Skip to main content

The Times mentions FCR's bailout of ACORN only parenthetically, claims city agreed to help finance AY housing plan

In a front-page article last Friday, October 16, the New York Times finally reported that the controversial housing activist group ACORN had been bailed out by a $1.5 million grant/loan from developer Forest City Ratner, a partner with ACORN New York on the Atlantic Yards project.

But that wasn't the point of the article, headlined Acorn’s Woes Strain Its Ties to Democrats.

Rather, the information was presented parenthetically, a variation of "rowback," which former Times Public Editor Daniel Okrent described in his 3/14/04 column as "a way that a newspaper can cover its butt without admitting it was ever exposed."

Beyond that, the article cited "[t]he city’s agreement to help finance the [Atlantic Yards housing] plan."

That overstates the city's commitment, which is no more than conceptual, and should be corrected, given that it could mislead readers into thinking that the affordable housing--the major source of political support for the project--is guaranteed.

Note ACORN's continued staunch support for Atlantic Yards despite mounting evidence that the housing promises are tenuous, depending on the availability of subsidies.

Also, the affordable housing total depends on Forest City Ratner completing Phase 2, though the state acknowledges that only one residential building may be built at first and the developer could abandon the project.

Donovan, housing, and AY

The article focused on the role of Shaun Donovan, who as head of the city Department of Housing Preservation and Development, had a close relationship with New York ACORN--whose housing work was widely seen as credible--but, after the national organization has been tinged by scandal and the focus of Republican attacks, "is unwilling to speak publicly about that project or any other work with Acorn."

From the article:
And [ACORN's Ismene Speliotis] and Ms. Lewis appeared to help Mr. Donovan deliver a coup for Mr. Bloomberg in 2005 when Acorn endorsed a huge Brooklyn development he was supporting in the face of local opposition.

Acorn backed the plan in return for an unusual promise from the developer, Forest City Ratner, to make half of the 4,500 rental apartments that it was proposing — along with a new Nets basketball arena — available to poor and middle-class families at below-market rates.

The city’s agreement to help finance the plan, hammered out among Mr. Donovan, Ms. Speliotis and others, was hailed as a breakthrough for subsidizing a substantial amount of housing for an unusually broad range of middle-class tenants.

Ms. Lewis — a supporter of Mr. Bloomberg’s challenger that election year, Fernando Ferrer — celebrated by exuberantly kissing the mayor at a public ceremony.

The project’s opponents accused Acorn of selling out. (More recently, Forest City Ratner — a development partner with The New York Times on its new Manhattan headquarters — complied with Acorn’s plea for $1.5 million in grants and loans to help it restructure after an internal embezzlement scandal involving Dale Rathke, the brother of its founder, Wade Rathke.)
(Emphasis added)

Curiously enough, though Atlantic Yards may be a step forward in providing subsidized housing to the middle-class, ACORN primarily represents low-income people, many of whom may not be eligible for the "affordable housing." In other words, Lewis got Forest City Ratner to agree to provide housing for people who aren't ACORN's constituents.

The "rowback" sequence

In this case, the Times wasn't publishing an unacknowledged correction, as is typical with "rowback," but providing information it owed its readers months ago--and without acknowledging the delay or that the information had been published elsewhere.

Consider this sequence:
  • the bailout occurred in August 2008
  • a Times reporter knew about it in September 2008 (and called ACORN's actions "incredible")
  • it was reported by me in December 2008
  • I sent an open letter to the Public Editor in April 2009
  • it was mentioned in a Congressional report in July 2009
  • the New York Post mentioned it nearly a month ago
The Times's vague formulation placed the bailout in context of the long Atlantic Yards fight, but did not mention the date it occurred.

NYC's "agreement to help finance the plan"?

Did New York City make an "agreement to help finance the plan"? No.

Even New York ACORN head Bertha Lewis--now head of the national organization--doesn't cite a government role, writing in the 7/31/06 City Limits:
Through months of negotiations we arrived at New York City’s first legally binding Community Benefits Agreement [CBA] and a groundbreaking Memorandum of Understanding [MOU] between ACORN and Forest City Ratner about the housing component of the project.
The city was not a party to either agreement, though Mayor Mike Bloomberg was a "witness" to the CBA and Bloomberg and Donovan expressed conceptual support for the Housing MOU (which speaks of "goals").

