Monday, January 31, 2011

Catching up: on declining manufacturing jobs, uncounted vacant lots (that could support new housing)

The Bloomberg administration may gain respect for pursuing illegal gun sales, but there are lots of lapses when it comes to land use.

In a post January 15, I quoted the Village Voice quoting City Limits on the decline of manufacturing jobs, but here's Sarah Crean's original piece, dated January 3, headlined Did City's Industrial Policy Manufacture Defeat?

She wrote:
According to research conducted by the New York Industrial Retention Network, 23.4 million square feet of industrial space was lost to approved rezonings between 2001 and 2008, impacting some of New York’s most populated manufacturing districts. Significant portions of Greenpoint-Williamsburg, Long Island City, the midtown Garment Center, and Port Morris in the Bronx were rezoned during this period, mainly for residential development.

Repeated attempts by community groups, labor unions, industrial advocates and others to promote alternative plans that would not place as much pressure on manufacturing clusters met with limited success. We were particularly unsuccessful in reaching any sort of a conceptual common ground with the Department of City Planning. They generally ignored the argument that permitting residential development in industrial areas would lead to conversion pressure because owners of industrial buildings could generate higher returns with residential tenants. The Department of City Planning made repeatedly clear its belief that manufacturing jobs were not integral to New York’s future, while residential development, of course, was. Now as we struggle through double-digit unemployment in many of the city’s low income neighborhoods, the logic of ignoring our industrial sector seems more questionable.

Two realities have emerged as the city’s rezonings have progressed. First, the amount of affordable housing that has been created as a result of the rezoning of industrial areas is very limited.

Second, the city lost a precious opportunity to maintain several flourishing mixed-use districts.
And while the Bloomberg administration created 16 Industrial Business Zones (IBZs) in 2005, they never received legislative protection, and the industrial development incentives offered by the Department of Small Business Services and other city agencies were paltry, Crean observed.

What about the vacant lots?


I wrote 11/26/07 about an initiative launched by Manhattan Borough President Scott Stringer, who, in partnership with Picture the Homeless, sponsored a study that concluded that 2228 properties in Manhattan appear to be vacant or have vacancies; 1723 contained built structures, while 505 are empty lots. Those lots could support, under current zoning, nearly 24,000 units.

Stringer recommended a citywide plan to identify vacant properties that are not in tax arrears. A registration and fee program could allow the city to learn the reasons for vacancy and suggest available financing options.

And what happened? Stringer wrote a letter to the New York Times, published 1/30/11:
To the Editor:

“The Bright Side of Blight,” by Diana Lind (Op-Ed, Jan. 25), about vacant lots in Philadelphia, suggests that — with a little imagination — these lots can be used to produce not just vegetables but jobs.

What’s different in New York is that we don’t even have a full accounting of where our vacant lots are, despite legislation now languishing in the City Council that would periodically tally them.

In April 2007, my office released the first-ever survey of Manhattan’s vacant properties, but that leaves us with four boroughs to go.

Let’s pass this legislation and start replacing blight with projects that add to the economic health and well-being of our neighborhoods.

Scott M. Stringer
Manhattan Borough President
New York, Jan. 25, 2011

Gramercy Recognition Agreement emerges, with hint that immigrant investor funds would mainly be used to pay off FCR's land loan

There are two Atlantic Yards Recognition Agreements after all, both of which allow those loaning money to developer Forest City Ratner to gain development rights for part of the Atlantic Yards site, and also allow the minimum square footage of Phase 1 to be delayed.

And the earlier Recognition Agreement, which is the second to be released, offers hints that the money sought from immigrant investors, subject of the later Recognition Agreement, would be used mainly to pay off Forest City Ratner's land loan, not to build a new railyard, as the developer has said.

Background

As I wrote 12/16/10, the Recognition Agreement that the Empire State Development Corporation (ESDC) signed last October allowed potential immigrant investors development rights to part of the future Atlantic Yards site. And a previous Recognition Agreement did something very similar.

That latter agreement, embedded below and dated December 2009, allows at least 2.25 years of additional time, to February 2012, to reset the clock should FCR default on its obligation to Gramercy Warehouse Funding, which "holds a leasehold mortgage on certain Project parcels."

That would mean at least a 14-year deadline for Phase 1, rather than 12 years. The second Recognition Agreement offers a seven-year extension, meaning a 19-year deadline.

The loan at issue

The Gramercy mortgage, the balance of which was $153.9 million when the Recognition Agreement was signed in December 2009, expires in February 2012.

FCR seeks $249 million from immigrant investors via the New York City Regional Center under the EB-5 program--green cards for purportedly job-creating investments.

FCR executive MaryAnne Gilmartin told the Wall Street Journal that the money would be used for a railyard, but could be used, in part to pay off that land loan.

Given that some 60 percent of the $249 million could be used for the loan, my bet is that's the priority. After all, the railyard doesn't have to be completed until 2016.

That suggests that the developer how has a 13-month window of opportunity to get a no-interest (or low-interest) loan from the immigrant investors to repay Gramercy.

The Gramercy agreement

The Gramercy Recognition Agreement has three parties: Gramercy Warehouse Funding, a subsidiary of Gramercy Capital; the AYDC Interim Developer (aka Forest City Ratner); and the ESDC.

It involves an unspecified portion of the Phase 1 Properties, including those on the Arena Block (but excluding the arena) and on Block 1129, the southeast block in the project site, which includes construction staging and interim surface parking.

Which properties? Likely some if not all of the ones in the second recognition agreement (in graphic at right): three parcels on the arena block, and four on Block 1129.

The value of the mortgage

How much does FCR owe Gramercy? There are several numbers to consider.

The Times reported 2/13/09 that the loan was worth $177 million, but a portion would be paid off:
Forest City will sign an agreement soon as today in which the company will make a $15 million payment immediately, as well as additional large payments in the future, in return for a two-year extension.
In March 2009, parent Forest City Enterprise cited a $161.9 million refinancing on the loan, which implies that the $15 million payment had gone through, lowering the sum from $177 million.

According to the Recognition Agreement, FCR apparently got an additional year for an extension--to 2012, not 2011. According to p. 4 of the document, the stated maturity date, after all extension options in favor of the developer, is 2/11/12.

Again, according to p. 4, the outstanding principal balance as of December 2009 was $153.9 million. If so, then Forest City Ratner seems not to have made many "additional large payments" to diminish the $161.9 million total.

Hence the pressure on the developer to raise cheap capital in China.

The Mortgage Spreader Agreements

The numbers get a bit more complicated when you look at Exhibit B (right), which explains the components of the Certified Mortgage.

The original loan was apparently $152.8 million.

An additional Mortgage Spreader Agreement apparently added about $37.4 million.

That totaled some $190.2 million.

While the document is not explicit, it seems that payments by Forest City Ratner reduced that sum to
$153.9 million.

Gramercy obligations

According to the document, the extension available in Article IV applies only to Gramercy, as Mortgagee, or any Successor Leasehold Owner who takes over after a foreclosure.

The interim lease can be extended, "as necessary" for Gramercy to foreclose on the mortgage and "for a Successor Leasehold Owner to make satisfactory arrangements with a Permitted Developer to perform Developer's Obligations"... provided that Mortgage "is acting diligently, in good faith and in a commercially reasonable manner."

Gramercy as Mortgagee, is not required to build the subway entrance, rebuilt Carlton Avenue Bridge, develop "Additional Affordable Housing Units," fund "the Existing Parks Investment" (as far as I know, money for the Dean Street Playground), develop the Arena, platform, upgraded railyard, or affordable housing on Site 5.

Successor Leasehold Owners may apply for generally available financing for affordable housing.

Reset date: Feb. 2012 or later

As with the deal with immigrant investors, there's a reset date, in which the new developer would have 12 years--FCR's outside date--to complete a minimum square footage in the towers of Phase 1.

