Monday, February 28, 2011

If 29 developers are interested in Willets Point, why not the Vanderbilt Yard? Also, no Times scrutiny for Pinsky's projections

Two things jump out from a New York Times article today headlined Concern for Underclass as the City Progresses on Its Willets Point Plan:
Seth W. Pinsky, president of the corporation, said in an interview that the project would create 5,300 new jobs, provide affordable housing and generate $25 billion in investment over the next 30 years. He said that 29 developers had already expressed interest, and that the city would choose finalists this spring.

But opponents of the Bloomberg plan counter that the project is speculative and environmentally unsound.
Contrast with AY

First, if 29 developers have expressed interest in Willets Point, would a similarly large number have jumped at the Metropolitan Transportation Authority's Vanderbilt Yard and/or the entire Atlantic Yards site?

But the MTA didn't reopen its RFP after Forest City Ratner in 2009 asked to renegotate the Vanderbilt Yard deal, and MTA board member Jeff Kay claimed, "But there is no other market. No one else has come forward with a credible proposal at this time, and we should take advantage of that.”

Optimistic projections

Second, Pinsky should not with any certainty claim such definitive numbers about jobs, housing and investment. Nor should the Times transcribe his claims without a glimmer of doubt.

Rather, he should call it a best-case or optimistic scenario. After all, the numbers for Atlantic Yards have been slashed drastically, due to a reconfiguration of the project, and delays in construction and the likelihood of a partial buildout would further lower the Pollyannish numbers produced.

Video (finally) of Marty Markowitz's outrageous claim to potential immigrant investors: "Brooklyn is 1000 percent behind Atlantic Yards"

OK, I posted the audio 12/8/10 and a link to the video on February 2.

But Brooklyn Borough President Marty Markowitz's performance in a video presented to potential immigrant investors in Atlantic Yards is so spectacular that it deserves its own video excerpt, below.

Markowitz claims, incredibly, "Brooklyn is 1000 percent, 1000 percent behind Atlantic Yards."

He knows that's false. But it could help save Forest City Ratner some $191 million under the dubious exploitation of a federal program in which immigrant investors get green cards for themselves and their families in exchange for purportedly job-creating investments.

The original video, produced by the New York City Regional Center, an investment pool, is made available by a South Korean video-sharing site. It is hard to download, so the excerpt was created the old-fashioned way, by filming the screen.

Markowitz closes by asserting that "there's nothing better than China and Brooklyn together."

There's some irony there, given that the version shown here is subtitled in Korean. Forest City Ratner and the New York City Regional Center have sought 498 investors, 40 from South Korea.

Sunday, February 27, 2011

A profile of the guy whose firm produced Ratner's brochures: "Josh is highly motivated by making profit"

The 2/22/11 profile in Capital NY, How former liberal operative Josh Isay became the default paid-media guy to the New York establishment, concerns SKDKnickerbocker, once known as Knickerbocker SKD.

It's an interesting piece of inside baseball, but without an attempt to evaluate the content of the firm's work. The press does such evaluation with certain political ads, but not (despite my argument) with the firm's misleading brochures for Forest City Ratner.

The article notes:
Both the corporate and the political clients ostensibly benefit from the same essential asset: Isay’s knowledge of how reporters, politicians and regulators process information.
And that's why the press should take the message seriously.


The article lists several clients, but not FCR:
In addition to NYSE, the firm has been hired by a host of corporate and union clients, including Thor Equities, the firm that sparred with the city over the redevelopment of Coney Island; the Rudin family, which controls some 14 million square feet of real estate in New York City; Genting New York, a subsidiary of the Malaysian gambling giant that won state approval to install slot machines at the Queens Aqueduct; and Education Reform Now, the Joel Klein creation that’s battling teacher unions in New York. (Anita Dunn, Isay’s partner in D.C., is advising a group with a similar agenda: Michelle Rhee’s StudentsFirst.)

Meanwhile, Isay seems to have worked at one time or another with all of the best-known politicians in New York City...
The bottom line

Here's the bottom line regarding Isay's choice of political clients, which likely applies to corporate clients, as well:
Certainly, he will not feel constrained by any sense of partisan duty.

(As one of Isay's consultant friends put it, "Josh is highly motivated by making profit, which is fine.")

Zimbalist issues guiding principles for successful arena in Edmonton; guarantees of revenues and ancillary development absent in Brooklyn

In an Edmonton Journal article headlined Case for new arena no 'slam dunk': Leading analyst says such plans can work - if conditions are right, sports economist Andrew Zimbalist, who claims he turns down 70 percent of consulting gigs offered, offers a mixed opinion on a new downtown arena:
Success, he says, comes down to a few guiding principles.

These include: thoughtful planning and design; a solid financial model that places most (roughly 80 per cent) of the financial burden on the private-sector partner; upfront, iron-clad guarantees from the developer to protect local taxpayers from projected future revenue shortfalls or project cost overruns; and a binding upfront commitment by the team owner and his developer-partners to proceed with ancillary projects, such as hotels or condos.
What was missing in Brooklyn

Funny, but Zimbalist didn't say that in the "study" he conducted for Forest City Ratner. (He was hired before the project was unveiled in December 2003.)

Protection from future revenue shortfalls? No, Zimbalist provided the best-case scenario, which assumed a full buildout of the original configuration, and at the announced ten-year timetable.

The timetable is long gone, as is the configuration, and a full buildout is questionable, given that it's not required by the Development Agreement.

Binding commitment to proceed with ancillary projects? The Development Agreement allows a much smaller project. Office space (jobs and tax revenue) was swapped for condos.

Here's a prescient criticism, from the 5/4/04 Daily News:
"This document is a self-serving document," said Councilwoman Letitia James (D-Fort Greene). "This document is a ruse. We should line our wastebaskets with it."
And that's not even getting into other contradictions and willfully naive statements.

Everyone's getting tax breaks, says Daily News columnist, who neglects the ironies of the free-market Bloomberg administration

Daily News columnist Adam Lisberg, in Everyone is getting a break because who can afford to pay retail on taxes?, points out some ironies:
Every one of the biggest new private construction projects in New York is helped along by some sort of public subsidy.

The World Trade Center floats on a sea of tax-free subsidized bonds and taxpayer-funded infrastructure. Same with the Barclays Arena under construction at Brooklyn's Atlantic Yards.

Big hospital projects, like a new research building at New York-Presbyterian Hospital Weill Cornell and a tower at Mount Sinai Medical Center, get tax-free bonds from the state Dormitory Authority.

Madison Square Garden isn't getting a break on the $850 million renovation it started last year - but belongs on the list since it hasn't paid any property taxes since 1982.

"I don't think there are any projects that don't get some type of public assistance," said Richard Anderson, president of the New York Building Congress, which put out its new list of the top construction projects Friday.
But he doesn't go far enough. After all, it's Mayor Mike Bloomberg who regularly invokes the free market when talking about the sports industry or the entrance of Wal-Mart.

Instead, Lisberg lets an apologist speak:
"If it was a more rational level of taxes, we wouldn't need it," said Steven Spinola, head of the Real Estate Board of New York.

Flashback, 2006: interim surface parking could last "for some time," predicted Brooklyn Views blogger Cohn

Architect Jonathan Cohn hasn't been writing his Brooklyn Views blog since March 2007, but he was right on the money when he wrote, on 4/3/06, about the emergence of interim surface parking and the elasticity of "interim."

