacturing and material possibilities of new digital technologies to integrate a building's exterior aspects with the many other--and equally important--considerations that go into making good architecture: the building's plan, sections, structural and mechanical systems, materials, program, site, light, space, environmental concerns, and so on.

The Miralles example

Goldhagen points to a different exemplar, the designer of, among other buildings, the Scottish Parliament in Edinburgh:
The best of the younger architects owe homage, or should, to one master, and it is not Frank Gehry. It is Enrique Miralles, a Spanish architect who died in 2000 at the age of forty-five.

(Photos from the Galinsky site devoted to the Scottish Parliament.)

She suggests that his work encompasses more:
Although Miralles died young, some of his projects stand. They are exquisite--some of the most uncannily intelligent buildings, landscapes, and public spaces of our time. Many look exuberantly wavy, but not because Miralles and his partners spent time studying crumpled paper. Critics tend to brand these projects with adjectives such as "intuitive" and "emotive"--words that, in the vocabulary of contemporary architecture, connote curves, Big Personality, a predisposition for the irrational, and (for some) a feminized sensibility. But to pigeonhole the work in this way is at best imprecise, and at worst just wrong. From the stark, breathtaking Igualada Cemetery (1985-1994) on the outskirts of Barcelona to the quietly exuberant Scottish Parliament in Edinburgh, this work, like Gehry's, is often curvy--but it also masters the architectural qualities that Gehry's buildings so often deny, combining exquisite analytical rigor with an almost poetic control over topography, siting, spatial sequence, natural light, color, and materials.

A sense of landscape

Goldhagen suggests the issue is not so much sculpture but landscape:
When these projects take off into curves, it is because Miralles and company decided that curves are what a particular architectural challenge evoked. There is no aggressive monumentality here, no cookie-cutter high-end product dumped wherever the money exists to pay for it. There is, instead, sensitivity and study. Miralles and his colleagues receptively investigated the landscape and the site. They considered when and how the people who were to use the structure or the landscape might live in, move through, and prospect space; how they might touch, and imagine touching, surfaces. Sure, they made use of computers to actualize their ideas. But their architecture neither starts nor stops with skin, or with what digital technology offers. Steeped in architecture's history, Miralles used architectural precedents when they offered reasonable solutions to problems that, in the words of Viennese modernist Adolf Loos, had already been solved. Steeped in art, nature, and local traditions, Miralles playfully engaged architecture's metaphorical possibilities.


Slowing complexity down

Her conclusion:
Miralles and his partners, like Gehry, and like the digitally besotted forty something generation of architects, revel in complexity. But then Miralles and his partners do a truly revolutionary thing: they slow complexity down. This architecture shows how you can live in this world without being consumed by it. It is artful; it is sculptural; it is wavy. But it is very much more. It offers places of experience that transform our social interactions and our awareness of being in the world.

Atlantic Yards "camera club" mobilization Sunday

In response to the incident last Sunday in which an MTA cop harassed a videographer at the Atlantic Yards site, some photographers will be out in force tomorrow.

At overstuffed State of the Borough address, AY gets mention but not applause

The State of the Borough Address delivered last night by Brooklyn Borough President Marty Markowitz was another marathon extravaganza, invoking a rich mix of issues and places and people contributing to "The Brooklyn Story," and lasting some 70 minutes.

Though Markowitz mentioned Atlantic Yards twice, the project generated not a smidgen of applause from the 2000-plus attendees at the Brooklyn Cruise Ship Terminal in Red Hook.

Not the Barclays Center arena. Not the affordable housing. (In fact, had some Atlantic Yards opponents been in the audience, the BP would've been heckled for falsely claiming that half the housing would be affordable.)

Do Brooklynites--most of them Markowitz fans, given the ovation he got--not care much about the project he's so fervently promoted?

It's hard to be certain. The crowd was certainly worn out by the time Atlantic Yards was mentioned, well into a speech that clocked at nearly 70 minutes, itself following an hour-long reception and a 75-minute series of introductory announcements and performances. And Markowitz didn't offer any particular verbal flourishes to hasten applause.

Then again, while the crowd didn't applaud the affordable housing at Atlantic Yards or in the Greenpoint-Williamsburg rezoning, there was some applause for Markowitz's support for rent protections for tenants as well as for the president of the tenants' association at Spring Creek, aka Starrett City, who fought a sale of the affordable housing complex.

What Marty said

[Here's the text of the speech.]

Markowitz first mentioned AY after asserting that "Brooklyn deserves a sizzling, modern, mixed-use downtown." He cited growth in "the corridor linking BAM to downtown," then a "revitalized Fulton Mall."

He continued: "Walking or biking up a spruced-up Flatbush Avenue to visit friends living at Atlantic Yards."

"Or going to check out a Brooklyn Nets game at the Barclays Center!"

"(Hey, the Nets may be losing this year, but remember, they're not a Brooklyn team yet.)"

[Punctuation is according to the written text of the speech.]

Later in the speech, he discussed the "crisis" in affordable housing. "That's why any time I can have an impact, I have advocated for the maximum amount of affordable housing to be included in new residential projects," he said.

(I don't think Markowitz has advocated for affordable housing in the Downtown Brooklyn rezoning, or whether he's signed on to Assemblyman Hakeem Jeffries' effort to push developers into some concessions.)

"In fact, my office pioneered what is now citywide policy. When a developer seeks a zoning change, they must be offered a tax incentive in exchange for making at least 20 percent of the proposed units affordable."

"At Atlantic Yards," he continued, "we celebrate the fact that a Community Benefits Agreement will guarantee that fully one half of those units will be priced below market rates." (Actually, only half of the rental units would be affordable, even though developer Forest City Ratner initially claimed that half of all the housing would be affordable.)

Planning wisely

Early in the speech, Markowitz made the completely plausible point that a balance must be fought between building and preservation: "By guiding growth where it's appropriate--near mass-transit and along major roadways--while continuing to enact historic districting and down-zoning, we can work together to retain the unique ambiance and intimacy for which Brooklyn's neighborhoods are famous, while leaving a more efficient, cleaner, and livable city for future generations."

(Whether that's been followed in Prospect Heights is another question.)

He went on to salute his new appointee on the City Planning Commission, Shirley McRae--"she earned it"--but didn't shy away from praising her predecessor, his longtime political supporter Dolly Williams, for "five years of invaluable service." He left out the part about how Williams resigned last November after paying a fine to resolve conflict-of-interest charges regarding her ownership stake in AY.

The news

A press release from Markowitz's office highlighted three pieces of news sprinkled through the speech. Canarsie High School will be the location for the High School for Innovation in Advertising and Media, to open in the fall, in an effort to get more students of color into the advertising capital of the world.

London-based Grimshaw Architects will design the city's first amphitheater, the Coney Island Center, at Asser Levy/Seaside Park, long home to a summer concert series sponsored by Markowitz since he was a State Senator.

Markowitz also called for the mayor's office to consider a Brooklyn-based board of directors to control and boost the New York Aquarium, which is currently operated by the Wildlife Conservation Society, which the BP said directs most of its efforts to zoos.

Oh, and what about Markowitz's political ambitions--will he run for mayor? "Too soon to tell" read a closing slide.

(Here's coverage from the Daily News, which also emphasizes the growth in tourism.)

Brooklyn the brand

An opening video featured an array of multilingual, multicultural Brooklynites, including some adorable kids, proclaiming "I am Brooklyn." Brooklyn has become a brand, Markowitz said, citing national and international press coverage of restaurants, hotels, art, design, and more.

He mentioned an "only in Brooklyn" moment: at the annual "Brooklyn Best" block party at Grand Army Plaza last summer, a fashion show featured Brooklyn designers. At the end of the event, one man in the audience said the show was great, but he felt his fashion sense was not represented. So, as a picture showed, a Lubavitch Hasid paraded down the runway.

In fact, Markowitz near the end of the speech observed how "Brooklyn" has become a popular name for babies--there's no one named "Manhattan," he noted--and saluting a cute two-year-old named Brooklyn Cumberbatch, whose last name suggests a Caribbean heritage.

The entertainment ran the gamut: a Brooklyn College chorus, two modern dance groups, a double dutch troupe, a senior tap dance contingent, and pre-teen punk rockers Care Bears on Fire. Their catchy "Everybody Else" so impressed Gov. Eliot Spitzer, who spoke briefly, that he ad libbed, "If they don't have a record contract yet, I want to be their agent."

Many shout-outs

It's impossible to catalogue all the people and places Markowitz saluted, but here's a partial list: the new LGBT Center; the Carlos Lezama Cultural Center; the Italian Community and Cultural Center; the Kahlil Gibran International Academy; the New York Times Crossword Puzzle Tournament; Dine in Brooklyn Restaurant Week; the Brooklyn Book Festival; Coney Island redevelopment; Ikea; IHOP; Trader Joe's; Noble Drew Ali houses; Atlantic Terrace; Polytechnic University

Also: Dressler/Dumont founder Colin Devlin; Mukhesh Patel and Roberta Gaeta of Hotels Le Blue and Jo-Lee; children's book author Mo Willems; someone in a walrus suit representing the Aquarium's new baby walrus; "green" bakery operators Luigi and Massimo Lo Buglio; Elizabeth Yeampierre of UPROSE, on the PlaNYC task force; Joe Chan of the Downtown Brooklyn Partnership; Bill Howell of the Downtown Brooklyn Advisory and Oversight Committee; education advocate Wendy Gilgeous; Brooklyn Public Library Director Dionne Mack-Harvin; animal medium Christine Agro; Elisa Zuritsky, who gave away her wedding dress after it wasn't ready in time; Keith Belvin, who turned in his daughter after seeing her on a video that showed a harassment attack on the subway; and Hassan Askari, the Muslim who intervened in a subway attack on Jewish passengers.

