Thursday, December 31, 2009

So, where's the $324.8 million more for the arena going to come from?

Eliot Brown of the New York Observer points to a major gap in funding for the Atlantic Yards arena, the need for $324.8 million, money not yet in hand but expected to be raised within a year.

The money would come from Mikhail Prokhorov (aka "New Investor"), additional financing, and new equity from Forest City Ratner or third parties.

FCR told investment analysts earlier this month it planned to invest $200 million in equity, but, as Brown writes, " it's not as if developers generally have $200 million just lying around." (Forest City hasn't yet publicly commented.)

And it's not clear to me what role the unmentioned taxable junk bonds would play in this.

The details

From the Barclays Center Official Statement:
As one of the Vacant Possession Release Conditions, and as required under the Arena Lease Agreement, ArenaCo will be obligated to pay or cause to be paid the Additional Rent Amount (presently anticipated to be $324.8 million, which amount may ultimately be reduced to reflect prior expenditures made for the Arena Project and included in the budget for the Arena Project on and after November 1, 2009) to the Issuer (for deposit with the PILOT Bond Trustee). Such amount has been estimated by the Independent Engineer to be sufficient to pay the Completion Cost, but a portion of such amount (not needed for construction) will be used for the funding of part of the Series 2009 PILOT Bonds Strike and Liquidity Reserve Requirement. At the time of the issuance of the Series 2009 PILOT Bonds, ArenaCo will not have funds sufficient to pay the Additional Rent Amount, but ArenaCo expects to raise sufficient funds prior to the Arena Project Effective Date from one or more of the following sources: (a) the proceeds of the Purchase Price payable by the New Investor (for a description of the Investment Agreement and definitions of such terms, see "PROJECT PARTICIPANTS--The Arena Developer, ArenaCo and New Jersey Basketball--Anticipated New Investment"), (b) additional financing at one or more of the parent companies of ArenaCo, including but not limited to Arena HoldCo, (c) additional equity contributions from the Arena Developer, its parent companies, and/or the New Investor, (d) additional equity contributions from the third parties or (e) any combination of the foregoing, in each case subject to the receipt of any applicable NBA approvals. Although ArenaCo expects that the necessary funds will be timely raised, there can be no assurance that the funds will be raised or that the amount of such funds will be sufficient to make the full payment of the Completion Cost. In the event that the Issuer has not received the Additional Rent Amount from ArenaCo for deposit with the PILOT Bond Trustee at or prior to the Outside Commencement Date, or if such receipt does not occur within five (5) Business Days of Vacant Possession having been achieved, proceeds of the Series 2009 PILOT Bonds will not be applied to the construction of the Arena, and the Issuer will be required to redeem the Series 2009 PILOT Bonds at 101% of (i) with respect to the Series 2009 Current Interest PILOT Bonds, the Amortized Value thereof plus accrued and unpaid interest thereon through the Extraordinary Mandatory Redemption Date, and (ii) with respect to the Series 2009 Capital Appreciation PILOT Bonds, the Accreted Value on the Extraordinary Mandatory Redemption Date. See "THE SERIES 2009 PILOT BONDS--Redemption--Extraordinary Mandatory Redemption." If such a mandatory redemption is made, Bondholders will not obtain the expected return on their investment in the Series 2009 PILOT Bonds and may not be able to reinvest the proceeds from such a redemption in an investment that results in a comparable return.

Can $8.1M in infrastructure contingency funds pay for repairs on damaged MTA tunnels when neither extent nor cost has been assessed?

Remember that confidential December 2007 report commissioned by developer Forest City Ratner and provided to the Metropolitan Transportation Authority (MTA), which stated that portions of two subway tunnels were in critical condition and required repair "in the immediate future" and the "near future"?

The MTA, as I wrote in August, would not provide details concerning the amount of repairs completed or planned, or how such repairs would be funded.

Now we learn the repairs would be paid for via a contingency fund in the budget for the arena project, but the extent of the damage--nor, obviously, the cost of such repairs--has not been determined. And there's only $8.1 million available for Infrastructure Contingency.

That raises lingering questions about whether the contingency funds would be sufficient.

According to the Barclays Center Official Statement, prepared by Goldman Sachs for the tax-exempt bond deal, a document called the Transit Improvement Agreement--yet unseen--lays it out.

Deterioration not known

From the Official Statement:
In addition, as part of the Transit Improvements, RailCo is obligated to reinforce and repair at its own cost and in accordance with standards and procedures set forth in the Transit Improvement Agreement any subway tunnel structural support members that are found to exhibit a twenty-five percent (25%) or greater section loss and that are in the load path of the Transit Improvements. The Arena Developer has performed some preliminary testing on the support members within the subway tunnels to determine their structural integrity, and such testing indicated that some columns had deterioration in excess of twenty-five percent (25%); however, neither the final quantity of columns with more than twenty-five percent (25%) deterioration nor the level of deterioration of untested columns is known. Funds for such tunnel support repair work will be provided for out of contingency funds in the budget for the Arena Project. The total cost of the Transit Improvements, which estimate is based on bids on so-called "ninety percent" (90%) construction documents, is anticipated to be approximately $71.6 million, $3.2 million of which has been contributed and $68.4 million of which is remaining.
(Emphasis added)

Note that the total cost of the Transit Improvements, $71.6 million, covers items other than the damaged tunnels, including a new subway station entrance.

Contingency funds

How much is available in contingency funds in the budget for the Arena Project? The total is $53.1 million, including $19.7 million in Hunt Contingency (the construction company), $25.3 million in Owner's Contingency, and $8.1 million in Infrastructure Contingency.

The latter seems a rather small sum for tunnel repairs.

About the Related Infrastructure

The Arena Project ($904.3 million) is separate from the Related Infrastructure ($195 million) and the latter would not cover the damaged tunnels. The document states:
The Related Infrastructure will include the following work necessary for the development, construction, equipment and operation of the Arena: construction of a temporary rail yard in order to move most of LIRR operations off of the Arena Premises; excavation and relocation of sewer pipes and water mains from Fifth Avenue and Pacific Avenue to permit construction of the Arena Project and to service the Arena; demolition of existing improvements; environmental remediation, and the rebuilding of the Carlton Avenue Bridge which links Atlantic Avenue and Pacific Street on the East side of the AY Project Site, between Sixth Avenue and Vanderbilt Avenue. Parking to service Arena patrons on a nonexclusive basis will initially be provided on the eastern side of the AY Project Site, on Block 1129 on the Borough of Brooklyn Tax Map (“Block 1129”), to service the Arena. See “ARENA MANAGEMENT AND OPERATIONS⎯Project Leases and Agreements⎯Parking Easement.”

According to bond deal, in absence of Urban Room, Ratner can leave temporary canopy over new subway entrance for ten years

Remember, a new subway entrance is supposed to be built on the south side of Atlantic Avenue--but it won't be enclosed in the Urban Room, because the latter structure is depending on Building 1, the office tower for which, as Bruce Ratner told Crain's, there's no timetable.

According to the Barclays Center Official Statement, prepared by Goldman Sachs for the tax-exempt bond deal, a document called the Transit Improvement Agreement--yet unseen--gives the developer (via a subsidiary termed, in shorthand, RailCo) ten years to house the entrance in a temporary canopy before the Metropolitan Transportation Authority would build a permanent one at the developer's expense.

In other words, they have a decade to construct Building 1.

