Skip to main content

Flashback: four years ago, ACORN's Lewis scoffed at getting paid by Forest City Ratner

While many people are looking forward, AYR today offers a couple of flashbacks.

A little more than four years ago, Bertha Lewis, executive director of New York ACORN (Association of Community Organizations for Reform Now), scoffed when a questioner wondered if the organization was being paid by Forest City Ratner for its support of the developer's Atlantic Yards project.

Today, Lewis is the chief organizer of national ACORN, as it recovers from an embezzlement scandal, and Forest City Ratner has bailed out the organization with a grant and loan worth $1.5 million.

The situation is not exactly analogous: national ACORN is the beneficiary, not New York ACORN, and the Atlantic Yards project is no longer pending approval but has gained state approval.

But Lewis's outrage at the question is belied by the organization's current dependency on the developer.

Flashback to the meeting

The issue came up at an 11/29/04 public meeting on the Atlantic Yards plan, organized by Community Boards 2, 6, & 8 and featuring Forest City Ratner point man Jim Stuckey. (The Brooklyn Downtown Star called it The Plucky Jim Show.)

The Brooklyn Paper, in a follow-up article headlined POWER BROKERS, reported on questions posed regarding whether both ACORN and the fledgling job-development group BUILD ((Brooklyn United for Innovative Local Development) were getting paid:
Stuckey balked, and refused to answer the question, instead saying, “Why don’t you ask them yourself?”

A chorus of boos came from the ACORN and BUILD activists who largely packed the audience. Afterwards, Stuckey told The Brooklyn Papers he didn’t answer the question because, “It was insulting. Of course, BUILD and ACORN are not getting paid.”

Bertha Lewis, Brooklyn director for ACORN, called the accusation ridiculous.

“We’ve built housing for over a million people. I raise two to three million dollars a year,” Lewis told The Papers. “It just says to me, ‘This is exactly why people think stuff boils down to race and class.’ It’s like, how dare you?

“We got paid? We got paid with the biggest housing program that has our name on it that you can imagine. We’re gonna be famous!” she said, referring to the 50 percent affordable housing, compared to the typical 20 percent found in most modern developments with an affordability incentive, that Ratner has agreed to include in Atlantic Yards.

However, Lewis sacrificed any larger evaluation of the project, as she later acknowledged--"I can't do environment," she said at a memorable debate--trading off the housing pledge for the density the developer chose.

And, of course, the Housing Memorandum of Understanding signed 5/17/05, requires ACORN to publicly support the project.

Getting paid, then and now

In the Brooklyn Paper article, project opponent Patti Hagan suggested that, if the groups were being paid, "it compromises them as free agents in negotiating a community benefits agreement.”

Well, both ACORN and BUILD stood to benefit in the future, given that they would be in line for management contracts for the affordable housing and job training.

BUILD, it later emerged, had told the Internal Revenue Service it expected $5 million from Forest City Ratner. While that was an erroneous estimate, BUILD representatives were shown to have lied when they denied in August 2005 that BUILD had been paid by the developer.

In the generous phrasing of the New York Times, a 10/14/05 article reported that spokespeople for FCR and BUILD "revised that account."

(That phrasing appeared in the notorious "modern blueprint" story, in which the Times, apparently attached to a story line about the developer's capacity to reap community support, saw fit to bury a scoop--catching the developer and its CBA partner in baldfaced lies. It is, to my mind, the second-worst example of New York Times Atlantic Yards coverage, trailing the phantom scaleback article only because the latter appeared on the front page.)

So the distinction between current payments and expectation of future payments might be seen as a bit murky.

ACORN in a jam

More importantly, national ACORN's fortunes have fallen, as the revelation of a scandal--the brother of founder Wade Rathke embezzled nearly $1 million in 2000 and senior executives kept mum--led foundations that previously supported the organization to back off, jeopardizing ACORN's ability to pay back taxes.

Enter Forest City Ratner, which has no history of corporate support for ACORN.

Lewis had scoffed at the "race and class" aspects of the accusation that New York ACORN was getting paid.

Now, however, one of ACORN's few friends with deep pockets is a developer that has no particular interest in ACORN's overall agenda but very much needs "race and class" grassroots support for its stalled project in Brooklyn.

Indeed, while ACORN should face questions about whether the money from Forest City Ratner compromises ACORN's capacity to represent the community regarding AY, parent company Forest City Enterprises should face questions from shareholders, not just about the rationale for the grant/loan to ACORN, but whether this will become a standard practice in development deals.


Popular posts from this blog

Forest City acknowledges unspecified delays in Pacific Park, cites $300 million "impairment" in project value; what about affordable housing pledge?

Updated Monday Nov. 7 am: Note follow-up coverage of stock price drop and investor conference call and pending questions.

Pacific Park Brooklyn is seriously delayed, Forest City Realty Trust said yesterday in a news release, which further acknowledged that the project has caused a $300 million impairment, or write-down of the asset, as the expected revenues no longer exceed the carrying cost.

The Cleveland-based developer, parent of Brooklyn-based Forest City Ratner, which is a 30% investor in Pacific Park along with 70% partner/overseer Greenland USA, blamed the "significant impairment" on an oversupply of market-rate apartments, the uncertain fate of the 421-a tax break, and a continued increase in construction costs.

