Thursday, July 31, 2008

The Yankees deal gets some more scrutiny, AY gets a mention

Yesterday, on the radio/TV program Democracy Now! (with transcript), Rep. Dennis Kucinich, whose Congressional subcommittee has looked closely at tax-exempt bonds for sports facilities, was interviewed by co-host Juan Gonzalez, who had found some curious discrepancies in the New York Yankees deal in a column Monday.

Kucinich chairs the Domestic Policy Subcommittee of the House Oversight and Government Reform Committee, which is looking into allegations that the city inflated the value of the land for the new Yankee Stadium, in order to enable a PILOT (payment in lieu of taxes), while at the same time lowballing the value to satisfy a federal requirement to replace parkland with property of equal value.

Kucinich (right) told Gonzalez:
From what I understand, as a result of our hearing [the IRS and Treasury Department] are reviewing their policies to see whether or not the 1986 Tax Reform Act has actually been compromised by the decision that they made. I think that it’s important to understand that we’re not alleging at this point that there’s been any kind of criminal activity. We’re simply reviewing all the information that’s been presented to us, so that we can determine, first of all, the discrepancy in the appraisals; secondly, the public policy issue of using tax-exempt bonds for these stadiums; and third, if there is an inflated value of this project, the implication that it has for security laws, with respect to the issuance of the tremendous amount of bond financing.

Hearing coming

Gonzalez also interviewed corporate watchdog Bettina Damiani of Good Jobs New York and Neil deMause of the book/web site Field of Schemes; both have looked closely at the Yankees deal and explained some of the issues regarding tax-exempt bonds.

A subcommittee hearing is upcoming in September; Gonzalez asked Kucinich about it.

Kucinich replied:
I can say that my subcommittee staff… is in contact with officials from both the city of New York and the New York Yankees to discuss their potential appearance in front of our Congressional subcommittee. I think that it’s very important to understand that we’re looking at a public policy matter here that relates not only to New York and not only to the Nets and the Atlantic Yard project, but it also relates to the whole country… because it’s quite possible that there are billions of dollars in tax benefits that should be going to municipalities for the purposes of repairing their infrastructure and for schools and other things and that are instead being diverted for these private sports complexes…
(Emphasis added)

Note that Kucinich's mispronunciation of "Atlantic Yards" suggests he's not quite up to speed on the deal.

Who are the watchdogs?

Near the end of the program, Damiani pointed to the absence of local watchdogs:
The city has really washed their hands of making sure there’s any accountability on jobs and clear benefits for New Yorkers on the other side of this project, which is very unfortunate. I mean, we’re grateful for Congressman Kucinich and Assembly Member [Richard] Brodsky to get involved in this issue. Neither represent New York City, by the way. New York City elected officials—they’re filling a void, because local elected officials in New York City have refused to get involved in this project. And we need them. We need them to make sure that the promises in the press releases actually turn out to be something that we can hold them accountable for.

Who's the landlord?

So, the "Landlord's Suite," as the Daily News reported Monday, must have eight seats plus standing room for four and offer the same "accommodations, services and amenities" as the other suites in the new $1.3 billion stadium, according to the Yankees' lease with the city-run Industrial Development Authority.

The Daily News Monday reported Mayor Mike Bloomberg's erroneous denial and then a spokesman's backtrack, claiming that the city hasn't decided what to do with the seats. A commenter on the Daily News web site suggested, "'The Landlord' is not a group of city officials. It is the people of the City of New York. It is the eight million residents who should be sharing this 'Landlord Suite,', not elected or appointed officials."

Bloomberg's obtuseness

On Field of Schemes, deMause reported Bloomberg's verbatim remarks, according to Patric Arden of Metro: "In the new stadiums, the city will not have any boxes, 'cause they're not going to be city-owned stadiums. They'll be built with private money - that was the whole deal. But I don't know whether anybody has any boxes. You talk to them."

However, the Yankees and Mets stadiums will be nominally owned by the IDA, so as to be publicly-owned and eligible for tax-exempt bonds, and leased to the teams for a song--as with the plan for the Atlantic Yards arena.

Bloomberg has shown similar obtuseness regarding the AY arena, claiming (ultimately erroneously) in a 1/23/04 radio interview that "any city monies of any meaningful size will be dead issues financed by the extra tax revenues that come from this. So, we’re not going to have to divert money from education, or police or fire or any other part of the city to do this. No. It is private money in that sense."

He also suggested that "the free market" was at work.

Wednesday, July 30, 2008

Typo? City/state letter on tax-exempt bonds backdates MTA RFP by three years

Maybe it's just a typo. Maybe it's a calculated slip. But there's another misleading element in a letter that, as I and Develop Don't Destroy Brooklyn have contended, deserves serious scrutiny.

The 5/8/08 letter to the Internal Revenue Service and U.S. Treasury Department from the New York City Industrial Development Authority and the Empire State Development Corporation backdates the issuance of the Metropolitan Transportation Authority's request for proposals (RFP) for the Vanderbilt Yard by three years, to 5/24/02.

The MTA's RFP was issued on 5/24/05. (Click on graphics to enlarge.)

Looking at the chronology

The passage at top appears in a chronology of the Atlantic Yards project, aimed to convince the federal agencies that they apply a 2006 "loophole" (in the words of the IRS's Chief Counsel) used for bonds to construct new stadiums for the Yankees and Mets to be used, as well, for the Atlantic Yards arena.

Both the Yankees and Mets want additional tax-exempt bonds backed by fixed payments in lieu of taxes (PILOTS). A proposed IRS rule would require that the PILOTs fluctuate so as to resemble the foregone taxes, given that tax assessment changes. Bonds with fluctuating payments would be much, much harder to sell.

The city and state argue that the AY arena should be grandfathered in under the more lenient rules allowing fixed PILOTs because "substantial progress" had been made before the proposed regulation was issued on 10/19/06.

The letter states:
Finally, the new regulations should not apply to bonds issued to finance a project that was described in a resolution, memorandum of understanding [MOU], or other preliminary approval adopted by a governmental entity prior to October 19, 2006. As we discussed, the Atlantic Yards project fits into this last category.

The chronology cites not just the MOU but public hearings and preliminary approval by the ESDC of the General Project Plan, which, at least in the section regarding tax-exempt bonds, remained virtually unchanged when finally approved in December 2006.

Looking at the MOU

Note that the Atlantic Yards MOU, signed 2/18/05, is quite tentative, stating that the project "may include" up to 2.16 million square feet of office development and 4.46 million square feet of residential development, though the former has declined by some 75% and the latter increased by 50%.

It also promises that the city and state would each commit $100 million in capital funding, though the city has since added $105 million. And it concludes:
This MOU is non-binding and does not create or give rise to any legally enforceable rights or legally enforceable obligations or liabilities of any kind on the part of any party hereto.

The advantage of 2002

What's the value of the 2002 date, compared to 2005? Well, maybe it's none, given that 2005 still would fall well before the October 2006 cutoff.

Then again, a 2002 date suggests that momentum for the project--which the letter says commenced in 2003--reached back even earlier.

Also, the 2002 date avoids potential consternation should regulators wonder why, if the project began in 2003 and the MOU was signed in February 2005, the Vanderbilt Yard was put out for bid only in May 2005.

That sequencing issue has been at the heart of the AY federal eminent domain case, which was dismissed by a district and appellate court and refused a Supreme Court hearing--but was never really addressed by the courts.

A modest proposal: Bruce Ratner should bunk on Dean Street

If, despite noise and disruption experienced by residents, daily life is sufficiently tolerable in the Atlantic Yards footprint, as per the Empire State Development Corporation (ESDC), perhaps some ESDC officials, joined by representatives of the Bloomberg administration and developer Forest City Ratner, can spend a few nights on Dean Street.