He also saluted some prominent Brooklynites who died in the past year, including developer Harvey Schultz, former Deputy Borough President Jeannette Gadson, and the Brooklyn Botanic Garden's Judy Zuk. A list of some 35 others scrolled on screen, including that of Heath Ledger. And perhaps the most heartfelt applause came for the families of the service members who died in Iraq, as well as local firefighters and a police officer who lost their lives on duty.

A blogger

Near the end of the speech, Markowitz noted that, "as the bloggiest place in America, our guest list wouldn't be complete without a notable blogger." His guest: Louise Crawford of Only the Blog Knows Brooklyn, whom he saluted as "the Cindy Adams of Park Slope."

"You should read what they write about me!" Markowitz said of bloggers. "On second thought, maybe you shouldn't." (Indeed.)

City study casts major doubt on state's AY parking availability estimates

A new city analysis has cast significant doubt on the Empire State Development Corporation's (ESDC) generous estimate, in the Atlantic Yards environmental review, of the availability of on-street parking in the vicinity of the project site.

It was hard for Brooklyn residents to believe the ESDC's claim (p. 12-20) that "[u]tilization of these on-street parking spaces was found to be approximately 65 percent in the 5-6 PM period, 47 percent in the 7-8 PM period, and 65 percent in the Saturday 1-2 PM period."
(Click on graphics to enlarge)

Their comments (12-84 of this PDF) were polite but incredulous. Excerpts: Seems fanciful. Simply untrue. Just not possible. Unrealistic. Never plentiful as stated. Woefully underestimates the existing capacity. (Full comments below.)

The ESDC's response was essentially a variant on that famous Marx Brothers line: Who are you gonna believe, me or your lying eyes?

Dueling evidence

To trump the observed experience of residents, the ESDC cited "extensive field surveys" of an area "within ¼ mile of the project site" by the transportation consultant Philip Habib and Associates. The surveys were conducted in February and March of 2006.

Less than two years later, things have changed enormously--at least for some of the data. As first pointed out yesterday on No Land Grab, at a residential parking workshop held last Thursday [corrected] at Temple Beth Elohim in Park Slope, a city Department of Transportation survey, conducted in January, showed that, of free parking spaces surveyed in the area surrounding the crossroads of Fourth, Flatbush, and Atlantic avenues, 98 percent were occupied at 2 pm, 98 percent were occupied at 6 pm, and 95 percent were occupied at 5:30 am.

There are obviously some differences in methodology, since the state study included both free and metered spots. And it's not at all clear that the exact same blocks were canvassed. Still, the areas seem comparable.

The city survey canvassed 332 spaces out of a total 2660 available. It's not clear what sample of spaces in the state study were canvassed, but a total of 5590 to 6280 spaces were found, including both free and metered parking.

Differences at 6 pm?

At 6 pm, according to the city study, 98 percent (2607) of the 2660 free spots in the study area were occupied. However, in the state study, only 65 percent (3660) of the 5590 spaces were filled during the 5 pm to 6 pm hour.

So, if we assumed (and it's a rough comparison) that the city study were a subset of the state study, the latter would include an additional 2930 spaces, of which 1053 were occupied. (That's how we get from 2607 to 3660.) That would represent only 36 percent of the additional spaces.

So 64 percent (NLG said 62 percent) of the additional spaces in the state study would have to be vacant at 6 pm. That's tough to believe. Even if the study areas don't completely overlap, the numbers are tough to believe.
Additional details may explain differences between the two studies. But the city study surely confirms the experience of numerous residents and suggests that the ESDC's conclusions should be taken with an large grain of salt.

"Hard look" in court?

The questionable parking statistics were not addressed in the lawsuit challenging the Atlantic Yards environmental review, which charged that the ESDC failed to take a "hard look" at various environmental impacts.

The standard for judicial review in such cases, cited in Supreme Court Justice Joan Madden's decision (p. 3 of PDF), is whether the agency followed lawful procedure and whether "the determination was affected by an error of law or was arbitrary and capricious or an abuse of discretion."

The court is not permitted to second-guess the agency or substitute its judgment for the agency. That sets a pretty high bar, since it essentially accepts an agency's response to evidence presented.

But what if another agency offers seemingly contradictory evidence? That might raise questions about the "hard look."

Primary source: From Chapter 12

This passage from Chapter 12 of the FEIS, Traffic & Parking (12-20 of the PDF), addresses on-street parking:
Table 12-5 shows the existing supply and utilization of on-street parking spaces within ¼ mile of the project site during the weekday 5-6 PM, 7-8 PM pre-game, and Saturday 1-2 PM pre-game periods. As shown in Table 12-5, accounting for curbside parking regulations, fire hydrants, curb cuts, loading zones and other restricted curb space unavailable for parking, there are a total of approximately 5,590 legal on-street parking spaces within ¼ mile of the project site during the weekday 5-6 PM peak period; 6,075 during the weekday 7-8 PM (pre-game) period; and 6,280 during the Saturday 1-2 PM (pre-game) period. The lower number of parking spaces during the 5-6 PM period reflects the more restrictive curbside regulations typically in effect during weekday peak periods. Utilization of these on-street parking spaces was found to be approximately 65 percent in the 5-6 PM period, 47 percent in the 7-8 PM period, and 65 percent in the Saturday 1-2 PM period, with approximately 1,930, 3,240, and 2,215 spaces available during these periods, respectively. As shown in Figure 12-4, many of the restrictions on parking within the study area (including metered parking) end at 6 PM or 7 PM, and some regulations, including most alternate side-of-the-street regulations, are only in effect on weekdays. Consequently, many of the on-street parking spaces available in the 5-6 PM, 7-8 PM and Saturday 1-2 PM periods can be utilized for lengthy periods (e.g., for more than two hours) or for overnight parking.

Primary Source: The Response to Comments

The Response to Comments chapter of the FEIS (12-84 of this PDF ) addresses comments on the Draft Environmental Impact Statement, or DEIS:
(Emphases added)

The DEIS analysis of on-street parking seems fanciful. It states that the "utilization of these on-street parking spaces was found to be approximately 65 percent in the 5 to 6 PM period, 47 percent in the 7 to 8 PM period, and 65 percent in the Saturday 1 to 2 PM period..." For the DEIS to suggest that in the worst case, more than one-third of on-street parking spots are available, flies in the face of the real-world experience of the people living in these neighborhoods. (102, 103, 154, 328)

Two years ago you could find a parking space fairly easily in Fort Greene. Now people are afraid to drive because they would lose their parking space. The EIS states there is ample parking when this is simply untrue. (77, 241, 266, 284)

Table 12-5 that deals with on-street parking utilization indicates current on-street parking spaces filled to only 65 percent of capacity between 5 and 6 p.m. and 47 percent of capacity between 6 and 7 PM. This is just not possible and contradicts the recent Residential Parking Urban Study completed by the Downtown Brooklyn Council, which concluded that there is inadequate on-street parking to accommodate current community needs. (24)

The DEIS suggests low 47 percent to 65 percent current utilization rates for on-street parking in near proximity to the proposed arena. These numbers are unrealistic. There is so little on-street available parking that there is competition for double parking spaces between church-goers and police and fire department workers. Availability has been worsened by overflow parking from the Atlantic Center Mall. (461)

On Vanderbilt Avenue at the edge of the footprint of the proposed project, parking is never plentiful as stated in the DEIS. As more and more properties continue to convert to condos, on-street parking is more and more scarce. (312)

The DEIS woefully underestimates the existing capacity for on-street parking and incorrectly assumes the project will have little or no impact. (324)

The ESDC's Response: The estimates of on-street parking supply and utilization reported in the EIS were based on data collected during extensive field surveys conducted in February and March of 2006. They included all blocks within ¼-mile of the project site. Much of the area surveyed was not included in the study areas for the Downtown Brooklyn Council’s Downtown Brooklyn Residential Permit Parking Study.

Forest City Ratner admits lie (well, "mistaken") about inflated AY revenue claim

They thought they could get away with it. Three times.

In three legal documents in the lawsuit challenging the Atlantic Yards environmental review, two Forest City Ratner officials and an FCR lawyer claimed that the Atlantic Yards project would generate $5.6 billion in new revenues and/or $4.4 billion in total revenues. They attributed those highly speculative estimates to the Empire State Development Corporation (ESDC).

However, no such figures appear in the ESDC's Final Environmental Impact Statement (FEIS), as claimed.

The first claim came in a 4/16/07 sworn affidavit from then-FCR executive Jim Stuckey, who asserted:
Furthermore, the Project will serve as a powerful engine of economic growth in other respects as well.
The Final Environmental Impact Statement (the "FEIS")... also estimates that the Project will generate $5.6 billion in new tax revenues — and $4.4 billion in net tax revenues — for the City and the State over the next 30 years.