The Times's 5/20/05 coverage, headlined Brooklyn Arena Plan Calls for Many Subsidized Units , stated:
The corporation plans to use a combination of bonds and reserves from investments to finance the subsidies, said Carol Abrams, a spokeswoman for the Department of Housing Preservation and Development. The funds will not be committed until the developer closes on the project, Ms. Abrams said.
And, as I've reported, the Empire State Development Corporation (ESDC), when it approved the project in December 2006, made no effort to ascertain whether there would be sufficient housing subsidies.

In June 2007, I reported on a huge deficit (at the time) in tax-exempt bonds, noting that Forest City Ratner had not yet applied for financing and that Donovan had asked Congress to increase the "volume cap" to allow cities like New York to issue more bonds. (The contours of the challenge may have changed since the economic downturn.)

When the ESDC re-approved the project September 17, it explicitly acknowledged that the housing was contingent on subsidies.

The House Republican report

Interestingly enough, the Forest City Ratner bailout was mentioned, albeit somewhat parenthetically, in a report released 7/23/09 by Rep. Darrell Issa (R-CA), the Ranking Republican on the House Oversight and Government Reform Committee, titled Is ACORN Intentionally Structured As a Criminal Enterprise?.

The report got little notice in the mainstream press. Fox News had a story, which quoted ACORN as calling the report a "partisan attack job." It was reported in The American Spectator Online, under the headline Community-Organized Crime, which mentioned the FCR bailout.

There clearly were exaggerations in the report--the executive summary states that "ACORN stands to receive a whopping $8.5 billion in available stimulus funds," while page 10 acknowledges that ACORN was eligible for that larger sum.

But there also were references to mainstream media reports, internal ACORN notes, and documents like the ones at left and below, which confirmsthe Forest City Ratner bailout.

The report did not make much of the Forest City Ratner bailout, perhaps because the writers did not recognize the significance of the alliance between the developer and ACORN is to both parties--an article that, as I wrote in April, the Times should have written.

(Click on graphics to enlarge)

Catching up

A few months later, a couple of mainstream press reports did take note of the Issa report.

A 9/18/09 article from McClatchy Newspapers, headlined As ACORN grew, so did its clout and its problems, cited "[i]nternal ACORN notes obtained by Republican investigators found some of the agency's top leadership worried about news coverage and anger at the actions of Rathke."

The article notes, "Weeks after the Republican House report, two undercover conservative activists began visiting ACORN offices across the country posing as a prostitute and her pimp." It also cites warnings to ACORN--as noted in the House Report--from a law firm that it could be improperly co-mingling financial accounts.

On 9/19/09, the AP, in an article headlined Did ACORN get too big for its own good?, reported:
The organization praised for its Hurricane Katrina relief efforts and treated by federal, state and local governments as a valuable public resource has had nearly $1 million embezzled by its founder's brother. The openly Democratic-leaning group has seen its employees accused of voter registration fraud, and taking it down has become a cause celebre for Republican lawmakers, activists and pundits.
The article described Democrats as distancing themselves from ACORN.

ACORN's Lewis met Issa in a contentious 9/20/09 debate on "FOX News Sunday." Forest City Ratner didn't come up.

The mainstream press & ACORN

In a 9/23/09 online Q&A headlined Latest Developments in ACORN Story, Washington Post government accountability reporter Carol Leonnig took questions about ACORN. (I've lightly edited segments of the transcript.)
New York: How did the two conservative activists decide to approach their investigation the way they did? Did they have prior information that ACORN was giving questionable tax advice, something like that? What made them decide to impersonate a pimp and prostitute?

Carol Leonnig: I don't know the complete answer. Both Giles, O'Keefe and their supporters have been pretty helpful to us in giving a broad-brush description of how this came together, but they are also defensive about claims that the pair were bankrolled by some big amorphous conservative GOP movement to tarnish ACORN. So some details are missing.

However, I noticed that the House Republican investigative report, which was launched earlier this year by Rep. Darrell Issa (R-Ca.) and was published in July, gave an interesting road map for a reporter if they wanted to find the vulnerable areas of the organization. The report highlights how poorly staff were trained, and how little they were paid and supervised.