After all, then-Chicago Mayor Jane Byrne and Newark City Council Member Cory Booker lived in housing projects to show their solidarity with residents and to point to conditions that needed improvement. So Brooklyn booster Bruce Ratner could take a field trip from his $7 million Upper East Side mansion and host a sleepover in one of the residential buildings his company owns.

Tuesday, July 29, 2008

Glaring gap: AY EIS ignored noise, vibration, disruptions faced by footprint residents

Grating, honking noise from construction equipment. Vibrations that shake buildings, enforcing a 7 a.m. wake-up call. Cracks in building walls and steps. Dust and dislodged paint in the house. Unsavory diesel and sewer aromas. Surprise cutoffs of water and gas. Long waits for restoration of utilities.

That’s life some days for the people--fewer than two dozen--living on the north side of Dean Street between Flatbush and Sixth Avenues in the Atlantic Yards footprint, as massive construction equipment is used to upgrade water and sewer connections destined to help service an 18,000-seat arena and thousands of apartments. (Click on graphics to enlarge.)

(See The Footprint Gazette blog for video here and here. On 7/25/06, the New York Times, in an article skeptical about AY blight claims, focused on this block.)

The AY catch

Here’s the catch: the Empire State Development Corporation’s (ESDC) voluminous environmental review, required to disclose the potential impacts of the project, said nothing about the impact on those in the footprint, whether residents or those working at or visiting Freddy’s Bar & Backroom, on the corner.

The Final Environmental Impact Statement (FEIS), which detailed the potential impact of the project, did acknowledge that construction activities might be “perceptible and annoying in buildings very close to a construction site.” But it didn’t acknowledge that some “very close” buildings might be on the north side of Dean Street, destined to be demolished for the project.

As the graphic at right shows, construction noise receptors were placed only at locations across the street from construction activities. (I've highlighted some--but not all--areas on Dean and Pacific Streets where there are residents, as well as a business open to the public. For example, I left out P.C. Richard/Modell's at Site 5 in the far west of the footprint.)

Two excavators have been working on the block, models 345C and 315D, equipment that in Caterpiller’s own brochures is shown by itself at a non-urban construction site, not in a residential street. (The current 345D model is similar to the 345C model.)

Some residents consider it a form of harassment, an effort to wear them down and choose buyouts rather than remain in lawsuits challenging the project. While there’s no evidence that’s the motivation, project planners’ effort to get the work done sooner rather than later certainly makes people uncomfortable.

Legal recourse?

It's hardly clear that there's legal recourse. "As there was no construction or infrastructure work going on when we filed the EIS suit in April 2007, this situation is not something we could have considered in that suit," Develop Don't Destroy Brooklyn spokesman Daniel Goldstein told me, after I queried him. (The dismissal of the case is under appeal, with a state appellate court expected to hear oral arguments in September. Success would not necessarily block the project but could require an additional and expanded environmental review.)

"But now that the intolerable situation for residents in the footprint—impacts which were not contemplated or reviewed by the ESDC in the environmental review process—continues to worsen we are reviewing and considering what legal avenues are available to us," added Goldstein, who lives on the south side of Pacific Street, abutting the north side of Dean Street. (At right, new larger pipes destined for installation are stored in a Dean Street lot, with Goldstein's building in the background.)

"Additionally we are advocating politically along with those residents, and doing our best to assist them," Goldstein added. "We urge our elected officials to bring relief to the residents in the footprint from the noise, vibrations and near round the clock disruptions impacting their lives in an unacceptable manner."

Residents, however, have told me that sympathetic elected officials have said there's not much they can do and less-sympathetic officials have pretty much passed the buck to the ESDC, the agency in charge.

[Update 11:35 a.m.: One of the people quoted below, WK, tells me his water service was out this morning for several hours, without notice, but was finally restored.]

ESDC punts

So, why were these residents left out? I suspect that planners assumed that, by the time construction activities began, no one would be there.

But I don’t know for sure, because, when I asked the ESDC why the impact on footprint residents was left out and whether that was standard operating procedure, the questions were ignored.

Similarly, I didn’t get an answer to the question of whether there’d been any attempt to measure noise or inspect for vibratory impacts for these residents.

ESDC avoidance of public policy issue

Goldstein told me that, as a footprint resident, rather than as a DDDB representative, he queried ESDC ombudsman Forrest Taylor, pointing to the FEIS graphic that omitted the footprint and stating that “the FEIS never contemplated people living in the project site while work was going on, so that needs to be reconsidered.” (Goldstein in February posted videos on YouTube showing late night construction work that interfered with his sleep.)

Taylor wrote back, “Since your attorneys have brought suit against ESDC with respect to the EIS, I have been instructed not to discuss your allegations with respect to the EIS, as these issues are being handled by the attorneys.”

Actually, Goldstein as an individual has not sued ESDC; DDDB has funded and led a challenge to the EIS joined by 25 groups, though that lawsuit, as noted, did not address the situation of footprint residents.

Residents of 473 Dean Street, home to the Footprint Gazette blogger, are plaintiffs in three suits filed by attorney George Locker against the ESDC and other defendants.

But putting the issue of plaintiffs aside, this public policy question deserves an answer.

ESDC’s response

Instead, ESDC spokesman Warner Johnston offered a general response to my questions: “The EIS contains a comprehensive analysis of the construction-related environmental impacts of the Atlantic Yards Project and requires that construction activities be performed in a manner that minimizes and mitigates impacts.”

While the EIS analysis is very extensive, I’m not sure it can be called “comprehensive,” given that impacts on footprint residents are left out.

He continued, “The specific construction-related issues touched upon in your email are noise, vibration, air quality and utility work. The FEIS identifies measures to address each of these issues, including the use of equipment that complies with the noise emission levels specified in Table 17c-3 of the FEIS (“Construction Equipment Noise Emission Levels”); other measures to address construction noise; vibration monitoring to protect historic buildings; dust-suppression measures; the use of ultra-low sulfur diesel fuel for all equipment having diesel engines; the use of diesel particulate filters or other best available tailpipe emissions reduction technology on all nonroad engines of 50 hp or greater and on all concrete trucks and concrete pump trucks; and many other measures specified in the FEIS in considerable detail.”

"Maximum extent practicable"

It’s not clear how much impact those measures have. But the standard seems flexible. Wrote Johnston, “In its SEQRA [State Environmental Quality Review Act] Finding Statement (approved December 8, 2006), ESDC determined that the numerous measures put into place to minimize and mitigate construction-related impacts were sufficient and appropriate and would avoid or minimize adverse environmental impacts to the maximum extent practicable. ESDC stands by that finding.”
(Emphasis added)

The “maximum extent practicable” statement seems to be the key phrase. It may just not be practicable to make things more comfortable for footprint residents.

(At right, cracks at 473 Dean Street, alleged to have been caused by the construction work, but I don't have proof. More from the Footprint Gazette.)

Wiggle room under SEQRA?

According to my reading of the State Environmental Quality Review Act (SEQRA), it's hardly clear that those made uncomfortable could make progress in court. SEQRA states:
Within the framework presented in paragraph 617.9(b)(5) of this subdivision, EISs should address only those potential significant adverse environmental impacts that can be reasonably anticipated and/or have been identified in the scoping process.

Should this have been reasonably anticipated or identified? Arguably, but I could imagine the ESDC responding in court that it wasn’t anticipated.

Then again, developer Forest City Ratner's willingness to provide noise-abating air conditioners to those both inside and outside the footprint indicates that someone recognizes that footprint residents are situated similarly to those neighbors who were recognized in the FEIS.