(Graphics by Abby Weissman; click to enlarge.)

Last April, I called the claim a lie. It was ignored.

After the claim was repeated twice more, petitioners' attorney Jeffrey Baker, using slightly more diplomatic language in a legal document, last week called it "completely disingenuous."

In response, on Monday FCR lawyer Jeffrey Braun belatedly admitted his statement was "mistaken," acknowledging that the projection comes not from a government-commissioned analysis but from Andrew Zimbalist, a consultant paid by the developer.

That's a big difference.

Anything goes?

It seems that Forest City Ratner is willing to practice a "scorched earth policy of anything goes"--a policy FCR's Bruce Bender attributed to project opponents.

Whether or not state officials have been co-opted or corrupted, as alleged in the lawsuit over eminent domain, the failure of anyone at the ESDC to correct the developer on this basic fact clearly suggests favoritism--or negligence.

Two years ago, I questioned whether the ESDC could "be expected to do a fair job in both promoting economic development and evaluating the environmental impact of the proposed Atlantic Yards development." I concluded that "ESDC Chairman Charles Gargano gives little cause for confidence."

Even with a new administration, things haven't changed enough.

The lie, redux

Stuckey's successor, MaryAnne Gilmartin, in her 1/17/08 sworn affidavit, essentially repeated Stuckey's claim:
In addition to the direct public benefits that the Project will create, the Project also is a powerful engine of economic growth. The Final Environmental Impact Statement (the "FEIS")... also estimates that the Project will generate $5.6 billion in new tax revenues — and $4.4 billion in net tax revenues — for the City and the State over the next 30 years.

FCR attorney Jeffrey Braun, a 1/25/08 affirmation, which he "affirm[ed] under penalty of perjury," repeated a variant of the claim:
In addition to the foregoing public benefits, the project will be a powerful engine of economic growth. The environmental impact statement for the project estimates that the project will create... as $4.4 billion in net tax revenues for the City and the State over 30 years.

The response

Baker responded in his 1/31/08 affirmation:
Nor should the court be affected in any way on Mr. Braun's completely disingenuous statement that the "environmental impact statement for the project estimates that the project will create... $4.4 billion in net tax revenues for the City and the State over 30 years." There is simply no projection at all regarding the net tax revenues contained in the EIS.

The admission

In a footnote to an affirmation issued Monday, Braun acknowledged a mistake:
Mr. Baker correctly points out that my statement in my prior affirmation that the "environmental impact statement for the project estimates that the project will create ... $4.4 billion in net tax revenues for the City and the State over 30 years" is mistaken, because "[t]here is simply no projection at all regarding the net tax revenues contained in the EIS". The $4.4 billion figure is in the report of a consultant who had been retained by FCRC and does not appear in the FEIS. It remains true, however, that the Atlantic Yards project has been approved by ESDC and the other involved agencies on the basis of the significant public benefits that it is expected to generate, which include substantial additional tax revenues. The General Project Plan that ESDC adopted concluded that, "[o]n a present value basis, the Project will generate $652.3 million of City tax revenues and $745.3 million of State tax revenues," and that "the project will generate $944.2 million in net tax revenues in excess of the public contribution to the Project."

There's a big difference between "present value" and the much larger 30-year cumulative value. Also, there's a big difference between the ESDC's methodology and the consultant's methodology, though both are flawed in their ways.

(The Zimbalist report on Forest City Ratner's web site provides different totals, including both the 30-year cumulative numbers ($6.02 billion before costs)--never used by government analysts--as well as present value. The net fiscal benefit, according to Zimbalist, would be $1.55 billion in present value, which is more than 50% higher than the state analysis. Zimbalist's report was based on a somewhat different configuration of the project, so the $5.6 billion figure touted by FCR officials is presumably based on an updated analysis not publicly delineated.)

Flawed analyses

The report by Zimbalist is full of holes, as I wrote. It's a "promotional study."

And the ESDC's estimates, while they do factor in the direct subsidies, make no attempt to account for the public costs that the project would incur. In other words, the net benefit promised by the state can't be trusted because the analysis is inadequate.

Daily News's "Abuse of process" editorial an abuse of facts

An editorial in today's Daily News about Atlantic Yards, headlined Abuse of process, deserves a close look because of the numerous errors.

(It was quickly distributed as part of Forest City Ratner's "Atlantic Yards News.")

Blight inflation

It begins:
Opponents of the Atlantic Yards project - developer Bruce Ratner's $4 billion plan to build housing and a pro basketball arena on 22 blighted acres in Brooklyn - have had their days in court. And they have lost over and over again.

While the extent of blight is a matter of extreme debate, especially the state's assertion that a building not developed past 60% of its development rights is blighted, no one disagrees that the state did not designate all 22 acres as blighted. The Second Circuit Court of Appeals opinion noted that "unblighted parcels" may be added "as part of an overall plan to improve a blighted area.”

Of course that "overall plan" came from Forest City Ratner. Note how the Daily News seems to have forgotten the "Jobs, Housing, and Hoops" rationale.

"Wacko attempt"

The editorial continues:
On Friday, a federal appeals court summarily tossed a wacko attempt to block the state from using eminent domain to buy a handful of privately owned properties on the site. The opponents argued that Ratner had co-opted or corrupted every official who likes the idea of building 2,250 units of affordable housing there, along with a ton of market-rate housing and a home for the Nets.

Wacko? Well, U.S. Magistrate Judge Robert M. Levy a year ago wrote that the case raised "serious and difficult questions regarding the exercise of eminent domain under emerging Supreme Court jurisprudence."

The state would not be using eminent domain simply to buy a "handful of privately owned property" but also to acquire buildings owned by Forest City Ratner itself in "friendly condemnations" that would bypass a more onerous process of removing tenants with rent-stabilized leases.

Given that the state’s projections "ignore a whole lot of public costs,” as the plaintiffs' attorney said in court, it's pretty hard to figure out the public benefit, and thus find clues to whether Ratner would benefit.

As for the argument of co-option and corruption, as the court summarized it, the plaintiffs "contend that a 'substantial' motivation of the various state and local government officials who approved or acquiesced in the approval of the Project has been to benefit Bruce Ratner."

I'm not sure that they have to (or could) prove it, but favoritism may arise simply out of failure to do due diligence, as I wrote.

Supreme Court Justice Anthony Kennedy, whose nonbinding concurrence in the Kelo v. New London decision inspired some of the legal challenge, wrote 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 Second Circuit Court's decision ignored Kennedy’s observation that Kelo was OK because “the substantial commitment of public funds by the State to the development project before most of the private beneficiaries were known” and “evidence that respondents reviewed a variety of development plans and chose a private developer from a group of applicants rather than picking out a particular transferee beforehand.” Both of those conditions are absent in the Atlantic Yards case.

Who's generous?

The editorial continues:
Such is the nonsense that the opposition, Develop Don't Destroy Brooklyn, has peddled for four years. As Ratner reached generous settlements with scores who lived or owned property in the development zone, the group charged that he had ensnared Mayor Bloomberg and Govs. Pataki and Spitzer into fabulously and unjustifiably enriching him.

While some (but hardly all) settlements may have been relatively generous for the market, they are dwarfed by the vast increase in development rights--and thus profits--that Forest City Ratner would get via the state override of zoning. (An expert in New York magazine estimated a billion-dollar profit.)

Misreading EIS review

The editorial continues:
The federal judges rejected the claim out of hand, just as a Manhattan Supreme Court justice two weeks ago threw out a suit by the group alleging state officials did a faulty environmental review in order to, you guessed it, make Ratner wealthy.

No, the charges of faulty environmental review don't claim a motive. They claim that, among other things, the state ignored extensive public comments refuting the blight study. And that the crime study component of the blight study was bogus--an issue on which the judge punted.

Nine month delay?

The editorial continues:
Now, the opponents are getting set to appeal again - and appear determined to wait the maximum of nine months before filing papers. This is the height of cynicism. The group is dragging its feet for one reason: to try to delay Atlantic Yards to death.

Except a lawyer for the petitioners says it would take three or four months, not nine months.

About that $12 million

The editorial concludes:
Every month costs Ratner $12 million, and financing has become increasingly difficult in the subprime mortgage credit crunch. The developer has asked the Appellate Division to force Develop Don't Destroy to make its case on an expedited basis.

That must happen. The opponents are engaged in an abuse of process that threatens great public harm. The court should order them to proceed forthwith so the matter can be decided on the merits once and for all.

That $12 million a month figure comes from Forest City Ratner's lawyer, who unaccountably doubles the $6 million a month figure provided by an FCR executive. And that $6 million figure is completely untenable as well, as I wrote.

Abuse of process

Are the petitioners' efforts to have their legal claims heard more of an abuse of process than the state's claim that there would be no redevelopment without Atlantic Yards or the state's willingness to claim blight at the edge of the Vanderbilt Yard (now magically removed) without pointing to who might be responsible?

