Monday, July 27, 2009

"Because it is shovel-ready construction": FCR's lame explanation for seeking federal stimulus funds for an essentially private arena

It was one of the more astonishing exchanges at the informational meeting last Wednesday--Forest City Ratner's MaryAnne Gilmartin's explanation for why the developer has sought stimulus funds to boost its essentially private project.

Remember, the developer has lobbied for federal stimulus funds, and is almost certainly still lobbying for such help, even though former Empire State Development Corporation CEO Marisa Lago said at a May 29 state Senate oversight hearing that the ESDC hadn't sought such funds.

Why not? Because, as I note below--it's not a public project.


(Video shot by Jonathan Barkey; edited by Norman Oder)

“Can Forest City Ratner comment on why there have been public requests for federal stimulus funds to help with the construction of the arena?” asked moderator Craig Hammerman.

“It’s shovel-ready construction,” shouted Marie Louis of BUILD (Brooklyn United for Innovative Local Development), a Community Benefits Agreement (CBA) signatory.

Gilmartin at first looked a little uncomfortable with the question--perhaps because there's no good answer--but quickly recovered: “Because it is shovel-ready construction, and the fact of the matter is that the project, like other projects around the country, have suffered, based on the economic downturn, and it’s our responsibility to try to do what we can to make the project happen and to maintain its viability.”

Whose responsibility?

It's our responsibility, but who's "us"? "Us" is Forest City Ratner, parent company Forest City Enterprises, and its shareholders.

It's the government's responsibility to direct subsidies and aid to public projects, not private ones. There's a lot of private shovel-ready construction that doesn't deserve stimulus funds. And, at the least, should the project get more taxpayer money, the public should own an ever-increasing piece.

A private project

As I pointed out, how much of the shovel-ready construction put forth for stimulus funds consists of public works and how many are private developers' projects? See state list from ProPublica, and New York's list--and, further below, see the categories in which New York actually has spent money.

The arena, despite the fig leaf of public ownership to allow for the issuance of tax-free bonds, would be an essentially private project, given that Forest City Ratner gets to sell naming rights and keep profits.

At the oversight hearing

At the oversight hearing, state Senator Marty Golden, a project supporter, asked if there was any stimulus money for the project.

ESDC “has not asked for stimulus dollars,” Lago said.

Golden asked why not.

“In looking at the project and the amount of public subsidy and the right way of getting it forward, we have not determined that stimulus funds are part of that package,” Lago responded carefully.

Golden asked if there was enough money as designated in the original agreement.

“As we’re looking at the project now, as all of us are engaged in the sensitive negotiation, they have not entailed a request for stimulus money,” Lago said.

“If that request were made, would you be willing to make that request?” Golden asked.

“That would be something that we would consider,” Lago said. “We would of course look at the overall project plan.”

Golden said he’d make a request.

New York's list

In the list below of categories eligible for stimulus funds, I've cut the individual category figures out, but they're visible at this link:
Medicaid - FMAP Increase
State Fiscal Stabilization - Education Restoration
State Fiscal Stabilization - Other Government Services
State Fiscal Stabilization - Education Incentive Grants
Sub-total $140,317,000 $14,118,000

Infrastructure and Energy
Transportation: Mass Transit
Transportation: Highways & Bridges
Transportation: Rail
Transportation: Air
Transportation: Discretionary Surface Transportation
Clean Water State Revolving Fund
Drinking Water State Revolving Fund
Weatherization
Energy Efficiency and Conservation Block Grant
State Energy Program
Broadband Access & Expansion
Science Facilities, Research, Instrumentation
Science - Brookhaven Laboratory
Environmental/Nuclear Waste Cleanup
Diesel Emission Reduction
Environmental Programs
Sub-total $91,700,000 $4,162,000

Health and Human Services
Health Information Technology
Public Health Programs
IDEA for Infants & Families
Food Stamp Benefit Increase
Food Stamp Administration
WIC Program Administration
Senior Nutrition Program
Homeless Assistance
Child Care Block Grant
Child Support Administration
Title IV-E Programs (Foster Care/Adoption Assistance)
Community Service Block Grant (CSBG)
SSI - One-time Payment
Workforce Investment Act (WIA)
UI Benefit Extension & Administration
UI Modernization
UI Weekly Benefit Increase
Employment Services
Trade Adjustment Assistance
Vocational Rehabilitation (Title I)
Rehabilitation Services & Disability Research
Neighborhood Stabilization Program
HOME Investment Partnerships-Tax Credit Assistance
Community Development Block Grant (CDBG)
Public Housing Capital Fund
Public Housing Retrofits
Project Based Rental Assistance (Section 8)
Lead Hazard Reduction
Native American Housing Grants
Community Health Centers
Commodity Assistance Program
TANF Block Grant - Emergency Fund
Sub-total $113,666,000 $5,981,672

Education
Title I
IDEA/Special Education
Head Start & Early Head Start
Pell Grant Increase
Federal Work Study
Enhancing Education Technology
Education for Homeless Children & Youth
Teacher Incentive Fund
Impact Aid Construction
National Endowment for the Arts
National School Lunch Program Equipment Assistance
Sub-total $43,770,000 $2,360,521

Public Safety
Byrne/JAG
Community Oriented Policing Services (COPS)
Homeland Security - Fire Station Construction
Violence Against Women Prevention
Crime Victims Compensation and Assistance
Internet Crimes Against Children
Other Public Safety Programs
Sub-total $4,200,000 $124,200

Grand Total* $393,653,000 $26,746,393

* Does not include certain federal spending items included in the Act which do not impact New York or cannot be quantified.

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