What SEQRA said

The SEQRA Findings Statement acknowledges that Dean Street, from Fourth to Vanderbilt Avenues, was among the locations “expected to experience significant construction noise impacts.”

It states that “construction is not expected to result in any significant adverse vibration impacts,” but acknowledges impacts:
Construction traffic and noise will alter the quiet character of Dean Street and Pacific Street in the immediate vicinity of the project site. A number of specific measures to minimize noise, vibration, dust, and other construction-related nuisances will be employed where practicable. The impacts will be localized and will not change the character of the larger neighborhoods surrounding the project site.

The character of life on those streets, however, has changed.

Still, the only unmitigated impacts acknowledged in the FEIS are outdoor locations: the Dean Playground, Brooklyn Bear’s Pacific Street Community Garden or South Oxford Park. The document states:
If owners or tenants of the Temple of Restoration, the Pacific Branch Library and residences in the vicinity that will experience noise impacts elect not to take advantage of noise mitigation measures, the Project will have construction noise impacts at these locations.

However, footprint residents say that noise mitigation measures--notably double-pane windows and air conditioners, supplied by developer Forest City Ratner if not already installed--don’t fully work.

Responding to questions

Johnston concluded, “ESDC welcomes input from the community and certainly believes that members of the community have a legitimate right to raise their concerns about any aspect of the project, including its construction. ESDC will continue to attempt to address any specific concerns raised by the community.”

Any recourse?

I spoke to the Dean Street resident who blogs at The Footprint Gazette. (I’ll call him FG.) “We’ve called 311 a hundred times and spoken with [ESDC ombudsman] Forrest Taylor a number of times.” Elected officials, both for and against the project, have expressed varying degrees of sympathy, but haven't been able to help.

“The 311 calls haven’t really resulted in anything,” he said. “If we call with a noise complaint, or my apartment was flooded with diesel fumes, they come at a totally different time. I was trying to get them to come by, immediately.” Indeed, he said the excavator's movement of large steel plates in the morning can cause major vibrations, but when I visited, it was relatively tolerable, and the same thing happened, according to FG, the morning Taylor visited.

“We’ve gotten some minor things accomplished,” FG said, citing Taylor’s intervention. For example, workers had put a Porta-Pottie right in front of FG’s building, though there’s ample space on the block in front of empty buildings or empty lots. Later in the day, it was moved. (FG instead has fought back with sardonic videos and ungentle protest songs.)

Forest City Ratner agreed to supply air conditioners for those who don’t have them. “It doesn’t really help,” FG said. “It deeply penetrates all parts of the apartment,” FG said of the sound. “I keep earplugs, but it’s no relief. Once they start, I’m up.”

“We’ve all had our utilities shut off,” FG said. “There have been a couple of times we got no notice, once they rang my bell and said they were going to shut off the water for an hour. The Community Liaison officer then came by and apologized profusely.”

The utility snag

A resident down the block, whom I'll call WK, took the day off from work yesterday in a fruitless wait for KeySpan to show up and restore gas service that had been off for four days.

The announcement had not been placed on his front door and he hadn't tried to use the gas last Thursday or Friday, given that his water was out those days. (He went without showers.) So when his housemate and a guest tried to cook over the weekend, they brought back food partly prepped only to find the gas was off.

"No one knows when anyone [from the utility companies] is going to be here," WK said, crediting a representative from Forest City Ratner's Community Liaison Office for visiting three times yesterday in a cordial but ultimately fruitless attempt to coordinate restoration of service.

Gas in his building is scheduled to be turned off twice more during the first eight days of August, which will require utility representatives to walk through the entire, mostly vacated building, checking multiple connections. That means more time off for WK.

WK said that at least one utility shutoff was not planned but occurred when workers accidentally hit the gas lines, leading him to wait around for a lengthy inspection by KeySpan.

“Normal people do not have to live like this,” he said. "I'm not very happy about the little things--not having gas service for a couple of days, or not having water, but that's not the point," he added. "This whole [project] shouldn't be happening in the first place."

A barrier

Among the Mitigation Commitments promised are a minimum 8 foot perimeter barrier (constructed of 3/4” thick plywood), with a 16 foot barrier (of 3/4” thick plywood) adjacent to sensitive locations, plus “[w]here practicable, use of quiet construction procedures,” the use of “quality mufflers,” and “[w]here practicable,” the use of noise curtains and equipment enclosures.

The wall blocking off the sidewalk is meant to protect residents from construction equipment. It also provokes a feeling of isolation. FG produced a mash-up audio with Ronald Reagan apparently targeting the Brooklyn Borough President: Mr. Markowitz Tear Down This Wall.

Also, the wall makes it impossible for a vehicle to come by to load anything and blocks emergency vehicles, as FG has detailed.

Down the block, WK says he believes the wall led to an attempted break-in, since the would-be burglar could act under some cover. One outside door was pried open, but the burglar was stopped before he got through a second door.

Response to comments

In the Response to Comments chapter of the FEIS, the ESDC acnowledges:
Response 17-10: As noted in the DEIS, with the exception of the case of fragile, typically historically significant structures or buildings, generally construction activities do not reach the levels that can cause architectural or structural damage, but they can achieve levels that may be perceptible and annoying in buildings very close to a construction site.

Also, the FEIS states:
Response 17-17: The DEIS included an assessment of the potential vibration impacts of construction activities on structures and residences near the project site. Vibratory levels would not result in architectural or structural damage to nearby structures.

There's no evidence, however, whether the buildings in the footprint were checked. After all, how important is structural damage in buildings destined for the wrecking ball?

Interestingly enough, as part of the EIS lawsuit, Jim Vogel, a member of the steering committee of the Council of Brooklyn Neighborhoods and a resident of Pacific Street one block west of the project footprint, filed an affidavit regarding vibations.

He stated that, in March 2007, more than three months after the FEIS was submitted, engineers working on the project were inspecting buildings on his block that might be affected by vibrations--and that his building would need some protection or stabilization.

Chapter 17, Construction Impacts, states, regarding vibrations:

The buildings of most concern with regard to the potential for structural or architectural damage due to vibration are the Swedish Baptist Church and nearby row houses along Dean Street, which are immediately adjacent to the site of Building 15. The project sponsors will implement a monitoring program to ensure that no architectural or structural damage will occur.

That raises the question: what about the houses down the block on Dean Street? At right is a crack at 473 Dean Street.

Vibration monitoring

Regarding mitigation of vibrations, the FEIS says:
The buildings of most concern with regard to the potential for structural or architectural damage due to vibration are the Swedish Baptist Church and nearby row houses along Dean Street, which are immediately adjacent to the Site of Building 15. Vibration levels at buildings within this area will be kept below the 0.50 inches/second PPV limit. In addition, the project sponsors will implement a monitoring program to ensure that this limit is not exceeded, and that no architectural or structural damage will occur. At all other locations, the distance between construction equipment and receiving building is sufficiently large to avoid vibratory levels which would result in architectural or structural damage.

The site of Building 15 is on Dean Street east of Sixth Avenue, with four-story apartment buildings immediately adjacent.

However, apparently there's no such monitoring of buildings on Dean Street west of Sixth Avenue. So it’s hardly clear that “the distance between construction equipment and receiving building is sufficiently large to avoid vibratory levels which would result in architectural or structural damage.”

The FEIS states:
For limited periods of time due to infrequently occurring construction activities, vibratory levels will be perceptible in the vicinity of the construction site but would not be considered significant adverse impacts.

Again, it depends on who’s receiving the impact.

