Wednesday, July 07, 2010

Brutally weird: top lawyer at firm that represents Forest City Ratner in Atlantic Yards cases denounces Community Benefit Agreements

While a few people covering the New York City Charter Revision Commission hearing on June 24 noticed the criticism of Community Benefit Agreements by invited experts, no one noticed an enormous irony.

The co-chair of Land Use department at the law firm Kramer Levin--which represents Forest City Ratner on Atlantic Yards--denounced Community Benefits Agreements (CBAs), even as a colleague has, in legal papers, praised the Atlantic Yards CBA.

And a fellow panelist, also denouncing CBAs, echoed a basic question raised by critics of the Atlantic Yards CBA: how do you define who represents a community?

The CBA critics agreed that the only mitigations should deal with project impacts rather than negotiating with groups--many of them, in the case of Atlantic Yards, with no track record--on issues like job training.

That suggests that Forest City Ratner should have negotiated with groups representing communities very close to the Atlantic Yards site regarding issues like traffic.

CBA defenders said the genie was out of the bottle but that there should be much greater transparency and accountability.

The larger issue

It segued into a longer discussion about how to streamline the project approval process, with panelists expressing the legitimate concern that it can take too long, especially given progress is other parts of the world.

However, they failed to recognize that it might make sense to look carefully at private-public projects like Atlantic Yards--"This isn't a public project," Bruce Ratner said famously to Crain's--while taking steps to ensure that truly public projects like infrastructure (such as high-speed rail) can move ahead.

Kramer, Levin testimony

Kramer, Levin partner Paul Selver, in his testimony (at 49:02 of the webcast), offered this recommendation:
The second is explicitly prohibit the imposition, whether direct or indirect, of conditions on a ULURP approval without a proper nexus. We believe that the under the Nollan and Dolan decisions [as noted in a recent report by the City Bar Association], this is the state of the law today. However, and despite this rule, commitments having no relationships to project impacts have been demanded and made either through Community Benefit Agreements or otherwise in recent land use approvals.

We believe that a clear prohibition of these conditions in the charter will at least have a hortatory effect and it certainly will reduce the likelihood that a ULURP [Uniform Land Use Review Procedure] applicant will be required to “voluntarily” agree to such conditions in the future.”
That's pretty much the consensus of the business community. However, fellow Kramer, Levin partner Jeffrey Braun, however, said in a 1/25/08 affidavit (p. 5) in a case challenging the AY environmental review:
“Furthermore, pursuant to an innovative Community Benefits Agreement, the FCRC affiliates that sponsor the project are contractually bound to provide a wide array of far-reaching benefits to the historically most disadvantaged segments of Brooklyn’s communities…”
That, of course, is questionable on a number of levels, given doubts about the contract, the connection between benefits and the project, and the identity of the beneficiaries, who include, for example, a woman-owned demolition firm from Long Island and a minority-owned construction firm centered in Philadelphia.

More support

Selver's concerns were echoed by other panelists, notably Vishaan Chakrabarti, head of Columbia University's real estate program.

“I am deeply troubled by the proliferation of Community Benefit Agreements," he said. "I believe it is an external process that is not predictable, not accountable, and not negotiated by the elected officials tasked with negotiating community benefits. Community needs should be negotiated through their representatives in the ULURP process, namely the borough president and the local council member. At their best, CBAs are the means for mischief and at their worst they could cripple our ability to grow as a city.”

Support for CBA reform

Commission member Betty Chen, at about 1:46:15 of the hearing, asked whether the city government should establish clear standards on CBAs or steer clear.

Urban planning professor Tom Angotti of Hunter College was in a minority of one among the five experts, supporting CBAs with conditions.

He noted that he's on a task force created by Comptroller John Liu, "which does not speak with a single voice… But it has been very clear to the task force that ULURP is part of the reason of the rise of CBAs… the land use review process is not incorporating the needs, the desires of both developers and communities to deal with issues through the land use process."

Angotti said he believed CBAs "should be audited" and should be subject to guidelines and sunshine so backroom deals don't undermine the process.

He also criticized CBA-like side agreements between mayor’s office and community-based organizations that help get major projects passed.

The response

Chen asked the panel how wages and local hiring could be associated with the ULURP process.

"Why not?" responded Angotti.

"They’re not land use issues," Chakrabarti chimed in.

Christopher Collins, former counsel to the Council's Land Use Committee for 13 years, added, “There is a whole body of case law that requires that these types of so-called deal-sweeteners have to have a nexus to the impacts of the development project that’s created. So I think the city needs to be exceedingly cautious about the growth of Community Benefit Agreements."

Who's the community?

“There’s a threshold question to ask when looking at the so-called Community Benefit Agreement," Collins suggested. "Who’s the community? Is it the elected officials? Is it the civic association? Is it the Community Board? Who gets to decide who’s on the community team? There’s no guidance that really tells us that.”

He cited "two very good studies by the Bar Association" that questioned such agreements.