Cumberland, MD: Why was the mainstream press so slow to deal with the criminality of ACORN? This failure to deal with the Acorn story is why the mainstream media is not trusted anymore.

Carol Leonnig: I have to agree with our executive editor when he said the other day that he is concerned that reporters sometimes tend to have more liberal sources than conservative ones. This could be part of the problem, but it also strikes me as a fairly natural imbalance that can happen when reporters focused on Washington have been covering a Republican administration for eight years, and trying to learn for the reading public whether they are doing a good job.

Next, I would offer this: There is such a lot of hyperbole being shouted from the rooftops as fact -- on BOTH extreme ends of the political spectrum, left and right -- that reporters are fairly dubious when someone makes a claim that is laden with factual exaggerations.

For example, when I heard ACORN was "on tap to get $8.5 billion in federal funders under the Obama administration", I kept thinking: Wow, Lockheed is sure gonna be jealous. Nobody, nobody, gets an $8.5 billion contract. And indeed this claim was wildly exaggerated. That said, when I was assigned (I cover federal agencies mostly) to start digging into ACORN's past financial problems, there was plenty to write about.
But the Washington Post hasn't mentioned the FCR bailout, despite a prime opportunity to do so.

The latest skirmish

ACORN CEO Lewis, speaking at the National Press Club, accused Republicans of McCarthyism. As the Times reported:
She decried a “modern-day Acorn McCarthyism,’’ and blamed some of the group’s current problems on its more than 40-year history of “going after the rich and the powerful.”
Issa issued a response:
"Was it Republicans who embezzled millions from within their own organization and have yet to report the embezzlement to the IRS or Labor Department? Was it Republicans who conducted the internal review that highlighted the lack of firewalls between their charitable and political activities?"


Popular posts from this blog

Barclays Center/Levy Restaurants hit with suit charging discrimination on disability, race; supervisors said to use vicious slurs, pursue retaliation

The Daily News has an article today, Barclays Center hit with $5M suit claiming discrimination against disabled, while the New York Post headlined its article Barclays Center sued over taunting disabled employees.

While that's part of the lawsuit, more prominent are claims of racial discrimination and retaliation, with black employees claiming repeated abuse by white supervisors, preferential treatment toward Hispanic colleagues, and retaliation in response to complaints.

Two individual supervisors, for example, are charged with  referring to black employees as “black motherfucker,” “dumb black bitch,” “black monkey,” “piece of shit” and “nigger.”

Two have referred to an employee blind in one eye as “cyclops,” and “the one-eyed guy,” and an employee with a nose disorder as “the nose guy.”

There's been no official response yet though arena spokesman Barry Baum told the Daily News they, but take “allegations of this kind very seriously” and have "a zero tolerance policy for…

Behind the "empty railyards": 40 years of ATURA, Baruch's plan, and the city's diffidence

To supporters of Forest City Ratner's Atlantic Yards project, it's a long-awaited plan for long-overlooked land. "The Atlantic Yards area has been available for any developer in America for over 100 years,” declared Borough President Marty Markowitz at a 5/26/05 City Council hearing.

Charles Gargano, chairman of the Empire State Development Corporation, mused on 11/15/05 to WNYC's Brian Lehrer, “Isn’t it interesting that these railyards have sat for decades and decades and decades, and no one has done a thing about them.” Forest City Ratner spokesman Joe DePlasco, in a 12/19/04 New York Times article ("In a War of Words, One Has the Power to Wound") described the railyards as "an empty scar dividing the community."

But why exactly has the Metropolitan Transportation Authority’s Vanderbilt Yard never been developed? Do public officials have some responsibility?

At a hearing yesterday of the Brooklyn Borough Board Atlantic Yards Committee, Kate Suisma…

Barclays Center event June 11 to protest plans to expand Israeli draft; questions about logistics

At right is a photo of a poster spotted in Hasidic Williamsburg right. Clearly there's an event scheduled at the Barclays Center aimed at the Haredi Jewish community (strict Orthodox Jews who reject secular culture), but the lack of English text makes it cryptic.