Neighborhood character

The FEIS says, regarding neighborhood character:
Construction activity associated with the proposed project would have significant adverse localized neighborhood character impacts in the immediate vicinity of the project site during construction. The degree of this change would depend on the type of construction activity being performed, the location and the length of time this disruption is expected to occur, and the character of the immediately adjacent neighborhoods. Construction would change the character of the project site from an underutilized and blighted area to one of construction activity. The existing uses on the site do not contribute to a vibrant neighborhood character, and their replacement with construction activities would not result in significant adverse impacts to neighborhood character on the project site.

Construction would also have significant adverse impacts on the local street network and cause construction-related noise, particularly along the Dean Street corridor just south of the project site.

Presumably, the north part of the Dean Street corridor, within the project footprint corner, would face even more construction-related noise. And while the ESDC may consider it underutilized and blighted, those living there have well-kept apartments that they are using every day, as FG details (above).

Immediate vicinity, losing character

The FEIS concludes:
The impacts would be localized and would not alter the character of the larger neighborhoods surrounding the project site. The proposed project would not result in significant adverse neighborhood character impacts during construction, except in the immediate vicinity of the project site.

In other words, if you live in the footprint, you’re out of luck. And, as far as I can tell, not in a very good mood.

Noise impacts

Regarding mitigation of noise, the FEIS says:
However, after evaluating all practical source and path controls, there would still be locations where construction activities alone and construction activities combined with project-generated traffic would result in predicted significant adverse noise impacts on the adjacent properties... Where they do not, receptor controls would be made available to residents within the significant adverse impact area identified in Figure 17c-2. At the Brooklyn Bear’s Community Garden, the Dean Playground, and South Oxford Park, because of safety and aesthetic concerns, there is no feasible and practicable mitigation that would eliminate project impacts; however, with respect to the Dean Playground, the impact would be partially mitigated by the provision of an amenity to the park users.

“Receptor controls” means air conditioners and double-pane windows.

It continues:
Figure 17c-2 is a map summarizing the locations where significant impacts are predicted to occur due to Phase I construction or the cumulative effects of Phase II construction activities and project-generated traffic. The locations where significant impacts are predicted to occur are typically the floors of a building which have a direct line-of-site to the site of construction.

In general, even during construction, L10 noise levels would generally be in the high 60 to high 70 dBA range and would be in the CEQR Technical Manual’s “marginally acceptable” to “marginally unacceptable” categories.
...(Noise levels in many areas of New York City are in the “marginally unacceptable” range.)

It’s all relative

The FEIS concludes:
While construction activities would be noticeable and intrusive, the noise levels produced by construction activities with the incorporated noise reduction measures would be relatively low for construction of a project of this magnitude. Additional mitigation measures that were identified to further reduce these incremental construction noise levels at nearby residences are described below and summarized in Chapter 19, “Mitigation”.

(Emphasis added)

But there are few projects of this magnitude, so, for those in the immediate vicinity, that’s surely cold comfort.

Monday, July 28, 2008

Another angle on the Yankee Stadium PILOTs deal

From Patrick Arden in today's Metro, another reason for the Congressional probe into whether Yankee Stadium PILOTs were "gamed":
To get the financing, the Yankees needed to pay off the debt with payments in lieu of property taxes, though the team has never paid property taxes. If the Yankees did pay property taxes, the IBO said, the amount would fall $29 million short of what the team needed to satisfy the debt. The city disagreed: The stadium would be valued at $1 billion, and the land underneath it was worth $200 million.

But a much lower number was offered when the city got that land appraised to satisfy a federal requirement to replace parkland with property of equal value. In a second set of appraisals obtained by NYC Park Advocates, the value of Macombs Dam Park was put at $21 million, just below the $25 million total of the replacement parcels.

[Update: Much more on the discrepancies from Daily News columnist Juan Gonzalez, including this passage:
Why such wildly different values for the same property?

"Our assessors jacked up the numbers and the comparables for the Council to justify the stadium bonds," said a Finance Department official familiar with the project.

AY is a project, not a place (again)

From today's New York Post, in an article headlined LANDMARKS BLOOMBLITZ:
The proposed historic designation for Prospect Heights would cover a neighborhood bordering the megadevelopment at Atlantic Yards. Similarly, the West Chelsea district abuts the massive Hudson Yards project.

No, Atlantic Yards is a project, not a place. And nearly all of the project would be in Prospect Heights.

Nor would the historic district border Atlantic Yards in a bookend manner; rather, the top finger would on two sides border the AY footprint. In other words, they're part of the same neighborhood.

The Hudson Yards map, while not a pure rectangle, includes whole blocks, not partial blocks, as with AY.

AY advertising, FCR branding, and the Manhattan Media connection

What's a generic Atlantic Yards advertisement--featuring some dubious statements used to promote the project even before it was passed--doing in the July 2008 issue of New York Family/Brooklyn, "a glossy, vibrant city magazine that offers active, sophisticated New York parents an inviting mix of feature articles and selected tips about their interests, issues, and concerns"?

Well, the magazine comes from none other than Manhattan Media, the enterprise that previously teamed with developer Forest City Ratner on the short-lived but much-criticized Brooklyn Standard "publication." Forest City Ratner initially pledged publication "every few months."

Contract unfulfilled?

Only two issues of the Brooklyn Standard were published, both in 2005. I speculate that Forest City Ratner contracted with Manhattan Media for more issues than were published, and the advertisements we see represent a fulfillment of the contract. [Update: NLG points out there's a term for this: makegood.]

Or perhaps Forest City Ratner likes Manhattan Media so much it has become, like the New York Post (with its Brooklyn Tomorrow advertorial), a valuable advertising outlet.

After, the Atlantic Yards ad is opposite the first page of a nine-page "special promotional section" featuring "dream buildings" like One Hanson Place, The Edge, and Peter Cooper Village, the latter not in Manhattan.

I assume that, should Atlantic Yards residential buildings actually be constructed, the marketing would be a little more targeted--buyers of high-end condos probably wouldn't care much about the Community Benefits Agreement.

Looking at the claims

Let's take a quick look at the claims in the advertising. Yes, some 6400 units of mixed-income housing are planned, but they sure wouldn't come in buildings that, as in the rendering above and in a previous brochure, would be only about 15 stories tall. Besides that, the project, though promoted as taking a decade, could take 20 years or more, thus slowing the delivery of the affordable units.

The 15,000 union construction jobs would be 15,000 job-years: 1500 jobs a year over a decade, or a smaller number annually over a longer period.

The Community Benefits Agreement was not "ratified by 200 leaders and organizations." It was signed by eight organizations, only two with established track records. The term “ratified” is a step up from “affirmed,” which was what was used in 2005.

As the New York Observer pointed out: The Real Estate asked for the list and counted fewer than 175; and that's only if "organizations" include elected officials, restaurants and real-estate agencies, as well as block associations and the like. But we were nonetheless surprised it had traveled so far, so fast. Why, there are groups from as far away as Queens and Manhattan on this list!

The eight acres of "public open space" would be privately owned but publicly accessible.

And "Brooklyn's own home team" would "Brooklyn's own" only in location. The major benefit would be reaped by majority owner Bruce Ratner and his firm, Forest City Ratner.

Branding ads

Also in the new magazine, as in Manhattan Media's New York Press and in the Post's Brooklyn Tomorrow, is a version (right) of Forest City Ratner's image-less branding ad.

In March, I wrote how the New York Press was prominently featuring a full-page advertisement from developer Forest City Ratner. The branding exercise, I suggested, might be seen as an effort to shape opinion among residents of Lower Manhattan, where the newspaper circulates, and where a promised school in Frank Gehry-designed Beekman Tower has been delayed--and where the developer has recently gotten support for more subsidies.

Now, as the ads persist, it looks like Forest City Ratner has some extra money to spend on image building or is just getting some value from the money pledged to the aborted Brooklyn Standard.