He wrote:
One change in the Final Scope is the admission that an unspecified amount of “interim surface parking” on the eastern part of the project site will be constructed during Phase I. (P.14). This “use” of the site could be in-place for some time. While the Phase I analysis year is 2010 and Phase II is 2016, schedules for large projects are notorious for being accurate only at the moment they are proposed.
Maybe not even then. Now we know that the interim surface parking could last for decades.

Saturday, February 26, 2011

That arena entrance on Sixth Avenue? It would become a main entrance for a stretch if Building 1 gets constructed

Only in December 2010 did we see images of an arena entrance on Sixth Avenue, not present in any of the previous renderings, or in the Design Guidelines, which state that principal entrances " shall be located through the Urban Room and on Atlantic Avenue and Dean Street."

But the Urban Room, west of the arena, would be replaced by a plaza, and that plaza would be closed during the time of construction if and when the flagship tower, B1, is built. That would finally produce the Urban Room.

(Click to enlarge the image below, which portrays the arena from the southeast, with cars at left going west on Dean Street and at right coming south on Sixth Avenue.)

A new main entrance

Information on the new main entrance was in the 12/21/09 Amended Memorandum of Environmental Commitments, posted by the Empire State Development Corporation and laying out Forest City Ratner's obligations:
In the event development of Building 1 is delayed so that it will be constructed after the arena commences operation, FCRC shall, for the period of construction of Building 1: (i) relocate the main arena entrances to the north and east side of the arena; (ii) provide directional signage at various point on the arena block, indicating routes to the arena’s entrances and amenities; and (iii) erect pedestrian construction sheds protecting, among other areas, the subway entrance and pedestrian walkways and sidewalks on the arena block.

Friday, February 25, 2011

Flashback, 2006, Gargano interview: "This site is dormant. It's on a railyard" and "the improvements... will benefit all the people from that area"

Remember Charles Gargano, the George Pataki-era Chairman of the Empire State Development Corporation who had a much higher profile than any of his successors? (Remember Patrick Foye, Avi Schick, Robert Wilmers, Marisa Lago, and Dennis Mullen? Now there's Kenneth Adams.)

Gargano, who liked to be called "the Ambassador" (for his time sweating out service in Trinidad and Tobago), famously declared "we cannot stop progress, stop development. I think what we have to do is to make sure we go through the proper process to assess everything."

To his credit, unlike his more cautious (and prudent) successors, Gargano liked to meet the press, and he was challenged at times during interviews, by Brian Lehrer ("classic political evasiveness") and also by Channel 13's Rafael Pi Roman, who interviewed him for an October 2006 piece I previously covered (overview and focus on blight).

Back to the video

Now Pi Roman has posted that New York Voices piece, The Battle for Brooklyn, on YouTube.

Questionable statements

Note this exchange:

CG: Look, I know this site for 50 years. I grew up in that area. This site is dormant. It's on a railyard.

See how Gargano, like developer Forest City Ratner, liked to conflate an 8.5-acre railyard with a 22-acre site. The railyard was and is actively used. The better way to change the use of a railyard, as the city determined regarding the Hudson Yards in Manhattan, is to have it rezoned and put up for bid.

RPR: Part of it is, but we did a report about two years ago, we saw some beautiful apartments, it's on the way up, it was on the way up. Wouldn't you say?

CG: Let me tell you. The order of magnitude of this project, the improvements that this project will bring about for the people of Brooklyn, in that particular neighborhood, in terms of shops, in terms of the apartments that I referred to, eight acres of open space, parks, beautiful amenities for this whole area. This is not just coming in, putting up buildings and going home. This is a question of building an entire community that will benefit all the people from that area.

Well, the people of Brooklyn, or the surrounding neighborhood, weren't about to get that eight acres of privately-managed, publicly-accessible open space--not parks--for a decade at best, and now that looks like it could be 25 years.

It's not putting up buildings and going home because the project could linger for decades. That's not the way to build community, is it?

The official promo

Here's the official promotional blurb for New York Voices' The Battle for Brooklyn:
The Atlantic Yards would be among the biggest real estate projects in Brooklyn history, stretching out over 22 acres of land in central Brooklyn. It would create 16 new residential and commercial buildings - including one tower rising over 60-stories - and an 18,000-seat basketball arena for the Nets.

Rafael Pi Roman looks into the explosive political and legal battle over the plan - a fight that has been colored by racial politics and accusations of backroom deals. The show features interviews with Charles Gargano, who is the top development official in the state and a supporter of the project; Council Member Letitia James, whose opposition to the Atlantic Yards led her to split bitterly with factions of her own party; and a profile of Daniel Goldstein and Shabnam Merchant, the leaders of Develop Don't Destroy Brooklyn, who are among the last holdouts in the footprint of the proposed project.

UPDATE: On October 18th, 2006, the Empire State Development Corporation released a seven-page document showing how it had arrived at figures predicting that the Atlantic Yards Project would yield a tax benefit of $1.4 billion to the city and state.

This was a reversal of its original decision not to release the documents. In his interview with Rafael Pi Roman, which was recorded on October 4th, Mr. Gargano said that requests to obtain the documents through the Freedom of Information Act had been turned down because "we are now still negotiating [with the developer, Forest City Ratner], and when you are negotiating you don't open your cards up to who you are negotiating with."

Thursday, February 24, 2011

Reopening of Carlton Avenue Bridge, closed since January 2008 (supposedly for two years), nudged from April 2012 to "summer 2012"; will it go longer?

It was inevitable, wasn't it? We knew that the Carlton Avenue Bridge, closed since January 2008, had to reopen before the Atlantic Yards arena reopens.

And now that "substantial completion" of the arena is August 12, 2012, so too has the city Department of Transportation nudged back the reopening of the bridge from the most recent deadline, April 2012, to "summer 2012."

That's not the first revision of the plan, not by a long shot.

And I'd say there's a good chance that the bridge reopening could be nudged further back to "fall 2012," if the arena opens in the fall.

Closure for four-and-a-half years?

All this means that bridge would be closed for at least four-and-a-half years, more than twice as long as originally promised in the Atlantic Yards environmental review, approved in 2006.

Above right, the previous estimation from DOT.

Original plans

The bridge, which connects Pacific Street to Atlantic Avenue and thus Prospect Heights to Fort Greene, closed in 1/23/08. In January 2009, the DOT said the work "is scheduled for completion January 2010."

By August 2009, DOT had quietly advanced the official opening date (above left) to January 2011--three years after closure. I wrote at the time that there was ample reason to believe that the reopening would be delayed even more.

Most recent estimates

According to the June 2009 Technical Memorandum of the Empire State Development Corporation (ESDC), accompanying the 2009 Modified General Project Plan:
Under the revised schedule, completion of the arena construction would occur in the first quarter of 2012, and the reconstruction of the Carlton Avenue Bridge would be completed in time for the opening of the arena and would be compatible with LIRR rail yard operations and the new permanent yard, which is expected to be completed in 2013.
Note that "completion of the arena construction" is not necessarily the same thing as "the opening of the arena."

In a December 2010 Response to the Remand Order of Supreme Court Justice Marcy Friedman, hearing an ongoing case regarding whether the ESDC should have studied the impacts of a 25-year (rather than ten-year) buildout, the ESDC stated:
Also, a delay in the construction of the Project would not affect the duration of the closure of the Carlton Avenue Bridge, because the 2009 MGPP requires the Carlton Avenue Bridge to be re-built and operational by the Arena opening condition.
That's not precisely true, given the nudge back.