From the document:
RailCo may install a high quality fabric and steel temporary canopy over the Subway Entrance in accordance with the approved plans and specifications. If RailCo or its affiliate or its successor does not commence the construction of a permanent building that would enclose the Subway Entrance within such building within ten (10) years after Final Completion of the Subway Entrance (as defined in and determined in accordance with the Transit Improvement Agreement), RailCo and/or such successor must replace the temporary canopy with a permanent canopy meeting the Authority Standards for a free-standing subway entrance. If such temporary canopy is not replaced within such ten-year period, the Authority may construct such permanent canopy at RailCo's expense. If a temporary canopy is installed, the installation of a permanent canopy is not a condition of the achievement of Beneficial Use of the Subway Entrance, Substantial Completion or Final Completion, as each term is defined in the Transit Improvement Agreement.
More about the agreement

Here's the overview of the Transit Improvement Agreement:
The Transit Authority and RailCo will enter into an agreement (the "Transit Improvement Agreement") pursuant to which RailCo will undertake the design and construction of certain work described therein and furnish and install certain equipment in accordance with the Authority Standards (as such term is defined in the Transit Improvement Agreement) and the approved plans and specifications therefor. Such work (the "Transit Improvements") consists principally of: (i) construction of a new subway station entrance (the "Subway Entrance"), at grade at the southeast corner of Atlantic Avenue and Flatbush Avenue, that will serve as the main entrance from the Arena to the Atlantic Terminal transportation complex (the "Transportation Complex"); (ii) construction of a mass transit access area (the "Access Area") located one (1) level below the street surface and containing a new fare control area (the "New Fare Control Area") adjacent to the IRT (2/3/4/5) and BMT (Brighton) (B/Q) subway lines consisting of eleven (11) turnstiles, three (3) high wheels, and two (2) gates; (iii) installation of stairs, escalators and an elevator compliant with the Americans with Disabilities Act (the "ADA") providing access to the New Fare Control Area from grade level; (iv) construction of a general purpose ramp connection from the New Fare Control Area to the existing underpass at the south end of the IRT 2/3/4/5 platform (the "Southern Underpass"); (v) restoration and reopening for public use of the Southern Underpass; (vi) construction of an ADA-compliant ramp connection from the New Fare Control Area to the Manhattan-bound IRT 2/3 platform; (vii) removal and relocation of any storage and equipment rooms that are impacted by the Transit Improvements; (viii) restoration of the stairs between the IRT 4/5 platform and the Southern Underpass; (ix) installation of new stairs between the New Fare Control Area and the Brighton B/Q subway line mezzanine and from the Brighton subway line mezzanine to the Brighton subway line platform; (x) installation of new signage throughout the Transportation Complex (including directional signs and those contemplated by the TA Naming Rights Agreement); (xi) at the Transit Authority's request, construction within the Access Area of a Transit Authority operations room to help coordinate train service and transit rider movement after Arena events; (xii) reconstruction of a closed street stair as a separate emergency stair to the sidewalk with a kiosk (if required) complying with requirements of the New York State Code Office; (xiii) relocation of existing Transit Authority vents on the east side of Flatbush Avenue between Atlantic Avenue and Fifth Avenue and repair of existing Transit Authority vent structures affected by the Transit Improvements to meet Authority Standards for load requirements (the "Vent Work"); and (xiv) fabrication and installation of an agent booth in the New Fare Control Area in accordance with Authority Standards.

Yormark moves the goalposts, asserts Brooklyn "sometime in calendar year 2012," claims construction has commenced

On 11/24/09, after the decision in the Atlantic Yards eminent domain case, Forest City Ratner and the Nets said "the intent that the Nets will play ball in the Barclays Center in the 2011-2012 NBA Season."

Yesterday, Nets CEO Brett Yormark offered some clarification, telling the YES network, "We will be getting into the Barclays Center sometime in calendar year 2012."

That means the 2012-13 season, I'd bet. Remember, a market study attached to the Barclays Center Arena Preliminary Official Statement (prepared by Goldman Sachs) states, "It is assumed that the arena will open in May of 2012. As such, the year ending June 30, 2012 only reflects two months of operations." And there's no revenue for 2011-12 ticket sales.

Construction begun?

Yormark also said, "we commenced construction," but that's rather ambiguous. The developer has continued longstanding demolition and utility work, but has not had an official groundbreaking. Nor has the Empire State Development Corporation (ESDC) successfully delivered properties sought via eminent domain.

The latest ESDC Construction Update concerns railyard work, environmental remediation, infrastructure, and demolition.

Some 2009 AY round-ups, from the Daily Eagle, Curbed, the New York Post, and Streetsblog

I'll be posting my 2009 round-up in 2010 (sorry), but here are four AY mentions--two pro, two con--worth noting in other publications' end-of-the-year wrap-ups.

The Brooklyn Daily Eagle

In a column, the Brooklyn Daily Eagle's Dennis Holt asserts that "Few people [at the opening press conference] could have foreseen the bitterness and anger that lay in the future for this project," to which NoLandGrab's Eric McClure responds, "Actually, we think it was probably quite easy to foresee the rancor the Atlantic Yards project would engender, especially once the audacity and magnitude of the land- and subsidy-grab became clear."

Curbed awards

Curbed, in typically restrained language, targets the "facade architect" of the AY arena:
Our Favorite Architectural Sell-Outs
Dude, can you believe they're using that Vampire Weekend song in a fucking commercial now? Or that those dudes at that hip architecture firm SHoP scored a commission from fucking Bruce Ratner to redesign his fucking Brooklyn basketball arena at the same time they're remaking the East River waterfront? It's like there's nothing pure anymore.
Curbed also notes that New York Times architecture critic Nicolai Ouroussoff didn't love the redesign (though he gave it two cheers, actually):
Don't Make Nicolai Angry, People
3) SHoP rolls out a new design for the Brooklyn Nets stadium: "Still falls short of the high architectural standards... the larger project remains worrisome
New York Post

Real estate columnist Lois Weiss offers an award:
Russian Brick to Bruce Ratner and Forest City Ratner for selling the Nets to a Russian billionaire and closing on the Atlantic Yards purchase despite years of NIMBY lawsuits.
Ratner gets an award for losing money on the team and finding a bailout buyer? As for the "NIMBY lawsuits," Weiss almost certainly hasn't taken a look, or recognized that even the mend-it-don't-end-it groups in BrooklynSpeaks are now in court.

Streetsblog awards

Streetsblog asked voters for the Urban Abomination of the Year
Ongoing massacre of the public realm near Atlantic Yards footprint (38%, 113 Votes)


ratner_road.jpg

Ben Fried wrote: This seems a little premature to us. Forest City hasn't turned whole city blocks into oceans of surface parking plus a big ugly arena just yet, though transgressions like this certainly deserve to be shamed...

(Also see Forest City's role in the New York City Economic Development Corporation's award as "worst city agency," given its approval of suburban-style devlopments like East River Plaza.)


Wednesday, December 30, 2009

ESDC files, shares condemnation petition, but condemnees will resist; will January 29 be the day it's resolved?

While it's difficult to challenge a condemnation petition--"It has to be limited to procedural defects, and that’s rare," attorney Michael Rikon told me--the Empire State Development Corporation's (ESDC) legal filing to take private (and public) property within the Atlantic Yards footprint won't be a walkover. (The petition is at bottom.)

"We will challenge the petition. It is defective in many respects," stated attorney Matthew Brinckerhoff, who is representing condo owner and Develop Don't Destroy Brooklyn spokesman Daniel Goldstein (and perhaps others). "The details will be laid out in our opposition to the petition, which we are working on."

Brinckerhoff was the lead attorney for the plaintiffs in the unsuccessful constitutional challenge to the ESDC's use of eminent domain; he has asked the Court of Appeals to reopen the case in light of seemingly contradictory decision by a lower court in the case challenging the ESDC's use of eminent domain for the Columbia University expansion.