Where the Mobil station stood, an empty lot

Less than a year ago, there was a busy (but blighted!) Mobil station at the northwest corner of Flatbush Avenue and Dean Street.

It closed around December and, as the wide-angle photo below from Tracy Collins shows, it's all been cleared.

There are still people living in the white building at left and the tan-yellow building at center.

Sunday, July 27, 2008

Talk to the (NY Times) Newsroom: unanswered questions about Atlantic Yards coverage

New York Times Metro Editor Joe Sexton answered questions from readers July 21-25, and there were some interesting and thoughtful exchanges.

I sent a question on Monday, which I didn't exactly expect him to answer.

A letter to the Times

Mr. Sexton,

In a previous "Talk to the Newsroom" feature, in March 2007, you wrote, "Pick any major topic of the last several years in New York... The paper's coverage has been unmatched."

I'd strongly disagree with that regarding Atlantic Yards. In fact, I'd argue, the Times has a special obligation to be exacting in its coverage, given the parent company's business relationship with Atlantic Yards developer Forest City Ratner, as partners on the Times Tower. (I wrote about that in a September 2005 report critiquing the Times, linked from my web site, and have continued my media criticism as part of my Atlantic Yards Report watchdog blog.)

A second look at Zimbalist

1) For example, the Times gave cursory coverage to a fascinating and strategic aspect of the Atlantic Yards fight, the developer's recruitment of prominent sports economist Andrew Zimbalist, a noted critic of sports facility deals, to write an economic impact analysis projecting huge gains in tax revenues from Atlantic Yards. When a critique of Zimbalist's work emerged in June 2004, the Times gave the last word to Zimbalist:

Dr. Zimbalist, for his part, said he had not seen the report and knew only what he had heard from reporters. Saying he was unsure whether Dr. Peebles or Mr. Kim had fully understood the economic issues, he added, "I was very careful in my use of numbers."

There's been no further coverage, even though the developer has regularly used Zimbalist's numbers. As I've written, the Times's approach to the West Side Stadium was more skeptical--and the Times last year pursued peer review of a study claiming NBA referees were biased.

Regarding Zimbalist, there was no peer review and no close reading. That's especially important in retrospect, given that the numbers have been repeated by project supporters, but Zimbalist's credibility on this project and others has been steadily undermined. (See here, here, and here.)

My questions: do you think the Times had an obligation to better analyze Zimbalist's report? Why can't the Times take a second look now?

Continuity of coverage

2) The Times in March broke the news that the Atlantic Yards project was delayed and, without context, reported that the planned arena would cost $950 million. The Times did not point out that the figure represented an approximately 50% jump in cost, perhaps because the reporter had not been covering the story steadily.

Three days later, I broke the news that a September 2007 State Funding Agreement gave the developer 6+ years to build the arena and 12+ years to build the four or five towers of Phase 1, even though, when approved in December 2006, the project was expected to take ten years to build. It took the Times more than a month to report that new timetable, when it provoked a lawsuit.

I know the Times in October 2005 assigned Nicholas Confessore to the Brooklyn bureau, with a responsibility to cover Atlantic Yards (among other things) and, after the project was officially approved in December 2006, promoted him to Albany.

In hindsight, given the ongoing controversy, and the complexity of the story, do you think it was a mistake not to aim for more continuity in coverage?

Putting a Times correction dispute to rest

In May 2006, I had a few go-rounds with a New York Times editor who insisted the newspaper did not have to correct a statement that Atlantic Yards opponents "have backed alternative plans for the site, including proposals by rival developers that would include mostly low-rise buildings and would not require eminent domain."
(Emphasis added)

Despite copious evidence, the editor declared, "[W]e've determined that no correction is warranted."

Well, I was just looking at the Final Environmental Impact Statement, issued in November 2006, and Chapter 20, Alternatives, described (p.19) the Extell proposal thusly:
The proposed design would result in eight high-rise structures and one low-rise structure in a curving footprint along Atlantic Avenue...
(Emphasis added)

If they don't believe me, or Forest City Ratner executive Jim Stuckey, or the publication Real Estate Weekly, all cited in my previous post, maybe they'll believe the government.

Saturday, July 26, 2008

Was Yankee Stadium value "gamed" to issue PILOTs? Congressional probe could affect AY

Was the valuation of the new Yankee Stadium "gamed" so that the foregone taxes exceeded the expected bond payments, thus allowing a PILOT (payment in lieu of taxes) financing deal?

That's the subtext of the inquiry launched yesterday by the Domestic Policy Subcommittee of the House Oversight and Government Reform Committee, which in March 2007 and October 2007 held hearings regarding tax-exempt financing for sports facilities.

And should the subcommittee, chaired by Rep. Dennis Kucinich (D-OH), find the procedures sketchy, that could cast doubt on similar financing plans for Atlantic Yards arena and the new Mets stadium.

In yesterday's letter, Kucinich was not questioning the use of fixed PILOTs, which would be forbidden under proposed federal regulations, just whether the city and others are cooking the numbers to make a deal with fixed PILOTs work. (Here's coverage from Reuters.)

Drilling down

The subcommittee is investigating the accuracy of representations made to federal agencies and bond investors about the property value of the land and buildings in the stadium construction project.

Kucinich yesterday sent letters to the New York Yankees, the New York City Department of Finance, New York City Economic Development Corporation, Internal Revenue Service, and National Park Service, asking for "all documents relating to any assessment, appraisal, or any other valuation, estimated or final, of the new Yankee Stadium and the land on which the stadium is being built, including the methodologies by which these valuations were calculated."

Fishy numbers?

As I wrote June 27, the city's Independent Budget Office (IBO) certainly thought the annual Yankees PILOT might exceed the foregone taxes and thus render the deal questionable. However, according to a 5/8/08 letter to the IRS and Treasury Department from city and state agencies, the estimated tax for the Yankees would be $62.5 million, while the PILOTs would be only $56.7 million.

But where did those numbers come from? The source for that estimate is not a city agency but a report from Moody's Investors Service, a company that offers credit rating and risk analysis.

No estimate for the Atlantic Yards arena PILOTs was given. However the IBO estimate of $11 million in foregone property taxes for Madison Square Garden would be far less than the estimated $48 million annual payment for $800 million in tax-exempt bonds for the arena. Develop Don't Destroy Brooklyn has raised this point with the IRS and Treasury Department.

At stake for developer Forest City Ratner is a savings of perhaps $165 million compared with taxable bonds. Federal taxpayers bear most of the burden; hence, the backing of the plan by the city and state.

Several levels of concern

Kucinich may personally oppose tax-exempt financing, but eliminating it is politically unlikely. Still, both Congress and federal agencies can on several levels make things difficult for backers of tax-exempt bonds for sports facilities.

First, Kucinich has questioned whether the PILOT deals for the Yankees and Mets should have gone through. In June, he published a letter questioning whether the IRS’s approval of the teams’ financing arrangements was permissible, let alone compelled, as the IRS Chief Counsel had testified.

He asked for clarification of testimony on the issue before the Treasury Department finalizes new rules that would permit a version of such financing.

New rules opposed by city and state

Second, even though Kucinich has questioned the proposed rules, they would remove what the IRS Chief Counsel called a "loophole" and make it impossible to issued fixed PILOTs, but rather make sure they fluctuate, as do regular property taxes.

The city and state are lobbying to make sure that additional bonds for the Yankees and Mets stadiums, as well as bonds for the Atlantic Yards arena, are grandfathered in under the more lenient standard, which allowed fixed PILOTs. As Neil deMause explained on Field of Schemes, bond buyers look askance at PILOT payments pegged to floating annual property assessments, since they "really really don't like uncertainty in their bond payments."

