Tuesday, July 19, 2011

Times article on arena rising finally mentions Friedman decision, acknowledges reasons for opponents to "complain" (but doesn't analyze the public interest); essential narrative is Ratner's triumph

The New York Times today finally does mention the important judicial ruling last week, only to give it short shrift in a wide-ranging article focusing on the under-construction arena.

It was initially headlined online as After Years of Delays, Atlantic Yards Arena Begins Taking Shape, later amended to Atlantic Yards Arena Takes Shape, but Protests Carry On, and in print as "An Arena Rises at Last, But Protests Carry On."

The article, despite rounding-up criticisms and mention of the documentary Battle for Brooklyn, maintains an overall narrative of triumph: the fact that an arena's coming. After all, the photos all illustrate construction, not community impact.

My criticisms include:
  • the suggestion that only "opponents" should care about the public interest
  • the downplaying of the significance of last week's court decision
  • the Times's acceptance of undocumented claims regarding naming rights
  • the Times's portrayal of Forest City Ratner's response to the rat problem
  • the Times's unquestioning description of the developer's use of the EB-5 program
  • the calculation of construction jobs
  • the downplaying of the value of the documentary Battle for Brooklyn
  • the shorthand description of Daniel Goldstein's settlement
Leading off

The article begins:
Steel beams arc high into the Brooklyn sky, flanked by five cranes that rise from a deep, divisive hole in the ground. Sections of prefabricated concrete seat platforms and concourses — the guts of every sports arena since Roman times — are now in place.

Trucks rumble through the hot, dusty corner of the 22-acre site known as Atlantic Yards. There, shoehorned into one of the busiest intersections in Brooklyn, the arena for the New Jersey Nets is finally taking shape.

After eight years of delays — involving eminent domain lawsuits, neighborhood protests, financial setbacks, the removal of its world-renowned architect to cut costs and the enlisting of a Russian oligarch to cover them — the arena, the site’s first building out of 17, is on track to open in September 2012.

“Sometimes I look at it and I am amazed we all got there,” Bruce C. Ratner, the chairman and chief executive of Forest City Ratner Companies, the project’s developer, said last week after part of the roof truss was installed. “It was a long haul.”

The arena, however, is the only building with a definite debut date. And the fights that have surrounded the $4.9 billion Atlantic Yards project from the beginning are far from over, with the rising colossus (and what is yet unseen) giving opponents fresh reason to complain.
The "complainers" and the public interest

That last paragraph lazily pits the enthusiastic Ratner against "complaining" opponents, rather than attempting some analysis.

First, a good chunk of the people complaining--about rats, illegal parking, dust--haven't been opponents. They're just citizens who happen to live in Prospect Heights and bear the brunt of the effort to fit an arena in a very tight spot.

Second, are opponents simply "complaining," or do those "complaints" represent issues in the public interest? The newspaper's language recalls that infamous 11/6/05 Times article headlined Routine Changes, or 'Bait and Switch'?; Fewer Jobs and More Condos, Ratner's Opponents Complain.

Similarly, today's article states, of opponents:
They are quick to point out that while moderately priced housing and jobs for Brooklyn residents were the hallmarks of the Atlantic Yards promise, the first has not happened, and the second has been slow to come.
Why can't project supporters be asked about this? Why can't the impact of unfulfilled promises be calculated?

In other words, why can't we get a preliminary verdict on whether all the government aid, tax breaks, and eminent domain have been worth it for the public? It sure looks like the project's good for Ratner. But the Times is supposed to serve its readers.

Comments and corrections

I posted several comments, which are distilled, amended, and extended here. The Times corrected a few of the obvious errors I pointed out, but ignored some other changes.

It can't be easy for a new reporter--Liz Robbins hadn't covered Atlantic Yards until a few months ago--to rely on an unreliable clip file.

The judicial decision

The coverage of the legal ruling downplays its significance. The Times wrote:
On Wednesday, Judge Marcy S. Friedman of State Supreme Court ruled that the Empire State Development Corporation, the state body charged with overseeing the project, failed to adjust its environmental impact study from 10 years to 25 in 2009 when it approved Forest City Ratner’s modified building plan, taking into account the legal and financial delays. Justice Friedman ordered the development corporation to conduct a new study to determine whether alternatives were needed for that lot.
Ms. Carponter of Develop Don’t Destroy Brooklyn, the lead petitioner of the suit, hailed the decision as a rebuke of the development corporation’s oversight and a chance to amend the project; the judge did not, however, order the current work to be stopped.
Of course it was a rebuke to the state oversight; state judges rarely declare decisions of state agencies to be "arbitrary and capricious," given that the agencies have merely to show they have a "rational basis" for their actions.