Henry Weinstein, who owns more than an acre of property in the southeast segment of the AY footprint, a block slated to become an interim surface parking lot, told me he would "fight tooth and nail."

George Locker, who represents several rent-stabilized tenants, stated, "The New York Court of Appeals has held that the New York State Division of Housing and Community Renewal, and not the New York State Supreme Court, has 'original and exclusive jurisdiction' over the eviction of Rent Stabilized tenants and the demolition of Rent Stabilized housing. ESDC cannot use the vesting proceeding so that Ratner, my clients' landlord, can make an end run around NYS DHCR. I will move to dismiss ESDC's petition based, among other grounds, on the court's lack of subject matter jurisdiction over the Rent Stabilized tenants. Given the clear and controlling law on this question, ESDC will be unable to remove my clients from their homes. Instead, Ratner, like all other landlords, will be compelled to make an application to NYS DHCR after the current leases expire, including one in 2011."

(He's made that argument previously, but the case was dismissed on other grounds.)

Property sought

The ESDC aims to take property in two or more stages; the first acquisition is for the first phase, including the arena block, the southeast block needed for the parking lot, and piece of property needed for a new railyard.

It also would condemn three blocks: Pacific Street between Carlton and Vanderbilt avenues; Pacific Street between Flatbush and Sixth avenues; and Fifth Avenue between Atlantic and Flatbush avenues, including the traffic island at Fifth Avenue and Pacific Street.

Procedure issues

The document, which was filed on December 23 in Supreme Court in Kings Country, is returnable January 29, 2010, which is presumably the time for legal arguments--unless it's postponed.

The ESDC seeks an order that would authorize it to file acquisition maps, which would then give it title to the property sought. Compensation would be determined by the court. Within 30 days after vesting title, ESDC would serve a Notice of Acquisition upon each condemnee, who would then have 120 days to file a written claim for damage.

Note that the list of properties to be condemned include those owned by Forest City Ratner--so-called "friendly condemnations" aimed to clear title.

IBO: $10M subsidy from city property

According to the New York City Independent Budget Office (IBO), the contribution of city streets and property constitutes a subsidy of nearly $10 million:
Contributions of City Property. The city will provide some property for the project at no cost. According to the latest modified project plan, this will include the street bed of Fifth Avenue between Flatbush and Atlantic Avenues and the street bed of Pacific street between Flatbush and Sixth Avenues, as well as a small traffic triangle at the intersection of Fifth Avenue and Pacific Street. Based on recent sales prices in the area, IBO estimates that the 2010 sales value of this property is $3.7 million. Not selling this land at a market price to another developer or to FCRC adds to the opportunity cost of the project. In the portion of the project east of Sixth Avenue— which is outside of the arena footprint—FCRC is committed to paying a market price for the street bed of Pacific Street between Sixth and Vanderbilt Avenues.

The city will also transfer two city-owned parcels to the Empire State Development Corporation (ESDC) at no cost, which will then be leased to FCRC, that appear to be included in the arena site. The first (block 1127, lot 33) is valued by the Department of Finance at $124,000 on the current tax roll, and the second (block 1118, lot 6) has a reported full market value of $5.8 million. Based on these market values, the value of the subsidy from ignoring the opportunity to sell these properties is $6.0 million.
Atlantic Yards Petition

During a short walk from Fort Greene to Prospect Heights, the contrasts and contradictions of Brooklyn

It was just a short walk, less than a third of a mile. But Brooklyn's contrasts and contradictions were manifest during a walk I took on November 24, a few hours after we learned that the state Court of Appeals had green-lighted the state's use of eminent domain, justified in part by removing "blight" in Prospect Heights, to build the Atlantic Yards project.

There, at the corner of Fulton Street and South Portland Avenue, a major shopping corridor in the gentrified section of Fort Greene, Brooklyn Borough President Marty Markowitz hosted a press conference outside the new Greenlight Bookstore, a most-local independent bookstore started with the help of a prize in a small business plan contest sponsored by the Brooklyn Public Library.

The new novel by Brooklyn author Jonathan Lethem, a member of the Develop Don't Destroy Brooklyn advisory board and noted critic of the Atlantic Yards plan, was in the window.

Markowitz and other were boasting "Shop Brooklyn" buttons, announcing a seasonal initiative. Markowitz's press people--the only ones looking wary at the cheery event--had sent out a notice that Markowitz would address the Atlantic Yards eminent domain decision at the event, but first there was some promotion to do, and Markowitz managed his usual enthusiasm.

After ten minutes of boosterish speeches by Markowitz and Wellington Sharpe of the Fulton Area Business Alliance, however, I couldn't stick around.

(Photo by Kathryn Kirk)

There was a Develop Don't Destroy Brooklyn press conference just a few blocks away, a straight shot down South Portland Avenue, then across broad Atlantic Avenue, past the Vanderbilt Yard and then buildings within the Atlantic Yards footprint that, as of that day, were more likely than ever to be demolished.

The march of towers

First, though, I looked west, with three new residential towers the horizon; in the foreground was the oldest, the Forte Tower in Fort Greene, where poor sales led the lender to take over the building.

Behind it were two rental buildings, the Brooklyner in Downtown Brooklyn, on blocks so nondescript the marketing plan sinks to generic banality ("designed for the people who make Brooklyn an interesting place to live") and Forest City Ratner's architecturally more interesting 80 DeKalb, which also has the advantage of bordering Fort Greene Park.

(Photo by Tracy Collins)

The upshot: the march of new towers is continuing, with 80 DeKalb and the Forte threading Downtown Brooklyn through Fort Greene, and then to the Atlantic Terminal area, site of the Williamsburgh Savings Bank tower and the Bank of New York tower.

And that march would continue to the Atlantic Yards site should residential buildings be built. While AY opponents say the project would damage the residential feel of Prospect Heights and Fort Greene, it's more a question of degree. After all, most of them support the dense--but not as dense--UNITY plan, which would be limited to the Vanderbilt Yard (and wouldn't require a massive parking lot).

At Hanson Place

I walked down South Portland at Hanson Place, noticing the landscape change from row houses to mid-rise buildings, with the Atlantic Center and Atlantic Terminal malls to the west, and the Museum of Contemporary African Diasporan Arts , in a building renamed for the (tragically killed) Council Member James E. Davis. The current exhibition offered an apt parallel to the eminent domain fight. The title: "They Won't Budge: Africans in Europe."

Toward urban renewal

There are row houses on South Portland below Hanson, but the block is more clearly a product of urban renewal. On the west side I saw the first of two Mitchell-Lama towers, home to Delia Hunley-Adossa, who was trounced by City Council Member Letitia James in the recent Democratic primary, but may be back for the 2013 race.

Just to the south came Forest City Ratner's "blighted" Atlantic Center Mall, posing blank walls to the streets, and to the east, the modern row houses of Atlantic Commons, meant to invoke the older neighborhood nearby.

Below Atlantic Commons, the ten-story mixed-income Atlantic Terrace project, begun by the Fifth Avenue Committee long after Atlantic Yards was announced, was nearing completion. It's all part of ATURA, the longstanding Atlantic Terminal Urban Renewal Area.

Crossroads

Then came wide Atlantic Avenue, the official border between Fort Greene and Prospect Heights, with the eastern edge of the Atlantic Center mall--the beneficiary of a superblock--at the corner.

When I crossed Atlantic, approaching the Vanderbilt Yard, a barrier bore some gnomic posters, "Atlantic Yards is___", leaving observers to fill in the blank.