That reset date would begin no earlier than February 2012, which is when the loan is due, but likely would take much longer, given the time it would take to find a new permitted Developer to develop the properties.

Minimum square footage

As with the other Recognition Agreement, the developers would be required to build a minimum of 1.3 million gross square feet (gsf) in Phase 1, if Site 5 (currently home to P.C. Richard and Modell's) is not included, or 1.5 million gsf if Site 5 is included.

If a Development Lease has been severed--because a building is under construction--the calculation gets more complicated. The requirement will be reduced by the gross square footage of each project building substantially completed, and will be further reduced by a percentage.

The calculations, in Section 5.2(d) and then Appendix C of the document below, are confusing, to say the least.

This document, as a whole, is an example of a quote from former chairman of the Civil Aeronautics Board, Alfred E. Kahn, who famously said, “If you can’t explain what you’re doing in plain English, you’re probably doing something wrong.”

Liquidated damages

If Gramercy or successors fail to substantially complete the Phase 1 improvements, then they would have to pay $7.5 million on the Mortgagee Outside Completion Date, which is 12 years after the payment reset date.

Then for the next four years, $7.5 million would be due each year. Each payment would extend the term of interim leases one year.

This does not affect the obligation of the Developer under the Interim Leases and Development Agreement. Nor are there offsets or credits, according to section 5.4 or the Recognition Agreement.

This suggests the ESDC might collect damages twice.

Allocation of obligations

Exhibit C (left; click to enlarge) allocates obligations between the part of the site currently included in the Interim Leases--the Mortgaged Leasehold Estate--and the Remainder Project Site.

There's a confusing error on the page.

The project requires no less than 2250 Project Site Affordable Housing Units. However, the requirement of 1305 such units on the Remainder Project Site--Phase 2--is, at least according to the document, diminished by any of the affordable units in the Mortgaged Leasehold Estate, or Phase 1.

That doesn't make sense. Indeed, ESDC spokeswoman Elizabeth Mitchell said, in response to my query, that it was a mistake:

There is in fact a typo on Exhibit C, because it was certainly not the intention to diminish the number of affordable housing units required. The third row of the third column should read “1,305 Project Site Affordable Housing Units in excess of Project Site Affordable Housing Units constructed on the Mortgaged Leasehold Estate”. The Development Agreement clearly outlines the obligation that the developer has to construct 2,250 affordable housing units. The Recognition Agreement speaks to the responsibility of Gramercy if a default were to occur. Therefore, column 2 is the information that is relevant to this document. This typo that you point out in Exhibit C does not alter the obligations of Gramercy or Forest City Ratner. We do appreciate you pointing out this error, and we will be certain to make the correction in all future agreements.

Note that Exhibit C can be revised depending on how Project Requirements are reallocated to new Development Leases. Indeed, the various documents regarding Atlantic Yards are likely to go through multiple revisions.

Gramercy Recognition Agreement with ESDC

Sunday, January 30, 2011

When was Ellerbe Becket on board? Article suggests arena architect switch began in November 2008, well before June 2009 announcement

When exactly did architect Frank Gehry get bounced from the Atlantic Yards arena and project?

The replacement firm, the veteran arena designers Ellerbe Becket (later to be assisted by facade architect SHoP), didn't emerge until 5/27/09, while the official statement that Gehry was gone came on 6/4/09.

However, a trade publication article that I (and others) missed suggested in September 2009 that the relationship had been severed as of November 2008, a time when Ellerbe Becket, according to another report, was said to simply have begun advising Forest City Ratner.

(Note: The Wall Street Journal in May 2010 reported that Gehry had been gone by November 2008.)

Official denials

Forest City Ratner had maintained that Gehry was still onboard.

"Frank Gehry is still the architect of this project," claimed New Jersey Nets CEO Brett Yormark, during a 3/29/09 radio interview. "And he loves it."

Yormark was doing damage control after Gehry, in an interview that month with The Architect's Newspaper, had suggested Atlantic Yards, "I don’t think it’s going to happen."

Shortly after Gehry's interview, the New York Post quoted a Ratner spokesman as claiming Gehry was still the project's "lead architect." That may have been a fudge to allow for the notion that the work of the "lead architect" was being modified.

Two months later, on 5/27/09, the Daily News reported:
Ratner spokesman Joe DePlasco said a reevaluation of Gehry's design would be completed by July, at which point Ratner will determine whether the world-famous architect would remain on the project...
When was firm on board?

That 5/27/09 Daily News article led with the new firm:
Ellerbe Becket, a Missouri-based firm, was tapped last fall to reevaluate the extravagant arena design Gehry conceived for developer Forest City Ratner to lure the NBA's New Jersey Nets to Brooklyn.
Yes, Ellerbe Becket was working in the fall of 2008, but it was described as simply reevaluating the design.

Could that be so? After all, the entire plan for the arena block--four tours built roughly at the same time as the arena--had been dumped.

Instead, a completely different design emerged, emphasizing a standalone arena, which did not share mechanical systems with the other buildings.

New evidence

Here's the new evidence. In a 9/30/09 article headlined Barclays Center: Firms Large and Small(er) Come Together Around Performative Design, AIArchitect reported:
Last November Ellerbe Becket (whose sports design practice is in Kansas City, Mo.) began working with Forest City Ratner on a less expensive design. In June, SHoP began working with Ellerbe Becket on the project, and the two firms released a final design in September, which Forest City Ratner is raising $700 million to build.
(Emphasis added)

The phrase "working... on a less expensive design" is not the same as (in the Daily News's words) "reevaluate the extravagant arena design Gehry conceived."

Ellerbe Becket and SHoP

The AIArchitect article ignores the sequence by which SHoP was hired. After generic Ellerbe Becket designs emerged (allegedly leaked by City Planning Commission Chair Amanda Burden), New York Times architecture critic Nicolai Ouroussoff in June 2009 called it a "shameful betrayal of the public trust."

After SHoP added a new metal facade and an oculus, Ouroussoff on 9/9/09 gave the new design two cheers, certainly enough to tilt the discussion among some readers.

Happy collaboration?

The AIArchitect article quotes principals of both firms, Bill Crockett and Gregg Pasquarelli:
The two firms’ collaboration began with Ellerbe Becket setting out program and site parameters for the project. “Once we had the program, the site, and some of the bigger picture fundamentals , we were ready for SHoP to join the party and start really fleshing out the big themes and the big ideas for integrating all those objectives in the building design,” says Bill Crockett, AIA, principal and national director of sports at Ellerbe Becket.

“The fascinating thing was to really learn all the parameters necessary to make a successful arena,” says Pasquarelli. “For us, it was taking those parameters and working with them collaboratively to push the overall form and aesthetics and methodology of the developing design.”

The Barclays Center design is more adventurous and unconventional than much of Ellerbe Becket’s sports portfolio, but MaryAnne Gilmartin, executive vice president of commercial and residential development at Forest City Ratner, says that in hiring SHoP, Forest City Ratner wasn’t attempting to buy into any particular level of design credibility or highbrow aesthetic sensibility. “It has a value-add,” she says. “It allowed us to take advantage of all that SHoP could offer at the right point in time. We understand that good design pays. I don’t think we have to hire an architect to prove that,” says Gilmartin, whose firm has already hired AIA Gold Medal Winner Renzo Piano for his New York Times headquarters skyscraper and still retains Gehry for the residential Beekman Tower in New York City.
This is just a tad bit of historical revisionism. The collaboration began after Ellerbe Becket produced a design.

