Monday, September 28, 2009

Opportunity for Thompson? Looking at Bloomberg's support for the West Side Stadium, reflexive backing for AY, and how AY was reframed in polls

Underdog Democratic mayoral nominee Bill Thompson's an Atlantic Yards supporter. Indeed, he signed a boilerplate letter (left) in July 2005 to the Metropolitan Transportation Authority in support of the project.

Should Thompson somehow challenge Mayor Mike Bloomberg on his support for the project, the challenger might gain some headway--only if he looked back in history and framed the issue appropriately. (Right now the only AY critic in the race is Green Party candidate Rev. Billy Talen.)

After all, there was originally widespread civic dismay at the plan, just as there was for the West Side Stadium, and the support Atlantic Yards has garnered depends in part on overoptimistic assumptions about its benefits.

And Atlantic Yards is radioactive enough for Bloomberg to ignore it on his campaign web site. Nor, despite claims about the project's benefits, was AY mentioned in Bloomberg's PlaNYC 2030 sustainability plan, likely because the report lays out a plan to develop railyards that involves local input, in stark opposition to the fait accompli in Brooklyn.

Reframing AY

Only when supporters reframed Atlantic Yards from an arena project dependent on subsidies and eminent domain to a project that would provide affordable housing and jobs did it win public support.

That framing was questionable--after all, the New York City Independent Budget Office assigns most of the subsidies to the arena, finding the arena a net loser for the city, and could go farther to include naming rights.

However, even for those who agree with the framing, there's reason to question it.

While Atlantic Yards was supposed to take a decade, deal has been structured to deliver affordable housing at a much slower pace, likely 25 years, and there wouldn't be many jobs beyond temporary construction jobs. The Empire State Development Corporation's (ESDC) "economic benefit analysis" isnt serious.

Bloomberg's record: unequivocal support

Mayoral biographer Joyce Purnick says Bloomberg thinks like a developer, valuing tax revenues from development above all else. However, as I pointed out, it's more than that. Bloomberg has maintained consistent support for the project, changing his rhetoric when necessary and contradicting himself.

In a January 2004 radio interview, he claimed erroneously that "any city monies of any meaningful size will be debt issues financed by the extra tax revenues that come from this." He agreed with his interviewer that moving the Nets from New Jersey represented the "free market."

In February 2005, a nonbinding Memorandum of Understanding committed $100 million in city funds to be used for infrastructure or land purchases.

In September 2005, the Independent Budget Office reported that the arena would produce a modest fiscal surplus for the city, given the $100 million in direct subsidies.

In January 2007, a month after the project was approved by the Empire State Development Corporation and the Public Authorities Control Board, Bloomberg assigned an additional $105 million for project infrastructure.

In March 2007, we learned that all of the original $100 million would be used for land purchases.

In May 2009, Bloomberg said there would be no more direct subsidies for the project.

In June 2009, mayoral appointees on the board of the Metropolitan Transportation Authority led the justification for a revised deal for the Vanderbilt Yard that would cut the initial payment by Forest City Ratner by $80 million and give the developer 22 years to pay the rest, as well as permission to build a smaller railyard than promised.

In August 2009, Develop Don't Destroy Brooklyn's Daniel Goldstein wrote:
Sole-source, no-bid contracts and cronyism for a money-losing, publicly funded arena do not demonstrate sound economic stewardship.


This month, the IBO reported that the arena would cost the city $40 million and represent a far greater loss in opportunity costs.

Also this month, as the Empire State Development Corporation re-approved the Atlantic Yards plan, the city agreed to accelerate $15 million in payments to Forest City Ratner and to transfer directly to the developer funds allotted for infrastructure.

Coming soon (likely): assessments on arena land sufficient to generate the PILOTs (payments in lieu of taxes) for the tax-exempt bonds to build the arena.

Looking back at 2005

The Race for Mayor: Campaign Roundtable 2005, held on 11/29/05 at the Center for New York City Affairs, is worth a look for a number of reasons, notably the impact of Bloomberg's support for the controversial West Side Stadium.

One important piece of context: a Quinnipiac Poll issued 1/20/05 showed New Yorkers 58-34 against a new West Side Stadium for the Jets and the Olympics.

Bloomberg Communications Director Bill Cunningham commented at the forum: "The mayor had been promoting the stadium for years. He had been promoting the Olympics for years. He believed they were good for the city... and I think ultimately, although he did not get what he set out to get in terms of the stadium or the Olympics, I think people gave him credit for fighting hard for what he believed in."

Asked what he tried to do to minimize the prospect of political damage, Cunningham observed, "Well, before it was ultimately resolved, remember, to a large degree the stadium is what generated support for us among the building trade unions throughout the city. ... And outside Manhattan, in different communities, there were different views about the stadium. In some places they saw it as possibly a good thing. They saw it as jobs. They saw it as bringing the Jets to New York."

"In Manhattan it was viewed very differently, obviously, in terms of traffic, congestion and the size of the project on the West Side," he continued. "But if we had to deal with the stadium going forward, we would have been making the best case in the outer boroughs on the job creation front."

One difference with the Atlantic Yards plan: Manhattan--especially neighborhoods near the West Side--does not have a large contingent of construction workers.