In the December 2010 Technical Analysis, the ESDC stated:
As detailed in Table 5 below, the 2009 Technical Memorandum found that the duration of construction of most Project elements, would not change as a result of their modified start date within the overall construction schedule. Rather, with the exception of Project elements whose construction had already commenced, the schedule’s overall timeline reflected a shift by approximately three years from what was presented in the FEIS. Under the schedule presented in the FEIS, in the fourth quarter of 2009 the construction of the arena would be completed and by the fourth quarter of 2010 the remaining arena block buildings—Buildings 1, 2, 3, and 4—would be completed. Under the revised schedule, completion of the arena construction would occur in the first quarter of 2012, and the reconstruction of the Carlton Avenue Bridge would be completed in time for the opening of the arena and would be compatible with LIRR rail yard operations and the new permanent yard, which was expected to be completed in 2013.

... Reopening of Carlton Avenue between Pacific Street and Atlantic Avenue would take place with the opening of the arena.
Longer sequence than promised

Why is it all taking so long? Partly because Forest City Ratner is proceeding in three stages, a far slower sequence than that disclosed in the Final Environmental Impact Statement (FEIS).

As I wrote, Chapter 17, Construction Impacts, of the FEIS prepared by the Empire State Development Corporation (ESDC), made no reference to such phasing. Rather, the bridge was presumed to be fully demolished and reconstructed within two years, during the construction of the temporary yard.

Also, the contract terms were more generous than predicted in the FEIS. While Forest City Ratner had three years to complete the job without penalty, a clause in the contract, signed 12/17/07, provides up to five years to complete the work in case of Unavoidable Delay.

One definition of Unavoidable Delay is a delay in "completing the Master Closing," which includes the ESDC's exercise of eminent domain and the closing of a purchase and sale agreement with the MTA/LIRR for the Vanderbilt Yard.

As I wrote 3/1/10, the bridge was originally supposed to reopen by the time a temporary railyard was completed--and the latter had been accomplished.

A key factor in the delay was likely Forest City Ratner's effort in 2009--well after the demolition process had begun--to renegotiate plans for a smaller and less costly permanent railyard.

A day after losing out on Anthony, Nets get superstar point guard Williams; he's got a contract extension to sign, but for now, it's seen as a big win

After being seen as losers to the Knicks in the (costly) effort to attract star Carmelo Anthony, the Nets yesterday got superstar point guard Deron Williams, unhappy at the Utah Jazz in exchange for point guard Devin Harris (the face of EB-5 flackery), rookie forward Derrick Favors, and more.

For Nets fans, the optimistic perspective is that Williams will sign a contract extension and help attract more stars. The pessimistic one is that Williams won't sign and will leave.

But the consensus, for now, is that the Nets made a good deal. The Record:
The Nets rebounded quickly and impressively after their long pursuit of Carmelo Anthony failed, acquiring a franchise-changing player and arguably the NBA’s best point guard.
The Times:
In a deal that shocked the league, the Nets obtained Deron Williams, one of the game’s best point guards, from the Utah Jazz. The trade is a tremendous boost for the Nets, who badly needed a franchise star to build around as they prepare to move to Brooklyn for the 2012-13 season.
Mitch Lawrence of the Daily News, just a day after slamming new owner Mikhail Prokhorov:
Hello, Brooklyn.

At long last, the Nets introduced themselves to their new home and new fans with a startling, bold trade that even had to make the Knicks take notice, on the very same day Carmelo Anthony was getting the red carpet rolled out on Broadway.

The Nets' acquisition of Deron Williams from the Jazz means that Mikhail Prokhorov can now put a star player on a billboard when he wants to tweak the Knicks.
Would that any of these writers, who pay such intense attention to hoops, considered the "Debbie Downer" issue of "the crooked crap that actually matters," such as how team and arena owners make their money.

Wednesday, February 23, 2011

My thoughts on the meaning of the BK Nets? Don't forget the EB-5 story, as immigrant investors are misled into thinking they're supporting an arena

I was asked today to comment for a New York Observer article "about the post-Melo fight between the Nets and the Knicks for New York's psyche. Would you be interested in sharing your thoughts as to what this team does or does not mean for Brooklyn and the city as a whole?"

My response: "I think it means that Chinese millionaires think they're investing in an arena in exchange for green cards, via the developer's dubious deployment of the federal government's EB-5 program."

Don't put on blinders

Yeah, it sounds like a non sequitur, but the point is: when it comes to sports, I lean toward Dave Zirin, who can't forget how team owners wangle profits, not Will Leitch, who willfully puts on blinders.

And the New York Observer, however worthy its effort to cruise the borough basketball zeitgeist, should also have been reporting on what surely is misrepresentation and may be fraud.

It was former Assemblyman Richard Brodsky who famously said, "[T]here is nothing like professional sports to make public people nutty."

That applies to the press, as well.

Professional sports didn't make Brodsky nutty, by the way. But he did display some curious agnosticism toward Atlantic Yards, when it could be criticized for some of the same things Brodsky went after with the New York Yankees.

Real public works (transportation), the mis-described "wave of development" (as of 2007), and Atlantic Yards

At the panel Roads to Nowhere: Public Works in a Time of Crisis, last night at the Museum of the City of New York, the discussion focused on the Access to the Region's Core (ARC) train tunnel between New Jersey and New York vetoed by New Jersey Governor Chris Christie, the Second Avenue Subway, and relatively smaller fixes like Bus Rapid Transit.

All of those are infrastructure projects that drive development. None are mega-projects like Atlantic Yards, run by a single private developer. (Atlantic Yards would add a transit entrance to an existing station, thus mainly serving the arena, and an upgraded but smaller railyard, not previously requested by the Metropolitan Transportation Authority.)

Why did Christie act? Jeff Zupan of the Regional Plan Association suggested it was a matter of politics, as he had inherited a project approved by his predecessor: "politicians are always thinking about cutting a ribbon in their terms in office."

Joan Byron of the Pratt Center for Community Development added that Christie was elected by South Jersey drivers, not North Jersey transit riders. She argued that transit advocates had done too little to build a base of public support. (Also see Benjamin Kabak's good summary on Second Avenue Sagas.)

That "wave of development"

I couldn't help but think back on a misguided 1/1/07 New York Times overview, headlined Wave of Development, Cleared for Takeoff:
City, state and federal agencies granted final approvals last month to a half-dozen wide-ranging projects in a political aligning of the stars that will promote New York City's most ambitious economic development agenda in decades.

Approval or financing was given to a Second Avenue subway; an extension of the Flushing Line to the Far West Side; a spur to connect the Long Island Rail Road to Grand Central Terminal; financing for tens of thousands of apartments for low- and moderate-income residents; the Atlantic Yards complex near Downtown Brooklyn, which includes a new home for the basketball Nets; and even the bus-stop shelters and public toilets that New Yorkers and visitors have demanded for years.
Yes, the subway and LIRR projects would build important infrastructure to boost economic development, but bus shelters (where) and public toilets (where?) do not economic development make.

Nor does the long-delayed arena. The surrounding office space, once promoted as home to 10,000 jobs, had already been severely reduced, and the one planned office tower is on indefinite hold.

And the Times's curious formulation--"financing for tens of thousands of" subsidized apartments--mis-described a revision in the 421-a tax incentive program, which instead led to a rush to get all market-rate buildings started, and produced hundreds of stalled development sites.

Public works?

So I don't blame author Robert Caro for his broad-brush comment to the Times:
In ''The Power Broker,'' Robert A. Caro in 1974 wrote that without the approval of Robert Moses, who oversaw virtually all public works in New York until he was eased out in 1968, the city was ''utterly unable'' to build anything.