(Photos--above, below--by Tracy Collins)

Down Sixth Avenue

The street below Atlantic became Sixth Avenue, with the former Spalding factory turned condos, now owned by Forest City Ratner and housing the Community Liaison Office, at the corner. As I've written, the demolition of this staunch building, already renovated, would be a final sign there's no turning back.

To the right, looking west on Pacific Street, I could see several empty lots, signs of demolition, and the most prominent building, the former warehouse turned the 31-unit Atlantic Art building, with just one apartment occupied, that of Develop Don't Destroy Brooklyn spokesman Daniel Goldstein and his family.

Then, at the next block, a crowd of neighborhood residents, associated activists, and journalists, had gathered outside Freddy's Bar & Backroom, the spiritual home of the AY opposition and in more danger than ever of closing via eminent domain. (Now they're gearing up with chains.)

Some two-and-a-half years earlier, at the 5/24/07 Ratnerville Singout held at Freddy's, one song was titled "Freddy's is an Escalator Now," a suggestion ofthe fate of the space should the arena be built.

Actually, a tower--once office, now residential--was once planned for that corner. But an arena would be coming first, plus perhaps a tower to the west, at the corner of Dean and Flatbush. So the Freddy's corner more likely would be left as interim open space or, rather, an "Urban Experience."

In Prospect Heights

On the south side of Dean Street, as shown in the photo, I saw some Prospect Heights row houses. The residents can't be thrilled about throngs of arena-goers on their block.

Maybe that's why there's a city zoning regulation requiring arenas to be at least 200 feet from residential districts. And why the state, in the interest of furthering Atlantic Yards, would override that regulation.

Perkins sets hearing January 5 on Columbia University eminent domain case, need for reforms

The Senate Standing Committee on Corporations, Authorities and Commissions, chaired by Senator Bill Perkins, will hold a hearing 4-7 pm on Tuesday, January 5, titled "Unconstitutional: What the Appellate Division’s Eminent Domain Ruling Means for the Columbia Expansion."

While the hearing seems focused on the recent decision stopping--for now--the Empire State Development Corporation's pursuit of eminent domain for the Columbia University expansion, some of the broader questions invoke the Atlantic Yards example and situation:
How should the process be reformed? What are the benefits of a moratorium on eminent domain takings pending legislative action?

Note that oral testimony is open to the public, with a three-minute limit, and written testimony is also accepted. It's unclear who's been invited.

Perkins is the most prominent legislative supporter of eminent domain reforms, while Gov. David Paterson backs an appeal by the ESDC to the Court of Appeals.

The court ruled in the other direction in the AY eminent domain case, saying that administrative agencies have significant discretion, so it will be a tough but not impossible challenge for the plaintiffs in the Columbia case.

Hearing Notice

Subject and Purpose: The Appellate Division recently rejected the use of eminent domain to take private property for the expansion of Columbia University. The court found that the Empire State Development Corporation violated both state and federal due process clauses in an effort to prevent affected property owners from obtaining necessary information. ESDC's finding of blight was “bereft of facts” to establish true blight. The ESDC's determination that the project even has a public use, benefit or civic purpose was also called into question. Most troubling of all was the pattern of collusion between the state and Columbia, a private developer trying to utilize the state‟s power of eminent domain to take private property. This was clearly evidenced by the ESDC and Columbia each hiring the exact same consultant to conduct the blight study that served as the rationale for triggering condemnation proceedings.

The abuse of eminent domain is always troubling. As the Appellate Division noted, "few policies have done more to destroy community and opportunity for minorities than eminent domain." In fact, the decision indicated that the ESDC's actions in the Columbia expansion is, “clear evidence of that reality. The unbridled use of eminent domain not only disproportionately affects minority communities, but threatens basic principles of property contained in the Fifth Amendment.”

During this hearing the Committee will inquire into the facts revealed by the ruling and the current status of the Columbia University expansion project. What does the ruling tell us about the eminent domain process? How should the process be reformed? What are the benefits of a moratorium on eminent domain takings pending legislative action? What are the consequences for all stakeholders in this case, not just the litigants, but also the community, displaced tenants and property owners? How will this ruling affect the Community Benefits Agreement? These are just some of the questions that will be considered.

Location – Adam Clayton Powell State Office Building
163 W. 125th Street, 2nd Floor Art Gallery
New York, New York 10027
Tuesday, January 5, 2010 – 4 pm to 7 pm


Anyone can testify

Reply Form: This hearing is open to the public. Anyone may testify. Persons who require assistance or wish to be added to the Committee mailing list for the Senate Standing Committee on Corporations, Authorities and Commissions are requested to complete this form, and submit it to:
Tom Briggs / Denise Outram
Office of Senator Bill Perkins, Chair
Corporations, Authorities and Commissions Committee
New York State Senate
Legislative Office Building 817, Albany, NY 12247
Phone: 518-455-2441, Fax: 518-426-6809
Adam Clayton Powell State Office Building, Suite 912
New York, NY 10027
Phone: 212-222-7315, Fax: 212-678-0001

Oral testimony will be limited to three (3) minutes per witness. Witnesses are asked to submit electronic copies of their testimony to tobriggs@senate.state.ny.us or deeoutram@gmail.com by January 4, 2010 or bring 10 paper copies of testimony to the hearing.

Tuesday, December 29, 2009

Gotham Gazette's 2010 predictions: three contributors are down on AY (where's Marty?)

If you didn't know better, by reading Gotham Gazette's 2010 predictions you'd think that Forest City Ratner's Atlantic Yards project is on its last legs rather than survived a key decision on eminent domain and seen the sale of $511 million in arena bonds.

That's not to say that the kinks in the bond deal--escrow until the delivery of property by condemnation--don't leave wiggle room for additional challange. But the advantage has to go to FCR, and it's surprising that no contributor--hey, where's Marty Markowitz?--pointed that out.

Excerpts from the article are below, with each individual's statements excerpted except for those from Daniel Goldstein.

If Atlantic Yards proceeds, one legacy may be tougher legislation on eminent domain.

State Senator Bill Perkins

I would like to see continuing types of reform we were able to pass this year like the public authorities reform bill.

I am looking forward to introducing legislation on eminent domain reform. I think there is a movement that has been galvanized around that issue.

Daniel Goldstein, Develop Don’t Destroy Brooklyn

Gov. Paterson enacts a statewide moratorium on eminent domain.

The Feds indict Bruce Ratner.

Cuomo commences a thorough investigation of the Empire State Development Corp.

The state legislature approves a bill removing "blight" as a justification for eminent domain.

Mikhail Prokhorov moves the Nets to Moscow, where they proceed to win a game.

Mayor Bloomberg comes to his senses and realizes that Atlantic Yards would be a huge stain on his legacy.

Brooklyn gets the kind of world-class development, at its crossroads, that it deserves.

Councilmember Letitia James

The Atlantic Yards project will continue to be challenged in the New Year, and I predict the courts will make the right decision to stand against eminent domain and big development in Brooklyn.

Nicole Gelinas, contributing editor, the Manhattan Institute's City Journal

The Atlantic Yards project in Brooklyn will finally die.

The Times takes a look at the Municipal Art Society, but gets the Atlantic Yards angle wrong

In a New York Times article today headlined New Leader Seeks Stronger Voice for Art Society, the Municipal Art Society is criticized for not speaking as loudly and effectively as it once did on urban design and preservation issues, such as when it helped save Grand Central Terminal. (They wanted to tear down Grand Central Terminal!)

So Vin Cipolla, who's replacing longtime leader Kent Barwick, is challenged to rebuild the membership, revenues, and board of MAS--and to speak louder.