As for Gilmartin's statement that "good design pays," it should be tempered by the recognition that good design pays only when, as she might say, "the numbers pencil out."
Forest City Ratner Statement Dropping Frank Gehry from Atlantic Yards, 6/4/09

Saturday, January 29, 2011

MAS announces 2011 Livability Watch List, including Moynihan Station, Coney Island, NYU expansion; AY is not included but said to inform MAS thinking

The Municipal Art Society (MAS) has announced the 2011 Livability Watch List, "a compilation of the 11 initiatives that will have the most significant effect on livability in New York City this year. As the leading organization dedicated to creating a more livable New York through intelligent urban planning and design, MAS will call attention to these 11 through advocacy work, public programming and issues monitoring."

The list, which leads with Moynihan Station & Hudson Yards, and includes Coney Island and the expansion of NYU, surely includes some major topics. It's tough to argue that any should be omitted, and it'll be a challenge for the MAS to keep track and galvanize interest.

That said, Atlantic Yards is a conspicuous omission, given that the issues it raises--a megadevelopment in a very tight spot, questionable design, indefinite interim surface parking--surely galvanized MAS for a while, leading it to help found "mend it, don't end it" BrooklynSpeaks, then to withdraw about a year ago once the latter finally went to court, a tactic with which MAS disagreed.

MAS statement

I asked why Atlantic Yards wasn't on the list, and got this response from spokeswoman Hazel Balaban:
Atlantic Yards was certainly on our minds when we drafted the list, and it’s on our internal work plan as the model for our work on Moynihan Station & Hudson Yards. Learning from Atlantic Yards, MAS will continue its advocacy efforts to ensure that future mega developments are planned in dialogue with their surrounding communities. Also, we intend to build on the planning principles MAS and Brooklyn Speaks offered for Atlantic Yards, as the foundation for our work on the Far West Side.
Maybe it's the lawsuit, maybe it's the difficulty of taking on so much, or maybe it's both.

Still, as I argued in a recent Complaint Box essay in the Times, amplified in a comment, I have to think that if Brooklyn were an independent city, and had its own MAS, such an organization couldn't give a pass to Atlantic Yards on a Livability Watch list.

The list

1. Moynihan Station & Hudson Yards
2. The Garment District
3. Disaster Planning
4. Public Housing
5. The Bronx
6. Lower Manhattan
7. NYU Expansion
8. Changing Streets
9. PlaNYC 2.0
10. Waterfront
11. Coney Island

See the MAS website for more details. For example, about the Bronx it states:
The Bronx

The 2010 MAS Survey on Livability indicated that Bronx residents were the most dissatisfied of all New Yorkers with their neighborhood services and safety. In response, MAS is exploring how community institutions can enhance livability by promoting economic development and the arts. We will examine the proposal to tear down the Sheridan Expressway and explore how other cities dealt with similar projects.

Friday, January 28, 2011

Markowitz, James comment with enthusiasm (and, in the latter's case, some challenge) on appointment of Brooklyn's Adams to head ESDC

Brooklyn Borough President Marty Markowitz issued a statement enthusiastically endorsing the appointment of Brooklynite Ken Adams as CEO of the Empire State Development Corporation:
“I congratulate Cobble Hill’s own Kenneth Adams on his appointment as the head of the Empire State Development Corporation. Ken is superbly qualified for this new role—he is an innovative trailblazer who made a huge and lasting impact on Brooklyn’s business community while president of the Brooklyn Chamber of Commerce. I have no doubt this will be Governor Cuomo’s top appointment, and all of Brooklyn is proud to share him with the rest of New York State.”
City Council Member Letitia James was enthusiastic, but more challenging:
“I want to congratulate Kenneth Adams on his new appointment as President and CEO of the Empire State Development Corporation. This pick to lead a restructured ESDC is a great match. As former president of the Brooklyn Chamber of Commerce and Director of the MetroTech Business Improvement District in downtown Brooklyn, Ken recognizes that small businesses serve as an economic engine in Brooklyn.

The community looks forward to partnering with an innovative leader to resolve outstanding issues in and around the Atlantic Yards footprint. I’m confident that Ken will address the high rate of unemployment in Central Brooklyn, the lack of procurement for minority and women owned businesses in the state of New York, as well as the impact of the recession on all small businesses.

Congratulations as well to Gov. Andrew Cuomo for this superb choice; Ken is one of Brooklyn’s own!”
And No Land Grab's Eric McClure reminds us:
Adams also headed the Brooklyn Chamber of Commerce during a shameful episode in 2005, when the public and owners of businesses opposed to the Atlantic Yards project were barred from a Chamber luncheon sponsored by Forest City Ratner, at which the project was discussed. Members of the press attending the function had to agree to a gag order, and opponents were relegated to protesting outside Gargiulo's locked doors.

Planner Garvin on the importance of parks; his checklist explains why publicly-accessible open space (as in AY) doesn't measure up

On Monday I attended a lecture by planner Alexander Garvin, academic, consultant (self-described "public realm strategist"), former Dan Doctoroff aide, and author of the recently-published Public Parks: The Key to Livable Communities.

While Garvin wasn't addressing publicly-accessible, privately-managed open space like that planned for Atlantic Yards, it's clear that it doesn't measure up to the standards of public parks.

AY open space comes later

It also should be pointed out that the Atlantic Yards open space would not come until Phase 2 of the project, and then in increments as each building is finished, which means the full eight acres would not arrive for ten years, under the non-credible official timetable, and more likely 25 years, the official deadline.

By contrast, at Battery Park City, much of the park space was built first. Indeed, as Garvin described using examples from Paris (boulevards, parks, small parks) and San Antonio (the Riverwalk), such public investment stimulated investment, rather than was portrayed as a reward after allowing new development.

Garvin, as I've reported, stresses investments in the "public realm," streets, squares, parks, transportation systems, and public buildings, which, he said Monday, provides the most leverage in capturing and guiding public investment in the public interest.

Garvin delineated four key roles for public parks.

Enhancing personal well-being

The first is to enhance personal well-being and public health. That implies both active recreation and passive recreation.

The Atlantic Yards open space would emphasize the former, though both presumably would support personal well-being and public health. However, given the influx of new residents, it's likely the open space would serve those living in the new development far more than be a resource for Brooklyn at large, as it was advertised in 2004.

Civil society

The second is to incubate a civil society, to mix people by class, race, and income. "You learn how to be a citizen in a place like this," Garvin said, after showing slides of Prospect Park.

He noted how investment in Central Park, led by the Central Park Conservancy, made the park safer and more attractive. Astonishingly, the number of felonies dropped from 1006 in 1980 to 93 in 2003.

Atlantic Yards, by virtue of subsidized, affordable housing--900 of 6430 units would be low-income--would indeed mix classes on site. However, given the constraints mentioned above, it's unlikely it would serve to mix civil society significantly in the open space.

Would the arena, a for-profit endeavor, be portrayed as incubating civil society? I'll bet backers try to do so.

Sustaining a livable environment

Green space plays a key role in enhancing air quality and lowering the heat, Garvin explained, showing how traffic islands in New York, under Parks Commissioner Henry Stern, were transformed into GreenStreets.

Given the size of the Atlantic Yards development, the landscaped space would be a necessary counterpoint.

A framework for urbanization

The final role, Garvin said, is to provide a public realm framework for development. Parks, hew suggested, have more influence than any other public works on development. He then offered the example of San Antonio's RiverWalk.

That, as I've suggested, is an area where Atlantic Yards clearly falls down. The open space is an afterthought.

Going forward

"Only by continuing to invest in the development and maintenance and maintenance of fine public parks can we be assured of a livable city," said Garvin.

He's clearly open to private funding of parks--he cited the role of the Bryant Park Business Improvement District--and the book (which I haven't yet read) describes various funding options.

Garvin was asked about political activity in parks. He said he had no problem with that, as long as the costs of park wear-and-tear were paid.

By contrast, political activity is verboten at privately-managed public space like MetroTech Commons, where even photography is banned.

