Thursday, May 28, 2009

Errol Louis blames AY foes, reveals that Ratner wants to pay MTA just $20 million at first

Amid New York Daily News columnist Errol Louis's predictable support for Atlantic Yards, criticism of project opponents, and avoidance of inconvenient facts, is some real news: developer Forest City Ratner wants to pay the Metropolitan Transportation Authority (MTA) just $20 million--rather than the $100 million pledged--then pay the rest of the sum over some unspecified timetable.

In other words, another indirect subsidy. Hints of the developer's strategy emerged in December, but not the sum at issue.

If the MTA is truly a guardian of its funds--the money would go to the capital plan, not operations--that deserves a lot of sunlight. Louis wrote that the MTA could vote as early as Friday morning; no board meeting is listed, and MTA spokesman Jeremy Soffin confirmed to me that there's no meeting. (An executive session requires a public meeting, and no special meeting is planned at this point, Soffin said. The next MTA board meeting is June 24.)

Keep in mind that Forest City Ratner's $100 million pledge in September 2005 was less than half the appraised value of $214.5 million--the appraiser took into account the value of an improved railyard, which FCR counts as a bonus--and less than Extell's $150 million bid. And that $100 million bid came only after a $50 million bid, and the decision by the MTA board--controlled by Gov. George Pataki at the time--to negotiate exclusively with FCR.

(El Diario has a far more skeptical editorial today: End developer welfare at Atlantic Yards.)

"My corner of Brooklyn"

Today's column, headlined The damage done to Brooklyn: Atlantic Yards has shrunk, and with it good jobs and affordable housing, begins:
More than five years after the first unveiling of Atlantic Yards, the ambitious project - a plan to build a basketball arena and thousands of units of housing - is being downsized and restructured so that maybe, just maybe, my corner of Brooklyn will secure badly needed jobs and housing.

It's been slow going.


As for "my corner of Brooklyn," consider that Louis lives in the eastern end of the district serviced by Community Board 8, while the project would be partly located in the far west end of CB 8, as well as two other Community Board districts,

"Frivolous litigation"

Louis writes:
Developer Bruce Ratner has been hobbled by frivolous litigation by an anti-development faction of neighborhood groups and a global credit crunch that's making it hard to line up financing for his multibillion-dollar project.

Louis can call it "frivolous litigation," but U.S. Magistrate Judge Robert M. Levy, in his 2/23/07 ruling, acknowledged that the plaintiffs’ eminent domain complaint “raises serious and difficult questions regarding the exercise of eminent domain under emerging Supreme Court jurisprudence.”

As for the litigation challenging the environmental review, Appellate Judge James Catterson filed a concurring opinion that read like a dissent, slamming the Empire State Development Corporation (ESDC) “for being used as a tool of the developer to displace and destroy neighborhoods that are ‘underutilized.’" Petitioners appealing that decision argued that Catterson’s inability to formally dissent, despite major misgivings, was a reason the Court of Appeals should step in and “determine the boundaries of judicial review.”

Government balking?

Louis writes:
Cash-strapped state and city government officials, who have already applied hundreds of millions in direct and indirect assistance to Ratner, are balking at giving any more help.

Project insiders say Ratner's most pressing short-term financial hump is the need to pay $100 million to the Metropolitan Transportation Authority for the Vanderbilt Yards, a crucial stretch of property and train tracks along Atlantic Ave. between Flatbush and Vandbilt Aves.

As early as tomorrow, the MTA board could vote in closed session on whether to allow Ratner to make a smaller-than-expected downpayment - $20 million or so - and allow him to pay the rest over time.

If that happens, Ratner hopes to break ground on the arena this fall, using part of the railyards as a construction staging area.


That doesn't sound like government is balking just yet. Nor do we know whether the city, for example, will speed up payments of money owed, as the developer has requested. In other words, there are ways to offer indirect subsidies without adding additional cash.

Arena re-design, public hearing

Louis writes:
That's the optimistic timetable. More delays are almost certain to crop up.

As reported by my Daily News colleague Jotham Sederstrom, the striking, soaring (and costly) arena designed by architect Frank Gehry will likely give way to a less expensive creation by Ellerbe Becket, the Kansas City firm that designed the Conseco Fieldhouse in Indianapolis, the Fedex Forum in Memphis and a host of other sports projects.