The website explains, Protest Against Israeli Draft of Bnei Yeshiva Rescheduled for Barclays Center:
A large asifa to protest the drafting of bnei yeshiva in Eretz Yisroel into the Israeli army that had been set to take place this month will instead be held on Sunday, 17 Sivan/June 11, at the Barclays Center in Downtown Brooklyn, NY. So attendees at a big gathering will protest an apparent change of policy that will make it much more difficult for traditional Orthodox Jewish students--both Hasidic (who follow a rebbe) and non-Hasidic (who don't)--to get deferments from the draft. Comments on the Yeshiva World website explain some of the debate.

The logistical questions

What's unclear is how large the ev…

Atlanta's Atlantic Yards moves ahead

First mentioned in April, the Atlantic Yards project in Atlanta is moving ahead--and has the potential to nudge Atlantic Yards in Brooklyn further down in Google searches.

According to a 5/30/17 press release, Hines and Invesco Real Estate Announce T3 West Midtown and Atlantic Yards:
Hines, the international real estate firm, and Invesco Real Estate, a global real estate investment manager, today announced a joint venture on behalf of one of Invesco Real Estate’s institutional clients to develop two progressive office projects in Atlanta totalling 700,000 square feet. T3 West Midtown will be a 200,000-square-foot heavy timber office development and Atlantic Yards will consist of 500,000 square feet of progressive office space in two buildings. Both projects are located on sites within Atlantic Station in the flourishing Midtown submarket.
Hines will work with Hartshorne Plunkard Architecture (HPA) as the design architect for both T3 West Midtown and Atlantic Yards. DLR Group will be t…

Forest City acknowledges unspecified delays in Pacific Park, cites $300 million "impairment" in project value; what about affordable housing pledge?

Updated Monday Nov. 7 am: Note follow-up coverage of stock price drop and investor conference call and pending questions.

Pacific Park Brooklyn is seriously delayed, Forest City Realty Trust said yesterday in a news release, which further acknowledged that the project has caused a $300 million impairment, or write-down of the asset, as the expected revenues no longer exceed the carrying cost.

The Cleveland-based developer, parent of Brooklyn-based Forest City Ratner, which is a 30% investor in Pacific Park along with 70% partner/overseer Greenland USA, blamed the "significant impairment" on an oversupply of market-rate apartments, the uncertain fate of the 421-a tax break, and a continued increase in construction costs.

While the delay essentially confirms the obvious, given that two major buildings have not launched despite plans to do so, it raises significant questions about the future of the project, including:
if market-rate construction is delayed, will the affordable h…

Revising official figures, new report reveals Nets averaged just 11,622 home fans last season, Islanders drew 11,200 (and have option to leave in 2018)

The Brooklyn Nets drew an average of only 11,622 fans per home game in their most recent (and lousy) season, more than 23% below the announced official attendance figure, and little more than 65% of the Barclays Center's capacity.

The New York Islanders also drew some 19.4% below announced attendance, or 11,200 fans per home game.

The surprising numbers were disclosed in a consultant's report attached to the Preliminary Official Statement for the refinancing of some $462 million in tax-exempt bonds for the Barclays Center (plus another $20 million in taxable bonds). The refinancing should lower costs to Mikhail Prokhorov, owner of the arena operating company, by and average of $3.4 million a year through 2044 in paying off arena construction.

According to official figures, the Brooklyn Nets attendance averaged 17,187 in the debut season, 2012-13, 17,251 in 2013-14, 17,037 in 2014-15, and 15,125 in the most recent season, 2015-16. For hoops, the arena holds 17,732.

But official…

At 550 Vanderbilt, big chunk of apartments pitched to Chinese buyers as "international units"

One key to sales at the 550 Vanderbilt condo is the connection to China, thanks to Shanghai-based developer Greenland Holdings.

It's the parent of Greenland USA, which as part of Greenland Forest City Partners owns 70% of Pacific Park (except 461 Dean and the arena).

And sales in China may help explain how the developer was able to claim early momentum.
"Since 550 Vanderbilt launched pre-sales in June [2015], more than 80 residences have gone into contract, representing over 30% of the building’s 278 total residences," the developer said in a 9/25/15 press release announcing the opening of a sales gallery in Brooklyn. "The strong response from the marketplace indicates the high level of demand for well-designed new luxury homes in Brooklyn..."

Maybe. Or maybe it just meant a decent initial pipeline to Chinese buyers.

As lawyer Jay Neveloff, who represents Forest City, told the Real Deal in 2015, a project involving a Chinese firm "creates a huge market for…