Open space does not mean park

But he doesn't think open space makes a park. I asked what he thought of privately-managed space like MetroTech Commons.

He said he had no problem with such private spaces, as long as they're publicly accessible and paid for by the people who own them.

"But I don't believe they're a substitute for public parks, they're something else," he said.

"I also have increasing problems with what happens to them when there's an attempt to keep terrorists from destroying them," he added, pointing not to MetroTech but to the tower at 140 Broadway, where he said security concerns have blocked off too much of the public plaza.

Thursday, January 27, 2011

Ken Adams, former head of Brooklyn Chamber and MetroTech BID, named new CEO of ESDC

Well, in naming Kenneth Adams as president and CEO of the Empire State Development Corporation, Gov. Andrew Cuomo is seen as reaching out to business.

And, despite some gubernatorial concern about the top-down growth model, I wouldn't bet on any changed course on Atlantic Yards.

After all, Adams in 2006, as president of the Brooklyn Chamber of Commerce, testified in favor of the project, on behalf of the organization. And he previously headed the MetroTech Business Improvement District, of which Forest City Ratner is a major member.

Still, give the guy a chance; maybe Adams has the integrity to recognize that the ESDC's support of Forest City Ratner's effort to get immigrant investor funding is a tad unseemly.

The Post quoted Adams' father Murray:
The elder Adams -- who in 2006 was part of a group that took on ESDC during a failed legal fight to keep condos out of Brooklyn Bridge Park – said, “I think Kenneth will listen to local concerns.” He cited both the park and the Atlantic Yards project in Brooklyn as two examples of ESDC ignoring residents' concerns.
The Business Council

More recently Adams has had a bigger portfolio. Crain's reported:
"Ken knows doing business in New York can be like swimming upstream, but now he is in a position to change the tide,” said Kevin Burke, chief executive of Consolidated Edison and chairman of the board at The Business Council of New York State Inc. “Business leaders know and trust him, and for good reason.”

Mr. Adams has been president and CEO of the Business Council, a 2,500-member business lobbying group, since 2006. The group advocates for lower taxes and fewer government mandates on business and has played a leading role in the Committee to Save New York, the coalition Mr. Cuomo asked to form to back his conservative fiscal agenda.
The Times-Union called it a sign Cuomo "is sensitive to upstate and even traditionally Republican concerns."

Past concerns

A 7/24/09 article in The Capitol, headlined Leadership Turnover And Deepening Recession Add To ESDC Woes, cited Adams' concerns:
Meanwhile, upstate regions are waiting for the promised influx of much-needed stimulus dollars to jump-start local economies. And after the state fumbled plans to renew the popular Empire Zone program, which provides a variety of tax credits to companies that invest in certain regions of the state and is set to expire in 2011, many upstate businesses were left with the impression that ESDC was rudderless and directionless.

“In the middle of a profound recession, this policy sent a chilling message to the business community here in New York state, and a terrible message to the rest of the country about how New York treats its businesses,” said Ken Adams, president and CEO of the Business Council of New York State. “That did affect the perception. And those perceptions are hard to change.”
Adams, by the way, in 2006 indicated he'd run for David Yassky's 33rd District Council seat if Yassky had won election to Congress. That seat is now occupied by Steve Levin.

At State of the District, Jeffries talks education, jobs, housing, public safety--but not AY (later, he says he's waiting for an ESDC chair)

At his fourth annual State of the District address last night, Assemblyman Hakeem Jeffries had some tangible and less tangible achievements to report to a supportive crowd, concerned with education, employment, housing, and public safety. And a few jabs at Mayor Mike Bloomberg certainly were well-received.

Ever more polished--part lawyer, politician, preacher--Jeffries drew a reasonable crowd on a snowy night, with local District Leaders (Walter Mosley, Olanike Alabi, Lincoln Restler) in attendance, along with Community Board 8 Chair Nizjoni Granville, CB 2 Chair John Dew, and Joe Chan, president of the Downtown Brooklyn Partnership.

Atlantic Yards, as with last year’s address, was not mentioned, a sign, perhaps, of Jeffries’ recognition that neither prominent criticism nor active support of such a divisive, complicated, and delayed project would play well with his base.

Or perhaps, Jeffries recognizes that he has relatively little clout at this point. I did interview him afterward (video below), and he said he hasn’t yet talked with Gov. Andrew Cuomo about Atlantic Yards because, understandably, a new Empire State Development Corporation (ESDC) leader is not yet in place. (Update: Ken Adams was named today.)

Here's coverage from Patch.

The Navy Yard and jobs

He was introduced at the event, held at the Pratt Institute’s Higgins Hall, by Andrew Kimball, head of the Brooklyn Navy Yard Development Corporation, who said that Jeffries has urged the Navy Yard to focus on job training and local and minority/women contracting.

Kimball noted that Pratt--presumably the Pratt Center for Community Development--will be issuing a report with the Brookings Institution on how to support urban manufacturing. “The model for bringing urban jobs back into our cities is the Brooklyn Navy Yard,” he said.

(The Navy Yard was a longtime military-industrial center, reborn in recent decades as an industrial park, so, while antiquated, it did have infrastructure.).

The Navy Yard’s placement center, Kimball said, has 1000 people in jobs in the last ten years, with ten percent formerly incarcerated. Next fall, the Navy Yard will open up a training center focusing on local growth sectors, with outreach to public housing nearby and formerly incarcerated people.

He thanked the Rev. Mark Taylor for helping advocate for a new supermarket at Admirals Row, citing 500 jobs. “Assemblyman Jeffries understands that the best social program you can provide is a job, particularly a manufacturing job that lets you move up the ladder.”

The video

As in the past, Jeffries’ speech was preceded by video segment produced with Assembly help. He was pictured advocating against luxury decontrol for rent-regulated housing and advocating for a law preventing the New York Police Department from keeping records of those stopped and frisked but not arrested.

He also was shown criticizing Bloomberg’s appointment of Cathie Black as “an abuse of power,” noting that Black’s waiver application “relies on the appointment of a shadow chancellor... to create the illusion of competence.” Black made it in, but his criticism drew big praise.

The speech: housing

“The road will not be easy,” Jeffries said, launching into his theme, “But I'm convinced that we are stronger together than we are apart.”

He said he would continue to stand up for rent-regulated tenants and those in public housing and Mitchell-Lama buildings.

“Now, Mayor Bloomberg, my good friend”--the latter said with an edge-- “and his buddies in the real estate industry... have unleashed a gentrification streamroller that threatens the very character and survival of neighborhoods” like those he represents.

“We must preserve the affordable housing that we have and create as much as we possibly can,” he said, citing a new law, implementing Project Reclaim, designed to encourage refinancing of failed market-rate housing.

“Several units in Crown Heights have already been created but much more needs to be done,” he said, suggesting that banks need to be cooperating more. “Governor Cuomo has agreed to support Project Reclaim,” he added.

Criminal justice

He cited the “legislation that shut the NYPD stop and frisk database down,” noting that the number of stop and frisk encounters has since dropped by 25 percent. “When it comes to making sure our community is being treated with the respect it deserves, I'm not finished, I'm just getting started,” he said.

“We continue to break the back of the prison-industrial complex,” he said. “ I want the upstate economy to turn around, I just don't want it to be done on the backs of young men and women” from the city.

He cited the repeal of the “draconian Rockefeller drug laws,” the significant closure of some detention facilities, and, most notably, a change in the way incarcerated individuals are counted for the census. That means that those in upstate prisons are not counted as residents of those counties, but rather their home county, which makes more sense because that’s where they’re returning.

The best tactic for public safety, for dealing with concentrated poverty, for coping with the breakdown of family structure, he said, is jobs.

“I will carry that message forward to people in high places,” he said. “The president of the United States I think cares about our community. The governor of the great state of New York I think cares about our community. The Mayor”--he paused--”of the city of New York, well, two out of three ain't bad.”