MTA cop tries to stop videographer at Atlantic Yards site

Though a good number of photographers regularly shoot around the Atlantic Yards footprint and the Metropolitan Transportation Authority’s (MTA) Vanderbilt Yard, a video artist/teacher on the first week of her visit to Brooklyn found herself on the wrong side of an MTA police officer Sunday.

He attempted to confiscate her camera, questioned whether she was part of an anti-AY organization, and more than once reminded her that the project was proceeding, according to her account.

Katherin McInnis, who teaches video and photography in San Francisco and is visiting Brooklyn on sabbatical, told me she was hardly traumatized by the encounter, because she knew she had the right to shoot video--and blurry, “arty” video at that--from the Pacific Street sidewalk bordering the Vanderbilt Yard. (On her AV Diary, she posted some stills, some of which are reproduced here.)

[See comment from Tracy Collins, who says that building security/construction officials, not cops, have occasionally tried to stop him from taking photos.]

Complaint to be filed

But she said she would file a complaint out of principle. “I feel a certain amount of responsibility,” she said. “I know this situation comes up for my students, my fellow photographers, getting harassed in some cases. It’s important that the cops know they can’t take away your camera, and that other people know that as well. I don’t have so much as a parking ticket. He was asking, ‘Have you ever been arrested, have you ever been detained?’” Even if you had [been], you’re still allowed to take photographs.”

The encounter had some inadvertent comic moments. “He kept asking me if I was a member of an organization,” trying to find out if she was part of a group opposing the project, McInnis recounted. “I totally had no idea. I told him I was part of an art collective. That didn’t help.”

When the officer asked why she was interested in the railyards, her response was “Aren’t they going away?” She thought would defuse the situation, she recounted, but it didn’t help.

MTA response, MTA record

I called the MTA public affairs office early yesterday afternoon and outlined the incident, as recounted by McInnis, named the officer, asked if there was an incident report, and asked for the MTA policy. I didn't get a response by the end of day, but when one is forthcoming, I’ll add it.

The MTA police have a track record of harassing photographers. A 3/17/06 article on the web site of the National Press Photographers Association reported that the MTA had pledged to the New York Civil Liberties Union that it will remind its staff and law enforcement officers that there is no photography ban on MTA property.

The photographers’ group noted that, despite the defeat of an MTA-favored ban on photography, MTA personnel, specifically on the Long Island Railroad, had harassed photographers, even threatening them with arrest. The Vanderbilt Yard is used to service LIRR trains.

Interest piqued

McInnis, who was staying with friends in the neighborhood, said she’d become curious after seeing so many signs in windows of homes and businesses opposing Atlantic Yards. After downloading a map, she took her “small consumer video camera” to the site.

She said that she’d been shooting for about ten minutes, while listening to an iPod, when the police officer approached her. He told her to turn off the camera and then asked her to turn it over. She said she didn’t think she was required to do so. He told her she wasn’t being cooperative. He asked for ID, and she provided her California driver’s license as well as her Brooklyn address.

He then ran a "security check" and asked McInnis if she’d ever been arrested, detained, or questioned--questions that seem more directed toward terrorism (a lingering issue for the Atlantic Yards project) than political opposition.

Finally, she said, he asked if she was part of any organization "opposing these Yards." She said no. He said "You know the project is probably going to go through." She made no response. He indicated she was free to go.

The ESDC won't ignore the market, in Manhattan, at least

When it comes to declaring parts of Prospect Heights blighted, the Empire State Development Corporation (ESDC) conducted no market analysis, as a lawyer for the petitioners challenging the Atlantic Yards environmental review pointed out in court last May.

And the Metropolitan Transportation Authority waited 18 months after city and state officials announced support for Forest City Ratner's developher as the Atlantic Yards developer to issue a Request for Proposals for the Vanderbilt Yard

When it comes to selling two parcels of land adjacent to the Javits Convention Center to raise money for Gov. Eliot Spitzer's budget, however, the ESDC wants very much to consider the market.

Anticipating a "market test"

From a New York Times article Monday, headlined Spitzer’s Budget Plans, and the Iffy Real Estate Deals Behind Them:
There is also the question of how a sale of the southern parcel, which is also about 3.6 acres, would fare in a tenuous real estate market.

“I think this is a valuable piece of land in a part of the city that is undergoing significant development,” said Patrick J. Foye, the downstate chairman of the Empire State Development Corporation.

“We think that it’s worth significantly north of $400 million,” he added. “Obviously a market test will confirm what it’s worth.”

Whose "intricate schedule"? Opponents in environmental suit joust over delay

According to Forest City Ratner officials, the pending appeal of the dismissal of the lawsuit challenging the Atlantic Yards environmental review is delaying the planned completion of the arena.

The only problem is, last year they claimed that the "intricate schedule" of current work was aimed at completing the arena for the 2009-10 season. Even though no stay was granted last year on pre-construction demolition, they claim that an "intricate schedule" of work is aimed at completing the arena for some time in 2010.

But they don't explain why or whether any alteration in their own schedule has caused delays. Nor do they explain why exactly the lawsuit has to be cleared for bond financing to be arranged; a lawyer for the petitioners contends that such risk should be priced into the bonds. (Presumably, responses will emerge in the final round of legal papers.)

It's all part of legal jousting in which FCR officials have both opposed a stay--which hasn't been granted--and seek an expedited briefing schedule for the appeal so it can be heard by a state appellate court no later than May, rather than in the fall.

Meanwhile, a lawyer for the petitioners acknowledges that an onslaught of legal papers from the defendants last spring hindered their case, and argues that the petitioners need sufficient time to go through Justice Joan Madden's decision.

Intricate, redux

Consider the essentially identical statements issued last April by then-FCR executive Jim Stuckey and two weeks ago by his successor MaryAnne Gilmartin.

Stuckey stated:
The current work is proceeding in accordance with an intricate schedule that is intended to allow the new arena to be completed in time for the Nets to relocate there for the 2009-10 National Basketball Association season. FCRC’s construction schedule has been carefully drawn to allow the arena to be ready for the 2009-10 season by commencing work now on vacant properties that are owned by FCRC, the MTA and the City, with work on properties that are owned or occupied by other parties deferred until the pending judicial challenges to the Project have proceeded to a point where ESDC is in a position to actually use its powers of eminent domain to acquire title to and possession of those properties. Therefore, even a short delay in the ongoing work could jeopardize the arena’s availability for an entire season, and thus would expose the Nets to additional operating losses of about $35,000,000 a year.
(Emphases added)

In an affidavit filed 1/17/08, Gilmartin stated:
The current work is proceeding in accordance with an intricate schedule, detailed in Mr. Sanna's affidavit, that is intended to allow the new arena to be completed in time for the Nets to relocate there in 2010. FCRC's construction schedule has been carefully drawn to allow the arena to be ready in 2010 by commencing work now on vacant properties that are owned by FCRC, the MTA and the City of New York, with work on properties that are owned or occupied by other parties deferred until ESDC actually uses its powers of eminent domain to acquire title to and possession of those properties. Therefore, even a short delay in the ongoing work could jeopardize the arena's availability for both basketball games and community events, and thus would expose the Nets to millions of dollars in additional operating losses.

In a 1/31/08 affirmation, petitioners' attorney Jeffrey Baker contends that litigation has not stopped the developer from moving forward:
FCRC's own financial limitations and the inability to finalize agreements with ESDC and MTA have kept the project from proceeding with its intended schedule. If Appellants have any role in causing those delays, it is only due to exercising their fundamental constitutional rights to seek judicial review.

Petitioners' delay?

According to an affirmation from FCR attorney Jeffrey Braun, the petitioners are trying to string things out:
On January 18, 2008, as soon as the parties were advised by personnel in the office of this Court's clerk that Justice Mazzarelli had denied petitioners' emergency application for an interim stay, petitioners' counsel — who had been discussing an expedited briefing schedule for the appeal with respondents' counsel -- suddenly reversed course and announced that petitioners would wait the full ninth months that would be available in a normal case before perfecting their appeal and serving and filing their opening brief. It was obvious that, if this Court was not going to halt work at the project site, petitioners' intention — their Plan B — would be to prolong the pendency of this appeal for as long as possible in the hope that intervening events unrelated to litigation would interfere with FCRC's ability to implement the Atlantic Yards project.

Baker, however, responds that Braun's statement about the full nine months is completely false. No such statement was ever made. Nor is it the intent of Appellants to take that much time. Currently, it is anticipated that the appeal will be perfected approximately three to four months after the Notice of Appeal was filed on January 18, 2008.

Petitioners unprepared?

Baker acknowledges that the petitioners may have been overmatched by a tight schedule and opposing legal firepower:
Preparation of the brief on this appeal is no minor undertaking. It must also be recognized that Appellants had only a very limited time to prepare and present their arguments to the court below. Appellants commended this proceeding on April 4, 2007 by Order to Show Cause challenging the actions of Respondents and seeking to enjoin the demolition of buildings on the project site. After a hearing on the request for a Temporary Restraining
Order, Justice Madden set a very expedited schedule for briefing on both the motion for a preliminary injunction and the merits of the petition. Respondents served their answering papers on April 25, 2007 consisting of four briefs totaling over 200 pages, at least four affidavits with over 1000 pages of attached exhibits. In addition, Respondent ESDC provided its administrative record of nearly 25,000 pages and MTA produced its record of approximately 800 pages.

