Saturday, September 04, 2010

"Stealing the common from the goose": Henry Stern's compelling case against 15 Penn Plaza (and the glaring Atlantic Yards blind spot)

Henry Stern, the former Parks Commissioner and founder of the watchdog group New York Civic, has written a compelling column, Gargantuan Tower Approved Two Blocks From King Kong, regarding the city's approval of 15 Penn Plaza, Vornado's fat skyscraper near Penn Station. (It's also on HuffPost, as The Great Giveaway.)

His point, relying on Community Board arguments, is that the issue is not accepting "change" or blocking a view from the Empire State Building, but whether a connected developer gets a set of variances to build 56% bigger than officially allowed.

(I referenced this point as well when I wrote about the issue on August 24, but could have emphasized it more.)

And his rhetoric is firm:
We believe that what happened in this case is a textbook example of unsound public policy, favoritism to a particular extremely well-connected developer, and lack of regard for the future of the commercial neighborhood around Penn and Moynihan Stations. To grant a massive upgrade to a property owner with no tenant, no financing and no immediate plans to build is premature and irresponsible.

...It is a top-down decision, clearly made at City Hall and not by the Planning Commission, which should have been embarrassed at the tricks they had to turn.
The blind spot

Sounds like... another top-down decision, the approval of Atlantic Yards, that had even less process, because the state, not the city, is in charge.

Remember, while Forest City Ratner very much wanted to build an arena, given the New Jersey Nets' losses at the Izod Center, the main tower, Building 1 (aka Miss Brooklyn), has no financing or tenant, the affordable housing depends on scarce subsidies, and the officially-stated plan to build the 16 towers in a decade is chimerical.

And remember, Forest City Ratner promised not to block the clock of the Williamsburgh Bank tower, but then it did, even after Miss Brooklyn was made a foot shorter than its neighbor, at the ostensible behest of the City Planning Commission, which should have been embarrassed at the tricks they had to turn.

But Stern is Bruce Ratner's old mentor, and Ratner has contributed to New York Civic. So Stern's critical scrutiny has reliably bypassed Atlantic Yards.

The public interest and campaign contributions

Stern asks, regarding 15 Penn Plaza:
Which, if any, of these guardians of the public interest will speak out on this issue, on either side? We will listen and report to you.
Well, it looks like Crain's New York Business was first off the block, reporting that City Council Speaker Christine Quinn, who had proudly claimed that a new law “successfully shifted power away from special interests” by limiting contributions to $400 from those with business before the city, actually got $19,900 from Vornado, of which nearly $15,000 is in a campaign account Quinn is expected to use in her 2013 run for mayor.

How'd the loophole work? Crain's reports:
A company or individual that owns a limited liability company that does business with the city is not bound by the “doing business” limits. In the real estate industry, limited liability corporations are commonly created to protect the decision-makers behind a project.
The variance issue

Stern writes:
The Times quote in support of the proposed tower came from Mitchell L. Moss, a policy adviser to Mayor Bloomberg: "People don't come to New York to visit caves. They want the views, the height, the experience of tall buildings. Skyscrapers allow us to make the best use of a limited amount of land."

The opposition quote was a snippet from my testimony at the public hearing on the matter, in which I called the proposed 15 Penn Plaza: "An assault on the Empire State Building and the New York City skyline."

The subject deserves more attention than that fragment of a sentence.

Yet the skyline of New York City is ever-changing... In this case, however, the proposed tower was far outside the zoning codes, and required five separate changes in the law to give the developer the height and bulk of the building that he wanted to erect. That is why the Community Board and the City Council were involved under the city's Uniform Land Use Review Procedure (sometimes affectionately called ULURP).
With Atlantic Yards, the process evaded ULURP, because the Empire State Development Corporation overrides city zoning. The three affected Community Boards all expressed opposition or significant concern.

What the CB said

Stern writes:
Board 5, however, is generally sympathetic to development and reflects the moderate views of its upscale community.

The Board held two public hearings and voted to oppose the project, 36 to 1, which is, for a community board, an overwhelming margin. They did not act at the behest of rival developers or NIMBY (not in my back yard) devotees. Board Five stated its objections on June 11 in a letter to Amanda Burden, chair of the City Planning Commission. Read their letter:
"The Board does not oppose this project per se....

"First, in exchange for a 20% transit bonus, the applicant's proposal includes the restoration and reopening of the Gimbel's Passageway plus various other access and egress improvements, all of which we applaud. But as we note in our resolution, some of these improvements are either self-serving or mandated, and thus not sufficient for the 474,000 square feet received in exchange.

"Second, Community Board Five is deeply troubled by this application's request for midblock up-zoning (from a C6-4.5 to a C6-6) adding another 266,000 square feet to an application that lacks many confirmed details, including building size, height, tenancy, construction timetable or financing plans...
Of course, Atlantic Yards is equally speculative, and it likely will be many years beyond the ten announced before a full development scenario moves forward.

The failure of analysis

Stern quotes Vikki Barbero, the chair of Board 5:
"The ULURP process has ended and the Council has made its final determination. We remain distressed and dismayed, however, by the level of discussion and debate both in the media and at the Council.