And that touches on Atlantic Yards, but the Times doesn't understand MAS's role regarding AY, leaving out the organization's failure to address the process behind the project.

(The Times assigned the article to its architecture reporter, who hasn't covered AY, and places it in the Arts section, though coverage of urban design and preservation issues would go better in the Metro section.)

A big voice?

The Times reports:
Vin Cipolla, 53, who replaced Kent Barwick as president of the society earlier this year, said it would be taking a stronger public position on development on the far west side of Manhattan and placing Moynihan Station on the site of the James A. Farley Post Office Building on Eighth Avenue at 33rd Street. “We have a responsibility to our members and donors and to the citizens of New York to be a big voice on those subjects,” he said.
What that big voice is going to be is unclear from the article, though Cipolla states on the MAS web site that the organization will more narrowly focus on "preservation and sustainability, planning for all New Yorkers, and place-making and visioning."

Changing times

The Times reports:
But in an era when activist bloggers and neighborhood preservation groups have proliferated — and when two mayors more associated with development than preservation have been elected to two terms each — some advocates on both sides of the preservation debate see the society as something of a dinosaur. Committed preservationists in particular say that it hasn’t been aggressive enough lately, on issues like the redevelopment of Atlantic Yards in Brooklyn and of 2 Columbus Circle.
Wait a second. The criticism of MAS's role on AY doesn't come so much from "committed preservationists" as Brooklyn activists like planner Ron Shiffman, who said the MAS critique "falls short because it avoids discussing the process issues and attempts to apply a design solution to a fundamentally flawed and ill-conceived plan."

And there's no such thing as "the redevelopment of Atlantic Yards," because AY was never developed in order to be redeveloped. Atlantic Yards is a project, not a place.

The AY debate

The MAS role in Atlantic Yards gets defended:
Mr. Barwick said the society had taken the initiative on several occasions, for example in protecting Times Square from what it saw as overdevelopment in the ’80s and in re-imagining the Atlantic Yards project to include city streets there. He also said criticism comes with the territory in the advocacy business.

[Preservationist] Mr. [Anthony] Wood conceded, “You had to be pretty gutsy to go out and take a leadership role” in favor of preservation during the Giuliani and Bloomberg administrations. “They may have felt there were some battles they couldn’t win.”

Mr. Barwick put it differently, arguing that the society’s mission is not always to fight. With Atlantic Yards, for example, many “felt this is a perfectly good place for development,” he said.
This is oversimplified. First, the MAS came significantly late to the Atlantic Yards debate, beginning in June 2006 as the project approached approval in the next six months.

Then again, MAS did take the initiative by offering a sophisticated critique of urban planning issues, such as the function of open space, thus helping fill a vacuum in the discussion.

However, additional streets were a feature of the UNITY plan alternative, announced more than 18 months earlier. And, while criticizing superblocks, MAS accepted a superblock for the arena.

Despite Barwick's quote, Atlantic Yards has never been an issue of development versus no development; the issue was whether pragmatism versus principle, whether better future process could redeem past bad process.

MAS, by forming BrooklynSpeaks, gave that a shot, but now many of the groups in BrooklynSpeaks have gone to court, in recognition that their "mend it don't end it" strategy got them nowhere with the state and the developer.

MAS ties

I'd be interested to learn how Cipolla and the MAS board plan to avoid the complications Barwick described in an interview:
We have ties to Bruce Ratner. He and I were in the Koch Administration together. Several of my trustees were personally friendly with Bruce and members of the Ratner family. We had a number of trustees who were former Koch people. So there was a feeling on our part, yeah, everyone likes Frank Gehry as a person. And Laurie Olin was a very fine landscape architect who has done a lot of fine work in the city and elsewhere.

So we weren’t dealing with the usual schlock, let’s-rape-the-site-and-get-out-as-quickly-as-we-can developers, using anonymous architects and landscape architects. There was clearly a greater set of ambitions here.


Yes, there were greater ambitions, though many of those ambitions have been jettisoned along with Gehry and (apparently) Olin.

Those personal ties and the respect for Gehry/Olin, however, obscured the process issues. Ironically enough, Barwick knows the process is bad; he famously suggested that AY might be "this generation's Penn Station," a quote absent in the Times.

Shouldn't MAS and allies have concerns about the role of consultants like AKRF, which can find "blight" in cracked sidewalks and thus smooth the way for eminent domain?

What about Jane Jacobs?

However legitimate the criticisms, I think the Times sells MAS short by not acknowledging its organization of a major exhibit on urbanist Jane Jacobs and sponsoring regular forums (I was on one panel) reflecting on the latter-day implications of her work. That's a major, ongoing contribution.

How many jobs, really? ESDC quietly added nearly 4000 construction job-years between June and September

So, how many jobs would there be at the Atlantic Yards project?

The numbers are confusing, as the Empire State Development Corporation (ESDC) in September significantly changed its projection on construction jobs without explaining exactly why. And Forest City Ratner, in its most recent press release, has doubled the number of permanent jobs projected.

Construction jobs

For years, Forest City Ratner said there'd be 15,000 construction jobs, which actually meant 15,000 job-years, or 1500 jobs a year over a decade.

Of course, if the project takes longer than the promised decade--which, if it is built, seems a good bet--there'd be fewer jobs per year.

The ESDC, in its July 2006 General Project Plan, estimated 15,344 new direct job years and 26,803 total job years (direct, indirect and induced).

But the numbers have kept changing, and we don't have backing information. And if you read recent legal papers, it would be easy to get confused.

From the ESDC's MGPP

Here's the ESDC's June 2009 Modified General Project Plan (MGPP), also cited in an MTA affidavit in the recent case challenging the approval of the revised Vanderbilt Yard deal.

The same numbers--12,568 new direct job years and 21,796 total job years--were in the the December 2006 MGPP. In other words, the estimates weren't updated in more than two-and-a-half years. (Click on all graphics to enlarge.)


From the MTA

In recent legal papers, the MTA stated more generally that the ESDC estimated it would generate more than 10,000 new, direct job years and more than 20,000 in total.

From the ESDC

But the 9/17/09 ESDC board memo, distributed on the day the project was reapproved, stated that construction would generate more jobs: 16,427 new direct job years and 25,133 total job years (direct, indirect and induced):

Why did the numbers change? The ESDC stated:
The new projections result from changes in estimated Project revenues, a significant increase in the Project budget based on more current information, revisions to the ESDC model used to predict job creation and fiscal benefits (some of these changes reflect the impact of the economic recession, such as changes in wage rates) and additional information with respect to Project costs and subsidies.
Does that explain the increase of nearly 4000 construction job-years? Not exactly.

More importantly, in the 2006 analysis, the ESDC calculated not only total tax revenues (nearly $1.4 billion) over 30 years, in present value, but net tax revenues of $944.2 million "in excess of the public contribution to the project." In the 2009 analysis, the ESDC omitted a net tax revenue figure.

From FCR

In its response in the lawsuit challenging the ESDC approval, Forest City Ratner used those updated numbers--16,427 job years--as it did in its response in the lawsuit challenging the MTA deal.


FCR press release

Those numbers were distorted somewhat in Forest City Ratner's press release last week after the master closing. The developer stated:
Atlantic Yards will create close to 17,000 union construction jobs, as well as 8,000 permanent jobs once the project is complete.
While I initially thought the figure of 17,000 construction jobs was way off base, given the longstanding estimate of 12,568 job years, it's not as far off base. Still, it should be job years, not jobs. And 16,427 is not "close to 17,000;" rather, it's closer to 16,000.