Faced with the onslaught of those papers, Appellants had only one week to file their reply papers and had oral argument before Justice Madden on the next day. Given that highly truncated time period to respond to the briefs and review the record, Appellants did not have an opportunity to present their arguments in as concise and persuasive manner as they would have desired.

Justice Madden took over 8 months to issue her deciison. While on its face the decision appears to be thorough, as set forth in my moving affirmation it is rife with errors of law and facts... Appellants have the right to comb through the record and present to the Court the clear evidence supporting their arguments.

Presumably the eight-month stretch during which Madden deliberated caused as much delay as anything, but there's not exactly a remedy that Forest City Ratner can request.

Financial turmoil

Also aired is a dispute over the meaning of the affidavit filed by FCR executive Andrew P. Silberfein, which led to a flurry of news last week.

Braun states:
The Silberfein affidavit shows that, in view of the turmoil that now is affecting the financial markets, the prolonged pendency of this appeal could have an adverse effect on the financing of the Atlantic Yards project, particularly the complex bond financing that is planned for the multi-purpose arena that is a key component of the project and the first building to be constructed.

Baker responds:
Mr. Silberfein does not say that the presence of the appeal or the pending Federal litigation will block financing, only that it presents a threat to the project. The precise nature of that threat is not stated other than lenders will be cautious about financing the project.

But that is how the bond markets and bond insurers work. They evaluate the risk of a project not being able to meet its obligations and price the risk accordingly...

If Respondents are so certain that Appeallants' claims are without merit, then presumably the lenders and bond insurers have considered their opinion and will be prepared to proceed with the financing...

In fact, a managing director of Goldman Sachs was recently quoted in the New York Times as saying... "We like the deal."...

To the general public FCRC claims that this project is "full steam ahead;" it is only to this court that FCRC claims it is having financial problems.

Arena--what year?

Stuckey in his affidavit last year criticized the petitioners for citing Forest City Enterprises executive Chuck Ratner's offhand acknowledgement that the arena would open in 2010, pointing instead to Ratner's strained clarification:
"When I was discussing the arena, I was referring to the arena block which includes the Barclays Center as well as four surrounding buildings, including the iconic Ms. Brooklyn. We expect the office and residential buildings to come on line beginning in 2010. We remain committed to our goal of opening the arena in time for the 2009-2010 NBA basketball season.”

That claim, of course, has fallen by the wayside, as the developer quietly and then more officially acknowledged that 2010 was the goal for the arena, even though the three-year bridge reconstruction schedule suggests January 2011 at best.

Does AY delay cost $6M a month? $12M? Forest City Ratner's fuzzy math

How much money is Forest City Ratner losing each month because of delays in the Atlantic Yards Project. In an effort to convince an appellate court to expedite the appeal in the suit challenging the AY environmental impact, a top executive and top lawyer both offer some very fuzzy math.

While last April executive Jim Stuckey estimated $4.15 million a month--a little more than .1% of the projected cost of the project--in an affidavit filed 1/17/08, his successor MaryAnne Gilmartin now claims $6 million a month.

However, the text of the affidavit offers no explanation of why that cost has escalated, and in fact cautions in more than one place that the developer can't predict cost escalations.

Compounding that, FCR attorney Jeffrey Braun, in his legal affirmation unaccountably doubles down, claiming that Gilmartin's affidavit indicates that The expenses that FCRC would continue to incur while a stay was in effect and that are relatively easy to calculate would exceed $12 million per month, and that does not include the operating losses that the New Jersey Nets basketball team incurs while it continues to use an antiquated arena as its home venue.
(Click to enlarge)

Gilmartin's affidavit

Let's look at the relevant section of Gilmartin's affidavit, reproduced in full, with some interpolation.

C. The Financial Impact of Delay
11. Delay in the progress of construction work for the Project not only would defer the Project's important public benefits, but it would expose FCRC to severe irreparable harm, resulting from, among other things, (a) the prolongation of the time in which FCRC must carry the real property and the Project's overhead without generating income, (b) costs incurred in connection with equity invested in the Project, and (c) the prolongation of the Nets basketball team's operating losses arising from its use of the current inadequate arena in New Jersey.

12. At this time, it costs FCRC about $2,400,000 per month to carry the real property that it has acquired for the Project and the overhead that is in place to work on the Project — a figure that does not include FCRC's legal fees and also does not take into account the operating losses that the Nets basketball team, which has been owned by an FCRC affiliate since 2004, continues to incur while it is based at its current venue in New Jersey.

13. Delay on a construction project such as this one probably would subject FCRC to significant escalations in its eventual construction costs. FCRC cannot accurately predict the amount of these cost escalations. However, given that the costs of materials historically have increased over time and also given the magnitude of the Project, it is reasonable to assume that a delay would cause a significant adverse financial impact. A delay also would subject FCRC to penalties and claims from construction contractors that would be forced to stop work, demobilize and subsequently start up again. FCRC cannot accurately quantify these penalties, but they would be significant.
(Emphases added)

Last April, Stuckey claimed that construction costs escalated $1.75 million per month.

14. In addition, during the construction of the temporary rail yard described in Mr. Sanna's accompanying affidavit, the Long Island Railroad ("LIRR") must modify its operations to allow trains displaced from the MTA's Vanderbilt Yard facility to be serviced elsewhere. As a result, FCRC is now paying approximately $300,000 per month to cover the increase in the LIRR's operating costs. A stay pending appeal would increase the period of time during which FCRC must make these payments.

The total of known costs would thus be $2.7 million a month, plus a significant chunk for cost escalations. Yet Gilmartin then picks some numbers seemingly out of thin air.

15. Therefore, if construction work on the Project was stayed temporarily for even one month, the damages to which FCRC would be subjected would be about $6,000,000 per month, not including the escalation of construction costs. A delay of two months would thus expose FCRC to damages of at least $12,000,000.

It just doesn't add up.

Forest City Ratner attorney claims Gehry as a Brooklyn native

It's a not-terribly relevant exaggeration, a sign perhaps of carelessness or litigation overkill, but Frank Gehry, the Toronto-born architect who said he was inspired by a Brooklyn bride, is apparently a Brooklynite, at least according to a Forest City Ratner attorney.

From FCR attorney Jeffrey Braun's 1/25/08 affirmation in the pre-appeal papers in the case challenging the Atlantic Yards environmental review:
The project is being designed by Frank Gehry, a California-based Brooklyn native who is one of the preeminent American architects of our era.
(Emphasis added; click on graphics to enlarge)

Affidavits from Forest City Ratner officials have been less ambitious. Former FCR executive Jim Stuckey's 4/16/07 affidavit and his successor Maryanne Gilmartin's 1/17/08 affidavit read similarly, both calling Gehry one of the preeminent American architects of our time.

From Toronto to L.A.

Is Gehry a Brooklynite? From a Guggenheim Museum bio, surely vetted by the architect:
Born February 28, 1929, in Toronto, Frank Owen Gehry is one of the most inventive and pioneering architects working today. Based in Los Angeles—where he relocated with his family in 1947—he has developed a unique vocabulary that reflects both the urban vernacular and his long association with contemporary artists.

A William Morris Agency bio is similar. The Pritzker Prize bio points to Toronto. An American Masters career timeline (right) also points to Toronto. Wikipedia reminds us that he was born Ephraim Owen Goldberg.

Have courts affirmed the "significant positive impact" of AY? Nope

Let's take another look at Bruce Ratner's statement after the Second Circuit Court of Appeals on Friday upheld the dismissal of the Atlantic Yards eminent domain case:
"Today's decision is more than another victory for Atlantic Yards," Ratner said. "It is a victory for public good and the importance of investing in diverse communities throughout the City. Atlantic Yards will bring thousands of needed jobs and affordable homes to Brooklyn. We believe, and the courts have repeatedly affirmed, that these are real benefits that will have a significant positive impact on the borough and the City."
(Emphases added)

Let's assume that Ratner didn't mean that Atlantic Yards would be a "public good"--something commonly enjoyed, like air or national defense--nor that it was an example of "public goodness" but rather thought the decision affirmed "the public good."

Significant positive impact?

But have courts affirmed that the benefits are real and will have a significant positive impact? Not in the slightest. While the courts have affirmed that the plaintiffs acknowledge some benefits, the courts have not tried to evaluate them, nor could they.

Rather, the bar is much lower. As the appellate court stated:

But we hold today that where, as here, a redevelopment plan is justified in reference to several classic public uses whose objective basis is not in doubt, we must continue to adhere to the Midkiff standard, i.e., that the Atlantic Yards Project:
may not be successful in achieving its intended goals. But ‘whether in fact the [Project] will accomplish its objectives is not the question: the [constitutional requirement] is satisfied if . . . the . . . [state] rationally could have believed that the [taking] would promote its objective.’
(Emphasis in original)

In dismissal of eminent domain case, court cautions against appeal

In another blow to the Atlantic Yards opposition, a three-judge panel of the U.S. Court of Appeals for the Second Circuit yesterday unanimously upheld Judge Nicholas Garaufis’s dismissal of the Atlantic Yards eminent domain case and even suggested that a U.S. Supreme Court appeal would be tough to mount.