Two tracks

David Karnovsky, General Counsel of the Department of City Planning, made a distinction, saying there must be a nexus between benefits and impacts when it comes to private applications for a rezoning. (There was no city rezoning for Atlantic Yards, but a state override of zoning.)

However, he said, “I do want to note that when the city of New York is acting in its proprietary capacity and is, for example, disposing of property, that it has the ability to integrate into its economic development procedures some community benefits. And I think the issue in part for the city how to do that within its own process, not through side agreements and not through so-called private agreements through self-appointed community groups and the developer.”

Issues of jobs and wages don’t have a role in ULURP, he said.

New York and its future

Chakrabarti raised a larger issue: "I truly believe that this represents a grave threat to the economic growth of New York City. It fundamentally would stop development in its tracks."

Commission Chairman Matthew Goldstein offered his first extended comments, saying there was "virtually no discussion about learning from other villages…what I am concerned about is the amount of time important projects, Hudson Yards, Moynihan Station, get done… the length of time from one economic cycle to another… can we learn from other parts of the world, where there is enormous, enormous development, where the time frames are depressed, relative to what we see in New York."

"If we could hold aside the political systems," he said, "are there structural ways in which things are done, for example, environmental impact statements…?"

Chakrabarti compared how China and India have spent far more on infrastructure, and if we followed China, we'd have high-speed trains from New York to Chicago or Charlotte in three hours. First-world cities like London and Berlin have also done more with rail.

"When the Obama administration passed the stimulus package, there was a look to see whether NEPA [the National Environmental Policy Act] could be streamlined," he said, indicating that was too complex. He also criticized "too much political infighting."

Goldstein cited not just infrastructure but "the very weak balance sheets of states across this nation."

A caution

City Pragmatist blogger Alvin Berk, chairman of Brooklyn Community Board 14, observed:
Neither Goldstein nor Chakrabarti noted that one reason for the “political infighting” is that elected officials in cities such as New York represent constituents whose homes would have to be bulldozed to enable major infrastructure improvements.
The impact of litigation

After citing CBAs, Selver also criticized the role of litigation, acknowledging such a critique might sound strange coming from a lawyer.

"One of the ways a single individual can hold up a very large project is to challenge the process by which it is approved," he said. "Those litigations can drag on for some time. That is a second drag on getting things done."

"Messy" democracy

"The third is that democracy is very messy," Selver added. "I think there is a sacrifice--we could spend a lot of debating where that line should be drawn. There’s a line to be drawn between getting something done in an expedited manner and making sure all potential stakeholders have had a role in shaping it. The more you bend toward the latter, the longer and more complex the process is going to be."

That's undeniable, but Selver wasn't talking about the enormous amount his clients spend on lobbying, surely an advantage to "getting something done in an expedited manner."

Pratt Center comments

In submitted comments, the Pratt Center for Community Development echoed some of Angotti's stance, calling for sunlight for CBAs but saying they reflected real concerns:
Challenge #4: Side agreements to land use decisions have proliferated without disclosure or enforcement

In the face of mayoral control of the Department of City Planning and City Planning Commission, the City Council is often faced with a narrow choice. It can veto a proposal, as it recently did in rejecting the redevelopment of the Kingsbridge Armory, a power that remains rarely used. More typically, the City Council approves the proposed change in exchange for commitments from the mayor to provide community benefits, such as job training opportunities or affordable housing. The Pratt Center has been involved in shaping many such agreements in Willets Point, Williamsburg/Greenpoint, Coney Island and elsewhere, and supports the principle that the land use process is an appropriate venue for mitigating the impacts of rezonings and ensuring they mesh with and meet neighborhood needs.

However, the final agreements are generally not part of the public record. Their terms are not memorialized in the ULURP council resolution or the land use record lings with the County Clerk. If the agreements are not made public, residents and other stakeholders cannot know if they’ve been fulfilled or breached. Unlike the zoning itself, which if violated provides the basis for legal action by an aggrieved community stakeholder, the side agreements that accompany land use decisions come with no mechanism for enforcement.

After a similar wave of murky agreements between community boards and the Board of Estimate, the 1989 charter revision commission required their disclosure. The same principle must apply to all agreements made in connection with land use decisions. The charter commission has to reckon with the reality that land use in the 21st century has moved beyond mere zoning. Its review must include consideration of the impacts on employment, affordable housing, open space, and other essential community needs – with explicit measures for addressing them as an open, acknowledged and enforceable part of the land use process.

What’s more, the city planning process itself must recognize these side agreements as a byproduct of broader failures in city planning and development policy. The agreements have become necessary precisely because planning does not take a look at citywide needs, forcing the City Council to address local needs or mitigate impacts project by project. Side deals are also no substitute for strong citywide standards promoting affordable housing and good jobs. A citywide planning framework, in the context of such standards and with a mandate to take into account neighborhood needs, would go a long way toward rendering side agreements unnecessary.

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