Also, the claim of 8000 permanent jobs is bogus. Remember, the ESDC memo and FCR legal memo both claim 3998 jobs in New York City and 4277 jobs in New York State, inclusive of New York City. Whoever wrote the press release apparently added those two figures together.

ESDC stays fuzzy

In its legal answer in the suit challenging project approval, the ESDC steered clear of definitive numbers, claiming "thousands of construction jobs." Maybe the ESDC's lawyers know how fuzzy the numbers are.

Monday, December 28, 2009

Video: a walk around the arena block footprint shows traffic, demolitions, and perspectives from a wide road and a low-rise neighborhood

Early in the afternoon on December 24 I took my camera to shoot some video (bottom) around the footprint slated for the arena block, the western third, more or less, of the site plan.

(December 22 photo of Atlantic Avenue at Fifth Avenue, looking east, by Tracy Collins.)

I wanted to see the new advertising signage erected by Forest City Ratner after the master closing and I wanted to see the impact of the new traffic plan, in which Fifth Avenue is limited to northbound traffic between Flatbush and Atlantic avenues, and southbound traffic is diverted to Sixth Avenue.

Bottom line observations

My conclusion: on a high-traffic day, the traffic was pretty bad, with gridlock at Atlantic Avenues going into Fort Greene Place (the northern extension of Fifth Avenue between the Atlantic Terminal and Atlantic Center malls), though it was manageable with the help of traffic officers.

That's an interim condition, of course, because Fifth Avenue would be completely demapped, either compounding the problem or provoking new solutions.

(December 22 photo of Fifth Avenue below Atlantic Avenue, looking north, by Tracy Collins.)

Also, a walk around the block offers evidence that can be used by both project opponents and supporters. Yes, the southern border of the site is an intact, low-rise residential community, with houses less than 200 feet away, thus violating zoning, which is why the city's rules would be overridden by the Empire State Development Corporation, with the city's assent.

And the remaining parts of Dean Street, despite demolitions, attest to the residential character of the block--a reason why AY supporter Roger Green, then an Assemblyman, declared that the neighborhood was not blighted. Some of Pacific Street is still residential, but there have been many more demolitions of industrial buildings.

Then again, the completed demolitions have left empty lots that serve as an argument for building something. And the Vanderbilt Yard, at the northern border of the arena block, as well as the now cleared triangular block to the west of it, together border wide Atlantic and Flatbush avenues, could accommodate significant density.

For a look at the existing and demolished buildings, as well as some neighboring buildings, see Tracy Collins's collection.

(December 22 photo of Atlantic Avenue at Flatbush Avenue, looking east, by Tracy Collins.)

The route

My route began on Sixth Avenue just south of Flatbush Avenue, the area marked at the bottom right of the map, then proceeded to Dean Street, the next marking, then west to Flatbush, up to Atlantic, east to Sixth, and back down to Dean.

Note that the map derived from the site plan, at right, shows Fifth Avenue already demapped, though it hasn't happened yet. See Tracy Collins's map, below, part of his collection of AY maps.

Before the video, some notes

On Sixth Avenue between Bergen and Dean Streets, two row houses are for sale. One of the houses, on the southwest corner of Dean and Sixth, has been on the block for a while, but the other is newer to the market.

While the houses might be attractive, say, to someone wanting a pied a terre near the arena, the foot and auto traffic, if/when the arena is built, would make Sixth Avenue a much, much busier street.
'
Also note that, while Forest City Ratner has demolished two buildings across Dean Street east of Sixth Avenue, leading to construction trailers, the state has deferred plans for eminent domain on the three adjacent occupied row houses.

The Barclays Center signage is not wrapped around all the arena footprint block, just the western part of it, the triangle bounded by Fifth, Flatbush, and Atlantic avenues

The video is not continuous; I had to edit segments to fit it within the ten-minute limit set by YouTube.

Sunday, December 27, 2009

At another Freddy's media event, a makeshift guillotine is used to execute an eminent domain effigy

Last week the staffers and regulars at Freddy's Bar & Backroom, slated to be demolished for the Atlantic Yards arena, installed "chains of justice" so resisters can handcuff themselves to the bar to protest the anticipated eviction.

This week came another media event, the guillotine, a creative structure made out of Pabst beer cans, used to execute an effigy representing "eminent domain theft."

And yes, the media came out--far more than at some of the important legal arguments or governmental meetings. Everybody loves a good metaphor.

At left above, executioner Steve de Sève (producer of video at Freddy's Brooklyn Roundhouse) and Death, portrayed by Elliot Crown, in action.

(Photos on left by Amy Greer/No Land Grab.)

The action begins

Bar manager Donald O'Finn read from a scroll, declaring a revolt against eminent domain law and criticizing the role of ACORN, the British bank Barclays, which bought the arena naming rights that the state gave away, and Russian billionaire Mikhail Prokhorov, slated to become majority owner of the Nets.

"It's just like a foreclosure, except they're foreclosing on a neighborhood, and we're not even behind on the mortgage," O'Finn declared.

He passed it over to Death, who pronounced, "Poor eminent domain, born of a noble purposes of building hospitals and roads... is being used to take Americans from their homes, not just for a British bank but also for Russia... eminent domain, you are hereby condemned."



With a straight face, de Seve predicted, "Sometime soon in the next weeks and months, a battle of epic proportion will be fought. Around here, it's known as the bars vs. banks smackdown."

And when he sentenced the effigy to death, he pulled a Blue Point beer tap, the handmade guillotine fell, and the head indeed was severed. He then collected money for those facing eminent domain to put armor plate on their buildings or--more likely--use for other purposes in fighting back.

O'Finn's comments

I shot a brief video of O'Finn answering press questions, in this segment mainly from Stephen Witt of the Courier-Life chain.

Witt asked if O'Finn had asked for a spot in the Atlantic Yards project for the bar--kind of a non sequitur, given that sports facilities don't accommodate quirky bars like Freddy's.

"We're not so great at getting a lot of money, we're great at getting local talent," O'Finn responded, noting that artists from all over the world want to perform at the bar.

"Why not in this massive project, why don't you try to give back to the community, letting us do what we do," he said, suggesting a community center with day care (the latter is actually planned), free legal aid, studios for artists, and an art gallery--all rather antithetical to the corporate plans for the project.



Witt pointed out that Freddy's is a for-profit operation.

"We're $2.75 a Pabst, we're not ripping anybody off," O'Finn responsed. "We don't have a cover charge, no drink minimum, nobody's getting rich here." And moving the bar, he said, would be tough, given the prices of real estate.

Freddy's operates in a building owned by Forest City Ratner but has two years left on its lease, which is why the state would use eminent domain to move Freddy's out.

Daily News finds a silver lining in the availability of cheap Nets tickets

In an article today headlined Cheap premium tickets available to see New Jersey Nets, NBA's worst team, the New York Daily News reports:
New Jersey Nets fans finally have something to be happy about.

Premium tickets to see the woeful NBA team play are selling for less than the cost of a stadium beer - as little as $7 - on sites like eBay and StubHub.com.
Well, it depends on which fans we're talking about. If fans with season ticket packages are unloading tickets because they don't want to see the team any more--or if they can't attract friends/guests--then those fans aren't happy; they're losing money.

And perhaps the market is simply speaking; a ticket has become cheaper than a movie because the quality of entertainment is (often) lower. And, of course, the cost of a visit, including parking/transportation and refreshments, is much higher than the ticket.

Who wrote that pro-Bruce letter to the Times? A Ratner spouse (and the Times either didn't ask or was lied to)

If you search the term "Bruce Ratner"--not "Bruce C. Ratner" on the New York Times web site, the "closest match"--not the newest--is a letter, and some footnotes are in order.