While the court acknowledged that eminent domain is an “immediate and intrusive” power for which “monetary compensation may understandably seem an imperfect substitute,” federal judges may not act on their sympathies, and Supreme Court precedent requires them to let elected representatives balance the costs and benefits.

The Atlantic Yards project clearly has some benefits, which the plaintiffs acknowledge, the court said, and that's essentially the end of the inquiry. Then again, its reading of the plaintiffs’ allegations about economic benefits and blight will be disputed, as will be its willingness to grapple with some allegations of a sweetheart deal.

Judicial deference to elected officials

The court concluded the 24-page opinion: This case has been very well litigated on both sides. At the end of the day, we are left with the distinct impression that the lawsuit is animated by concerns about the wisdom of the Atlantic Yards Project and its effect on the community. While we can well understand why the affected property owners would take this opportunity to air their complaints, such matters of policy are the province of the elected branches, not this Court.

That brought the issue full circle, echoing the statement in court 2/7/07 by Empire State Development Corporation (ESDC) attorney Douglas Kraus, “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."

That's an awkward fit with this case, as none of those officials had a vote on Atlantic Yards, and even Deputy Mayor Dan Doctoroff now acknowledges that such a project should go through the city’s land use review process, which does include a vote by City Council members. The ESDC, while a creation of the legislature, is essentially controlled by the governor.

Plaintiffs' attorney Matthew Brinckerhoff said in a statement, "Today's decision is disappointing. We disagree with its conclusion.... The court today affirmed that the government is free to take private homes and businesses and give them to influential citizens as long as one can imagine a conceivable benefit to the public, no matter how small or unlikely it may be. Indeed, it does not matter if all evidence points to a secret back room deal. All corrupt politicians need do to insulate themselves from judicial scrutiny is claim a benefit to the public. This is wrong.”

Developer Forest City Ratner issued a statement quoting Bruce Ratner: “Today's decision is more than another victory for Atlantic Yards. It is a victory for public good and the importance of investing in diverse communities throughout the City. Atlantic Yards will bring thousands of affordable homes and needed jobs to Brooklyn. We believe, and the courts have repeatedly agreed, that these are real benefits that will have a significantly positive impact on the borough and the City.”

Supreme Court appeal?

Plaintiffs’ attorney Brinckerhoff said, “We intend to ask the U.S, Supreme Court to hear our case.” That’s a longshot--the court accepts fewer than 2% of the petitions it receives.

Then again, eminent domain is a hot-button issue, and it only takes four justices to accept a case. While the four conservative justices likely would sympathize with any case that seeks to narrow eminent domain, given the 5-4 vote upholding eminent domain in the 2005 Kelo v. New London decision, they likely will be careful to pick what they consider the right case, one that will attract a vote from Justice Anthony Kennedy, the swing justice on this issue.

Still, the appellate court yesterday went out of its way to cast doubt on an appeal, suggesting in a footnote that Kennedy, whose nonbinding concurrence in Kelo buttressed the plaintiffs’ skepticism, would not look askance at this case.

I’m not so sure, as noted below. Then again, questions remain as to whether Kelo is directly on point, since it addressed eminent domain solely for economic development, while there are multiple justifications, including the removal of blight, in the Atlantic Yards case.

An appeal raises the question of how many of the 14 plaintiffs would remain in the case. Two of six rental tenants had signed settlement agreements, as of the beginning of January, but had not officially left the case. An additional two--perhaps three--were negotiating, according to attorney Jennifer Levy.

While it may be in Forest City Ratner’s interest to settle with residential tenants (and perhaps residential owners) rather than see the state evict them via eminent domain, such settlement is less likely with commercial owners and tenants. The state might well try to proceed with condemnation shortly.

(Brinckerhoff also said the case could be refiled in state court, though it's tough to imagine a state court would be more receptive to such claims. An appeal of a separate case, in which a state judge denied claims challenging the legitimacy of the environmental review, is pending.)

Mixed motives?

The plaintiffs’ theory of the case charged official malfeasance, which may be a stretch. Develop Don't Destroy Brooklyn legal director Candace Carponter said, "Our support of the fight of citizens to live safely in their homes, and operate safely in their business, will continue. We maintain that the government's motivation in using eminent domain for Atlantic Yards is not to benefit the public, but rather, to benefit a single, very rich and powerful developer.

The court observed: Beyond being conclusory, the claim that the “decision to take Plaintiffs’ properties serves only one purpose” defies both logic and experience. “Legislative decisions to invoke the power to condemn are by their nature political accommodations of competing concerns.” Brody v. Vill. of Port Chester.

As I wrote in November, I’m not sure discovery would turn up evidence of a backroom deal. (Even if it did, ESDC lawyer Preeta Bansal claimed in court that such corrpution wouldn't violate the public use clause, as long as there were public benefits.) It might simply show a city and state grateful for and not too skeptical of the project, as evidence already suggests.

Remember, as former New York City Economic Development Corporation President Andrew Alper told City Council 5/4/04:
The developer came to us with what we thought was actually a very clever plan.... And it is not really up to us then to go out and find to try to a better deal.

Nor was there much due diligence. For example, the ESDC and governor's office both on 3/4/05 issued press releases relying on revenue projections made by the developer’s paid consultant, Andrew Zimbalist, rather than conducting their own analyses. And both the ESDC and the New York City Economic Development Corporation conducted fiscal impact analyses without looking at a range of costs.

Fishy sequence?

The court yesterday acknowledged that “a fact pattern may one day arise in which the circumstances of the approval process so greatly undermine the basic legitimacy of the outcome reached that a closer objective scrutiny of the justification being offered is required.” However, in this case, the “objective basis” of the public use is not in doubt, so even if the project may not achieve its intended goals, as long as the state rationally could have believed that eminent domain would lead to those goals, the court should not intervene.

So the court in this case did not consider the Atlantic Yards approval process fishy, even though, for example, the developer was backed by the city and state 18 months before an RFP was issued for the MTA’s Vanderbilt Yard, the key component of the project footprint. The court's only mention of that charge was that the MTA was not a defendant. (Should it have been?) The plaintiffs also pointed out that there was no RFP at all for the project site as a whole, which had not been identified as blighted before Forest City Ratner's proposal.

Public benefits

The appeals court cited Garaufis’s conclusion that the plaintiffs acknowledged that the project “would serve several well-established public uses such as the redress of blight, the construction of a sporting arena, and the creation of new housing, including 2,250 new units of affordable housing,” so a reasonable juror couldn’t conclude that the public benefits were pretexts.

The court stated:
The appellants have conceded, if only reluctantly, that the Atlantic Yards Project will target a long-blighted area, result in the construction of a publicly owned (albeit generously leased) stadium, create a public open space, increase the quantity of affordable housing, and render various improvements to the mass transit system.

That generous lease would be $1 a year. The total quantity of affordable housing, as noted below, is in dispute.

Skewed process?

The plaintiffs, in the appeal, argued that Garaufis ignored specific allegations regarding a process that favored Ratner. The court’s summary:
First, the appellants point to a series of allegations that follow logically from the acknowledged fact that Ratner was the impetus behind the Project, i.e., that he, not a state agency, first conceived of developing Atlantic Yards, that the Ratner Group proposed the geographic boundaries of the Project, and that it was his plan for the Project that the ESDC eventually adopted without significant modification. Second, the appellants emphasize certain allegations that relate not to the passage of the Project, but to some purported departures from convention in the process through which the MTA (which is not a defendant in this case) accepted a bid from the Ratner Group to develop land owned principally by the MTA. Third, certain allegations are invoked to suggest that the public uses being proffered by appellees (and relied upon by the district court) were post hoc justifications, for example, the charge in the appellants’ brief that “Defendants never claimed that the Takings Area was blighted until years after the Project was officially announced and Kelo had been decided.” Fourth, while conceding that the ESDC has at all times abided by the letter of the strict requirements of state law, the appellants make various conclusory allegations in the complaint to suggest that the ESDC has nonetheless violated the spirit of these rules, to wit, that the “ESDC . . . engaged in a sham ‘public’ review process whose outcome was predetermined long before.”

Costs dwarf benefits?

The court observed:
Read carefully, however, the specific allegations in the complaint foreclose any blanket suggestion that the Project can be expected to result in no benefits to the public... Instead, their collective import is that the costs involved, measured in terms of either government spending or the impact the Project will have on the character of the neighborhood and its current residents, will dwarf whatever benefits result.

Well, if some costs dwarf the benefits, does that ultimately render them negligible? For example, in an allegation not addressed in the opinion, the plaintiffs pointed out that the state calculated the net economic benefit “without regard to the attendant public costs.” Once the costs are factored in, they alleged, “the net economic benefit is either negligible or non-existent.”
(The court opinion notes that, according to precedent, it is “construing the complaint liberally, accepting all factual allegations in the complaint as true, and drawing all reasonable inferences in the plaintiff’s favor." It's debatable whether the court did so fully.)

On the other hand, as the court noted, the plaintiffs did not allege that the increase in open space or improvements to mass transit were not public benefits.

