Skip to main content

On Brian Lehrer: the Manhattan Institute's Gelinas vs. AY on eminent domain, blight, and affordable housing (and Ratner as a creature of the state)

Yesterday, WNYC talk show host Brian Lehrer opened up a segment on Atlantic Yards by suggesting that listeners might be surprised that opponents of eminent domain for Atlantic Yards are not just political liberals but are joined by conservatives like his guest, Nicole Gelinas of the Manhattan Institute.

Actually, he had it backwards--as a caller pointed out. Conservatives have long been opposed to eminent domain, while liberals--leading the narrow 5-4 Supreme Court majority in the controversial 2005 Kelo v. New London eminent domain case--have been much more willing to defer to state power.

The curious thing is that, in New York, where the balance tilts enormously to the state, those who might be politically liberal in general have found themselves opposing particularly egregious cases of eminent domain and thus aligned themselves with those on the right.

"It’s not unusual to see strange bedfellows, if you realize the common ground is distrust of government power," former New York Civil Liberties Union director Norman Siegel, who's challenged the Columbia University expansion, said in December.

On the radio

"Why do you consider Atlantic Yards an example of eminent domain abuse?" Lehrer asked.

"Well, this is a classic example of the government not understanding its limited role, at best, in the private economy," she said. "What should the government be doing in Brooklyn, and what actually would do what Governor Paterson wants to do and bring the unemployment rate down: instead of using government subsidies to take private property from someone with less political power and give it to someone with more political power, what they should be doing... is say, We're going to spend the same amount of money fixing up the subway system so that you knock ten minutes of the commute from the outer reaches of Brooklyn to Manhattan."

"You spend the same amount doing that, the same $700 million in subsidies for the arena alone"--actually, the New York City Independent Budget Office calculated $726 million in savings and tax breaks for the developer, not in city costs--"and you'll create tens of thousands of jobs in the private sector, you'll open hundreds of thousands of affordable housing units, make them closer to Manhattan, improve hundreds of thousands of people's quality of life, instead of picking and choosing a few and basically hoping that people are ignorant enough to be happy being grateful for be crumbs that come out of high-level political dealing."

Radical idea? Not particularly. After all, mainstream urban planner Alexander Garvin, a periodic advisor to New York City and former Deputy Mayor for Economic Development Dan Doctoroff, has said we must spend public money on the public realm, "the quality of life of a great city,” including streets, squares, transportation systems, schools, public buildings, and parks.

Ratner as creature of the state

Lehrer said the liberal view is that powerful players are so strong that government can't resist them. "You see Ratner as more a creature of the state than a creature of the market?" he asked.

"Sure," responded Gelinas, author of After the Fall: Saving Capitalism from Wall Street--and Washington. "This is not Ratner's fault. Ratner is just doing what he does. It's the state's fault for not being able to resist him. It's no different from what's going on in the finnaical industry. The government says, Oh, the big bad banks are taking advantage of us. Well, whose fault is that if you let people take advantage of you? Bruce Ratner could not use the power and the threat of eminent domain [to purchase properties voluntarily] if he did not have the power of the state behind him here."

"If the state were to get out of the way today, Atlantic Yards would look much healthier today. You have un-investment in the area because of uncertainty," she said. "For six years, there's been a cloud of uncertainty hanging over the neighborhood.... why should we continue to fix up these old warehouses when this property is going to be seized?... You build the infrastructure and you keep up public safety, which is what the government is supposed to do, and the private sector will do the rest of that for you."

Lehrer asked if she opposes the entire field of urban planning. Gelinas said good urban planning would be for the mayor to say there'd be a 30-minute commute to Manhattan, as opposed to using eminent domain-"that is income transfer. Property rights is one of the fundamental bases of a healthy economy."

"The MTA gave Ratner and the state much of this property for a song," she added, saying that infrastructure money was being used to help Ratner build luxury housing, with the hope he'll build affordable housing.

Actually, he'll build the latter if the city directs subsidies his way.