Mr. Caro said in an interview that he, too, was struck by the plethora of projects approved in December.

''Does this alignment of stars show that this is may be a problem that democracy can solve?'' he said. ''For the first time in 40 years, I'm hopeful.''
Moses, for all the criticisms he deserved, built public works.

The Atlantic Yards arena, as well as the stadiums mentioned in the article, is a privately-operated building, with profits and naming rights accruing to the private owner, but benefiting from the fig-leaf of public ownership in order to get federal tax-exempt bonds.

Reasons for infrastructure delay

Zupan offered a list of reasons, in no particular order, why it was tougher to build infrastructure today than generations ago:
  • the multiplicity of agencies involved, with different agendas
  • capital programs of limited length, without assured funding for long-term projects
  • competition with funding for a backlog of regular, "state of good repair" maintenance
  • lack of support for long-term projects vs. the instant gratification of ribbon cutting
  • redoing of environmental impact statements when major changes occur
  • changes in administrations, which bring different agendas
  • unexpected cost overruns, sometimes for good reasons, sometimes not
  • a very complex federal environmental review process, NEPA
  • an exacting Federal Transit Administration process
  • opposition by "small but vociferous groups" that larger interests (exemplified by the LIRR's third track project)
  • disagreement in values, such as an emphasis on Manhattan vs. the boroughs
  • an absence of professionalism, replaced by cronyism and political appointees
  • lack of understanding of the economic threat posed by static and crumbling infrastructure
  • the unwillingness to tax ("We expect something for nothing, and it just doesn't happen that way.")
I'll note that a few of those criticisms have been raised in the Atlantic Yards debate; I'd agree that, for truly public projects, such as infrastructure, there should be a way to ensure more rapid progress.

Now we face a significant stall in improvements in the subway and bus system.

An AY footnote

At the end of the program, the panelists were asked about their commutes. Byron said her bicycle commute to Pratt had been "severely compromised" by the closing of the Carlton Avenue Bridge for the Atlantic Yards project--an example of the potential tension between real estate development and transportation.

A bike lane footnote

Asked about issues of walking and biking, Zupan commented, "we have the specter of a former DOT [Department of Transportation] commissioner [Iris Weinshall] suing the city because they're putting a bike lane in Brooklyn--that's horrible."

Gotham Gazette: CPC's New Domino plan prompts criticism of affordable housing policy, but loan recipients offer pragmatic support

In Gotham Gazette, Brian Paul, a fellow at the Hunter College Center for Community Planning & Development, writes critically of the city's trickle-down affordable housing policies, and Community Preservation Corporation (CPC), the lead developer on the New Domino.

Not only has CPC been willing to partner with some questionable developers--the New Domino is not the first relationship with Isaac Katan--but it has focused on (mostly) luxury development on the fringe of gentrification, with its affordable housing lending concentrated in poor neighborhoods.

(A more detailed study in Williamsburg, from 2007, concluded that inclusionary zoning—which provides increased development rights in exchange for including affordable housing—has worked well on waterfront parcels, but not on smaller upland parcels.)

An AY parallel

In July 2007, I noted Some AY echoes in Williamsburg's New Domino plan (& hype). Paul's analysis suggests another parallel, that with ACORN, which argued that it was pragmatically pursuing an imperfect deal with a developer.

Critics, however, might argue that ACORN was compromised by accepting money from the developer.

Paul writes:
The single-minded pursuit of "deals" for a percentage of affordable housing in luxury projects like Domino Sugar may be leading non-profit community developers to overlook the role that the market-oriented affordable housing system is playing in gentrifying their communities. When confronted with these findings, John Simon from Catholic Charities said, "We supported the Domino project based simply on the fact that they guaranteed 30 percent affordable housing. …We didn't do any intricate analysis."

Speaking on behalf of East Brooklyn Congregations, Michael Gecan defended CPC' for being a "central and pivotal part of investment and production" of affordable housing in New York City. "In an imperfect world … [deals like Domino Sugar] are the best solution. Others may disagree or believe in wishful thinking. We operate in reality," he said.

...Because government investment in affordable housing is tied into the public-private, luxury-affordable models, the community-based nonprofit developers need private dollars from entities like CPC to fund their work. All of the community development corporations and church affiliated groups that testified on CPC's behalf during the New Domino hearings have received loans from the company during the past four years, with the largest amount -- over $30 million -- going to the East Brooklyn Congregations' Nehemiah Houses project.

With the community housing organizations so heavily invested in this current "reality," there are few voices left to question whether this system -- and the tremendous amount of public money that flows into it -- really serves the best interest of all New Yorkers.

Tuesday, February 22, 2011

Near arena site, O'Connor's expands, though AY-connected buyer was rebuffed

Here's Park Slope blogger Dan Myers has an interesting interview with Mike Maher, who bought O'Connor's Bar, on Fifth Avenue between Bergen and Dean, three years ago, and is expanding it with a beer garden, a backyard, and a kitchen.

And while it is not becoming an arena bar, as apparently some suitors sought, it can't not be influenced by the building just a few blocks north:
"When I was a candidate to purchase this bar from the O'Connor family, I was the only one who promised to keep the name, and the brand," said Maher. "Everybody else wanted to change the name. People connected to the Atlantic Yards offered them more money, but they sold it to me because I promised to keep it O'Connor's, and to not build condos on the roof. I think the O'Connor family would be happy with what we're doing here. They never considered the bar a 'dive,' and if you take a look around, we've always kept it spotless in here."

Maher claims that the rising Barclays Center didn't affect his decision to expand, but with construction well-underway just up the street, it's clear that there will be a huge demand for bars like the new O'Connor's as soon as the arena opens. It remains to be seen whether the old bar will remain the classic, regular hangout it's been for decades, or if the new additions will alter the bar's character irreparably. It appears to be in good hands, though.
(Emphasis in original)

Note that Freddy's Bar & Backroom was populated by staff and patrons who once moved from O'Connor's.

Jeffries, Barron, James seen as leading candidates for Congressional seat now held by Towns

City Hall News reports on the expected departure of Rep. Ed Towns and his son Darryl Towns' recent appointment to a post in Albany, in Next Towns Over: The next expected Brooklyn Congressional vacancy:
Now, the field for the coveted north Brooklyn seat has likely narrowed to four frontrunners: Assembly Member Hakeem Jeffries, Council Member Charles Barron, Council Member Tish James and, depending on whether he runs for re-election, Ed Towns himself.

There are reasons to believe Towns may not. He not only lost his chairmanship but also was very publicly bounced as the ranking member of his committee by House Minority Leader Nancy Pelosi over fears that Towns would not aggressively combat investigations launched by the new chair, California Rep. Darrell Issa.
Still, a Towns spokesman said last week that the Congressman would run again.

Barron vs. Jeffries?

Though Jeffries is reportedly preparing for a race, he was closemouthed:
"Others might fantasize about a hypothetical campaign, but I'm focused on the job I was elected to do."

Jeffries' comment appears to be directed towards longtime nemesis Charles Barron, who has no problems talking openly about a potential run against Towns. In 2006, Barron narrowly lost a three-way race against the incumbent congressman, despite being out-raised tenfold and not declaring his candidacy until February of that year.

Barron maintains that he would be the favorite in 2012 regardless of who is in the race because of his hardcore group of supporters in East New York and the rest of his Council district. Of course, most labor unions, the Brooklyn Democratic Party and the district's sizable Hasidic Jewish population would likely line up against Barron in a one-on-one match-up against Jeffries.
Tish for Public Advocate?