Blight debate

The complaint distinguishes between the railyard blocks, part of ATURA, the Atlantic Terminal Urban Renewal Area, and the Takings Area, the blocks on Pacific and Dean streets where plaintiffs have property or live. The court pointed out that the plaintiffs conceded that ATURA had been designated as blighted. The court said:
The blight study commissioned by ESDC in 2006 determined that the conditions of blight extended well into the Takings Area, and the complaint alleges no facts to the contrary.

On the other hand, the complaint does challenge the blight study:
Even accepting the six characteristics of blight described by AKRF for each lot in the Blight Study, only 27% of the 73 parcels examined, at most, could be considered blighted. Only 19% of the Takings Area blocks and tax lots could be considered "blighted"; and that 19% is owned entirely by FCRC. None of the "blighted" properties is owned by the plaintiffs.

Affordable housing

As for affordable housing, the court pointed out that the plaintiffs concede that a significant amount of below-market housing would be built, but simply argue that it wouldn’t offset the impact of the luxury housing--which the court said wasn't enough to deny a public benefit.

The allegations went further; the plaintiffs contend that secondary displacement calls into question the net gain in affordable housing.

Would the Kelo dissenters agree?

The court suggested that the dissenters in Kelo wouldn’t look askance at this case:
We find it instructive that Justice [Sandra Day] O’Connor... agreed without reservation that, in addition to redressing blight, the “sovereign may transfer private property to private parties . . . who make the property available for the public's use–such as with a railroad, a public utility, or a stadium.”... As such, the instant challenge to the Project hinges on a proposition of law that would appear to fare no better under the Kelo dissent.

Brinckerhoff argued last October that “the notion that a stadium is a public use is just wrong.” (O’Connor in her Kelo dissent identified a stadium as a public use, but without any citations.) “A stadium is a private, money-making enterprise,” he said, not different from a hotel that offers public access.

Investigating motives

The court looked askance at the plaintiffs’ desire to gain discovery into the approval process via depositions, e-mails, and other communications, suggesting it “would add an unprecedented level of intrusion into the process.”

The court suggested that the plaintiffs were contending that the Kelo majority was quietly trying to overrule precedent and “require federal courts in all cases to give close scrutiny to the mechanics of a taking rationally related to a classic public use as a means to gauge the purity of the motives of the various government officials who approved it.”

Brinckerhoff had said in court that such scrutiny would apply to only a few cases, when it was clear that a private party had driven the process

Kennedy's concurrence and question of favoritism

The appellate court, in a footnote, took note of the Kennedy concurrence and suggested he wouldn't embrace the plaintiffs here:
Justice Kennedy, who joined with the majority opinion, nonetheless wrote separately to state his view 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.” Justice Kennedy may well have intended this caveat to apply exclusively to cases where the sole ground asserted for the taking was economic development.... None of the Equal Protection Clause cases Justice Kennedy relied upon involved deposing legislators or subpoenaing their confidential emails. Accordingly, even assuming, arguendo, we were to apply a version of Justice Kennedy’s standard here, we would scrutinize objectively and find no “plausible” accusations of favoritism.

The appellate court waved away the appellants’ argument that, unlike in Kelo, Atlantic Yards was proposed by the developer rather than the result of a response to an RFP. It stated: However, here, New York long ago decided by statute not to restrict the ESDC’s mandate to those “projects in which it is the prime mover.”

That’s true, but the court didn't address Kennedy’s observation that Kelo was OK because “the substantial commitment of public funds by the State to the development project before most of the private beneficiaries were known” and “evidence that respondents reviewed a variety of development plans and chose a private developer from a group of applicants rather than picking out a particular transferee beforehand.”

Both those conditions were absent in the Atlantic Yards sequence.

The court also noted that Kelo was solely about economic development, while there are several justifications for Atlantic Yards. Then again, the majority opinion in Kelo acknowledged: There is, moreover, no principled way of distinguishing economic development from the other public purposes that we have recognized.

The unelected ESDC

The appellate court rejected the argument that the ESDC doesn’t deserve deference as a state agency, noting that the Supreme Court has extended deference to both “Congress and its authorized agencies." The court also agreed that the ESDC's role was appropriate, given that the statute encourages "maximum participation by the private sector of the economy.”

Then again, that language stems from the 1968 desire of legislators for an agency to have significant power to clean up the slums, to invest its own money, then sell off projects to the private sector.

Recusal not a factor

What about the after-the-argument recusal of Judge Edward Korman, who acknowledged responding positively to an Atlantic Yards mailer? That might have given opponents some optimism.

But Chief Judge Dennis Jacobs, appointed in his stead, joined in the unanimous opinion, having read the briefs and having been furnished with a transcript and audio recording of the 10/9/07 oral argument. At the oral argument, Korman had been the most skeptical of the plaintiffs' argument, but none of the three judges were particularly skeptical of the defendants' case.

Eminent domain appeal rejected by appellate court

Breaking: here's a summary and link to the opinion in Goldstein v. Pataki. Forest City Ratner expressed satisfaction. Develop Don't Destroy Brooklyn, organizer of the case, said the plaintiffs intended to appeal to the U.S. Supreme Court, though the court takes only a fraction of the cases presented.

State of the 57th: Jeffries talks housing, skirts AY

In his first "State of the District" address, Assemblyman Hakeem Jeffries, who represents Prospect Heights and adjacent neighborhoods, drew an enthusiastic response Wednesday night from a crowd of supporters, even as he mostly ignored the single biggest project in the 57th Assembly District: Atlantic Yards, for which he has offered support tempered by criticism.

Opening the event at the Pratt Institute's Higgins Hall, MC Laurie Cumbo, founder and director of MoCADA, the Museum of Contemporary African Diasporan Arts, announced that the program would "focus on the positive" but acknowledge challenges. A video showed a BCAT profile of Jeffries as he held "office hours" last summer outside some subway stations during the evening commute.

Jeffries, whose prime focus was affordable housing, apparently concluded that Atlantic Yards would either be too much of a hot button or too tough to explain in a limited amount of time. He didn't say anything about the anticipated affordable housing that would be part of Atlantic Yards, including the 200 on-site affordable condos that he helped get Forest City Ratner to announce.

He didn't say anything about anticipated jobs. He talked about the reform of the 421-a tax break but not the "Atlantic Yards carve-out" that he's criticized because it would allow some Atlantic Yards buildings to be eligible for the tax break even though they don't contain affordable units. Nor did he say anything about the project's environmental impact, including the traffic planning that he's criticized.

Against eminent domain, sort of

The only nod to AY was a repeat of Jeffries' careful formulation that he opposes eminent domain to remove residents to build a basketball arena--not eminent domain for the project as a whole--just as he opposes the rumored privatization of public housing.

The audience clapped much harder for his statement about public housing than his mention of eminent domain and Atlantic Yards. (I interviewed him several weeks ago about eminent domain, and conclude his statement is essentially toothless.)

In the community

At several other junctures, he received enthusiastic applause from the mostly-black audience, which was quite comfortable with the church-like aspects of the event. Speaking in cadences shaped by decades of churchgoing, Jeffries got "Amens" when he quoted scripture and "uh-huhs" at certain points from the audience. The evening featured an invocation, a benediction, and a church choir. Jeffries closed by citing his faith in the community and his faith in God.

Among those in the audience and recognized from the podium were Shirley McRae, former chair of Community Board 2 (which criticized Atlantic Yards) and now the Brooklyn representative on the City Planning Commission, and Delia Hunley-Adossa, president of the 88th Precinct Community Council and Atlantic Yards Community Benefits Agreement Executive Committee Chair. Jeffries saluted City Council Member Letitia James, with whom he's worked cordially since his election, even though James backed his rival Bill Batson and strongly opposes Atlantic Yards.

From the address

After some introductory words, Jeffries got to the point:
I think that the single most important challenge facing this community today is the affordable housing crisis... pushing out long-time residents, working families, middle-class folks, senior citizens. It is the single greatest threat to the community that we know today. Residential gentrification, which leads to small business gentrification... which leads to cultural gentrification. You don't even recognize the community that you're living in.

Now this is not a black issue, and it's not a white issue. I think it's all about the color green. We have to define the enemy, in order for us to be able to defeat the enemy. And the enemy, in this case, is greed. Greed, which has led to the luxury condominium explosion all across this community. Greed, which has led to the subprime mortgage crisis and predatory behavior by banks and financial institutions. Greed, which has led landlords to close down rent-stabilized and rent-controlled residences so they can double, triple, or quadruple their profits. The enemy that we must defeat is greed.

421-a

Jeffries continued:
We began this process with 421-a reform, something that Councilwoman James worked on in the City Councill and a bill that I cosponsored in the Assembly .. 421-a, providing tax breaks to developers to build housing in the outer boroughs without any requirement that that housing be affordable to people who live in the community. It was a law that was first passed in 1971. And after a couple of decades, it had clearly outgrown its usefulness. Because neighborhoods like Fort Greene and Clinton Hill, Prospect Heights, Bedford-Stuyvesant, Crown Heights had become attractive to folks from Manhattan and other parts. And the developers, over the last couple of years, began to use 421-a tax breaks to build luxury condominiums all across our community that almost no one from the community could afford to buy. And so we set out to reform this law, from the principle that any development is to receive tax breaks and money from the government, a significant part of the housing that they build must be affordable to people who live in the community.

