Friday, March 18, 2011

Times can't help but notice bad news about Atlantic Yards, gets supportive quote from Markowitz, soft-pedals EB-5 story, railyard deal

The New York Times today follows up on the skein of bad news and broken promises afflicting the Atlantic Yards project, but doesn't go nearly far enough.

The article downplays the bargain Forest City Ratner got on the renegotiated railyard and finally mentions--but completely soft-pedals--the astounding effort to trade green cards for purportedly job-creating investments.

The headline, With Federal Case and Modular Building Plan, New Attention for Atlantic Yards Project, inherently indicates the Times's own role in calling attention to the project.

Yes, the taped conversation between scandal-plagued state Senator Carl Kruger and Forest City Ratner executive Bruce Bender is in the public record, but the modular building plan was a Times scoop.

The missing scoop(s)

And the Times could've had a scoop of sorts on Forest City Ratner's effort to exploit the EB-5 investment program; after all, I laid out a road map in a comment yesterday on the Times's web site.

Instead, just as with two other pieces of damning Atlantic Yards news--Forest City Ratner's bailout of ACORN, and the major cut in the value of arena naming rights--the Times covered it belatedly, parenthetically, and weakly.

Criticism and support

The Times's Charles Bagli balances some quotes:
Develop Don’t Destroy Brooklyn, the organization whose lawsuits delayed the project for years, said the plan for a modular building was the latest in a long line of broken promises.

“Jobs and affordable housing accounted for nearly all of the Atlantic Yards project’s promised benefits,” said Candace Carponter, the group’s legal director. “With Ratner’s selling out of the unions, shelving of any office space and the scarcity of subsidies for housing, the community is left with the arena as the primary benefit, if you believe a traffic-choking, noise-generating, taxpayer-money-losing white elephant is somehow beneficial.”

But Marty Markowitz, the Brooklyn borough president and a longtime supporter, attributed Atlantic Yards’s current problems to a devastating recession and the opposition’s lawsuits.

“Despite the economic realities we face today,” Mr. Markowitz said in a statement, “I have every confidence that Atlantic Yards will deliver what was promised, including affordable housing, much needed jobs and, of course, the new Barclays Arena for the Brooklyn Nets.”
Markowitz, it should be noted, no longer needs union support to run for office. Let's see how many other elected officials choose Forest City over the unions; I'd bet most just keep quiet.

The question Bagli didn't ask Markowitz is, how many of those much needed jobs would be delivered.

Changes noted, but too little skepticism

Bagli notes the sale of the team to Mikhail Prokhorov and the replacement of Frank Gehry's arena design.

(Unmentioned: the issue wasn't simply the flashy arena, but that Gehry's plan implied four towers under construction in a short period of time, all sharing mechanicals with the arena.)

Bagli writes:
Instead of paying $100 million in one lump sum for the land owned by the Metropolitan Transportation Authority, the company made a $20 million down payment and has until 2031 to pay the remaining $80 million.

The issue isn't the time, it's the interest rate. If Forest City had to pay a typical interest rate available on the open market, it would have huge incentive to buy the development rights more quickly. Instead, the MTA gave an implied 6.5% interest rate, considered a coup.

The EB-5 mention

Bagli writes:

[Forest City] also lined 498 Asian investors who enrolled in an obscure federal program that grants green cards in exchange for a $500,000 investment in a job-producing American project.

MaryAnne Gilmartin, executive vice president of Forest City Ratner, said that when it received final approval from the federal government, the $249 million would be used to pay down a land loan for the project and additional work on the railyard.

That's it?

Nothing about the deceptive marketing to Asian investors of a basketball arena?

No questions about whether any new jobs would be produced?

Nothing about Markowitz's astounding, lying claims on video that "Brooklyn is 1000 percent behind Atlantic Yards" or that the developer is "unbelievably reliable"? (Shouldn't these quotes be taken more seriously than his canned statement?)

No observation that Forest City is, in the main, simply getting new, cheaper financing?

Not even a comparison between the subtle difference in Gilmartin's rhetoric from September to March? Last September, Gilmartin reversed the priorities, telling the Wall Street Journal's Eliot Brown:

Ms. Gilmartin said she expects much of the money raised through the program would go toward financing the construction of a new rail yard for the Long Island Rail Road to replace the one that occupied a large portion of the site. Some may also be used to help pay off land loans on the project, she said.

In other words, they lied (or dissembled) twice--first to Asian investors about the "Brooklyn Arena and Infrastructure Project," then to the Wall Street Journal.

Giving FCR the last word

The article closes:
Ms. Gilmartin said the company was “working on multiple fronts to start the first residential building.” She said, “We’re in tireless pursuit of moving this project forward.”
Is that believable? Should the Times have let her get away with it?

How about rephrasing that to, "We're in tireless pursuit of moving this project forward if we can get sufficient subsidies and, as I like to say, the numbers pencil out."

After all, FCR wouldn't have asked Carl Kruger for $9 million of the $16 million it was supposed to pay for the Carlton Avenue Bridge if it was truly tireless. It would have reached into the corporate coffers and written a check.

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