He cited an effort with NYCHA and Council Member Letitia James to secure $2 million to start a not for profit organization to provide job training in Central Brooklyn.

About Atlantic Yards

Later, I asked if he'd talked to Cuomo about Atlantic Yards. No, he said, because he's been waiting for a new ESDC head, a process that has been delayed.

He said that Council Member James also wanted a conversation with the governor, but they wanted to wait until an ESDC head was in place.



What's the agenda? "First, we want to get his support for the governance act," Jeffries said, referring to the vaguely-worded bill that would set up a subsidiary in charge of Atlantic Yards. The ESDC under former Gov. David Paterson did, in fact, support last year's bill.

"[Cuomo] has not, in my view, taken a position one way or another, as it relates to the Atlantic Yards project, in great detail, so I'm hopeful that there's at least an opportunity to provide him with some community-based education as to what we think are the flaws and concerns of the project," he said.

(Given contributions from developer Bruce Ratner and closeness with the lobbying/p.r. firm DKC, there's little reason to expect Cuomo to take a critical view.)

"Are you familiar with ESDC's effort to help Ratner raise money in China from green card-seeking millionaires?" I asked.

"I'm somewhat familiar," Jeffries said, referring to my coverage, "but that's certainly is a subject that I think I'd bring up with ESDC."

"Did you know Peter Davidson of the ESDC went to China and said that Atlantic Yards would be the largest job-creating project in New York City in the last 20 years?" I asked.

"Well, that was clearly a gross exaggeration," he said with a smile, pivoting to add, "and there's no evidence that many of the jobs that have already been allegedly created have gone to local community residents. One of the biggest complaints I think that we've heard so far is that job training and preparation, and the access to the employment on Atlantic Yards leaves a lot to be desired. So certainly, if that is going to be the case, they got a long way to go."

(Forest City Ratner is supposed to make such figures available, and did so, in a partial way, at the first Atlantic Yard District Cabinet meeting, last November. The next meeting will be held the morning of Feb. 10 at Borough Hall.)

Job training and Project Reclaim

In the video below, Jeffries answers questions from another reporter about the job-training effort, and then from me about Project Reclaim



The job-training effort is aimed at public housing residents and others, based on a successful project at the Queensbridge public housing development. While federal funds seems to be available, the process of getting city and state funds is continuing, he said.

Some existing not-for-profit organizations, notably BUILD (Brooklyn United for Innovative Local Development) that aim to cover some of the same ground, though BUILD's offices are in Downtown Brooklyn--and, crucially, BUILD is seen as centered around Atlantic Yards advocacy.

I asked him about Project Reclaim--he indicated one six-story building in Crown Heights has been subject to conversion, part of Project Reclaim as well as a similar city program known as HARP.

"We still see a significant number of distressed properties," he said, in neighborhoods like Fort Greene, Clinton Hill, and Bedford-Stuyvesant, so the program can be replicated.

It also depends on the ownership/financing and whether it makes more financial sense to just drop the prices, as happened with some buildings seemingly stalled a year or two ago.

New Betaville, based on gaming technology, could equalize the information gap in urban design and enhance public participation

Public presentations of projects like Atlantic Yards have relied principally on self-serving, often misleading renderings produced by the developer's architect, frequently from a helicopter view rather than street level.

Indeed, even New York Times architecture critic Nicolai Ouroussoff got religion in April 2008, pointing out, in relation to the Hudson Yards plan, that misleading and incomplete renderings produce a "distorted picture of reality" that "stifles what is supposed to be an open, democratic process."

With Atlantic Yards, some citizen activists and outside professionals produced alternative renderings of the project in neighborhood scale, which in turn led to a new and better renderings from architect Frank Gehry, which were released by the Empire State Development Corporation, the state agency shepherding the project.

Still, New York's daily newspapers failed to present a rendering of the project in neighborhood scale.

So, as I told Urban Omnibus, Betaville, described as a new “open source, multi-player environment for real cities” offers great promise in equalizing the information gap and helping present, from the start, a more honest perspective on development projects big and small. Such a service is only fair, and long overdue.

Urban Omnibus has an fascinating video interview with Betaville developer Carl Skelton, director of the Brooklyn Experimental Media Center (BxmC) at NYU Poly, in which he describes, using Betaville, how you can "fly around, like Robert Moses, and walk around, like Jane Jacobs" and how expertise can meet "local competence."

At the MAS Summit

I got a look at and a description of Betaville at the Municipal Art Society's Summit for NYC last October.


DNA Info offered coverage and a slideshow:
Betaville, which is available for download now, looks a lot like Google Earth, with true-to-life 3-D models of Manhattan's buildings and streets. But instead of a static landscape, users can alter the map, moving buildings and adding new ones, as well as roads, bridges, parks and public art.

Other users can then weigh in, adding comments and proposing changes...

(Here's the press release.)

Skelton showed a piece of Downtown Brooklyn, showing how public spaces such as Cadman Plaza might be reconnected, with art or new buildings. "There could be a dynamic connection between Downtown Brooklyn and Dumbo and the waterfront," he said.

"People could get online and tell you you were dead wrong," he said. "That process can get you mature design and consensus."

Of course that depends on whether the political framework is structured to get there. "What it costs to piss off a politically active and competent community is huge," Skelton suggested in the UO video.

Surely, the Atlantic Yards example shows some of the costs, but the city and state had long structured the deal so it couldn't be stopped.

Opening up

"It turns out that architects actually hate models that look like they're made out of foam core," he observed. With Betaville, structures can be translucent, showing sections and interior divisions and skins. "Yes, we can give you volume, as well as mass."

"Things you thought were only available to professionals have been available to all of us," he said.

Still, it will take a while to get more of New York online. "If somebody needs it badly enough, we'll do the work," he said, "but we're not systematically in the five boroughs."

One audience member recalled the resistance to Maya Lin's Vietnam Memorial, but then how the experience of the structure and space was profound. Given that "architecture is about much more than what we see, or even hear," the person asked, what are the limitations of this new tool?

"Is this the whole story? No," acknowledged Shelton.

Could the tool, another person asked, be used to apply community feedback after a project is proposed.

Yes, Skelton said, it can serve for not only feedback but to make an alternate model. It could even be used to respond to an RFP (Request for Proposals).

Wednesday, January 26, 2011

The Capitol: ESDC still waiting for a leader, but top-down growth model (AY?) seen as history

From The Capitol, Empire State Building: Details about Cuomo’s economic development strategy emerge, but a new ESDC chair does not:
In his State of the State speech, Gov. Andrew Cuomo said that the only way to make New York the Empire State once again was through “a vibrant private sector that was creating great jobs.”

But the 10 regional councils Cuomo has vowed to create to drive economic development around the state are still unformed and his plan to remake the Empire State Development Corporation is shrouded in secrecy, with no word on who will get the top spot at the agency.

What can be gleaned from sources close to the discussions is that Cuomo and Lt. Gov. Bob Duffy, who will oversee the regional councils, are intent on moving away from the top-down, New York City-and-Albany-driven models of the past, empowering the regional councils with funding and bond-buying powers, and instilling a sense of competition in the process to encourage growth.

After years of turnover, failed programs and conflicting mission statements, ESDC is widely seen as in desperate need of a jump-start.
(Emphasis added)

It's hard to believe that the concept of "top-down, New York City-and-Albany-driven models of the past" doesn't include Atlantic Yards.

In December, ESDC Chairman Dennis Mullen had his valedictory. Mullen, in an unguarded moment last March, half-joked that Atlantic Yards was "a project that I would like to move off our portfolio."

For Times, arena returns as a sports story, sourced to Ratner, who claims, “Brooklyn has been waiting for this, really, since the Dodgers left"

Atlantic Yards is once again a sports story, and the only sources for the New York Times's New Arena for the Nets Is Sprouting in Brooklyn are developer Bruce Ratner and uber-marketer Brett Yormark.