Benefits of stadium failure

Cunningham was asked: "When the stadium was killed, were you happy?"

"We sent flowers to Shelly Silver," he quipped, a reference to the Assembly Speaker, responsible for killing the stadium plan at the state level.

"We understand in the polling that people disagreed. They thought the money could be used differently," Cunningham acknowledged. "It would have been a particular problem... to better our numbers in Manhattan."

The same argument could be made about the AY arena: the direct subsidies and tax breaks, as well as tax-exempt housing bonds, might be better used elsewhere. Now, in fact, Thompson could point out that the benefits would go in part to Russia's richest man.

Cummingham was seconded by Nick Baldick, who worked on the campaign of Democratic candidate Freddy Ferrer: "The best thing that could have happened to the mayor was the stadium going down. We all had polling that shows it would have been brutal for him. Not that I think he would have lost... He got the best of both worlds... he got the political bonus because there were some unions that he was seen as fighting for them. And then he didn't get the pain."

Ferrer's failure

Robert Hardt Jr., NY1 News political director commented in an essay:
I was genuinely shocked by the Ferrer campaign's inability or unwillingness to go for the jugular during much of the campaign.

He wrote:
Where were the weekly tours to libraries across the city that were closed on weekends during Bloomberg’s watch? Where was the trip to Washington, DC, to challenge Bloomberg to take on his fellow Republicans in Congress and in the White House? Where was the bridge-building to the fire marshals who had been demoted less than five years after 9/11? And how could the Ferrer campaign not hold a single press conference to highlight Bloomberg’s very questionable relationship with Lenora Fulani and Fred Newman of the Independence Party?

As I wrote in November 2005, Ferrer also flubbed the opportunity to take on the mayor regarding his support for Atlantic Yards, and the press made it worse, with the New York Times choosing to highlight not Ferrer's decision to oppose the project but the Rev. Al Sharpton's criticism of Ferrer.

Polls on Atlantic Yards

Polls initially showed opposition to Atlantic Yards, but later turned to support. It likely has to do with questions were framed: people were wary of government support for a sports facility but were willing to support a larger project that would "provide" affordable housing.

A 4/1/04 Quinnipiac Poll suggested that locals favored a new arena for the Nets in Brooklyn, but only if it didn't require tax dollars.

29. Do you favor or oppose the government spending tax dollars to build a new arena for the Nets basketball team in Brooklyn?
Yes: 35%
No: 59%
DK: 7%

30. Would you favor or oppose the building of a new arena for the Nets in Brooklyn, if it was built without using tax dollars?
Yes: 75%
No: 19%
DK: 6%

(Click on graphics to enlarge)

The New York Times, interestingly enough, did not report on the poll, though the other dailies did so, as noted on page 46 of my September 2005 report on the Times.

The Times poll: the arena and demolition

The 4/21/04 New York Times Poll indicated that 45% of those polled favored a new arena, with 42% opposed and 14% saying they didn't know or it was not applicable.

However, those who favored the arena were then asked: "What if new arena requires the demolition of the local homes and businesses? Then do you favor or oppose building a new arena in Brooklyn?"

Of that 45% in favor, more than half, 25%, opposed the new arena, with 18% in favor and 4% DK/NA. (That adds up to 47%, not 45%.)

Note that this question involved demolition but not demolition via eminent domain, surely a higher barrier.

Notably, the Times didn't report on this poll until May of 2006.

The Times poll: the arena and subsidies

A 6/26/05 The New York Times Poll asked the same question--"Do you favor or oppose building a new arena in Brooklyn for the Nets?"--and the numbers changed notably, from 45% to 37% in favor, and from 42% to 45% opposed. A larger group, 17%, was DK/NA.

[Note: the poll had a misprint, identifying the responses in June as from 2004 rather than 2005]

Nearly half of those in favor, however, withdrew their support when asked, "What if a new arena in Brooklyn cost $200 million in public funds? Then do you think the city should or should not build a new arena in Brooklyn?"

Of course, the city was never going to build the arena, but city and state funding/approval would be needed.

And the project now would cost much more in public funds, some $305 million in direct subsidies and hundreds of millions of dollars more in tax breaks and other benefits, including naming rights.

The Times, as noted on p. 46 of my report, didn't report on the poll.

The move toward support

The most recent poll, however, was support of Atlantic Yards, and Forest City Ratner did its best to exploit it, such as in this September 2006 letter to the ESDC from Jim Stuckey, then Forest City Ratner's Atlantic Yards point man.

In September 2006, Crain's reported:
The colossal and controversial Atlantic Yards development is favored by a solid 60% of city residents and disliked by only 25%, according to a Crain's New York Business poll. New Yorkers cite the jobs and affordable housing that it promises for Brooklyn as the two most important benefits of the project.

I pointed out that the questions were stunning generalities and that different phrasing--such as pointing out the cost and timing of the affordable housing--could sway the results.

Now, the promised benefits of the project would be both delayed and attenuated. Do Bloomberg's critics notice?

1 comment:

  1. AY is a big stick to beat Michael Bloomberg over the head with.

    But it appears Thompson is compromised because of union, ACORN and WFP support.

    But what does Thompson have to lose by using Atlantic Yards as a Bloombergian poster child?

    ReplyDelete