While the delay essentially confirms the obvious, given that two major buildings have not launched despite plans to do so, it raises significant questions about the future of the project, including:
if market-rate construction is delayed, will the affordable h…

Revising official figures, new report reveals Nets averaged just 11,622 home fans last season, Islanders drew 11,200 (and have option to leave in 2018)

The Brooklyn Nets drew an average of only 11,622 fans per home game in their most recent (and lousy) season, more than 23% below the announced official attendance figure, and little more than 65% of the Barclays Center's capacity.

The New York Islanders also drew some 19.4% below announced attendance, or 11,200 fans per home game.

The surprising numbers were disclosed in a consultant's report attached to the Preliminary Official Statement for the refinancing of some $462 million in tax-exempt bonds for the Barclays Center (plus another $20 million in taxable bonds). The refinancing should lower costs to Mikhail Prokhorov, owner of the arena operating company, by and average of $3.4 million a year through 2044 in paying off arena construction.

According to official figures, the Brooklyn Nets attendance averaged 17,187 in the debut season, 2012-13, 17,251 in 2013-14, 17,037 in 2014-15, and 15,125 in the most recent season, 2015-16. For hoops, the arena holds 17,732.

But official…

At 550 Vanderbilt, big chunk of apartments pitched to Chinese buyers as "international units"

One key to sales at the 550 Vanderbilt condo is the connection to China, thanks to Shanghai-based developer Greenland Holdings.

It's the parent of Greenland USA, which as part of Greenland Forest City Partners owns 70% of Pacific Park (except 461 Dean and the arena).

And sales in China may help explain how the developer was able to claim early momentum.
"Since 550 Vanderbilt launched pre-sales in June [2015], more than 80 residences have gone into contract, representing over 30% of the building’s 278 total residences," the developer said in a 9/25/15 press release announcing the opening of a sales gallery in Brooklyn. "The strong response from the marketplace indicates the high level of demand for well-designed new luxury homes in Brooklyn..."

Maybe. Or maybe it just meant a decent initial pipeline to Chinese buyers.

As lawyer Jay Neveloff, who represents Forest City, told the Real Deal in 2015, a project involving a Chinese firm "creates a huge market for…

Is Barclays Center dumping the Islanders, or are they renegotiating? Evidence varies (bond doc, cash receipts); NHL attendance biggest variable

The Internet has been abuzz since Bloomberg's Scott Soshnick reported 1/30/17, using an overly conclusory headline, that Brooklyn’s Barclays Center Is Dumping the Islanders.

That would end an unusual arrangement in which the arena agrees to pay the team a fixed sum (minus certain expenses), in exchange for keeping tickets, suite, and sponsorship revenue.

The arena would earn more without the hockey team, according to Bloomberg, which cited “a financial projection shared with potential investors showed the Islanders won’t contribute any revenue after the 2018-19 season--a clear signal that the team won’t play there, the people said."

That "signal," however, is hardly definitive, as are the media leaks about a prospective new arena in Queens, as shown in the screenshot below from Newsday. Both sides are surely pushing for advantage, if not bluffing.

Consider: the arena and the Islanders can't even formally begin their opt-out talks until after this season. The disc…

Skanska says it "expected to assemble a properly designed modular building, not engage in an iterative R&D experiment"

On 12/10/16, I noted that FastCo.Design's Prefab's Moment of Reckoning article dialed back the gush on the 461 Dean modular tower compared to the publication's previous coverage.

Still, I noted that the article relied on developer Forest City Ratner and architect SHoP to put the best possible spin on what was clearly a failure. From the article: At the project's outset, it took the factory (managed by Skanska at the time) two to three weeks to build a module. By the end, under FCRC's management, the builders cut that down to six days. "The project took a little longer than expected and cost a little bit more than expected because we started the project with the wrong contractor," [Forest City's Adam] Greene says.Skanska jabs back
Well, Forest City's estranged partner Skanska later weighed in--not sure whether they weren't asked or just missed a deadline--and their article was updated 12/13/16. Here's Skanska's statement, which shows th…

Not just logistics: bypassing Brooklyn for DNC 2016 also saved on optics (role of Russian oligarch, Shanghai government)

Surely the logistical challenges of holding a national presidential nominating convention in Brooklyn were the main (and stated) reasons for the Democratic National Committee's choice of Philadelphia.

And, as I wrote in NY Slant, the huge security cordon in Philadelphia would have been impossible in Brooklyn.

But consider also the optics. As I wrote in my 1/21/15 op-ed in the Times arguing that the choice of Brooklyn was a bad idea:
The arena also raises ethically sticky questions for the Democrats. While the Barclays Center is owned primarily by Forest City Ratner, 45 percent of it is owned by the Russian billionaire Mikhail D. Prokhorov (who also owns 80 percent of the Brooklyn Nets). Mr. Prokhorov has a necessarily cordial relationship with Russia’s president, Vladimir V. Putin — though he has been critical of Mr. Putin in the past, last year, at the Russian president’s request, he tried to transfer ownership of the Nets to one of his Moscow-based companies. An oligarch-owned a…