Saturday, February 07, 2009

Be skeptical of Forest City, New Yorkers warn Las Vegas

KNPR, Nevada Public Radio, has been reporting on a proposal by Las Vegas Mayor Oscar Goodman to build a new downtown Las Vegas City Hall in partnership with developer Forest City Enterprises, a proposal opposed by the 60,000-member Culinary Union.

And while Forest City has been unwilling to send a rep to be interviewed, on January 30 the program focused on the developer's project in Fresno, CA, and yesterday on Atlantic Yards.

The takeaway for Las Vegans from yesterday's show was to be skeptical of the developer and to take any announced plans with a grain of salt.

But the takeaway for Brooklynites probably came from Matthew Schuerman of WNYC, who warned that "the bond market can turn around in a year," which means that, should lawsuits be resolved in the state's favor--and that's more likely than not--the arena might go ahead. In other words, AY is hardly dead.

Who speaks for AY?

If you listened to yesterday's show, which contained a snippet from a city official, two reporters who've covered the project with some skepticism, and one leading AY opponent, you'd think that the sentiment in Brooklyn was largely critical of Atlantic Yards.

I don't think that can be proven; elite opinion, in the form of the editorial boards of the three daily newspapers, is for the project, as are most elected officials. Public opinion varies, though most are indifferent and those closest to the site are most critical.

So it's too bad neither Forest City Ratner nor parent Forest City Enterprises will talk. (The Fresno segment on KNPR featured a Fresno Bee columnist who spoke supportively of the developer.)

In the absence of the developer, Borough President Marty Markowitz, the not-so-coherent Carl Kruger, or Daily News columnist Errol Louis (who's been quiet of late on AY, maybe because he's got a very busy schedule, and has launched some worthy criticism of the mayor), I'll nominate another project proponent: the New Jersey-based Nets superfan known as NetIncome (on the NetsDaily site he helps run) and Bobbo (in comments on this blog and elsewhere).

A well-respected newsman in the career from which he just retired, should NetIncome/Bobbo become a more public pundit, he might have to own up to his real name and his errors in the AY debate.

Show opening

The KNPR host began with two inaccuracies in one sentence, stating, "Atlantic Yards, a onetime railyard, has been cleared..." (He clearly didn't read my crib sheet.)

Schuerman clarified that, saying that about a third of the project--actually, closer to 40%--would be built over the railyard. He cautioned that, while lawsuits are "the ostensible reason why this preliminary work has stopped. A lot of people... say they could've gone a little bit farther," given that the developer owns buildings it could demolish.

Daniel Goldstein of Develop Don't Destroy Brooklyn was introduced as the last resident in the project site. He clarified that he was the last one in his building. (Actually, he's been joined by a wife and child.) He described the vision of developer's blight outside his window.

Chris Smith of New York magazine pointed out that, given that Las Vegas "has an arena"--actually, one is planned but not yet under construction--and that Bruce Ratner has a team without a project, "let me propose it, if it hasn't happened already: the Las Vegas Nets! I think that solves a couple of problems."

That's not so likely, given that a gambling scandal has made the NBA skittish about expanding into Sin City.

City defense

Without a project proponent on the line, the show used a WNYC clip from city economic development official Seth Pinsky, who said, "The one thing that anyone who’s lived through the history of New York City real estate is that New York’s real estate market is cyclical and during the down cycles, everyone despairs that nothing is going to get built for decades and decades, and then the boom returns and things sprout up out of the ground."

Goldstein allowed that Pinsky is partly right, but called it irresponsible because "we have in the heart of Brooklyn... a half-demolished site... with no timeline holding the developer."

His interviewer asked Goldstein if the heart of the project was to bring luxury development to the neighborhood.

Goldstein said that was one justification. Others have been affordable housing, civic pride, and removing blight. He pointed out that "the site is, or was, in the middle of the hottest real estate in New York City... In the end, it was about buying a basketball team to get a real estate deal for that company."