Holding the city and state to the PILOTs deal

Third, as noted above, Kucinich in the letters issued yesterday did not question the concept of fixed PILOTs, just whether the numbers behind them are fishy.

At the Assembly hearing

There are several reasons to question the numbers, including the IBO report and discussion at a State Assembly hearing July 2. At the hearing, Assemblyman Richard Brodsky grilled Seth Pinsky, head of the New York City Industrial Development Authority, about the assessment for the new Yankee Stadium.

Pinsky said he didn’t know the methodology, but said the IRS had given its blessing.

“I believe the IRS accepted the numbers given without examination,” Brodsky responded.

Pinsky said that the bond buyers and rating agencies and associated law firms had vouched for the numbers.

“We’re going to take a much harder look at that,” Brodsky said.

It looks like Congress will be part of that "much harder look."

Friday, July 25, 2008

In downtown Anaheim, the false promises accompanying Gehry's (nice) ice rink

It's not directly related to Atlantic Yards, but a look at Frank Gehry’s ice rink in Anaheim, CA, originally dubbed Disney Ice and now called Anaheim Ice, offers a cautionary tale about promises made for ambitious architecture.

Notably, the structure, when it opened in 1995, did not contain some of the Gehryesque elements announced, it did not prompt the redevelopment of nearby parcels, and, counter to the expectations of its builders, it did not spawn a national effort to teach inner-city youths ice hockey.

(It was built in part as a practice rink for the Mighty Ducks of Anaheim; I'll bet that Gehry does not design the practice facility for the Nets that Forest City Ratner now promises in Brooklyn.)

Such sobering reality is accessible to anyone who takes a serious scan of local news coverage, but if you read the New York Times, the only extant look at the rink--other than two throwaway mentions--was a review written 9/18/94 by architecture critic Herbert Muschamp, a Gehry champion, some 13 months before the building opened.

The building serves as the practice rink for the Anaheim Ducks (originally Mighty Ducks of Anaheim) team in the National Hockey League (NHL). It includes one standard NHL-size rink, and one Olympic-size rink, is striking but hardly urban from the outside, an island of corrugated steel, but handsome on the inside, the rinks defined by curvaceous wood beams. It seems to get steady use from youth skating, beyond serving as a practice facility.

Writing too soon

Notably, the Times review was written when the building was about to go into construction, not after it opened and was used. Thus Muschamp could gush about the building as a piece of sculpture, not a messy, living thing with blank walls backing into a major avenue, though years later, as the photo shows, there's a new development (at right in picture) bordering the rink.

Similarly, he could proclaim, improbably at the time and incredibly in retrospect--that the Atlantic Yards arena, as designed, would be an “urban garden.” (Now even the promised green roof is gone.)

Muschamp’s essay, headlined Disney Takes the Ice to the Players, explained that the rink would be a practice rink for the team:

Initially conceived as a home base for Disney's N.H.L. team, the Mighty Ducks, the arena will also provide a community center for what Anaheim officials hope will become a vibrant downtown district. With walls and roof sheathed in corrugated aluminum, finished to the semi-gloss of freshly resurfaced ice, the building is plainly intended to stand out as a city landmark. And its shape, which will be visible from all four sides, also evokes imagery of winter sports. The structure rises from the ground in a steep convex slope, then swells into two silvery crests with a gentle dip in the middle. The effect is of two big Quonset huts that have partly melted together then magically congealed: an inner-city ski run for a contemporary Cinderella.

The name of the arena -- for now, the Disney people are calling it Goals, though that may change -- will be spelled out on the front and back of the building in curving metal letters three stories tall. If you look at the arena sideways, you may be able to make out that the letters form a stylized pair of mouse ears. On the other hand, you don't have to. An entrance canopy -- unmistakably a stylized duck bill -- projects over a plaza painted in radiating stripes of purple, green and yellow, the Ducks' team colors. (Even Ro
bert Venturi has never designed so literal a duck.) A big silver puck will hold the street edge of the plaza; you'll be able to buy your own hockey stick at the sporting-goods store housed inside it. Rows of palm trees will set this alpine apparition within a tropical frame.

Design changes

As photos from my recent visit show, no such three-story metal letters exist, nor do a stylized duck bill or silver puck. (Similarly, some of the flourishes announced for the Atlantic Yards arena, such as a rooftop park open to the public and even a green roof, have vanished.) What happened?

A 5/4/95 Los Angeles Times article, headlined "Disney Ice Rink Gets New, Cost-Saving Look," explained that the Anaheim City Council had just approved revised plans that eliminated a costly sign envisioned by Gehry. The news came in the wake of criticism of Gehry in the area for “cost overruns like the ones that have plagued the Walt Disney Concert Hall in Los Angeles.”

The newspaper reported:
The original sign by Gehry was an architectural feature that blended into the front of the building. Its graphic elements and canopy were found to be "economically infeasible," according to a city staff report.

While Disney officials would not disclose the estimated cost of the building, a council member told the newspaper the building would cost $10 million to $12 million--nearly 100 times less than the Atlantic Yards arena, now estimated at $850 million.

An 11/12/95 Los Angeles Times review, headlined "Gehry Goes with the Floe," said it cost $8.5 million.

That review, praised Disney Ice as “a rare case of a hockey rink transformed into attractive architecture,” suggesting that the exterior was welcoming and the interior “warm and sheltering.” (I’d agree with the latter but not the former.)

A reader from Anaheim was a bit more skeptical, suggesting in a 12/3/95 letter:
I have seen better looking Quonset huts in the most desolate parts of the world that were put up in a day.

Gehry told the newspaper that one of Muschamp’s faves had been nixed:
"At one point I actually had a canopy shaped like a duck's bill over the entry, but the client felt it was a touch too fanciful."

Vibrant downtown?

Regarding the hope for Anaheim’s revival, Muschamp was repeating the conventional wisdom, such as an 8/10/94 Los Angeles Times article, headlined "Anaheim, Disney to Built Joint-Use Ice Rink,' which stated:
City officials hope that the new Community Ice Center will help revitalize downtown Anaheim.

It didn’t work. Anaheim’s downtown, more than one-and-a-half miles away from the Disneyland resort area, was long moribund. A 1/31/99 Orange County Register article about the relationship between Disney and the city of Anaheim, headlined “The Ties That Bind,” explained:
The stark facade of the Frank Gehry-designed building has been criticized by downtown merchants for its lack of landscaping. The city exempted Disney from normal landscaping rules at the request of the company's architects.

That was clearly a mistake, just as it was a mistake, in retrospect, not to require retail or other street-level activity around the rink. (Note the photo of the rink's back side near top.)

By contrast, planners for the Atlantic Yards arena, planned for an urban area already much, much busier than downtown Anaheim, say there will be retail around the building, and City Planning Commission Chair Amanda Burden even pushed for a “b-market” along Atlantic Avenue, a narrow strip of retail to accommodate smaller shops.

An arena wasn't necessary to revive the border of Prospect Heights and Downtown Brooklyn (and a site mostly in the former); an RFP process would've done fine.

A 10/3/02 Orange County Register article headlined “Voters concerned about downtown” stated:
The Anaheim Boulevard Consortium for Development has also been rallying for a more commercially viable downtown for two years.
Vic Real, a member of ABCD and a West Anaheim resident, said the goal is to make the downtown area more of a destination.
''Right now you find the downtown is deserted, everyone is going home,'' he said. ''Pedestrian-friendly, that would make downtown a downtown.''

Only recently has development come to a plot next to the rink. According to an 8/13/07 Orange County Business Journal article headlined Harbor Lofts by Lee Homes & CIM Group Attracting First Time Buyers:
Harbor Lofts is Anaheim's first mixed-use building and stands as a pillar of the downtown's exciting revival.