"The issue before the Council was not principally about women and minority employment, as important as this issue continues to be in all job areas...voted on. The issue before the Council was not about a battle between two major real estate developers, as many press reports made it out.

"The issue before the Council was not about the need to foster jobs during this bad economic climate, for even the developer admits they won't be building for years to come. Yet, a number of our political leaders used that bogus argument as an excuse to support the project.

"And the issue before the Council was certainly not about sticking it to the Empire State Building because it failed to light up for Mother Teresa.

"The issue before the City and the Council was, in fact, about far more than just one project on one block of midtown Manhattan. It was about giving strategic and prudent oversight to a section of our city - the area around Penn Station - that is about to undergo significant change.

...A city as dense as ours, with so many competing interests, needs to thoughtfully and inclusively plan for its future and not let one wealthy and powerful developer override that process."
Can't argue with that.

Stern's comments

Stern endorses Barbero:
On this one, the CPC was clearly in the tank, abandoning its customary guardianship and attention to size, taste and design in its eagerness to approve the tower.

We believe that what happened in this case is a textbook example of unsound public policy, favoritism to a particular extremely well-connected developer, and lack of regard for the future of the commercial neighborhood around Penn and Moynihan Stations. To grant a massive upgrade to a property owner with no tenant, no financing and no immediate plans to build is premature and irresponsible. These valuable new rights will be for sale along with the property if the developer is unable or unwilling to build on the site.

Much attention has been paid to the Aqueduct racino and the unwholesome process used by the State of New York to select a developer. In this case, there is only one corporate developer. It is the value of the property, however, that is being changed by law to suit his particular demands. No one less well connected than the Vornado Realty Trust (owner of numerous major properties, including Bloomberg Tower) could play the system with such success and gain an unprecedented blank check for possible future development.

This is a case of the city making an extraordinary gift, probably worth hundreds of millions of dollars, to one of its richest and most influential developers. It is a top-down decision, clearly made at City Hall and not by the Planning Commission, which should have been embarrassed at the tricks they had to turn.

The point we make today was best expressed in 1764 in an insightful quatrain, which we have occasionally quoted when we believe it is relevant:

"The law doth punish man or woman
That steals the goose from off the common,
But lets the greater felon loose
That steals the common from the goose."
The public interest

And then he asks for "guardians of the public interest" to speak out.

The fact of the matter is that there are too few such guardians, and some of them are timid or compromised. Too much of the city's press, for example, is controlled by or overly influenced by the real estate industry.

The fact of the matter is that, yes, much has been said about the Aqueduct racino. Except that it looks like a more credible process than the one that gave us Atlantic Yards. Remember this chart from March, 2010:


2 comments:

  1. Henry Stern is very much on target in his critique but one point he is making is being made far too quietly and deserves much more attention.

    Not only did Christine Quinn get a pay-off in the form of a hefty campaign contribution from developer Vornado that makes the appropriateness of her support pushing this vote through the City Council altogether suspect, (Manhattan Borough President Scott Stringer whose support was similarly needed and duly furnished was also given campaign money by Vornado which he after-the-fact-of-his-support returned on August 2nd ), Stern a tad-too-quietly makes the following highly pertinent point: Vornado’s political connectedness is cemented by the fact that the Vornado Realty Trust is the “owner of numerous major properties, including Bloomberg Tower.” More succinctly: Vornado is Michael Bloomberg’s landlord.

    This special spot zoning deal would never have happened without Bloomberg’s support.
    Without Bloomberg’s personal direction the City Planning Commission would never have been “in the tank” for the project and its developer “abandoning its customary guardianship and attention to size, taste and design in its eagerness to approve the tower.” (According to William Safire “in the tank” often includes the more sinister meaning of “self-interestedly involved; surreptitiously supportive.”) As Stern points out, this approval was obviously “a top-down decision, clearly made at City Hall and not by the Planning Commission.” That makes the fact that Vornado is Bloomberg’s landlord very sinisterly a story of self-interest and conflict-of-interest at City Hall. The benefits in rent and related concessions that can readily be extended to Bloomberg, L.P. (the continuing source of Michael Bloomberg’s fortune) by Vornado as his landlord absolutely dwarfs the otherwise sizable campaign contributions made to the likes of Christine Quinn and Scott Stringer.

    Why is Bloomberg overseeing this handout to Vornado? One thing to note is this: Vornado has been involved in the tying the nearby Moynihan Station (the reconstruction of Penn Station) deal up in knots through most of Bloomberg’s terms in office. In the end, despite the delays Vornado has caused with respect to that desirable public transportation project Vorndao had not come away with the kind of specially engineered benefits it had been fishing for. Is it possible that this 15 Penn Plaza deal is an appeasement for other finagling efforts of Vornado with the city that didn’t bear fruit?


    Michael D. D. White
    Noticing New York
    http://noticingnewyork.blogspot.com/

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  2. I have been fighting the approval of this project since its inception years ago, and was also disappointed with the outcome of the whole process. But what can the citizen of NYC do now? Who do you go to when the local govt fails you? As the little guy we don't have the resources to go up against a political contributor (Vornado) that has virtually endless resources, and (apparently) high power corporate lawyers.

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