What does that mean? Just because work on the arena hasn't stopped--a very very long shot request--it doesn't mean the decision's insignificant.

It means that Phase 2 could be amended, but, more importantly, it means a judge agreed with the widespread critique that the state has done much to accommodate the developer.

And, as I've explained, had the judge not been subject to a "misapprehension" about the Development Agreement that the state deliberately withheld, she would have had to rule on this case much earlier.

The value of naming rights

The Times initially wrote:
The new design from SHoP Architects for the Barclays Center arena, which the British bank paid $400 million to name...
(Emphases added)

I posted a comment pointing out that the number was no longer valid, having been announced in 2007, before the deal--for an arena no longer designed by Frank Gehry--was renegotiated.

I also pointed out that Ellerbe Becket (now part of AECOM) designed the arena, with SHoP as the facade architect.

So that was later amended to:
The new design from SHoP Architects and Ellerbe Becket for the arena, the Barclays Center, which the British bank will pay nearly $400 million to name...
Nearly $400 million? That's not backed up by any documents, other than a New York Times article from 2007. The deal was renegotiated--twice. The final figure was north of $200 million.

According to the Barclays Center Project Preliminary Official Statement prepared by Goldman Sachs, a chart (click to enlarge and clarify) summarizes the allocation of certain revenues expected to be generated from the Arena Project between ArenaCo and New Jersey Basketball pursuant to various agreement.


As seen above, under ArenaCo, it allocates $10,000,000 annually in Naming Rights Fees. Under New Jersey Basketball, it allocates only "Certain fees under Naming Rights Agreement." If the latter sum were worth $10 million a year, wouldn't it be spelled out?

After all, the Bergen Record reported 12/3/09 that a Nets official said "that Barclays also would contribute an unspecified amount annually to the franchise itself, while other monies from Barclays are allocated to 'hospitality assets.'" No dollar figure was attached.

Then the project promoters regrouped. The Times itself reported 1/5/10 that, "according to a bond document, the arena naming rights were halved," but quoted team officials as insisting--without offering proof--that the value of the naming rights remained constant.

As I wrote 1/6/10, when the original deal was signed in 2007, there was no claim that other rights were worth $10 million a year.

So there's no reason to believe the naming rights agreement is worth "nearly $400 million," the same figure announced in 2007.

FCR's response to the rats

The anecdote about the rat problem compresses a complicated story, and lets Forest City Ratner off just a little too easy. The article states:
The community has been most vocal about the rat problem, and Forest City Ratner Companies has recently been more receptive to people’s outrage. Last month, more than 60 residents gathered in the Soapbox art gallery on Dean Street to tell horror stories of a “rat tsunami,” with rats, very likely stirred up by all the construction, chewing through their car wires and destroying their engines, running rampant on doorsteps and eating through plastic garbage cans.
First, Forest City Ratner didn't deign to send a representative to that meeting.

Second, the developer's receptiveness was a bit belated--in May, executives insisted they had no responsibility for the rat problem outside the boundaries of the project.

To what should we credit the developer's current posture, which includes a willingness to buy new garbage cans for neighbors?

I'd say significant media coverage about the "rat tsunami" and concern expressed by city and state officials, beginning with Council Member Letitia James, helped nudge Forest City toward better corporate citizenship.

Ratner's use of EB-5


As the Times did in March, it brushed over the complicated EB-5 issue without acknowledging the whiff of scandal that's already there.

The Times wrote:
In seeking financial backing to begin construction of the towers, the company has arranged for $249 million in loans from investors in China through a government program that offers immigrants green cards in exchange for a $500,000 investment. The investors are still being vetted, said MaryAnne Gilmartin, Forest City Ratner’s executive vice president for commercial and residential development.
They don't get green cards in exchange for a $500,000 investment; the EB-5 program requires that the investments create ten jobs each.

And there's the rub.

The Times has long ignored evidence that Forest City's partners are misleading investors--and that, given that new new jobs would be created, the project violates the spirit if not the letter, of the federal program.

Would you believe that Brooklyn Borough President Marty Markowitz made a video, aimed to recruit Chinese investors, in which he claimed "Brooklyn is 1000 percent behind Atlantic Yards"? Wouldn't you think that's news? Here's the video.