Many of the units are still for sale, as far as I could tell, while taking a walk around the area earlier this month. It’s a sensible development, of reasonable scale, with retail on the ground floor, trying to add residents to downtown.

In fact, what it shows most of all is how the Gehry rink is anti-urban, isolated on the street, with a moat of parking. It can be fun for skateboarders, at least (see below).

A "piece of sculpture"

The rink gets unconditional kudos in the 2006 documentary Sketches of Frank Gehry, directed by Sydney Pollack, which I recently watched again.

Former Disney CEO Michael Eisner explains to the camera, "We bought a hockey team. We needed a practice rink. He designed for us a hockey rink in downtown Anaheim."

Eisner's enthusiasm ramps up: "It is a piece of sculpture sitting in this town. I think that and Bilbao and a couple of other things are his best work."

As the music swells, Eisner explains, "The inside is reminiscent of those hockey rinks that Frank grew up with in Canada. All wood, all trusses, looks very traditional, it looks like you could be nostalgic for being in Toronto in 1940something."

Delivering the picture

Finally, Eisner describes what it's like to be the client: "You give Frank the functionality, you make sure in the hockey rink you have the workout room and the locker rooms and all that stuff, and you’re on Frank that way--and then he delivers the picture."

The camera pulls away to an aerial shot of the rink, notable for the parking lot in the background, now, more than a dozen years later, occupied by a development, the Harbor Lofts. In other words, "the picture" to Eisner and so many Gehry enthusiasts ignores the larger context. Sure, it's a lovely piece of sculpture. But it's in an urban environment.

Beyond that, Eisner and the film omit the decisions to truncate Gehry's "picture" by eliminating the sign, duck bill, and puck.

Social mission truncated

Muschamp wrote:
The Anaheim rink has been conceived as a pilot project for a new Disney program with a serious social mission. Directed by David Wilk, founder of a pioneering New York City program called Ice Skating in Harlem, the Goals program is being developed to serve inner-city youth. Wilk views skating as a way to develop teamwork, discipline and self-esteem.

In addition to recreation, Goals will offer scholarships, internships and other educational programs. If the project succeeds in Anaheim, the plan is to replicate it in other American cities, perhaps as many as 30, in the next 10 years, according to David Malmuth of Disney's development wing.

Well, as the photo shows, at least it's provided a haven for skateboarders.

A 7/2/95 Orange County Register articled headlined "Disney’s Rink is All Business; It’s Mice-Free Ice," explained that the developer got a carrot to do so:
The city's redevelopment agency gave the 3.2-acre plot of vacant land at Lincoln Avenue and Harbor Boulevard to Disney Goals in exchange for an agreement to provide $ 4.3 million in ice-related youth and community services to the city.

And what happened to Disney GOALS? It has expanded only modestly, now operating in both the Anaheim and San Diego areas.

A 6/7/07 Orange County Register article, headlined "Scoring Goals," explained that, “between Orange and San Diego counties, the program serves about 2,000 youth.” While that’s nothing to criticize, it should be pointed out that it has not been replicated on the scale hoped for in Muschamp’s essay.

Losing commitment

Then again, Disney sold the hockey team in 2005, and the team’s name changed from the Mighty Ducks of Anaheim to the Anaheim Ducks. Thus Disney has no reason to be fully committed to hockey.

How long before Forest City Ratner and parent Forest City Enterprises, who have no past history with professional sports, sell the Nets basketball team? According to the 10-K report (p. 9) filed in March with the Securities and Exchange Commission, one of the risks investors should recognize is this:
We Have Limited Experience Participating in the Operation and Management of a Professional Basketball Team, and Future Losses Are Expected for the Nets.

Gehry’s fuzzy geography

In a 7/1/08 Guardian of London interview headlined Let's twist again, Gehry recalled his upbringing in Toronto:
The Gehrys were "pretty poor. At school, I got beat up by Catholic Polish kids, miners' sons, who called me 'kike' and 'Christ killer'. But the French Catholics, the underdogs in Toronto, were on my side and I learned to fight back. I even got good at ice hockey. One of my favourite projects has been 'Disney ice', a rink we did in Anaheim in the mid 90s close by Disneyland."

Well, “close by” is a relative term. It’s 1.68 miles away, according to MapQuest (right), and downtown and Disneyland are separated by a residential neighborhood.

Given Anaheim weather and traffic, it’s really not walkable--though there is a regular bus.

It makes you wonder how much feel the Los Angeles-based Gehry has for Brooklyn.

Thursday, July 24, 2008

Looking back at the unanticipated impacts of the Downtown Brooklyn rezoning

It’s well-known that the 2004 Downtown Brooklyn rezoning resulted in some very different outcomes than expected, given that the hot residential real estate market, coupled with changes in the back-office needs of large companies in Manhattan, made it far more lucrative to build luxury housing (and hotels) than the office space (and jobs) that the rezoning was intended to foster.

A new report, Downtown Brooklyn’s Detour: The Unanticipated Impacts of Rezoning and Development on Residents and Businesses, prepared by the Pratt Center for Community Development for FUREE (Families United for Racial and Economic Equality), points out how much has changed in four years, raising concerns about the displacement of lower-income retail and residential tenants. It doesn’t suggest particular strategies, however. (Solutions aren’t simple; perhaps that’ll be another report.)

The report does remind us that an EIS (environmental impact statement) is hardly infallible, as we’ve also learned in the case of Atlantic Yards, where the EIS anticipated a ten-year project buildout that seems deeply divorced from reality. The report points out that there was too little public input regarding the concerns of FUREE’s constituency, though it doesn’t mention that FUREE, among others, was asleep at the wheel.

It also points out that no affordable housing was required as a trade-off for giving developers vastly increased development rights--clearly an error in retrospect, as the city has learned in rezonings of Fourth Avenue in Park Slope. The unanswered question is how to fairly share the increased wealth created by the rezoning.

The report was released last week as FUREE members protested the continued absence of neighborhood retail--a well-used supermarket and drug store on Myrtle Avenue just east of Flatbush--demolished by developer John Catsimatidis in anticipation of new development. Here’s a Brownstoner interview with probable mayoral candidate Catsimatidis, who, in his narrow analysis of displacement--none on the blocks he owns--shows himself to be underinformed.

Catsimatidis was not asked about the timetable to replace the retail, though he has said it was coming within a year--though subject to the vagaries of the real estate market, which is a big caveat.


The episode suggests that, while the supermarket and drug store may have been profitable serving the working-class and low-income residents nearby, the potential returns from the rezoned land were, to Catsimatidis, much more significant.

How to deal with the mismatch in the market? Here’s a Pratt Center report on some strategies, including commercial rent control, none of which are easy to implement.

And here’s an article in the current issue of City Limits, in which Julia Vitullo-Martin of the Manhattan Institute suggests that street frontage available within the footprint of a public housing project--in Chelsea in this case--could support new retail. It’s an idea that hasn’t been suggested yet in Brooklyn but shouldn’t be dismissed.

The probable solution regarding a supermarket involves construction at the Brooklyn Navy Yard, which, because it involves demolition of houses at Admiral's Row, has turned into a contentious fight that pits a variety of preservationists and neighborhood organizations against local elected officials, tenant groups, and Navy Yard brass. (Is a compromise possible? Maybe. Here's coverage from Brownstoner and the Gowanus Lounge.)

The essential complaint

"The papers and the Downtown Brooklyn Partnership keep talking about a renaissance in Downtown Brooklyn,” said Randy Leigh, FUREE Board Member, in a press release. “But none of this reflects what's actually happening to the people who live, work, shop and own businesses here. We did this report because we wanted to show the true story. The city is trying to move out low income and working class people, especially people of color. They're marketing everything to wealthy people who don't even live here yet, and aren't part of the history of this great community.”