In response to some not-so-informed comments by former point guard Jason Kidd, who didn't think the arena was happening, and perhaps (as per NLG) a not-so-flattering article telling us Nets tickets are going for pennies, the Times tells us:
After several years of legal wrangling and the economic downturn, the Barclays Center is finally and firmly on the way after ground was broken last year.

“It got delayed so much and there were so many false starts, ‘I think we’re there, I think we’re there,’ and then the economy got bad and this thing happened and that thing happened, so unless you read carefully, you don’t realize how far along it is and that it’s really on its way,” Ratner said.
Well, it's on its way, but exactly how far is not completely clear. A more independent source, a consultant to the bond trustee, has indicated that a meeting on schedule disputes was to happen last month, and that substantial completion had been nudged back from July to August 2012.

Ratner's Dodgers fix

The article continues:
He spoke Tuesday from the 14th floor of a bank building across the street from the construction in Prospect Heights as snow fell and workers pieced together parts of the upper bowl. The arena, which is expected to open in the summer of 2012, will also host boxing, tennis and other events. The Nets will attempt to tap into the Knicks’ stranglehold of New York City and have hired the marketing agency Translation, led by the former recording executive Steve Stoute, to promote the brand.

“I think Brooklyn has been waiting for this, really, since the Dodgers left,” Ratner said.
Ah, but in October 2003, as plans emerged, Ratner told New York magazine something a tad more subtle:
“The Dodgers, the Dodgers, the Dodgers,” Bruce Ratner says, his voice mixed with affection and weariness. He’s talking about the baseball team that once anchored Brooklyn’s major-city aspirations and now anchors Brooklyn in the past. “That’s nice nostalgia, but we have to get beyond that. In a metaphorical way, we have to get over the Dodgers. That’s important. Because that talk represents the way Brooklyn used to be. And how one talks about the New Brooklyn is very important.”
Remember, back in November, 2005, Scott Turner of Fans for Fair Play savaged the relevance of Dodgers nostalgia in the context of the Atlantic Yards saga, contrasting owners, their devotion to sports, their commitment to local fans, the players, ticket costs, and commitment to local businesses, among other things.

The "clogging" opposition


The Times article continues, in response to the Dodgers quote:
The opposition that clogged the arena’s path would probably disagree. Ratner — a development partner of The New York Times in building its current headquarters — once doubted that the arena would be built when the economy collapsed, but regained optimism once the Yankees gained financing for their new stadium.
It's tough to divine what exactly "Brooklyn" wants--especially 53 years later, after such things as cycles of economic decline and renewal, generational change, immigration, technological change.

And it's doubly tough for Ratner, a resident of the Upper East Side, and Yormark, a New Jersey guy, to speak for Brooklyn.

As for the reasons for opposition, to quote NLG's Eric McCLure:
That's us, clogging the path of progress like an oversized dump. Didn't have anything to do with eminent domain abuse, backroom deals, massive subsidies, rigged environmental studies... shall we go on?
Coach Johnson and Clarence Norman

Meanwhile, the hard-hitting Brooklyn Paper reports on an appearance in Crown Heights by Nets coach Avery Johnson, Nets coach is second-to-last in the standings, but standing tall with God.

Vouching for Johnson was not exactly the most credible source:
The talk was organized by the Mighty Men of Valor, a ministry at the church, which is led by the father of former Brooklyn Democratic Party boss Clarence Norman Jr.

“He gave a powerful message and provided a roadmap to success,” said Norman, who was jailed in 2007 for campaign corruption and extortion convictions.

Markowitz quiz: "The [???] will distort and manipulate anything they have to, to justify their action"

Both Streetsblog and Aaron Naparstek point to a stunning interview of Brooklyn Borough President Marty Markowitz by Marcia Kramer of CBS, opposing the Prospect Park West bike lane.

"I don't believe a word coming out of that department, not a word," Markowitz says of the Department of Transportation. "The Department of Transportation will use any way to justify their action, distort and manipulate anything they have to, to justify their action."

While Markowitz thinks bike advocacy groups juiced the statistics by showing up the day of a survey, the DOT had a plausible explanation for the counter-statistics offered by Markowitz's favorite civic group: they counted only at the end of the line.

The Borough President wants an independent group to study usage of the bike lane, one not beholden to the DOT or the community.

The AY contrast

As several commenters pointed out, this sequence contrasts mightily with Markowitz's unyielding support of Atlantic Yards.

Consider, by contrast, Markowitz's lost opportunity to question the obviously distorted statistics on the Brooklyn housing market, contained in a KPMG report to the Empire State Development Corporation.

Or consider Markowitz's blatant lies in service to Forest City Ratner's effort to raise cheap capital from Chinese millionaires seeking green cards.

Tuesday, January 25, 2011

Dave Zirin on the Green Bay Packers and the road not taken in professional sports

Edge of Sports columnist Dave Zirin is now blogging for The New Yorker, and his first piece, Those Non-Profit Packers, reminds us of the the way professional sports didn't go, toward non-profit ownership, with the unique example of the Green Bay Packers:
In 1923, the Packers were just another hardscrabble team on the brink of bankruptcy. Rather than fold they decided to sell shares to the community, with fans each throwing down a couple of dollars to keep the team afloat. That humble frozen seed has since blossomed into a situation wherein more than a hundred thousand stockholders own more than four million shares of a perennial playoff contender... Shareholders receive no dividend check and no free tickets to Lambeau Field.

....The Packers’ unique setup has created a relationship between team and community unlike any in the N.F.L. Wisconsin fans get to enjoy the team with the confidence that their owner won’t threaten to move to Los Angeles unless the team gets a new mega-dome. Volunteers work concessions, with sixty per cent of the proceeds going to local charities. Even the beer is cheaper than at a typical N.F.L. stadium.
And while a member of the Packers board thinks costs today would make it tough to duplicate the ownership structure, even if the N.F.L. allowed it, Zirin sees a counterargument:
It may be exorbitantly expensive to run a team, but people don’t buy N.F.L. teams as a civic service. Being an N.F.L. owner is like having a license to print money... In the United States, we socialize the debt of sports and privatize the profits.

Still waiting for some answers from the USCIS on EB-5 and the Brooklyn arena project

So, the federal government's EB-5 immigration program, in which investors in purportedly job-creating projects can get green cards for themselves and their families, has been the subject of a broad investigation by Reuters and an Atlantic Yards-focused investigation by this blog, both concluding last month.

Three weeks ago, I posed the following query to the United States Citizenship and Immigration Services (USCIS), the federal agency overseeing the program:
I recognize that you may be unable to comment on specific procedures or projects, so not all my questions may be answered, but they include:
--what has been the reaction, from external and internal stakeholders, to the Reuters article?
--has the Reuters article prompted any changes, or consideration of any changes?
--can/should/will USCIS crack down on apparent abuses in the marketing of EB-5 projects?
--is USCIS satisfied with the guidance/rules on crediting immigrant investors with job creation based on money already committed by other sources, especially for a project that would move forward with or without the immigrant investor funds?
--does USCIS have any new concerns about the Brooklyn Arena and Infrastructure project, marketed by the NYC Regional Center?
I'm still waiting for a response.

And yes, the second-to-last question points to the Brooklyn Arena and Infrastructure Project, given that Atlantic Yards would move ahead with or without immigrant investor funds, according to the state.

