Moreover, the State Funding Agreement signed in September 2007 gives the developer a pass, asserting that a good faith application for housing bonds was expected to lead to their receipt--without evaluating whether such bonds would be available.
In my FOIL request, I sought "records that describe whether the board or staff, before the project approval, discussed or evaluated the likelihood that there would be sufficient tax-exempt housing bonds (from New York City or New York State) to construct the project within the anticipated 10-year project timeline."
An early draft of the Atlantic Yards General Project Plan (GPP), dated 4/10/06, shows (right) that the approval process included city and state approval of funding for affordable housing financing. The draft was produced by a law firm working for Forest City Ratner. It did not reflect comments from either the developer or the ESDC.
(Click on all documents to enlarge)
A revision (left), attached to a 6/1/06 email from ESDC Senior Council Steven Matlin, indicated that both sections, on city and state approvals, had been crossed out.
What about bond cap?
There are very few references to the issue of "bond cap" or "volume cap"--whether the city and state agencies would have sufficient bonds available.
Only a few months after Atlantic Yards was approved in December 2006, the New York Observer reported in March 2007 on the state's huge deficit in "volume cap," and in May 2007, Housing Preservation and Development Commissioner Shaun Donovan (now the head of HUD) testified before Congress about an "immediate crisis" facing the city.
The issue apparently came up not before the ESDC but before the Public Authorities Control Board (PACB), which voted on 12/20/06 to approve the project. On 12/12/06, Andrew Kennedy of the state Division of Budget forwarded several questions to the ESDC regarding AY. Two of the questions were redacted by ESDC as nonresponsive.
On the evening of 12/19/06, less than a day before the PACB approved the project, city official Maria Torres forwarded ESDC officials an email (left) regarding Atlantic Yards housing issues.
One section regarded "the bond cap issue."
As seen by the screenshot, the ESDC redacted the response. It was not marked "nonresponsive," as were several other redacted sections. So perhaps it was redacted as an "inter-agency communication" exempt from disclosure "to protect the deliberative process of government."
In July, when asked if there would be sufficient housing subsidies, Forest City Ratner official Mary Anne Gilmartin deflected the question: “There are bonds being issued for the construction of the arena, and there are programs that are being accessed for construction housing, and there are two different things. 80/20 bonds, which are the bonds used to build market-rate housing with 20 percent low-income, are volume cap bonds, which are readily available in this state, because there’s an absence of construction, nothing, frankly, is being built right now, so there is not a concern about the availability of that financing for housing."
First of all, she referred to 80/20 bonds (80% market, 20% subsidized), which were used for FCR's 80 DeKalb Avenue project but are not expected to be sought for Atlantic Yards (the rental buildings of which would be 50% market). Also, she has no way to estimate the availability over the life of the project. Indeed, last year, New York City Housing Development Corporation president Marc Jahr said demand well exceeded supply.
Subsequently, in April 2008, emails indicate discussion between the ESDC and the governor's office regarding affordable housing.
I tried, without response, to get some clarification on the somewhat confusing 4/29/08 email (right) from the ESDC's Matlin.
In the Funding Agreement, we basically set forth the understanding that Forest City would apply for existing housing subsidies and incentives, and that if the application is deemed to be consistent with program requirements, then they will be entitled to the benefits.
We expect that the documents will provide that Forest City will take the risk that adequate housing programs are in effect--however, if there are no housing programs available we would be precluded from exercising our remedy to purchase back the premises. (We also expect that Forest City will not close unless adequate programs are in place at that time.)
That suggests that if affordable housing subsidies are not available, ESDC will not have an option to purchase and will not be able to enforce the timetable, despite Matlin's email. However, I've been unable to get a response from the ESDC.
Also, the meaning of this statement is unclear: We also expect that Forest City will not close unless adequate programs are in place at that time.
Also, if "the affordable housing requirements do not go away if housing benefits are inadequate or are not available," how then are they enforced? As noted, the State Funding Agreement suggests that the developer has an out.