Saturday, February 20, 2010

Gelinas op-ed in the Post: "How 'eminent domain' makes blight" (in Prospect Heights)

In a New York Post op-ed today headlined How 'eminent domain' makes blight (adapted from the winter issue of City Journal), Manhattan Institute fellow Nicole Gelinas endorses the effort by state Senator Bill Perkins to redefine blight.

(She also thinks "it could even stop the Atlantic Yards project -- a prime case of abuse," but I doubt that, given that the bill wouldn't be retroactive.)

Gelinas writes:
Brooklyn's Prospect Heights, industrial and forlorn for much of the late 20th century, was better by 2003. Government was doing its job: Crime was down, and the short commute to Manhattan was attracting new residents.

The private sector was doing its job: Developers had bought 1920s-era factories and warehouses and converted them into condos for buyers like Daniel Goldstein, who paid $590,000 for a place in an old dry-goods warehouse.

The old MTA railyards nearby didn't stop this gentrification -- which should be no surprise. After all, other developers have built new multimillion-dollar condos right on the West Side Highway.

...[Bruce Ratner] successfully appealed to the central-planning instincts of New York's political class. Then-Gov. George Pataki, Mayor Bloomberg and Brooklyn Borough President Marty Markowitz agreed to use the state's power to benefit Ratner. The state would use eminent domain to forcibly buy up private property where he wanted to build, then transfer it to him -- and also let him buy the railyards at below-market price and kick in hundreds of millions in subsidies.

...Perkins' bill is be a good first step in reining in all this abuse. But the state should go even further and eliminate blight as a justification for seizing private property. Since the 1960s, New York has learned that the remedy for "substandard" conditions is policing and infrastructure.

...Today, Prospect Heights displays what the state wants everyone to see: decay. But it's isn't the work of callous markets that left the neighborhood to perish. It's the work of a developer wielding state power to press property owners to sell their land "voluntarily." Meanwhile, true private investment has been choked off, since everyone knows the state's aiming to hand everything to Ratner.
More evidence

Let me add a couple more pieces of evidence. As I reminded readers last May, it was one of the least credible statements in the Atlantic Yards Draft Environmental Impact Statement (DEIS) issued in July 2006 by the Empire State Development Corporation (ESDC):
The project site is not anticipated to experience substantial change in the future without the proposed project by 2016 due to the existence of the open rail yard and the low-density industrial zoning regulations.

The Park Slope Civic Council and Park Slope Neighbors challenged that, commenting that a city rezoning could do just that, though it would "involve professional planners whose job is to advance the public interest, rather than a reliance on private interests to establish de facto zoning."

In the Final Environmental Impact Statement, the ESDC (via consultant AKRF) responded:
While the City, if it desired, could rezone the project site, it has not. Given the attempts over the life of ATURA [Atlantic Terminal Urban Renewal Area] to encourage development, the challenges of developing over the rail yard have resulted in the project site remaining underutilized and blighted, rendering any rezoning of the rail yard parcels unable to affect desired change.

Remember, the Department of City Planning's Winston Von Engel said in March 2006 that the city hadn't yet taken a look at the railyards: "They belong to the Long Island Rail Road. They use them heavily. They're critical to their operations. You do things in a step-by-step process. We concentrated on the Downtown Brooklyn development plan for Downtown Brooklyn. Forest City Ratner owns property across the way. And they saw the yards, and looked at those. We had not been considering the yards directly."

The Times Real Estate section

In October 2006, I took a more longitudinal look at the change in conditions, considering four "If You're Thinking of Living In" articles from the Times's Sunday Real Estate section. The articles, from 1985, 1990, 1999, and 2005, portray a neighborhood on a fairly steady rise.

Especially notable was the 1999 coverage, headlined A Diverse Neighborhood Spruces Up in a Turnaround.

The money quote: Two decades after an economic downturn left Prospect Heights spotted with shuttered and abandoned buildings, the neighborhood is undergoing a revival. Newcomers are renovating long-neglected brownstones and Vanderbilt Avenue, a main commercial streets, new tenants trickle in as existing merchants spruce up their facades.

Resonant quote: In another transaction, investors including Manhattan-based Shaya B. Developers Inc. bought the former Daily News printing plant on an industrial strip of Pacific Street between Carlton Avenue and Sixth Avenue and are planning a commercial development, possibly with a theater complex, and including apartments above if the proper zoning can be obtained.

Speaking of the industrial buildings in the border area on Dean and Pacific Streets Mr. McLaren said: ''It's the last large concentrated amount of square footage in brownstone Brooklyn. These are no handyman specials. You need to have sophistication in navigating city bureaucracy to make them work.''


(Emphasis added)

Note that the sophisticated Boymelgreen later sold other properties, including the Ward Bakery, to the even more sophisticated Forest City Ratner at a hefty profit.

And Forest City Ratner navigated both the state and city bureaucracy to get an override of zoning along with the benefit of eminent domain.

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