The newspaper reports:
Council Member Tish James is also seen as a potential candidate, though she and Jeffries both share the same Fort Greene base. James was noncommittal about her plans.

...According to two people who have spoken to James about her plans, James is strongly leaning towards running for public advocate if Bill de Blasio runs for mayor.
The article didn't mention perennial candidate Kevin Powell.

As Nets lose out to (high-paying) Knicks in Anthony trade, Prokhorov takes some hits; goodbye, Devin Harris, face of EB-5 flackery?

Well, Bruce Ratner has convinced Daily News columnist Denis Hamill (who conveniently forgot about affordable housing and permanent jobs) of the importance of the in-construction Barclays Center arena, it's a tougher sell for Nets majority owner Mikhail Prokhorov, who lost to the Knicks (who paid dearly in a turf war with the Nets) in the trade for departing Nuggets star Carmelo Anthony.

Writes the Daily News' Mitch Lawrence, in Mikhail Prokhorov is all talk, no action, lets Carmelo Anthony slip through Nets' fingers to Knicks:
There's no other way to sum it up: Monday night was another bad night for the Nets under Prokhorov.

Just as last July was a bad month for the Nets' owner, when the Knicks got Amar'e Stoudemire and he got Travis Outlaw.

Prokhorov likes to tweak his counterpart, Garden chairman Jim Dolan. He likes to put up billboards across the street from the Garden, challenging the Knicks. He likes to send statements out of Moscow saying he doesn't want the Nets to become the Knicks, he wants them to become the Lakers.

Prokhorov is all talk. No action.

Under Prokhorov, the Nets haven't done a thing.

It's not entirely Prokhorov's fault. He goes to see superstars like James last July and Anthony in Los Angeles over the weekend and all he can give them is Brooklyn as an idea. There's nothing in Brooklyn now for the best players in the game to come to. Maybe when the arena is finished, that's when Prokhorov will be able to convert his vast fortune into some NBA superstars.

But not yet.
Record columnist Tara Sullivan, in Russian’s tactics backfire, writes:
Prokhorov came to America with a bold plan to crash the NBA’s elite party in record time, promising a title within five years. He tried to make us believe he didn’t care about the specter of the Knicks, taking multiple opportunities to dismiss any notion of being in their shadow. But after twice reneging on his promise to pull out of the negotiations for Anthony when it became painfully obvious Carmelo wanted no part of a long-term deal, Prokhorov allowed himself to be pulled back in.

...But the Knicks got the last laugh.

No matter how Prokhorov spins this as something positive, we’re not buying. He blew into New Jersey and promised nothing short of world basketball domination. He talked of building a global brand, a team that will take its New Jersey fan base, move it to Brooklyn, and build a team to rival the much-more-popular Knicks.

He declared his intention to sign big-time free agent stars, to ultimately overshadow his big-time neighbors across the Hudson. He planted his egotistical “blueprint for greatness” billboard in the Knicks’ backyard, and then answered their taunts that he’ll never be like them with a dismissive retort that he’d rather be like the Lakers anyway.

...The Nets, with one foot in Newark and the other in Brooklyn, remain in the shadows with their cast of pawns.
Writes New Jersey Newsroom's Mike Vorkunov, in As Nets miss out on Carmelo Anthony, owner Mikhail Prokhorov left standing by:
It may be taking a while but Prokhorov is slowly learning the cardinal rule of the NBA, that wealth and ego can only take you so far because here the players run the show.

Prokhorov may have thought that his swagger and money would be enough to turn this franchise around but it does not seem like he counted on what awaited him. He may have expected to come in and woo LeBron or impress ’Melo but by now he should have learned his lesson that in this league it doesn’t work that way.

That is why his is the biggest name in the Nets organization, not any players who can fill up the marquee outside the Prudential Center. It’s not the business world where rationale may rule, it’s one where egos and over-abundant self-worth rule and Prokhorov will always be second in that regard to the players he is chasing after.

The Nets can move to a state-of-the-art arena in Newark while waiting for one of their own in Brooklyn and they can parade around efforts to become the world’s NBA team but that is all for show. At this point all they have are ideas and plans and no execution.

That’s how the first year of the Prokhorov regime has gone.
Goodbye, Devin?

Meanwhile, the Nets appear ready to deal guard Devin Harris, who, after star point guard Jason Kidd had departed, less than two years ago was touting the move to Brooklyn and then saw his charitable efforts get a promotional push.

Harris and center Brook Lopez were used to promote the effort to get immigrant investors to put $500,000 each into the questionable "Brooklyn Arena and Infrastructure Project."

ESDC in 2009 promised B2, first affordable housing tower, wouldn't be delayed; is hold-up due to search for bank financing or new subsidies?

The first tower planned for the Atlantic Yards arena block is delayed yet again, even though, when the project was re-approved by the Empire State Development Corporation (ESDC) in 2009, the agency asserted that at least that building--Building 2, at the corner of Flatbush Avenue and Dean Street--was on track.

According to the June 2009 Technical Memorandum:
These potential delays due to prolonged adverse economic conditions would not affect the timing of the development of the arena, the transit access improvements, the construction of the new LIRR rail yard, the reconstruction of the Carlton Avenue Bridge or the construction of Building 2. It could, however, delay the construction of some of the remaining buildings on the arena block as well as the Phase II sites.
It's unclear whether the delay is caused by the unavailability of affordable housing bonds, bank financing, or both.

But as of August 2009, as the Times reported, the developer was already seeking additional affordable housing subsidies, beyond the standard incentives.

A month later, Bruce Ratner told his company's favorite reporter:
“They [opponents] are 100 percent wrong about the affordable housing. It’s another red herring. We’re required to build affordable housing and it has been my personal commitment from the very beginning,” said Ratner.
If and when the building gets started, construction should take 18 months.

Bond financing

At the 7/22/09 informational meeting preceding the ESDC's public hearing, one questioner asked whether the ESDC had conducted an analysis that indicates that the bond financing would be available for the affordable housing subsidies the project would require over its life cycle.

The answer came not from the ESDC but from Forest City Ratner project leader MaryAnne Gilmartin, who deflected the question; “There are bonds being issued for the construction of the arena, and there are programs that are being accessed for construction housing, and there are two different things. 80/20 bonds, which are the bonds used to build market-rate housing with 20 percent low-income, are volume cap bonds, which are readily available in this state, because there’s an absence of construction, nothing, frankly, is being built right now, so there is not a concern about the availability of that financing for housing. The financing on the arena, which is a different form of financing, will take place by the end of 2009, as we indicated. Again, we’re optimistic we can sell the bonds necessary to commence construction on the arena."

She did not mention that the buildings with 50 percent affordable housing are supposed to be financed through a separate program known as 50/30/20, involving 30 percent middle- and moderate-income units, and 20 percent low-income units.

A week later

A week later, at the 7/29/09 public hearing on the revised Atlantic Yards plan, David Pechefsky, the Green Party candidate for the 39th Council District and a former City Council budget analyst, brought up the issue of the project's financial viability.

He noted that, at the informational meeting, he asked about Forest City Ratner’s internal rate of return--which had not been voluntarily made public by the developer, but had come through in some documents--and FCR refused to answer.

“If this is truly a public project for the public good, it absolutely should be talked about,” said Pechefsky.

(Photo by Tracy Collins.)

