Skip to main content

Wanting to ensure "we get the most out of every economic development dollar," de Blasio calls for more transparency and "the subsidy cost per job" (what about AY?)

“We have an unemployment crisis in this city that demands we get the most out of every economic development dollar," says Public Advocate Bill de Blasio, so he wants to make sure there's more transparency regarding projects funded by the New York City Economic Development Corporation (NYC EDC).

De Blasio said in a press release:
The new legislation to be introduced by Public Advocate de Blasio in the City Council would require EDC to report for each project site:
  • The number of jobs prior to receiving subsidies;
  • The projected number of jobs when subsidies end;
  • The current number of jobs; and
  • The subsidy cost per job.
The legislation is the first in a series of reforms to be proposed by the Public Advocate this month to spur job creation and expand opportunity for the middle class.
That's surely a worthy goal, but de Blasio is not exactly consistent, having not said a word about the failure to monitor the Atlantic Yards Community Benefits Agreement.

How many jobs have been created by Atlantic Yards subsidies, and at what cost?

Leveraging the IBO

As the Wall Street Journal reported yesterday, in Bill Focuses on Cost of Keeping Firms in City, the Public Advocate provided--um, leaked--a report that was to be released Tuesday by the New York City Independent Budget Office.

The IBO Fiscal Brief, Tracking the City’s Discretionary Economic Development Deal, analyzed 17 years of NYC EDC reports, but said they "do not allow us to produce credible estimates of the costs to the city of different projects or their effectiveness in creating or retaining jobs."

The Journal reported:
Some would like to see even more transparency. The EDC should do further analysis on whether subsides are even needed in the first place to lure or retain specific companies, said James Parrott, chief economist of the left-leaning Fiscal Policy Institute, a think tank.
"We don't really have the info needed to know whether the subsidies are necessary," Mr. Parrott said.
Parrott said in de Blasio's press release:
“This is an important step in clearly understanding City investments to spur job creation and economic growth. The public needs much better information on how the City subsidizes economic development and reliable data on the number and quality of the jobs being subsidized,” said James Parrott, Deputy Director and Chief Economist at the Fiscal Policy Institute. “The IBO wasn't able to assess whether city subsidies make any difference because the public doesn't have the information needed to make that determination.”
A NYC EDC spokesman told the newspaper:
"We fully enforce all reporting requirements, which include the change in number of jobs at a project site, projected employment growth and the amount of benefits a company has received to date."
However, de Blasio's press release seems to contradict that:
The law does not require EDC to disclose project site-specific employment data, making it difficult to gauge the effectiveness of subsidies, particularly for larger companies that employ workers at more than one site in the five boroughs.
The changing pattern and the Ratner angle

The report does not mention Atlantic Yards, for which the city--via the associated NYC EDC, a private agency contracted by the city and controlled by the mayor--provided a reported (by Forest City Ratner!) $205 million but then dialed back the total somewhat.

But it does mention Forest City Ratner's MetroTech project:
Changes in the Borough of Projects. The industries accounting for most of the larger projects—finance and information—are concentrated in Manhattan. As a result, Manhattan projects accounted for the lion’s share of new projects’ value each year for over a decade—in almost all but the earliest and latest years covered by the LL69/48 data. Prior to 1993, Brooklyn and/or Queens, or both, accounted for most of the value of projects being initiated each year. For example, with the initiation of projects benefitting Chase Manhattan Bank in Metrotech Center, 79.8 percent of new project value in 1990 was in Brooklyn. The following year, the start of a large project for American Airlines led Queens to account for 77.4 percent of new project value. Turning to the last few years, with the start of the two stadium projects, the Bronx and Queens together accounted for 74.9 percent of the value of projects begun in 2007. In 2008 through 2010 there were no new large-scale projects for finance or information firms, and the value of nearly all new projects comes from projects outside of Manhattan.

...Rather, Brooklyn projects accounted for 56.1 percent of the total value of Koch Administration projects, mainly because of large-scale projects for Chase Manhattan and Forest City (a real estate development company that developed Metrotech) in downtown Brooklyn.
In the Times

The Times's City Room coverage had the lame headline In Doling Out Economic Incentives, Bloomberg Looks Outside Manhattan, which was undermined by the text, which pointed to the more important issue of legitimacy:
Fewer than half of the projects – measured by their total value – have been in Manhattan during Mr. Bloomberg’s time in office, compared with almost three-fourths of the total under Mr. Giuliani and Mr. Dinkins, the report found.

And fewer than one-fifth of the economic incentives went to the finance and information industries under the Bloomberg administration, compared with about two-thirds under each of the two previous mayors.

But Bettina Damiani, who scrutinizes the city’s corporate incentives at Good Jobs New York, said that much of that shift was attributable to the generous deals the city gave to the owners of the Yankees and the Mets to build stadiums in the Bronx and Queens.

“The stadium stuff was such a blatant misuse of resources and did so little to address the unemployment crisis of the people in the Bronx,” Ms. Damiani said, referring to the Yankee Stadium incentives. “Subsidizing projects without a guarantee that it’s going to help low-income people is, to me, a problem.”
A Reuters article was headlined NYC firms got $898 million of aid but job data slim.