The role of blight

"If a city deems an area to be blighted, and sees that the market alone is not providing enough incentives for productive development," asked Lehrer, "isn't it a good use of local development ... to alleviate poverty and lack of decent housing. The supporters of Atlantic Yards say that was the case here. There was the hole in the ground, the scar in the ground, that the market by itself was not coming to fill, and couldn't be filled without using the property around it, so the state had to do something, it was just going to sit there."

Lehrer's summary was a little off. The city didn't deem the AY site to be blighted, that was the role of the state. And, as I've written, the Empire State Development Corporation (ESDC) claimed:
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.

But the city could've done a rezoning to make the land more valuable, and the MTA could've put the railyard out for bid.

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.

However, 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."

Gelinas's response to Lehrer

"The city and state should handle the blighted properties they already control," she said, citing the Deutsche Bank building in Manhattan, and public housing elevators. Property, she said, is often blighted because of crime or lack of public transportation.

"At Atlantic Yards, there's no part of it that is blighted, except for the uncovered railyards, and arguably that's not blighted either... people don't seem unhappy living with a view of the railyards, but if the MTA and the city and state want to cover up the railyards, build some limited buildings on top of the property they already own, go ahead, they don't need to take private property to vastly increase this project far beyond what the facts would justify."

It might be tough to assemble land for an arena, given the size of the building, so maybe there's a role for the government in doing that. If so, though, shouldn't the government own or have a piece of the arena, and not give away naming rights?

The affordable housing

Gelinas said people would live at Atlantic Yards for only a couple of years. Actually, the "affordable" apartments would be rent-stabilized, so people with reasonable rent would stay a long while.

Lehrer said that Paterson at the groundbreaking said that government has to make sure Ratner keeps his promises to build the promised affordable housing. "In your understanding, is the affordable housing guaranteed now, with the force of law?" Lehrer asked.

"Oh, no, it's not guaranteed at all," Gelinas responded. "Even covering up the railyards for the MTA is certainly not guaranteed."

While the Development Agreement officially requires the construction of affordable housing, but the developer can claim a subsidy unavailability.

"When you look at the affordable housing component of this, we have hundreds of thousands of privately-owned affordable housing, out in Coney Island, out in the farther reaches of Brooklyn and the Bronx, but we have no reliable, fast transportation to get there," she said. "If the mayor and governor want affordable housing, build the infrastructure and the affordable housing will build itself. For people who say, oh no, the city has to build affordable housing directly. Well, we've been trying that, for a century, and we still don't have enough of it. Why don't we try it my way, just once, and see that it works."

There may be a need for subsidies, or tax breaks, but, again, Gelinas's idea is not that different from Garvin's take, given that the latter has proposed that the government build a light rail system on 21st Street in Queens, which would stimulate development in a substantial amount of vacant or underutilized property, and also new transportation along Third Avenue in the Bronx. He didn't specifically say "affordable housing," but the increase in supply should help.


  1. I have great respect for Brian Lehrer and his staff and show. They are invaluable in this city.


    It is truly shocking to me that he would suggest it is surprising that conservatives oppose eminent domain generally and for Atlantic Yards specifically.

    Brian has his finger on the everyday political pulse of the city and beyond, he should realize and understand the ideological turf when it comes to eminent domain. Unfortunately too many liberals in this supposedly liberal city ended their conversation about this stuff when they heard housing and jobs.

    But as Norman Siegel said, and you quote, when eminent domain is abused, as it was for Atlantic Yards, the political spectrum is compressed into a tight ball of "distrust of government power." That is why somewhere around 90% of the public disagreed with the Kelo ruling.

    It is not a mystery as to why in NYS/C liberal and conservative politicians on the whole don't take on this populist cause. They are too afraid of the money they might lose from developers.

    Gelinas is correct in every single point she made in this interview.

    It is plainly obvious why eminent domain was used for Atlantic Yards—it was used to benefit Ratner.

    If an increase of density was needed at that location—and I believe it was—the proper, efficient and easiest way to do was to rezone the whole site and have the city/state chip in to build a platform over the yards. Then auction off multiple parcels of the yards. The rezoning would give the right and incentive to owners to build more density, or sell to developers who could.