China high court cracks down on illegal fundraising, said to be warning to EB-5 marketers

It's not exactly clear how it applies to marketing of EB-5 investment projects like the one involving Atlantic Yards, but a new legal interpretation (translation, shorter version) by the Supreme People's Court of China should be considered a warning for EB-5 marketers, according to consultant Brian Su:
The detailed legal interpretation specifically target various illegal fundraising and PE [private equity] activities conducted by various unlicensed and unregistered agents without proper licence, including brokers and entities from foreign countries. It also addresses the issues of misinformation, mis-representation, and misuse of public media to illegally attract investors in China. The interpretation will have great implications and impacts on EB-5 regional center that are seeking Chinese investments through marketing activities in China.
Some of the provisions in the interpretation involve blatant fraud, such as promising a refund. It's unclear to me whether and how it extends to projects, for example, where investors are told they're investing in an arena that's already funded.

Monday, January 24, 2011

The Vanishing City: film focuses on the fruits of a corporate-friendly mentality and the "luxury city"; AY gets a cameo

Trying to understand the arc of the city that led to such projects as Atlantic Yards, I've been writing recently about the loss of manufacturing. That's part of a larger story, told intriguingly--if incompletely--in the 55-minute 2010 documentary, The Vanishing City, by Fiore DiRosa and Jen Senko.

The overview:
Told through the eyes of tenants, city planners, business owners, scholars, and politicians, The Vanishing City exposes the real politic behind the alarming disappearance of New York’s beloved neighborhoods, the truth about its finance-dominated economy, and the myth of “inevitable change.” Artfully documented through interviews, hearings, demonstrations, and archival footage, the film takes a sober look at the city’s “luxury” policies and high-end development, the power role of the elite, and accusations of corruption surrounding land use and rezoning. The film also links New York trends to other global cities where multinational corporations continue to victimize the middle and working classes.
Opening with the voices of neighborhood residents who fear they are being pushed out, the film pivots on the insights of anthropologist and urban historian Julian Brash, author of Bloomberg’s New York: Class and Governance in the Luxury City and subject of this 10/22/08 Q&A on Jeremiah's Vanishing New York blog.

The "luxury city" quote, as noted at the bottom, reflects Mayor Mike Bloomberg's framing of the city as a luxury product for corporations to choose as a location--a philosophy, as the film points out, that's belied by the tax breaks targeted for big employers.

But the film, not inappropriately, points to an emphasis on building luxury housing, with the attendant shift in the character of neighborhoods, as small businesses close.

The question, echoed in the 2007 and 2008 discussions of Jane Jacobs and Robert Moses, is whether that was simply the market at work. As the film reminds us, it wasn't.

(In the blog Q&A, one commenter suggests the problem is supply and demand--restrictions on building mean a lack of sufficient units, in contrast with other growing cities with sufficient land. There's truth to that, but there are also ways to bring down housing costs, like eliminating parking. As the city becomes more of a luxury product, formerly working-class areas go upscale. Where do poorer people go? They leave the city, for cheaper suburbs and satellite cities.)

Back to the 1970s

After the mid-1970s fiscal crisis, the narrator explains, city policy shifted to white-collar business and real estate, with an emphasis on global industries. (Unmentioned, though key in later decades, has been tourism.)

Jonathan Bowles of the Center for an Urban Future and Bettina Damiani of Good Jobs New York criticize the "nonsensical policy" (in Bowles's words) for dangling tax break to corporations like J.P. Morgan, Goldman Sachs, and major media outlets, which distorts the tax system.

(There are other, if smaller, distortions, such as tax breaks for condos and co-ops, as noted by the Independent Budget Office on p. 54 of the 2010 Budget Options document.)

Urban planning professor Tom Angotti observes that, in response to massive abandonment in the 1970s, the real estate industry "contrived a set of policies to subsidize reinvestment," which excluded people with low incomes, reduced public housing subsidies, and was keyed to the market.

While it's true that major tax breaks were passed to encourage market-rate housing, an enormous amount of housing was reclaimed under the administration of Mayor Ed Koch, as author Jonathan Soffer writes.

After the worm turned

A key insight in the film comes from sociologist Saskia Sassen, who suggests city leaders in the 1970s were terrified of decline, "so they gave it away... It is less excusable that, later on, in the 1990s, when it was clear that there was a new type of economic growth, that they still were giving it away."

This suggests some framing for the Atlantic Yards project, illustrated in the film with photo composites (right) by Jonathan Barkey.

When, in 2003, the project was announced, should Brooklyn have been grateful for such presumed investment, as Borough President Marty Markowitz suggested, or should the city, state, and MTA have driven a hard bargain?

The 421-a giveaway

The film moves on to City Council Member and urban planner Brad Lander, who describes the 421-a tax break for housing, passed in 1970s and, by the 21st century, fueling an enormous amount of housing in Manhattan and, notably, Brooklyn.

The value of the tax break tripled from 2001 to 2004, reaching half a billion dollars by 2006, he says.

Endless growth?

Historian and Manhattan Institute fellow Fred Siegel expands on the "luxury city" idea, noting that the increased growth, notably from the world's rich, would ride the financial boom and require the rezoning of manufacturing space for housing and retail.

The city needs to ensure that growth takes place in the right places, declares a reasonable sounding Rohit Aggarwala, who led the PlaNYC program, pointing out that the rezonings aim to encourage greater density.

But Andrew Berman of the Greenwich Village Society for Historic Preservation responds that such plans usually precede a bust, but wind up "being a way of facilitating completely out of scale development."

Bowles is skeptical of the growth model, saying that it depends on immigrants, and jobs for them. There comes a point, he says, where cooks, maintenance workers, and home care aides can't afford to live here. (Unmentioned: many already can't afford to live here; they cram apartments, sometimes violating housing codes.)

Angotti points out that no market builds low-cost affordable housing unless it's heavily subsidized, and Bloomberg throws in "some so-called affordable housing" as a crumb. (That could use more exposition; some subsidized housing is aimed at the middle class, some not--and Atlantic Yards is a good example.)

The lack of public input

Hinted at but not stressed in the film is the essential bypass of public input. Doris Diether, a zoning consultant, says the rezonings come from the city, not community voices. Indeed, the city has ignored the 197-a plans produced by some communities.

We see City Council Member Tony Avella complain how the city bends the rule for developers--"people have to take it back from the developers." Still, Avella was an outlier in a city dominated by the mayor and a strong Council Speaker, Christine Quinn.

We see Nellie Hester Bailey of the Harlem Tenants Council decry a rezoning aimed to increase luxury housing in Harlem, criticizing elected representatives for not caring about "the loss of 71 local businesses."

Psychotherapist Christopher Murray observes that displacement has psychological effects: "it's a big deal to have to move from Harlem to Coney Island."

True, but the question remains: to what extent should people be guaranteed a place in their community at or near the rent they long have paid?

Eminent domain

We see attorney Norman Siegel, who represented plaintiffs challenging eminent domain for the Columbia University, at a press conference offering a stemwinder: "No, no to eminent domain."

Kent Barwick, former head of the Municipal Art Society (MAS), observes that "we think there should be a pretty clear showing there's a public benefit." That's a reasonable guideline, but the MAS notably steered clear of challenging eminent domain for Atlantic Yards.

We see Develop Don't Destroy Brooklyn spokesman Dan Goldstein (right) decrying eminent domain abuse as a citywide problem.

Brash suggests that the decision to turn gritty, under-serviced (but economically quite busy) Willets Point into a center for housing and conventions is driven by image of city as a luxury product.

Willets Point property owner Jake Bono offers earthy incredulity, complaining that the plan was announced with no local consultation.

"If you disenfranchise a population," observes Barwick, you can't blame people for being estranged.

Rent regulations

The film is perhaps on its firmest ground when it explores how property owners are trying to take advantage of the law to move rent-regulated housing to the market.

One egregious case: owner-use eviction at 47 E. 3rd Street in Manhattan, in which the owner said he'd take all 15 apartments and combine them into one unit.

Also, as described by East Harlem Council Member Melissa Mark-Viverito, an investment firm picked up 50 rent-stabilized buildings, assuming they could force tenants out and make big profits. (Some of those investment plans backfired.)