Adding to redesign delays will be a requirement that revisions to the project go through public review, complete with hearings and a 30-day comment period.


Note that Conseco Fieldhouse, rather than the Ellerbe Becket's newer arenas in Memphis and Charlotte, gets mentioned first. Is that a hint that the AY arena would look most like Conseco?

Louis doesn't pause to consider why arena costs went up so rapidly, some 50% after the project was approved in December 2006. Was that because, as Sederstrom's reporting suggested, no one calculated the cost of safety glass?

The "obstructionists" and the hearing

Louis writes about the hearing scheduled for tomorrow:
And that brings us to the obstructionists who have spent more than five years In a losing battle to block the project in court and/or convince the world that Brooklynites don't want a massive investment in jobs, hoops and housing.

Expect a new wave of anti-project propaganda as soon as tomorrow, when Sen. Bill Perkins of Harlem, who chairs the state senate's committee on Corporations, Authorities and Commissions, convenes a misguided hearing in Brooklyn on Atlantic Yards.

"This hearing will trace the history of the Atlantic Yards project to determine its current status," the official notice reads, promising to "envision where this project might lead" and consider "whether this is the best possible deal for taxpayers and the local community" and "the meaning and use of the concept of 'blight' in condemnations," and "what is a 'public benefit' sufficient to justify massive state action."

The hearing will likely be a complete waste of time.


Does Louis think that the state's enormously loose application of vague language regarding blight--allowing minor cracks in the sidewalk and minor graffiti to qualify--is unworthy of scrutiny? Does he think that government should never do a cost-benefit analysis or, in this case, even a revised benefit analysis?

Issues in flux

Louis concludes:
Perkins is unlikely to hear about key aspects of the project that are in flux right now, including Ratner's purchase of the Vanderbilt Yards from the MTA.

Even if the details were settled, it turns out that Forest City - the single most knowledgeable source of changes to the project - wasn't even asked to testify at Perkins' invitation-only hearing, according to a company spokesman.

Questions like the meaning of "blight" and the application of New York's powerful eminent domain laws have been litigated repeatedly in state and federal court, debated in thousands of pages of testimony, and covered in detail in the press. There is no constructive reason to rehash these five-year-old questions yet again.

But the anti-development brigade - and, it seems, their new friend, Sen. Perkins - seem bent on blocking money and manpower from being mobilized.

That, in a city shedding jobs by the thousands, is inexcusable.


Well, the head of the MTA is supposed to testify. She should be asked about the attempt to revise the deal.

If Forest City Ratner wasn't asked to testify, that's not what I was told.

[Update 5:10 pm: Perkins says it's not true.]

As for the meaning of blight and eminent domain, last year, a Special Task Force on Eminent Domain appointed by the New York State Bar Association recommended a Temporary State Commission on Eminent Domain to address just such issues. Perkins held a hearing last September regarding reform of eminent domain laws.

The litigation and (skimpy) press coverage do not put the issues to rest; they only highlight the need for reform.

Check out Louis's language here:
But the anti-development brigade - and, it seems, their new friend, Sen. Perkins - seem bent on blocking money and manpower from being mobilized.

Note the passive voice. While money might be mobilized, more and more, it seems, it would not be contributed by the developer.

Jobs and housing

The only jobs right now would be construction jobs, and construction jobs could be created for many other projects.

As for housing, the developer plans to build only one tower. And there's no evidence that the developer or the state considered the availability of crucial housing bonds when they announced the ambitious plans that convinced Louis the project was legit.

1 comment:

  1. If ESDC holds a public hearing on changes to the Atlantic Yards Project (as the law requires), and if ESDC then issues determinations and findings, a new state court challenge can be commenced (Eminent Domain Procedures Law section 204(C)). That legal challenge will take a year, and nothing can happen until it is over. On behalf of the Rent Stabilized tenants who still live in the footprint, I will file such a challenge. So, either ESDC will not hold a hearing, or ESDC will claim that it doesn't have to vote again, so that litigation is avoided. That will only engender other litigation. It is unclear why anyone believes that work can begin this fall until the courts rule on the new AYP.

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