Back in 2006, he said, “I looked at the numbers on the rental buildings… What they suggested to me that the affordable housing was really unlikely to get built in the time frame of the project, unless there was going to be additional public subsidies.”

His point was never addressed by the pro-project affordable housing advocates who spoke later.

Lingering questions

At the 11/4/10 Atlantic Yards District Service Cabinet meeting, Gilmartin said the developer intended to release designs and start construction of B2 in the first quarter of 2011. That was not to be.

She said the developer is committed to making the building 50% affordable, but "the actual program itself is still being worked out." As I suggested, that means that subsidies from the city and state are being sought.

"We are able to build for-sale housing on the arena block. I will tell you that, based on the current state of the market, and what we think is financeable and executable, we think it's more likely these buildings will be rental," Gilmartin said.

"We as a company do like the rental product," she said. "80 DeKalb has proved to us the rental market is strong enough we can convince banks to finance the building and be successful."

However, 80 DeKalb is an 80/20 building, not a 50/30/20 building.

So, the questions remain:
  • has Forest City convinced the banks to finance B2?
  • is Forest City seeking additional subsidies for B2?
Failure to require guarantees

The Atlantic Yards Development Agreement, signed in December 2009, allows an Affordable Housing Subsidy Unavailability to be claimed for up to eight one-year periods for each Phase 1 building.

A draft of the ESDC's General Project Plan in 2006 seemed to consider city and state actions to fund the affordable housing as part of the official approval process. Such language was dropped before the ESDC approved the plan.

Monday, February 21, 2011

Jesse Jackson, 1996: "Between these mountains of the ball parks and the jails was once Campbell's Soup and Sears and Zenith... and stockyards."

Once upon a time, before developers muddied up sports facility projects with mixed-use add-ons that might or might not deliver jobs and taxes and publicly-accessible open space, such projects could be seen plain.

Consider the Rev. Jesse Jackson's stirring 8/27/96 speech at the Democratic National Convention in Chicago. The prepared text was amplified and amended in the remarks as delivered; Jackson, among other things, went off on stadiums and called--15 years before it became more mainstream--for investment in infrastructure.

As Michael Lewis explains in his book Losers: The Road To Everyplace but the White House, Jackson abandoned his notes and became the only speaker to fully engage the crowd, addressing the issue nearly everybody had ignored: economic justice.

Sports facilities as mountain tops

Jackson said, in part:
The Republicans in San Diego put forward the image, the vision of a big tent. On the cover was Gen. Powell and Jack Kemp. But clearly you cannot judge a book by its cover. For inside the book was written by Newt Gingrich and Ralph Reed and Pat Buchanan, all the rights that made Gen. Powell possible are now under assault for the next generation and all that Kemp believed in until last week is now under assault.

What is our challenge tonight? Just look around this place. This publicly financed United Center is a new Chicago mountain top. To the south, Comiskey Park, another mountain top.

To the west, Cook County jail. Two ball parks a jail. That jail, mostly youthful inmates 80 percent drug-positive, 90 percent high school dropouts, 92 percent functionally illiterate, 75 percent recidivist rate. They go back sicker and slicker.

Between these mountains of the ball parks and the jails was once Campbell's Soup and Sears and Zenith and Sunbeam and stockyards. There were jobs and there was industry; now there's a canyon of welfare and despair. This canyon exists in virtually every city in America. One-tenth of all American children will go to bed in poverty tonight. Half of all America's African-American children grow up amidst broken sidewalks, broken hearts, broken cities and broken dreams. The number-one growth industry in urban America -- jail. Half of all public housing built to last 10 years. Jails. The top wealthiest 1 percent wealthiest Americans own as much as the bottom 95 percent -- the great inequality since the 1920s. As corporations downsize jobs, outsource contracts, scab on workers' rights, a class crisis emerges as a race problem. But the strawberry pickers in California, the chicken workers in North Carolina deserve a hearing. We must seek a new moral center.
And today?

This new moral center does not come, as the Rev. Al Sharpton suggested last March at the Atlantic Yards groundbreaking, via fractional team ownership by one very rich celebrity.

"I'm glad I lived to see the color line in ownership broken in Brooklyn, where we've gone from Jackie to Jay-Z, where we can not only play the game but we can own a piece of the game," Sharpton asserted. "So my mother saw Jackie and my daughters will see Jay-Z--we have come a long way."

Sharpton was wrong not just on theory but on facts: the majority owner of the Charlotte Bobcats when it was established in 2002 was Robert L. Johnson, founder of Black Entertainment Television.

Balls and strikes

Jackson, in his speech, later picked up the sports metaphor:
For us Democrats, when we change the course, the real issue is not "three strikes and you're out." If the crime is vicious enough, maybe one strike is enough. But what about the vision of "four balls and you're on"? Prenatal care and Head Start, ball one; an adequately funded public education, ball two; a marketable skill, ball three; and a job, ball four. Put America on. Lift our youth up, not lock them up.

What shall we do? Between these two ball parks and this jail, what shall we do in this canyon between the ball parks and the jail, we shall reclaim our children. Certainly, these stakes are very high in 1996. We have the burden and the obligation to win for yet unborn generations. What shall we do economically?

We have $6 trillion in private and public pension funds. Why can't we take five percent of that money, $300 billion, government secured -- use that money to reinvest in our infrastructure and put America back to work. We did it for Poland. We made for Poland, 40-year loans at three quarters of one percent, first payment due in 10 years. If we can rebuild Poland and Europe and Japan, we can build Chicago and Atlanta and Memphis and Nashville. We can rebuild America.

...On this note, I leave you now. And we protect that big tent and leave here stronger, diverse and better more challenged, and we leave here with a plan to reclaim our children, leave here with a plan to reinvest in America's infrastructure. Then we need to have the faith to hold on.

Sunday, February 20, 2011

Now at the ESDC, succeeding Laremont and Bloch: Leecia Eve, the almost-Lieutenant Governor, and Juanita Scarlett, veteran governmental/political hand

A reader points me to news of two executive appointments at the Empire State Development Corporation (ESDC), who should have some role, as had their predecessors, in Atlantic Yards.

The summaries are from The Business Council:
Leecia Eve, Senior Vice President and Counsel to the Empire State Development Corporation
Ms. Eve most recently served as Vice President for Policy of the No Limits Foundation, a not-for-profit organization that promotes economic issues at home and abroad and advocates transforming American foreign policy around the world, including advancing the rights of women. She is a former partner at Hodgson Russ, Western New York's largest law firm. She served as a judicial clerk to the New York State Court of Appeals Judge Fritz W. Alexander II, Judiciary Committee Counsel to then-Senator Joseph R. Biden, Jr., and as Senate Counsel to then-Senator Hillary Rodham Clinton.
Eve succeeds Anita Laremont, who took the state's early-retirement incentive. Laremont had the uncomfortable task in her last year of service of claiming at a Senate hearing that the ESDC's board, rather than ubiquitous consultant AKRF, finds blight.

The almost-Lieutenant Governor

By the way, Eve might have been Governor today instead of Andrew Cuomo. She was the black establishment's choice for Lieutenant Governor to run with Eliot Spitzer, until state Senator David Paterson manuevered his way in, as noted in this account from Maria Rosa:
She was more erudite than Paterson, having passed her bar exams, graduating from an élite law school and frankly her political acumen far a superior one.
Then-Daily News columnist Errol Louis, in a 1/27/06 column headlined SPITZER WRONG TO TOSS EVE: GOV HOPEFUL MISSES CHANCE TO CHOOSE REAL REFORM CANDIDATE FOR LIEUTENANT GOVERNOR, wrote presciently:
Leecia Eve's possible withdrawal from the race for lieutenant governor provides a miniprimer on much of what's wrong with politics in general and the state of the Democratic Party in particular. A party that chases away star talent like Eve has its priorities hopelessly muddled and a back turned against its own future.