Angotti decries short-term outlook of such investment funds.

After the crash

Many buildings were stalled or empty after the October 2008 financial crash, according to the film, though an up-to-the-minute update would present a more mixed picture, as unsold units saw prices slashed.

Fred Seigel again points to the unsustainable expansion of the financial sector and the need to preserve manufacturing space for immigrants. (See Mike Wallace's A New Deal for New York, reviewed by Mary Campbell Gallagher, for suggestions on revitalizing manufacturing and the city's port.)

Brash notes that fiscal crises seem to appear once a decade, and should lead to an effort to diversify the economy, since, when crises hit, finance does worse.

Bailey uses the acronym FIRE-- finance, insurance, real estate--and suggests that the city will balance the budget on the backs of the poor and working-class. (Fred Siegel would disagree, arguing that the public-sector unions hold disproportionate power.)

In 1969, the film tells us, 40% of workforce worked in blue-collar jobs. Currently, that figure is less than 10% of workforce. So the city is increasingly dominated by extremes of wealth and low-wage service jobs.

Unexplored is what the right percentage for blue-collar jobs might be. There are other technological and societal forces besides city policy that have lured manufacturing away.

Changing times

Sassen, who's studied cities around the world, suggests that today's inequality is different, as growth means the growth of high-income jobs, with concomitant low-income jobs. "When you have this distribution we see," she says, "the city itself is in trouble."

The film closes in a bit of a muddle. One unidentified person says, not unreasonably, that the city needs development, but we don't want it at expense of character.

(What, then, is the mechanism to achieve the balance? No one at the Charter Revision Commission last summer seemed ready to take it on.)

The final frames, echoed by an ominous drumbeat, portray gleaming new buildings. In some other city, they might be lauded as signs of progress. Here, it's more problematic.

"There needs to be kind of an oppositional understanding of New York that needs to become widespread," suggests Brash.

This film helps, but it's swimming against a big tide. In the blog Q&A, Brash stated:
Political action is not dead—it’s just not being articulated in a coherent way on a city-wide level. It’s hard to tell where a coherent alternative would emerge from right now. But it's hard to believe it will not.
(That was two years ago.)

Assemblywoman Deborah Glick gets the closing words, suggesting that private profit is seen as contributing to the general good, while supports for working and middle class people are seen as an unaffordable entitlement. "We have to change that basic notion," she says.

That's a broad statement about a complicated issue.

Still, projects like Atlantic Yards are billed as supplying trickle-down benefits from private profit. But those calculations of new tax revenues have been based on very optimistic assumptions, so it's quite doubtful we'll get what was projected.

An alternative view


Urbanist Joel Kotkin thinks the issue is keeping the middle-class, writing The Luxury City vs. the Middle Class for the 5/3/09 American, the journal of the free-market American Enterprise Institute:
Yet, if these and other cities are to sustain their momentum, they need to look beyond “the luxury city” and to the potential of less glamorous neighborhoods that can attract the middle class and people with families.

...But these communities can only grow if cities focus on those things critical to the middle class such as maintaining relatively low density work areas and shopping streets, new schools, and parks.

This would require a massive shift in urban priorities away from the current course of subsidizing developers for luxury mega-developments, new museums, or performing arts centers. To maintain and nurture a middle class, cities need to look at the essentials that have made great cities in the past and could once again do so in the future.

Of course there can be a tension, at least in new York, between density and affordability

Where are the jobs?

Kotkin, who also writes for the Center for an Urban Future, in this article seems less concerned about jobs for immigrants than the changing economic base:
It’s clear that many traditional industries—heavy manufacturing, warehousing—as well as middle management white collar jobs will diminish in the future. But it is possible to imagine the rise of a new kind of urban economy built around people working in small firms, or independently in growing fields such as information, education, healthcare, and culture, or as specialists in a wide array of business services.
The luxury city, 2003

Here's the original concept. As the Times reported 1/8/03, Mayor Says New York Is Worth the Cost:
Taking aim at the notion that New York's high costs discourage business growth, Mayor Michael R. Bloomberg said yesterday that the city is a luxury product and that businesses should be willing to pay more to operate here.

Addressing an audience of corporate, cultural, government and labor leaders attending an economic conference at Rockefeller University that was closed to the press, Mr. Bloomberg said the city needed to act like a private company and strengthen its brand to market itself better to those businesses that can afford it.

''If New York City is a business, it isn't Wal-Mart -- it isn't trying to be the lowest-priced product in the market,'' a draft of the speech reads. ''It's a high-end product, maybe even a luxury product. New York offers tremendous value, but only for those companies able to capitalize on it.''

Mr. Bloomberg's address signaled, in perhaps the starkest terms yet, his change from a man who thought higher taxes would ''destroy this city'' to one who sees the city he governs as a value-added commodity.

''New York City is never going to be the lowest-priced place to do business; it is just the most efficient place to do business,'' Mr. Bloomberg told reporters later. ''You have to get value for the moneys that you're going to spend.''

The words underscored the direction in which Mr. Bloomberg has been moving as his administration struggles to find a way out of the city's fiscal crisis. Some of his positions -- raising taxes, specifically -- have been surprising, coming from a businessman and a nominal Republican. At the same time, he has also remade the mayoralty to reflect his style and the lessons learned through years in private business. Yesterday, both aspects were on full display.

''I've spent my career thinking about the strategies that institutions in the private sector should pursue, and the more I learn about this institution called New York City, the more I see the ways in which it needs to think like a private company,'' the speech draft reads.

Mr. Bloomberg outlined a strategy to encourage economic development, saying the city needed to focus more on those companies that would pay extra for the unique advantages the city offers, as well as companies that can help the city, too.

Sunday, January 23, 2011

Post, belatedly, notices Judge Catterson's complaint about no judicial oversight of eminent-domain proceedings; why not put EB-5 on the agenda?

In an article headlined Wrong from blight: Judge rips land grab, the New York Post reports three months late:
In a little-noticed ruling that could pack a punch for property owners, a judge has blasted the city for abusing eminent domain in its bid to seize buildings in East Harlem -- yet says there's nothing he can do about it.

In a searing statement, Justice James Catterson of the state Appellate Division accused the city of falsely claiming "blight" as a ploy to transfer private property to developers.

But New York's lower courts are powerless to stop it, said Catterson, thanks to prior rulings from the state Court of Appeals on eminent-domain cases related to Brooklyn's Atlantic Yards development and Columbia University's West Harlem expansion.

"In my view, the record amply demonstrates that the [East Harlem] neighborhood in question is not blighted . . . and that the justification of under-utilization is nothing but a canard to aid in the transfer of private property to a developer," Catterson said of the city's argument that it can grab two blocks between 125th and 127th streets along Third Avenue because the area is economically depressed.

"Unfortunately for the rights of the citizens affected by the proposed condemnation, recent rulings . . . have made plain there is no longer any judicial oversight of eminent-domain proceedings," the justice wrote.

Catterson and a panel of four other Appellate Division justices dismissed the matter of Uptown Holdings vs. New York City on Oct. 12, 2010...
Previous notice

Actually, Develop Don't Destroy Brooklyn noticed in October, and so did others watching Atlantic Yards, including this blog.

Catterson is known for the plurality opinion temporarily blocking eminent domain in the Columbia University expansion and also a searing concurrence, which read like a dissent, in the case challenging the Atlantic Yards environmental review.

On the agenda: EB-5?

This Post article suggests that newspaper can put issues on the agenda when someone decides it's important, whether or not it's "old news."

By the same token, couldn't the Post cover Forest City Ratner's astonishing effort to raise money from Chinese millionaires seeking green cards under the EB-5 immigration program, and Brooklyn Borough President Marty Markowitz's lies in service to that effort?