Comments

Popular posts from this blog

Barclays Center/Levy Restaurants hit with suit charging discrimination on disability, race; supervisors said to use vicious slurs, pursue retaliation

The Daily News has an article today, Barclays Center hit with $5M suit claiming discrimination against disabled, while the New York Post headlined its article Barclays Center sued over taunting disabled employees.

While that's part of the lawsuit, more prominent are claims of racial discrimination and retaliation, with black employees claiming repeated abuse by white supervisors, preferential treatment toward Hispanic colleagues, and retaliation in response to complaints.

Two individual supervisors, for example, are charged with  referring to black employees as “black motherfucker,” “dumb black bitch,” “black monkey,” “piece of shit” and “nigger.”

Two have referred to an employee blind in one eye as “cyclops,” and “the one-eyed guy,” and an employee with a nose disorder as “the nose guy.”

There's been no official response yet though arena spokesman Barry Baum told the Daily News they, but take “allegations of this kind very seriously” and have "a zero tolerance policy for…

Behind the "empty railyards": 40 years of ATURA, Baruch's plan, and the city's diffidence

To supporters of Forest City Ratner's Atlantic Yards project, it's a long-awaited plan for long-overlooked land. "The Atlantic Yards area has been available for any developer in America for over 100 years,” declared Borough President Marty Markowitz at a 5/26/05 City Council hearing.

Charles Gargano, chairman of the Empire State Development Corporation, mused on 11/15/05 to WNYC's Brian Lehrer, “Isn’t it interesting that these railyards have sat for decades and decades and decades, and no one has done a thing about them.” Forest City Ratner spokesman Joe DePlasco, in a 12/19/04 New York Times article ("In a War of Words, One Has the Power to Wound") described the railyards as "an empty scar dividing the community."

But why exactly has the Metropolitan Transportation Authority’s Vanderbilt Yard never been developed? Do public officials have some responsibility?

At a hearing yesterday of the Brooklyn Borough Board Atlantic Yards Committee, Kate Suisma…

Barclays Center event June 11 to protest plans to expand Israeli draft; questions about logistics

At right is a photo of a poster spotted in Hasidic Williamsburg right. Clearly there's an event scheduled at the Barclays Center aimed at the Haredi Jewish community (strict Orthodox Jews who reject secular culture), but the lack of English text makes it cryptic.

The website Matzav.com explains, Protest Against Israeli Draft of Bnei Yeshiva Rescheduled for Barclays Center:
A large asifa to protest the drafting of bnei yeshiva in Eretz Yisroel into the Israeli army that had been set to take place this month will instead be held on Sunday, 17 Sivan/June 11, at the Barclays Center in Downtown Brooklyn, NY. So attendees at a big gathering will protest an apparent change of policy that will make it much more difficult for traditional Orthodox Jewish students--both Hasidic (who follow a rebbe) and non-Hasidic (who don't)--to get deferments from the draft. Comments on the Yeshiva World website explain some of the debate.

The logistical questions

What's unclear is how large the ev…

Atlanta's Atlantic Yards moves ahead

First mentioned in April, the Atlantic Yards project in Atlanta is moving ahead--and has the potential to nudge Atlantic Yards in Brooklyn further down in Google searches.

According to a 5/30/17 press release, Hines and Invesco Real Estate Announce T3 West Midtown and Atlantic Yards:
Hines, the international real estate firm, and Invesco Real Estate, a global real estate investment manager, today announced a joint venture on behalf of one of Invesco Real Estate’s institutional clients to develop two progressive office projects in Atlanta totalling 700,000 square feet. T3 West Midtown will be a 200,000-square-foot heavy timber office development and Atlantic Yards will consist of 500,000 square feet of progressive office space in two buildings. Both projects are located on sites within Atlantic Station in the flourishing Midtown submarket.
Hines will work with Hartshorne Plunkard Architecture (HPA) as the design architect for both T3 West Midtown and Atlantic Yards. DLR Group will be t…

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…

"There is no alternative": DM Glen on de Blasio's affordable housing strategy

As I've written, Mayor Bill de Blasio sure knows how to steer and spin coverage of his affordable housing initiatives.

Indeed, his latest announcement, claiming significant progress, came with a pre-press release op-ed in the New York Daily News and then a friendly photo-op press conference with an understandably grateful--and very lucky--winner of an affordable housing lottery.

To me, though, the most significant quote came from Deputy Mayor Alicia Glen, who, as the Wall Street Journal reported:
said public housing had been “starved” of federal support for years now, leaving the city with fewer ways of creating affordable housing. “Are we relying too heavily on the private sector?” she said. “There is no alternative.” Though Glen was using what she surely sees as a common-sense phrase, it recalls the slogan of a politician with whom I doubt de Blasio identifies: former British Prime Minister Margaret Thatcher, a Conservative who believed in free markets.

It suggests the limits to …