The letter, published in the 6/11/06 edition of the Times, responded to architecture critic Nicolai Ouroussoff's piece about the complex and difficult relationship between architect Frank Gehry and his clients, notably developer Bruce Ratner:
After reading this article, I am left feeling that Bruce Ratner, taking a huge gamble, is proceeding in a smart, businesslike way. The risks are enormous and Mr. Ouroussoff pays no heed at all. Perhaps he ought to start a fund to develop any mad, beautiful, outrageous or significant work of architecture of his own and put his money where his mouth is.

Michael Salzberg
Bethesda, Md.
Looking more closely

Why did someone from suburban Washington, DC take such a keen, supportive interest in the Atlantic Yards project?

Why did he claim that the project is a "huge gamble" when, unlike many others in the city, it proceeded as a single-source deal rather than via a request for proposals?

Is Salzberg just a typical enthusiast for development?

No.

Salzberg is the spouse of Deborah Ratner Salzberg, who is president of Forest City Washington, Inc., a member of the board of directors of Forest City Enterprises, Inc. (parent company of Forest City Washington and Forest City Ratner), and a cousin of Bruce Ratner. An earlier version of the corporate family tree (via a former iteration of ForestCity.net) is at right. (Click to enlarge.)

Big stock holdings

According to a SEC filing a year before the letter, Salzberg and his family had more than 950,000 shares of the company stock, FCE A. At about $47 per share, the price of the stock at the time of the letter, those holdings were worth nearly $45 million. (The stock is now closer to $13, which means the value has been cut some 70%.)

Other trusts and family holdings included 800,000 shares of FCE B, worth more than $37 million at the time, but again now diminished. But they now have a lot more stock.

Disclosure needed

So Salzberg wasn't exactly a disinterested party. Was the Times expected to catch this? Yes, as Letters Editor Thomas Feyer wrote in a 5/23/04 essay headlined Our Compact, Updated:
If your letter is selected, we will try to reach you and ask a few questions: Did you write the letter? (We're not amused by impostors.) Is it exclusive to The Times? (It should be.) Do you have a connection to the subject you're writing about? (Readers should be able to judge your credibility and motivation.)
(Emphasis added)

Should Salzberg have identified his connection to the Times? Sure.

He's apparently not an actual company official, though he has made political contributions from Forest City's Cleveland address and also given to Forest City's political action committee, Forest City Enterprises, Inc United for a Sensible Government, which has supported Sen. Chuck Schumer and Rep. Edolphus Towns, among others.

So maybe he's not himself bound by the values professed by the real estate developer. Under the heading "Integrity and Openness," the company states:
In all our dealings with all stakeholders, we will uphold the highest possible standards of ethical behavior. Our interactions will be characterized by an attitude of openness, candor and honesty.

Project Finance on escrow situation: "one important kink in the deal's structure"

I again checked to see if any mainstream press outlets had even mentioned the murky Brooklyn Arena Local Development Corporation (BALDC)--answer: no--but was reminded that two finance publication pointed out that the arena bond deal would not be done after the sale was completed.

In other words, though the project may be closer than ever, it's not over, given the escrow provisions.

Deal kink

An 11/24/09 Project Finance article headlined Goldman plans Nets offering memo next week (full article only to subscribers) stated:
The legal challenges have placed one important kink in the deal's structure. If the bonds are sold but the issuer does not have free and clear title to the land, the proceeds would be placed in escrow by the bonds' trustee, Bank of New York Mellon, and only released when the issuer has control of the site. If, within a year, the project does not have control of the site, the proceeds of the bonds would be returned to the lenders, and Forest City Ratner has promised to pay capitalised interest to bondholders and a make-whole premium to bondholders and, if necessary, the monoline. According to Jonathan Beyer, senior counsel at the ESDC, the issuer has not obtained a separate ruling from the Internal Revenue Service on the escrow arrangement, though it has relied upon IRS rulings on the use of a Pilot structure.
Bond Buyer

An 11/25/09 Bond Buyer article headlined Brooklyn Arena Project Gets Board's Approval; N.Y. Wins Eminent Domain Lawsuit (full article only to subscribers):
The New York State Court of Appeals, the state's highest court, yesterday upheld a lower court ruling that the state had the right to seize property on behalf of the private developer. Other suits are still pending and the bond proceeds will be held in escrow for up to one year after which they would be used to redeem the outstanding bonds if the developer has not secured possession of the land for the arena.

Saturday, December 26, 2009

Goldberger on Lopate: "Atlantic Yards was and is a mistake" (but might be re-thought over time)

Yesterday's Leonard Lopate Show on WNYC Radio, Why Architecture Matters, was a rebroadcast of an 11/17/09 interview with New Yorker architecture critic Paul Goldberger, keyed to his new book of the same name and his book titled Building Up and Tearing Down: Reflections on the Age of Architecture, an anthology of criticism, mostly from The New Yorker.

Goldberger, speaking before the eminent domain case had been decided in the Court of Appeals and before the bond sale--both of which have given AY significantly more momentum--said Atlantic Yards "was and is a mistake," given that megaprojects don't do much for street life, and suggested that the silver lining of the recession might give it time to be improved.

Goldberger talked more about the Chrysler Building (on the cover of Why Architecture Matters) and the World Trade Center ( "our first modern architectural martyrs"), making an intriguing point about the latter.

While he never felt good about the Twin Towers, he allowed, "I definitely came to accept them. It's just too hard to hate a building over time. It's just too much effort."

"I think we condition ourselves over time to be slightly numb over time, for certain buildings, because it's just too painful, over time to hate them every moment," he said.

Perhaps the same would be true of the Atlantic Yards arena, should it be built, as seems increasingly likely. In fact, Goldberger likes the redone facade of the arena, as he wrote in September 2009 (my comments), though in October 2006 he criticized the project as a whole (my comments).

Neighborhood issues

At about 13:45, Lopate quoted Goldberger quoting celebrated critic Lewis Mumford: "The great function of the city is to permit, indeed, to encourage and incite, the greatest possible number of meetings, encounters, challenges between all people, classes, groups, providing a stage upon which the drama of life may be enacted."

"I wonder whether city planners think in that way, ever," Lopate continued. "For example, the city's still behind the Atlantic Yards project, isn't it? The Municipal Art Society has said it would be a total disaster because it would cut people and neighborhoods off from each other."

"I think city planners do think in terms of streets and neighborhoods perhaps more than they did in the 60s, when the World Trade Center was designed," Goldberger responded. "But we have begun, in the last few years, to almost come full circle, and again fall under the spell--or into the thrall--of gargantuan mega-projects, which generally are in fact destructive of that very street life that Lewis Mumford was talking about, and I think you and I both agree is essential to the city."

They then moved into a discussion of Battery Park City, which does feature streets but is cut off by the West Side Highway, and at 15:42 Goldberger returned to the question.

"No, I think Atlantic Yards was and is a mistake and it's one of the reasons, I suppose--y'know, every silver lining has a cloud, every cloud has a silver lining--and the silver lining of the recession is that that is certainly not going to happen immediately and may give us some time to rethink some of the mistakes," he said.

Streets vs. buildings

At about 17:00, Goldberger made an important point. "Over the years, I've realized that streets are more important than buildings," he said. "The urban experience has to be had on foot."

That goes back to the MAS critique of AY.

Half-cheer for stadiums

Also, at about 31:00, Goldberger declared that neither of the city's two new baseball stadiums are great, but they're better than what they replaced, given that, for example, the predecessor Yankee Stadium was not the original but one regularly modified.