Schumer and construction jobs


The article originally stated:
As of this month, the company said that the construction on the arena and the subway and rail yard infrastructure projects employed 430 workers (180 from Brooklyn), far from the project’s anticipated 10,000 jobs.
That was amended to:
As of this month, the company said that the construction on the arena and the surrounding subway and rail yard infrastructure projects employed 430 workers (180 from Brooklyn), a fraction of what the developer promised and far from the 10,000 jobs that Senator Charles E. Schumer promoted.
Except Schumer was "enervated" by the prospect of 10,000 permanent jobs, not construction jobs. And those permanent jobs depended on building four office towers around the jobs, a configuration that was bogus from the start and discarded by 2005.

Forest City promised 15,000 construction jobs, then 17,000--though those are in job-years: e.g., 1700 people a year over ten years.


It would have been more apt to compare current numbers to projections contained in the Technical Memorandum issued in June 2009 by the Empire State Development Corporation (ESDC), which offers quarter-by-quarter construction jobs estimates over an elapsed time of 13 years.

But has anyone at the Times read that document? Doubtful.

(Click on graphic to enlarge for clarity, and focus on Cur., for Current, as opposed to FEIS, which represents the numbers in the Final Environmental Impact Statement.)



Over the second quarter and third quarter of 2011, there were supposed to be about 1700 workers--or four times the current total. So in this matter the Times was actually too hard on the developer.

One reason why the number's down is that no other buildings are under construction. But it would still be good to get a reputable outside consultant to estimate the likely number of jobs, so Forest City would stop making increasingly untenable claims of 17,000 jobs.

Battle for Brooklyn and AY media coverage

The Times refers to Battle for Brooklyn as "a new documentary featuring the opposition to the project" and as a film "which spans seven years of [Daniel Goldstein's] group’s fight against the project and the company’s use of eminent domain."

That's not inaccurate, but it is inadequate. As I wrote in my review, I found the film "most valuable in the camera’s witness to the palpable insincerity and cold-blooded indifference of the developer-government alliance."

For example, in one scene, Mayor Mike Bloomberg imperiously dismisses questions about the much-promoted Community Benefits Agreement (CBA), purported to guarantee affordable housing, local hiring, and minority contracting. “I would add something else that’s even more important,” the mayor declares. “You have Bruce Ratner’s word, and that should be enough.”

Now that we've seen how things have turned out, Bloomberg's assurance seems hollow.

At the end of the movie, I'm interviewed, and observe, "If the government had done its job, if the media had done their job, we wouldn’t be here like this. It would’ve been a fair fight."

This article, which touches briefly on a number of issues but can't do them justice, illustrates my point.

Goldstein's $3 million

The article includes this mention:
Included in a mass e-mail for V.I.P. tickets was Daniel Goldstein, a founder of Develop Don’t Destroy Brooklyn, who refused to sell his apartment for years and finally took $3 million to move...
That formulation, which makes it sound like Goldstein was squeezing the developer for cash and finally got his number, thus serves the developer's storyline.

He reached a settlement only after the state took title to his condo and his days were numbered. A judge knocked heads and said a settlement had to be negotiated in one day. And the developer tried to silence him, which didn't work.

Goldstein wrote:
So instead of being evicted in about 27 days and then being forced to go to court to hope to get close to fair market value for my home (as opposed to the extremely lowball "just compensation" offered to me by New York State, which was nowhere near fair market value), I agreed to leave in about 17 days. That agreement to leave ten days sooner avoids further litigation over "just compensation," which would have cost me more time and money while accomplishing nothing for the fight against the project.
Forest City Ratner wants Goldstein to seem greedy, even though the developer gave some speculators--who didn't stay in their apartments during years of disruptive work outside--much more generous payouts.

Noticing New York's Michael D.D. White estimated Goldstein's gain at extra $636,500 after taxes, the cost of a replacement apartment, and moving fees, suggested that the developer actually got a good deal:
The property, through an ESDC zoning override, was being upzoned. This means that the value of the apartment should not be gauged by what actually existed there but by what could replace it with the zoning increase.
And the larger issue, of course, is what Forest City got from the government. The developer got  New York City to supply $100 million to pay for property in the arena footprint, including all those seemingly generous payouts to Goldstein's neighbors, who generated that May 2004 Daily News headline "Bonanza."

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