...Spitzer's choice of Paterson is a phenomenally bad idea for the ticket, the party and the Harlem community Paterson represented for more than two decades.

At a time when voters are demanding reform, Paterson is an Albany insider who has often ended up on the wrong side of ethical questions.
Later, of course, Spitzer resigned in disgrace and Paterson performed erratically, mixing good moments with enough ethical snags that he recognized he shouldn't run for a term on his own.

Another executive

Also at the ESDC, succeeding Darren Bloch (who left to run The Capital and City Hall newspapers), is, according to The Business Council:
Juanita Scarlett, Executive Vice President of Strategy, Policy & Public Affairs, Empire State Development Corporation.
Throughout Juanita’s career, she has held vital roles in both government and public relations including Director of Intergovernmental and Community Affairs at the New York State Office of Attorney General Andrew M. Cuomo and Executive Advisor for Public and Governmental Affairs at the Port Authority of New York and New Jersey. Juanita began her career in public service as Press Officer to Governor Mario M. Cuomo.
Scarlett, as it happens, is married to Louis, a noted supporter of Atlantic Yards. (I've had, um, my differences with Louis, who now anchors Inside City Hall on NY 1, but never any dealings with Scarlett.)

In a 1/25/10 article headlined Still Preparing, Cuomo Courts Black Support, the New York Times reported:
Mr. Cuomo has also hired Juanita Scarlett, a well-connected black political hand who has worked at various points for John C. Liu, Eliot Spitzer and Senate Democrats, to work on intergovernmental relations in the attorney general’s office.
Besides her work in public service, Scarlett has also worked on several campaigns. She was paid $20,000 in July and August 2009 working for the New York State Democratic Senatorial Campaign Committee (plus another $10,000 in February 2009, via Scarlett NY), $7000 in September 2008 for work on the campaign of Malcolm Smith (who has a historic connection to Atlantic Yards minority contracting consultant Darryl Greene), and $38,250 from May through September 2009 for work on John Liu's city Comptroller campaign.

Saturday, February 19, 2011

New York Times devotes investigative resources to Park Slope Food Co-op "scandal," ignores EB-5 story

This is pretty rich or, rather, brutally weird. Yesterday, the New York Times devoted two reporters and some 1100 words to an article headlined At a Food Co-op, a Discordant Thought: Nannies Covering Shifts:
So the allegation by a Park Slope blog last week that some members were sending their nannies to fulfill their work shifts has raised eyebrows and debate among the granola-and-strollers set of greater Park Slope, and smug satisfaction among those who would rather go to Key Food.
The allegation, by a blog "which goes by a name that cannot be printed in this newspaper" (Fucked in Park Slope), was worth a follow-up, a perfect story for, say, the old and departed City section.

But the coverage seems disproportionate to the Times's willingness to ignore Atlantic Yards. Meanwhile, there's a blog that kinda did some reporting about Forest City Ratner's attempt to raise $249 million from immigrant investors under the federal government's EB-5 program.

Other northeastern cities move ahead to lower mandated parking in developments; will New York replace PlaNYC 1950?

In December 2007, I described how Mayor Mike Bloomberg's much-praised PlaNYC 2030 contains a glaring omission, a failure to address the antiquated anti-urban policy that mandates parking attached to new residential developments outside Manhattan, even when such developments, like Atlantic Yards, are justified precisely because they're located near transit hubs. I called the current situation PlaNYC 1950.

In Building a Greener Future: A Progress Report on New York City’s Sustainability Initiatives, released in May 2008, The New York League of Conservation Voters Education Fund recommended, among other things, a comprehensive study of the parking requirements in the Zoning Resolution. Last July, the Department of City Planning was said to be rethinking parking minimums in new developments in western Brooklyn and elsewhere.

Others move ahead

But nothing's happened yet, while others move ahead. Streetsblog reports, in New York Falls Behind Big Northeast Cities on Parking Policy :
The city of Philadelphia recently released a draft of its new comprehensive plan, Philadelphia2035]. The plan’s release makes New York the last city in the four largest Northeastern metro areas that hasn’t so much as stated a commitment to cutting back on off-street parking.

Philadelphia2035 calls for controlling congestion by adding parking maximums into the zoning code and pricing on-street parking high enough so that 15 percent of spaces are always free. Here in New York, we still pretend that adding off-street parking reduces traffic congestion.

Friday, February 18, 2011

Winning the lottery: The speculator who damned Ratner, got $3 million for his Pacific Street property, and then gushed about the developer

So, here's a story credulous Daily News columnist Denis Hamill somehow missed: a speculator (like the guys who bought the building housing Freddy's), who slammed Forest City Ratner when it was strategic, then, after he cashed in for $3 million, praised Bruce Ratner to the skies.

Crown Heights resident Menachem Friedfertig bought this empty garage, at 622 Pacific Street, in May 2003, for $382,000, as noted in the document embedded below.

That was two months before any mention of Atlantic Yards surfaced in the press, and six months before the plan was announced.

According to the New York Sun, whose 9/2/04 article was headlined "Message to Ratner: ‘I Want My $4M’: Brooklyn Developer Looks To Cash In," Friedfertig planned a new building, with medical offices on the first floor, and five stories of condos, all permitted by current zoning, and got approval from the Department of Buildings.

He clearly felt he had lucked out, telling the Sun, "I have the winning lottery ticket and I want my $4 million."

When I wrote about this 1/20/06, I didn't know what kind of deal Friedfertig made.

ACRIS as of 5/2/06 (right, though the document embedded below has no figure) says it was $3 million, an enormous profit.

A better deal than Goldstein

That's a far better deal for Friedfertig than the $3 million Forest City Ratner paid in 2010 to get Daniel Goldstein to leave 636 Pacific Street condo he'd already lost to eminent domain, given the higher initial cost of Goldstein's property, taxes, the now-inflated cost of replacement, and attorney's fees. (The latter two push $2 million.)

Oh, and the fact that Goldstein lived there seven years, enduring demolition and other construction activities.

But Forest City Ratner did not orchestrate a media crusade against Friedfertig, as it's done with Goldstein.

Why not? Because Friedfertig changed his tune, very conveniently.

At the 2004 hearing

Freidfertig's testimony at the 5/4/04 City Council hearing showed no love for Bruce Ratner:
Good afternoon. My name is Menachem Friedfertig from Crown Heights. I wrote things out, but watching these proceedings and why I am here, right now, the only way to convince you is to tell you that it is in your interest to look deeply into this, and not to be fooled. And I am going to tell you an anecdote.

People are coming to you and saying, oh, there is going to be more jobs, there is going to be more housing, and jobs for all people, and there is going to be money. And they say, why should we do it, you have a few houseowners, homeowners, and a few business people, but come on, we will push them out, whatever. But by in large you are going to get that goal at the end of the road. But that is a lie. Because we are talking about building. If you are building a building, and the foundation is no good, that building is no good.

And this is what I want to say. I bought before I even heard about Ratner. I bought a property at 622 Pacific Street. I said this is nice, it was an old broken down garage building, I said, well, I will knock it down, build it right.