We set out initially to reform the law on a citywide basis. But the powerful real estate industry and the developers fought back. Although we weren't successful in getting it citywide, each and every neighborhood in the 57th Assembly District is part of 421-a reform.

On July 1, when the law becomes effective... if 421-a tax dollars are used for any of these luxury condominiums, by law, a substantial portion of that housing must be affordable to people who live in the community. By law, 50 percent of that affordable housing must be reserved for folks living in the community right now.

Subprime mortgages

Jeffries continued:
And then we stand to tackle the problem of the subprime mortgage crisis, and the predatory banks that were snatching away people's homes. So very early on, during my time in the Assembly, I met with Priscilla Almodovar, she's the governor's top advisor on this issue. And I said to her, "New York State has to get involved in dealing with this crisis." And as a result of my advocacy and the advocacy of others, and Governor Spitzer's willingness to address this problem, last year we announced the "Keep the Dream" program, a $100 million fund to refinance folks who are in predatory loans, which are unaffordable... so they can stay out of foreclosure, stay in their homes and keep the dream of affordable homeownership alive.

We also need to deal with the issue of preserving the affordable housing that presently exists in the community. So I've introduced several piecese of legislation and cosponsored other bills designed to protect the interests of rent-stabilized, Mitchell-Lama, NYCHA, Section 8, HUD-subsidized residents who are facing displacement. But as these bills work their way through the legislative process, I recognize that folks need protection--right now. So I'm pleased that in last year's budget, we were able to secure a legislative grant to establish a housing clinic in the 57th Assembly District to provide working families and middle-class folks and senior citizens with free legal represenation whenever they're facing displacement.

We recognize that there are certain folks who make too much to qualify for civil legal services. But they don't make enough to afford a private attorney without it having a devastating impact on their family's budget. But these are folks who still need legal representation. They deserve legal representation. And as the result of this housing clinic in the 57th Assembly District, they will get legal representation.

I asked yesterday for more details, and Chief of Staff Daisy James responded, "Assemblymembers Jeffries and [Adriano] Espaillat secured a legislative grant of $100,000 in the 2007-2008 budget to establish a housing clinic in their respective districts that would be administered by the CUNY School of Law Community Legal Resource Network. The City University of New York has also agreed to match the $100,000 grant.

We are in negotiation with the Hanson Place United Methodist Church to rent space, and hope to finalize an agreement next month. The funding will permit the clinic to hire two attorneys for this calendar year to provide legal representation to community residents in housing court. The attorneys will be available to meet with constituents twice weekly, and thereafter provide legal representation after the initial consultation."

They also will try to get additional money to extend the clinic.

New state spending

Jeffries continued:
But I know that more needs to be done. More needs to be done. And the governor just announced his intention for New York State to spend $400 million on the creation of affordable housing, $300 million of which is scheduled to be spent downstate. And you have my commitment that, over the next few months, and the next year, I will struggle to make sure that as much of that $300 million as possible will be spent right here in Central Brooklyn, where we need it and where we deserve it.

The state has long lagged behind city efforts to invest in affordable housing.

Kids & youth

Jeffries went to talk about the importance of increased state funding for schools, and cited his "most difficult" experience, attending the funeral of a 19-year-old "gunned down on the streets of Clinton Hill." (Here's coverage by Errol Louis in his Save Brooklyn Now blog.)

He said that "we must provide constructive alternatives' announced plans in tandem with Council Members James and Al Vann, and State Senator Velmanette Montgomery to turn a vacant building at 1024 Fulton Street into a "state-of-the-art youth center."

That's still in process. Chief of Staff James explained, "The NYS Office of Children and Families currently holds title to 1024 Fulton Street, and Assemblymember Jeffries, Senator Montgomery, and Councilmember Vann have reached a tentative agreement with the Spitzer administration to transform the building into a state of the art youth center. The initial step will be to secure city funding for a feasibility study in this year's budget, which will be spearheaded by Councilmember Vann.

Thereafter, Assemblymember Jeffries, Senator Montgomery and Councilmember Vann will launch the campaign to secure public funding and private philanthropic money to get the youth center built. The feasibility study will dictate the timetable."

Tale of two cities

Jeffries managed to work in a reference to Charles Dickens' "A Tale of Two Cities" and--thanks to his rhetorical skills--make it sound not-so-cliched:
I believe that the greatness of a society is not determined by its wealth or by its military power but how we treat the least of those among us. Charles Dickens wrote once about "A Tale of Two Cities," that "it was the best of times and it was the worst of times." And though he was writing about a European city centuries ago, there are some times when I think he could've been writing about our community. Because I've often been struck by the fact that you could go to Fort Greene Park, and if you decided to walk a few hundred feet in one direction toward DeKalb Avenue, you'd find yourself in a midst of half-a-million-dollar condominiums, multi-million-dollar brownstones. The best of times.

But if you went back to Fort Greene Park and you decided to walk a few hundred feet in the other direction, toward Myrtle Avenue, you'd be at Ingersoll, Whitman, and Farragut, where hard-working people are struggling every day just to provide a decent way of life for themselves and for their families.

And it's all happening in the shadows of billions of dollars worth of development in Downtown Brooklyn. And so I look forward to working with Joe Chan [of the Downtown Brooklyn Partnership] to make sure that everybody in the community can benefit from that development.

There were hearty claps. Jeffries last month said he wanted downtown developers to ensure community participation, suggesting a contrast with the obligations Forest City Ratner agreed to regarding Atlantic Yards. (Of course, as I pointed out, FCR got a zoning override in exchange.)

AY mention

Jeffries segued into his Atlantic Yards mention:
Just as I oppose the use of eminent domain to displace any resident simply to build a basketball arena, I continue to stand up for Whitman and for Ingersoll and for Farragut, and for Lafayette Gardens.

He went on to cite rumors that such public housing projects would be sold--"not my watch"-- and that NYCHA Chairman Tino Hernandez had told him last year that that would not happen. (City officials have long denied such plans.) But Jeffries wanted verification and had just received it in writing--another applause line, before he closed on an upbeat note.

Looking at Jeffries' opposition to eminent domain for the AY arena

Assemblyman Hakeem Jeffries, elected in 2006, has long held a (take your pick) nuanced or calculated position on Atlantic Yards, supporting the goals for minority hiring/contracting and affordable housing, yet criticizing transportation planning and excess density, and declaring that he opposed eminent domain to build a basketball arena--though not for the project as a whole.

He mentioned that issue again Wednesday night at his "State of the District" address, which allows him to be critical of the project without actually joining the opponents who are suing to block eminent domain.

While issues of process and planning may be amenable to negotiation, eminent domain is far less open to negotiation, given that the Empire State Development Corporation (ESDC) has announced its intent to pursue condemnation for properties developer Forest City Ratner has not been able to acquire. And the ESDC has defended its position quite vigorously in court.

Political positioning

Jeffries' position (click to enlarge), developed in 2006 when he was a candidate facing against clear AY opponent Bill Batson and proponent Freddie Hamilton, allowed him to establish a mend-it-don't-end-it position.

But the eminent domain date is drawing closer, as the ESDC defends a lawsuit filed by 14 plaintiffs, including three residential tenants, one commercial tenant, and two residential owners within the proposed arena footprint. (One of those owners has tenants.)

Of the plaintiffs in the footprint as a whole, two of the six residential renters as a whole are said to have settled, and it's possible that they are among the three cited above. Another pair of lawsuits, yet unresolved, have been filed by 13 tenants living in the footprint of the arena block, who also face displacement.

And the dismissal of the state lawsuit challenging the project, though it will be appealed, is another step toward condemnation.

Querying Jeffries

“My commitment to not supporting eminent domain for an arena remains firm,” Jeffries told me January 4, when I interviewed him about his comments comparing Atlantic Yards and Downtown Brooklyn development.

Will ESDC not pull the trigger?

Jeffries hasn’t supported the lawsuit--which challenges the project as a whole--so why hasn’t he done more than state his position?

“Eminent domain will have to be exercised through the ESDC. I’m not convinced that the [Gov. Eliot] Spitzer administration needs this fight,” he responded. “The Spitzer administration had a very uneven first year. He has a very aggressive and ambitious agenda for reform in Albany. I think they’re going to make every effort to be sensitive to concerns of local elected officials.”

“They inherited this lawsuit,” he said. “I think it will be a terrible fight for them to take on. I still think the Spitzer administration hopes for a negotiated solution. Ethically it’s not right to throw someone out of their home to build a basketball arena.”

I told Jeffries that all signs show that the Spitzer administration is moving forward to do exactly that. “If they pull the trigger,” he said, “it’s a tough political decision that I think will have negative implications on their ability to move forward with their agenda. That’s just my instincts, but assuming my other colleagues are as passionate as I am, there are going to be consequences.”

Consequences?

But what impact can Jeffries have, even with the help of some fellow local elected state officials? Spitzer last year did not heed requests by several organizations--including those not opposed to Atlantic Yards--and elected officials who asked that he support a delay in the AY approval vote.

Yes, the governor has suffered some political setbacks. But it's easy to imagine project proponents arguing that the number of displaced residents would be relatively small, given the expected benefits the state has calculated. And there's no reason to think Spitzer will back off from the AY steamroller, whatever concerns Jeffries and other officials express.