While Goldberger can certainly offer a savvy critique of buildings as buildings, that assessment leaves out the larger public policy questions concerning the process behind and financing of those stadiums--just as he did when assessing the latest design for the AY arena.

More from Goldberger

For those who don't have Golberger's books, his web site links to numerous writings and lectures. Here are a few excerpts.

At the American Planning Association's 100th National Planning Conference in 2008, he said:
This may be the only talk I have ever given on urbanism and cities in which I have not, I just realized, used the phrase “the public realm,” which most of the time when I talk about cities I am probably guilty of over-use, since to me it is the most important defining quality of cities – the sense that they consist mainly of a public realm, whether in the form of streets or squares or parks or civic buildings, and that the private buildings, however large and grand, defer to the public realm and fit into a pattern established by it. In a city, streets matter more than buildings, and the whole is more than the sum of the parts. In the suburbs, the opposite tends to be true, and private values take precedence over public ones.
Planner Alex Garvin has also used the term "public realm," saying that cities should invest in such thinks as streets and transportation systems, and not expect megaprojects to solve pressing needs for infrastructure improvements.

Historic preservation

On historic preservation, in a lecture titled Landmarks Preservation at Forty:
All of these are examples of what one distinguished preservationist, Otis Pratt Pearsall, recently called "preservation fundamentalism." It is a good phrase, because it tells us exactly the problem we are facing a replacement of common-sense, wise judgment with an absolutism, with a belief that the job of the landmarks process is to freeze a place in time. It is not, and fundamentalism has no more place in preservation than it does in religion or public life, where it also replaces balanced, liberal and judicious thinking.

As I said, there are no formulas, and there should not be. The commission should make judgments, and determine reasonable tradeoffs.

Civic News coverage of BrooklynSpeaks lawsuit quotes a PSCC trustee: "All attempts at persuasion have failed"

Well, I'm getting to it a bit late, but coverage in the Park Slope Civic Council's (PSCC) Civic News of the BrooklynSpeaks lawsuit challenging the Empire State Development Corporation's approval of the revised Atlantic Yards plan is worth a read.

(The lawsuit was filed November 19; Ezra Goldstein's article is dated December 1, but didn't arrive in print form until recently.)

No chance for changes

Notably, it reminds us that those who tried to "mend-it-don't-end-it" finally hit the wall:
Assemblyman [Jim] Brennan, whose office attempted to facilitate communication between BrooklynSpeaks and the state, said he finally concluded that “there has never been any interest in any modification of the project or its governance. The state government, basically acting as the agent of Forest City Ratner, never had any interest in reforming or modifying the project to address any community or public concerns about balancing public good versus private interest.
First PSCC lawsuit?

And this may have been the first lawsuit ever filed by the PSCC, one of the members of BrooklynSpeaks:
The same point [about BrooklynSpeaks being pushed into opposition] was made by several speakers at the Oct. 1 meeting where Civic Council trustees voted overwhelmingly--with no nays and three abstentions--to join the lawsuit, believed to be the first such step in the organization’s 113-year history. Trustee Michael Cairl captured the trustees’ sentiment: “A lawsuit is the last chance open to us to affect the outcome of this project. All attempts at persuasion have failed.”

Another plan for the old Times building is a reminder of the missing back story

In an December 23 article headlined Former Times Building to Be a Hotel and Condos, the New York Times's Charles Bagli reports:
Lev Leviev, the Israeli billionaire, made many New Yorkers sit up and take notice when he bought the former New York Times Building on West 43rd Street in 2007 for $525 million, three times what the seller paid for it 30 months earlier.

It was a bold declaration that Mr. Leviev, who planned to spend an additional $170 million transforming the landmark building into a first-class office building, wanted to be a real estate player in New York. It was also a deal emblematic of an era when buyers and bankers imagined that rents and values would soar forever.
Now Leviev wants to turn the building into a mix of luxury shops, a bowling alley, a high-end hotel, and 26 penthouse condominiums on top. And some of the lenders who lent Leviev $711 million have had to take a bath.

It's a prime example of real estate froth and well worthy of coverage.

But the Times, as I wrote four years ago still hasn't reported, as the Village Voice explained in an 11/20/04 article headlined The Times' Sweetheart Deal, that the Times Company had underestimated the profit on the sale of its long-term headquarters by some 50 percent, which might have eliminated the need to subsidize the new Times Tower built on 8th Avenue in partnership with Forest City Ratner.

Friday, December 25, 2009

Brutally weird holiday news from NYT: Stadium Boom Deepens Municipal Woes (no mention of AY or other NYC projects)

From today's New York Times, an article headlined Stadium Boom Deepens Municipal Woes:
CINCINNATI — Years after a wave of construction brought publicly financed stadiums costing billions of dollars to cities across the country, taxpayers are once again being asked to reach into their pockets.

From New Jersey to Ohio to Arizona, the stadiums were sold as a key to redevelopment and as the only way to retain sports franchises. But the deals that were used to persuade taxpayers to finance their construction have in many cases backfired, the result of overly optimistic revenue assumptions and the recession.

Nowhere is the problem more acute than in Cincinnati. In 1996, voters in Hamilton County approved an increase of half of one percent in the sales tax that promised to build and maintain stadiums for the Bengals and the Reds, pay Cincinnati’s public schools and give homeowners an annual property tax rebate. The stadiums were supposed to spur development of the city’s dilapidated riverfront.

But sales tax receipts have fallen so fast in the last year that the county is now scrambling to bridge a $14 million deficit in its sales tax fund. The public schools, which deferred taking their share for years, want their money.

The teams have not volunteered to rewrite their leases. So in the coming weeks, the county plans to cut basic services, lower its legal bills and drain a bond reserve fund with no plan for paying it back.

“Anyone looking at this objectively knows it’s a train wreck,” said Dusty Rhodes, the county auditor. “I told them they were making a big mistake, but they didn’t want to hear me.”

Cincinnati is hardly alone. In Indianapolis, the Capital Improvement Board spent 2009 trying to find $32 million to run the Lucas Oil Stadium and convention center. In Milwaukee, a drop in sales tax receipts may delay by several years the date for paying off the bonds issued to build Miller Park, the home of the Brewers.

Columbus, Ohio, is considering using public money to keep the Blue Jackets in town. Glendale, Ariz., has fought to hold the Phoenix Coyotes to their long-term lease. In New Jersey, a ticket surcharge may be added to help resolve a tenant-landlord dispute between the Devils and Newark.
And in New York?

There's no mention of New York City in the article.

Well, the sports facility financing schemes in New York are different and, to their architects, much superior: the amount of direct subsidy is much smaller, for land and/or infrastructure rather than construction, while the cost of construction is magically shifted to PILOTs (payments in lieu of taxes), given that the land is (and, in most but not all cases, was) tax-exempt. And the Internal Revenue Service has now banned such plans, after grandfathering in the one for the arena.

Of course the tax exemption for the Metropolitan Transportation Authority's Vanderbilt Yard was supposed to increase the price of the property when sold, but there was only one other bidder, given Forest City Ratner's head start. As the New York City Independent Budget Office (IBO) observed, "It is clear that the MTA’s ability to maximize its return from property sales has been constrained."

And the PILOTs in the case of the AY arena would rely significantly on the naming rights that the state simply gave away.

And Forest City Ratner has been good at getting the city, state, and MTA to modify agreements in its favor. Meanwhile, the IBO's analysis that the arena would be a net loss for the city has not been refuted, despite the Times's willingness to quote a deceptive response from the New York City Economic Development Corporation ( an agency that has failed to release a promised cost-benefit analysis).