    But none of that would have helped Bruce Ratner or given him a land monopoly at Brooklyn's crossroads.

    This is what the courts never wanted to recognize, instead they basically said that it is not for them to decide how to do urban planning or second guess planning decisions. While true that it is not for them to do urban planning, it IS for the courts to be a check on decision-making processes that so clearly demonstrate favoritism and fixing. So far only Justice Catterson's appellate division panel recognized this in Harlem.

    (btw, eminent domain was not needed to build an arena at that site. an arena could have been built over the yards and over Ratner's mall. but why should he use his property when he could make the government use other people's.)

    If ever there was evidence that Ratner is a "creature of the state" (and city), that the whole project was a fixed/wired deal and the review process was a predetermined sham, it is this quote (which you've published) from Ratner's 17 minute groundtaking speech/confession:

    "And Mr. Mayor, in July 2003, I remember presenting this project to you. After listening, you said, 'Let's get this done.' Design reviews, transportation issues, infrastructure, housing programs, water, sewer, building department, DEP. Your agencies responded and you responded. You met that commitment."

    In other words once the 3-termer said let's git her done, the rest was all so much kabuki chitter chatter.


Post a Comment

Popular posts from this blog

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…

Is Barclays Center dumping the Islanders, or are they renegotiating? Evidence varies (bond doc, cash receipts); NHL attendance biggest variable

The Internet has been abuzz since Bloomberg's Scott Soshnick reported 1/30/17, using an overly conclusory headline, that Brooklyn’s Barclays Center Is Dumping the Islanders.

That would end an unusual arrangement in which the arena agrees to pay the team a fixed sum (minus certain expenses), in exchange for keeping tickets, suite, and sponsorship revenue.

The arena would earn more without the hockey team, according to Bloomberg, which cited “a financial projection shared with potential investors showed the Islanders won’t contribute any revenue after the 2018-19 season--a clear signal that the team won’t play there, the people said."

That "signal," however, is hardly definitive, as are the media leaks about a prospective new arena in Queens, as shown in the screenshot below from Newsday. Both sides are surely pushing for advantage, if not bluffing.

Consider: the arena and the Islanders can't even formally begin their opt-out talks until after this season. The disc…

Skanska says it "expected to assemble a properly designed modular building, not engage in an iterative R&D experiment"

On 12/10/16, I noted that FastCo.Design's Prefab's Moment of Reckoning article dialed back the gush on the 461 Dean modular tower compared to the publication's previous coverage.

Still, I noted that the article relied on developer Forest City Ratner and architect SHoP to put the best possible spin on what was clearly a failure. From the article: At the project's outset, it took the factory (managed by Skanska at the time) two to three weeks to build a module. By the end, under FCRC's management, the builders cut that down to six days. "The project took a little longer than expected and cost a little bit more than expected because we started the project with the wrong contractor," [Forest City's Adam] Greene says.Skanska jabs back
Well, Forest City's estranged partner Skanska later weighed in--not sure whether they weren't asked or just missed a deadline--and their article was updated 12/13/16. Here's Skanska's statement, which shows th…

Not just logistics: bypassing Brooklyn for DNC 2016 also saved on optics (role of Russian oligarch, Shanghai government)

Surely the logistical challenges of holding a national presidential nominating convention in Brooklyn were the main (and stated) reasons for the Democratic National Committee's choice of Philadelphia.

And, as I wrote in NY Slant, the huge security cordon in Philadelphia would have been impossible in Brooklyn.

But consider also the optics. As I wrote in my 1/21/15 op-ed in the Times arguing that the choice of Brooklyn was a bad idea:
The arena also raises ethically sticky questions for the Democrats. While the Barclays Center is owned primarily by Forest City Ratner, 45 percent of it is owned by the Russian billionaire Mikhail D. Prokhorov (who also owns 80 percent of the Brooklyn Nets). Mr. Prokhorov has a necessarily cordial relationship with Russia’s president, Vladimir V. Putin — though he has been critical of Mr. Putin in the past, last year, at the Russian president’s request, he tried to transfer ownership of the Nets to one of his Moscow-based companies. An oligarch-owned a…