While the marketing, as shown in projects listed on the Downtown Brooklyn Partnership site, is indeed to wealthy people, the displacement issue is more subtle--as is the question of whether Downtown Brooklyn is a "great community." Large housing projects like Ingersoll and Whitman are not going anywhere. The Pratt report notes that the EIS analysis estimated that 386 residents living in about 130 housing units, mostly in rent-stabilized buildings, face displacement.

“The rezoning included no provisions to create or preserve affordable housing, and fewer than 800 below-market-rate units are being built in downtown Brooklyn,” the report states. While that may seem to be a net gain, it’s hardly clear when those units would be built, or whether they would be affordable to those displaced.

A victory

It also may be possible to preserve the rights of some residents; 40 families living in rent stabilized apartments subject to eminent domain will get “substantial relocation benefits and protections,” including Section 8 subsidies and a preference in all City-supervised affordable developments, according to a FUREE announcement.

The settlement was a result of a lawsuit filed South Brooklyn Legal Services and the law office of Candace Carponter (who is also the legal chair of Develop Don’t Destroy Brooklyn).

Slow down for a solution?

FUREE’s Leigh also said, “We hope this report shows it's time to stop the nonsense, slow down the development until the people who live here and know best can be part of the plan."

What exactly that means is another question. Assemblyman Hakeem Jeffries acknowledged in an interview in January that public officials have relatively little leverage, but may be able to use bond financing to nudge developers to create affordable housing.

Unanticipated impacts

The Pratt study notes:
The stated goal of the 2004 Downtown Brooklyn Plan was to stimulate the redevelopment of the area in order to encourage its continued transformation into New York City’s third central business district. The comprehensive development plan has created a set of negative impacts, some of which were outlined in the plan’s Environmental Impact Statement. However, many of the negative impacts that small businesses and households are currently experiencing were not taken into account by the EIS.

Displaced businesses

While the EIS analysis estimated that 100 businesses—and 1,700 jobs---would be directly displaced by new development, it concluded that this does not constitute a “significant adverse impact,” the Pratt study notes. Already more than 100 businesses in the rezoning area have already been displaced.

The problem, according to Pratt, is that it is very difficult to meet the criteria for establishing a significant adverse impact--there must be a critical mass of unusual retail businesses. (What might be a solution? A relocation fund? Loans to re-establish businesses?)

Further, because the Downtown Brooklyn plan includes existing urban renewal areas, such as the Albee Square Mall with 731 jobs, the potentially lost jobs from those zones are not included because they were already subject to displacement--thus producing an undercount.

A change in character

The report notes:
As landowners clear out small businesses located on future development sites, moderate income office workers find that the shops they have patronized for years are gone. Also, as small businesses get displaced, the character of Downtown Brooklyn—particularly the Fulton Street Mall--as a shopping destination for low and moderate-income households is being threatened.

While the EIS analysis has a very narrow perspective on the neighborhood’s historical significance and character and how they are expected to change, the new residents and workers who are expected to come to the area will create significant impacts.

The report suggests that delis, barbershops, and other convenience retail shops serving moderate-income office workers will be lost, and other businesses—”from an array of small clothing stores to a specialized wig shop”—will be lost that currently serve people from a large area. The report concedes:
While perhaps it would be difficult to argue that the small businesses in Downtown Brooklyn constitute a critical economic sector in Brooklyn or the city overall, their removal alters the character of Downtown Brooklyn’s thriving shopping district and decreases the number of establishments that offer affordable goods to shoppers.

The report notes that the Downtown Brooklyn EIS “fully acknowledges that the rezoning is very likely to impact the area’s character, but its framework for analysis is much more quantitative than qualitative,” suggesting positive impacts from increased development and demand, but ignoring those who might feel excluded.

Is it the market at work?

Again, this raises a question about the appropriate public policy. Given Downtown Brooklyn’s place as a transit and office hub, shouldn’t there still be a market for working-class shoppers?

And, if not, is Downtown Brooklyn redevelopment a project purely of the market? Not really. The Downtown Brooklyn Partnership has an $8 million annual budget, with $2 million from the city and hundreds of thousands of dollars from local businesses, property owners, and other institutions, according to the Pratt Center blog The Eminent Domain. (That still doesn’t add up to $8 million.)

Sharing the wealth

Change in Downtown Brooklyn was inevitable; the challenge is sharing the wealth created by public action. And it should be noted that the Downtown Brooklyn Partnership (DBP) hasn’t ignored all the concerns raised by FUREE. One critic of the rezoning, speaking at the FUREE convention in May, was the owner of the restaurant Tio Pio.

However, according to the latest Downtown Brooklyn Partnership newsletter, Tio Pio has moved to a new and much larger home, thanks to help from the MetroTech Business Improvement District (BID), a component of the DBP.

Who dropped the ball?

The report notes:
The only way for regular citizens to have participated in this process, at least in theory, would have been to try to influence members of Community Board 2 who had—but ultimately did not use—an opportunity to cast an advisory vote on the plan. Outside of this narrow official review process, there was no on-the-ground constituency group (or a coalition of groups) that pressured the city to ensure that the plan contained provisions to meet the needs of low and moderate-income people and small business owners who had been living and doing business in Downtown Brooklyn for many years.

All true, but unmentioned is that groups like FUREE and ACORN were otherwise engaged, as the New York Observer reported in 2006. According to coverage of that CB2 meeting in the 2/7/04 Brooklyn Paper, the opponents of the plan were worried about eminent domain, traffic impacts, and overdevelopment--not the concerns raised by FUREE.

By contrast, Atlantic Yards developer Forest City Ratner, promising ACORN and Community Benefits Agreement signatories affordable housing, job training, and the hiring/contracting of minorities and women in exchange for, essentially, a private rezoning at the scale the developer required.

Neither process seemed to work too well.

Supplemental EIS needed?

Though the Downtown Brooklyn EIS, under its reasonable worst-case scenario, estimated that only 979 residential units were likely to be created, that was way off. Does that mean there should be more analysis?

No. In July 2007, according to the Pratt Report, a city “technical memorandum” was issued assessing changes proposed for the Albee Square Mall site--from an EIS analysis that assumed more than 1 million square feet of office space and no residential units to a CityPoint project with some 125,000 square feet of office space and more than 1,000 housing units. However, the city concluded that no new significant environmental impacts would be created, so no Supplemental EIS was necessary.

That suggests that changes in the Atlantic Yards plan similarly will not generate a Supplemental EIS, despite a vastly different time frame. (A Supplemental EIS was requested in the lawsuit challenging the Final EIS, as petitioners said a wind study should have been included; Justice Joan Madden disagreed, dismissing the case, which is under appeal.)

Whither the Fulton Street Mall?

The Fulton Street Mall, faces an uncertain future, the report adds, calling the mall “a tremendously successful urban place” “in terms of retail performance and its viability as a social meeting space for a wide array of people.”

While the EIS did not anticipate impacts on the mall, the Pratt report suggests that nearby development may call into question “the prospect of Fulton Mall as an economically and socially vibrant place and a destination for low and moderate-income shoppers.” (Here's a link to a Times article and Brownstoner discussion last December that's a bit less affectionate toward the mall.)

Again, that raises questions about whether the government should intervene to preserve retail or let the market work--and what exactly the market is. Will sneaker stores and discount emporiums stores--some of which pay very high rent, making it up with volume--exist in tandem with upscale shopping? In the near term, it’s likely they will.

So, what next--can FUREE and the Downtown Brooklyn Partnership schedule an open meeting together? That's doubtful, but it would be interesting to watch.