Politics and costs

Schuerman, who pointed out that tax-exempt bonds had to be issued by December 31, said he was a little less skeptical than Smith and Goldstein regarding whether the arena would be built, stating, as noted above, that the bond market could turn around. He did allow that the residential component of AY represents "a really long-range project, a 20-year project."

The project was approved, of course, with a ten-year timetable.

Goldstein noted that neither the city nor the state have done a comprehensive financial analysis. He said the city's Independent Budget Office (IBO) did an economic impact report on the arena and "basically, when that study has been updated, it shows that the arena itself would be a loss for the city."

The study has not been officially updated; some of us have extrapolated the numbers and gotten the IBO to acknowledge that a loss might be the result.

Goldstein also said that the total government support amounts to about $2 billion, which is, of course, up for debate--and deserves more official scrutiny.

Smith agreed that those in Las Vegas should be skeptical of the numbers--and gave some credit to "a reporter/blogger named Norman Oder."

Schuerman pointed out that "city and state officials don't think they're making all that great an investment," given the larger scheme of things and the poaching of a team from another state.

Message for Las Vegas

The interviewers were asked for one thing to tell Las Vegans.

"Be exceptionally skeptical of what are billed as public-private partnerships," Smith said, noting that everything "is being driven by a private developer."

"Be careful of what will go wrong or what could wrong," Schuerman cautioned. "Assume everything's going to take twice as long as it's going to, and cost twice as much, and then ask yourself: is it really worth it?"

Goldstein suggested listeners not "trust this developer or any developer when they have the steering wheel, and put a lot of pressure on local politicians to make sure that they bring out the information that the people of Las Vegas need."

4 comments:

  1. I guess it hurts when someone calls you on YOUR own errors and particularly your misstatements, your record of pushing possibilities that turn out not to be possibilities at all.

    No tax exempt bonds!!!

    No federal housing subsidies left!!!

    It's not shovel-ready!!!

    And the single most despicable propaganda: we're all going to die in an al Qaeda attack on Barclays Center!!!

    So much verbiage so little consequence.

    Bottom line is that the editor of the Brooklyn Paper understands the tide has turned. The economics of the recession, which you and the rest take such delight in, is actually something that will work in Ratner's favor. Weintrob understands the city is in deep trouble and needs whatever stimulus it can find. The rest is minutiae, which of course remains your specialty.

    PS I love the idea of journalists making a pitch in Las Vegas as part of a remote control effort to hurt Forest City and thus Atlantic Yards.

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  2. You never could've gotten away with this stuff at NBC, Bob. That's why you should sign your name.

    Come clean. C'mon. Answer that one.

    I sign my name to what I wrote. You should too, especially since your little list there is patently wrong.

    This is a developing story, and I cover things as they develop.

    Tax-exempt bonds for housing are questionable--they're not federal housing subsidies but a grant of bond cap to the states.

    Tax-exempt bonds for the arena were questioned; they were grandfathered in and now must be issued by the end of 2009.

    The ESDC said it wasn't shovel ready. Now ESDC says it might be.

    As for the security issue, I never said anything of the kind. But I did compare it to the Prudential Center, which changed its security procedures.

    You never could've gotten away with that at NBC, Bob. That's why you should sign your name.

    Bottom line: The editor of the Brooklyn Paper didn't sign the editorial. The publisher did.

    Journalists didn't pitch Las Vegas. The NPR station called them.

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  3. Building an arena is not a security problem in and of itself. Trying to shoehorn this arena into a space in which it doesn't fit and can't be made safe, is a security problem. Newark closed streets next to its arena after the fact -- for that to happen at Atlantic and Flatbush Avenues would be disastrous.

    So call it a transportation issue rather than a security issue; build the arena where it can be built safely. But accusing people raising legitimate concerns of fear-mongering is illegitimate.

    And if you think the recession works in Ratner's favor, with a non-existent credit market, the financial albatross of the Nets' current situation, and the crumbling balance sheet at Forest City Enterprises, you must be willing to lend them the $800 million yourself.

    And by the way Mr. Anonymous Whiner, Norman is kicking your ass. Your corner man should throw in the towel already.

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  4. Bobbo should sign his name as Bob Windrem.

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