It is R-7 zoning, a nice little six, five story, whatever, a nice, like a tree grows in Brooklyn, I visited different architects. My wife said, you are crazy. I said you will see its nice. Everything was going along fine, we filed with the Buildings Department, everything was going nice. Suddenly, about two months ago, the attorney who closed on it for me gets a call from one of Ratner's people. And he says, we are giving you the courtesy of calling you before the condemnation process happens. Before this happens, we are calling different people to see if you want to sell. So what did he think we were going to knuckle under. That is what they thought.

You know, Mr. Ratner, and I can speak the same language, I think you should tell him that this is the most, utmost of chutzpah. And just as he is trying to push out the little guy, and God forbid if he will do that successfully, do you think he is not going to hurt you at the end, also?

Thank you very much, and please be careful.
A roadblock to the Olympics?

In a 2/20/05 article headlined The Mike-athalon, concerning the Bloomberg Administration's effort to lure the 2012 Olympics, the Observer's Matthew Schuerman pointed out some snags in the plan, including some roadblocks in the path of a proposed Brooklyn arena, one of 33 proposed venues.

The Observer reported:
"Not only do I own it, but I have approved plans to build. I just haven't built it," said Menachem Friedfertig, a Brooklyn landlord who bought 622 Pacific Street at an auction more than a year ago. Mr. Ratner's folks made an offer a year ago, but Mr. Friedfertig turned them down. "In fact, when I met with them, I said, 'I think I'm against your backboard,' and they said, 'Actually, you're in our grandstands.'

"I really had my hopes set on developing it. It was going to be my first development project. It was my little baby. It was going to be a cute little brownstone thing."
Changing his tune

At the 9/12/06 community forum (a not-quite public hearing) sponsored by the Empire State Development Corporation, Friedfertig changed his tune.

The reasons? Probably because he not only got most of the money he sought, and an enormous, painless profit, but also because of a requirement, as with many who agreed to deals with Forest City Ratner, that he testify in favor of the project.

(Courier-Life photo by Tammy Meadows)

As I reported, Friedfertig was effusive. “It was the most amazing thing,” Friedfertig said. “Mr. Ratner, he was so fair. He was such a mensch.”

Friedfertig, an Orthodox, Hasidic Jew, unveiled a shofar—the ram’s horn used in Jewish ritual—as a gift to Bruce Ratner and proposed that the developer “should blow it on opening day at Ratner arena."

The Brooklyn Paper, in Low turnout at Ratner hearing, quoted him:
“Mr. Ratner gave me a deal. He dealt with me in the most ‘erlach’ way [Yiddish for honest]. What an angel. What a mensch. I bought a garage at a public auction and it was the most amazing thing that ever happened to me when Mr. Ratner decided to buy it for this Atlantic Yards project. [His offer] was beyond my wildest expectations. I present this shofar to Mr. Ratner. He should blow it on the Nets opening day.”
Maybe it was beyond Friedfertig's wildest expectations, but it was actually less than the $4 million he once sought.

It was, however, a lottery ticket, not just for him, gaining far more than he paid, but also for Forest City Ratner, gaining the right to build far larger than zoning permitted.



Thursday, February 17, 2011

Credulous Daily News columnist Denis Hamill asserts "Atlantic Yards" dream real for Ratner, buys into Ratner spin, fails to check facts

Denis Hamill, the Daily News's most prominent Atlantic Yards apologist, today pens a fabulist valentine to Bruce Ratner, headlined Atlantic Yards and the Nets Barclays Arena dream real for Bruce Ratner - after 7-yr. nightmare.

First, let's check the headline. The arena might be happening, but Atlantic Yards isn't very real at all. Hamill couldn't be bothered to check, but the much-ballyhooed affordable housing is yet again delayed.

And instead of taking ten years, as Ratner repeatedly promised, the project more likely would take 25.

But that's not why--I suspect--Forest City Ratner reached out to the convenient Hamill. They need to sell some suites, and some sponsorships.

Leading off

Hamill writes:
The first time I met him he was 59, and I walked with him along Dean St., where he explained his dream of building a sports arena for the "Brooklyn Nets" basketball team on this place called Atlantic Yards.
There's no place called Atlantic Yards. It's the name of a project, a brand.

What's real?

Hamill continues:
Today Bruce Ratner is 66, and seven years, 35 lawsuits, two architects and one economic meltdown later, he's sold off 80% of the Nets and 45% of the arena. But standing at a window 13 stories above the zigzagging yellow bulldozers and swinging boom cranes in the steel armature of the under-construction Barclays Arena, he says: "It's real."
Um, 35 lawsuits? Maybe 35 rulings in about ten lawsuits.

Two architects? Nope, three. Hamill apparently missed the fact that, after Ellerbe Becket was tapped to re-engineer the arena on a budget, that design was denounced so much that a buzzy architect, SHoP, was brought in to add a facade.

Arena boosterism

Hamill continues:
Yes, it is, and next year Brooklyn will have its first professional sports team since the Dodgers left in 1957. The 18,500-seat Barclays Center will host more than 200 events, including big-name concerts, pro boxing promoted by Oscar de la Hoya, tennis, the Ringling Bros. and Barnum & Bailey circus and Disney on Ice.
What's all this about "Brooklyn" having a team? This isn't Green Bay. The team will be located here.

Hamill seems excited that the arena aims to feature a panoply of high-priced entertainment. But when the arena was first sold to the public, the promoters kept talking about accommodating such things as high school basketball, college graduations, and even Hasidic weddings.

Ratner's big investment

Hamill continues:
Was there a time when Ratner didn't think it ever would be real?

"Yeah, in October of '08," he says. "Like a lot of people, I didn't know if we'd all be on breadlines. Goldman Sachs and Barclays Bank were always our underwriters. Greg Carey at Goldman, always a very optimistic guy, told me in October and November there was no financing available at all."

He says Carey was working on getting the Yankees financing for their new stadium and told Ratner that if that happened, the Barclays Center had a chance.

"When the Yankees got financed in January '09, it was the first glimmer of hope that we'd get financed," Ratner says. "This arena we're looking at being built required $500 million in financing. A billion in total costs, including interest, land and architecture."
On breadlines? The guy's a multimillionaire. That's about as dunderheaded as MaryAnne Gilmartin talking about cleaning ladies.

And guess what else Hamill missed? Forest City Ratner's attempt to sell that arena to Chinese investors seeking green cards.

Misreading lawsuits

Hamill continues:
But Ratner was still battling lawsuits that scared investors in 2009.

They included one brought by a vocal holdout resident who could have traded his slogan of Develop Don't Destroy for Deposit Don't Annoy when he banked Ratner's check for $3million for his condo.

The condo, which he'd lived in for less than a year when Ratner first petitioned for eminent domain for the rail yards and the mostly barren surrounding land to build his arena and a 16-building complex of affordable and market value housing.

I asked Ratner how he'd feel if someone wanted to glom his home in eminent domain.

"That's a good question," Ratner says, coincidentally watching a backloader scoop dirt where the final resident once lived. "I wouldn't be happy. On the other hand, you get paid fair market value. It's not the same as being foreclosed on and losing your equity.
The lawsuit wasn't brought by one resident, it was brought by 13 original plaintiffs. As for "mostly barren surrounding land," that's not true. There was a significant mix, especially on the Dean and Pacific Street portions taken for the arena block.

Deposit Don't Annoy? Ratner's $3 million check meant 1) far less gain than that by others who left quickly and 2) far less value than the development rights Ratner secured when the state overrode local zoning.

Creating jobs at MetroTech?

Hamill continues:
"Still it's not the greatest thing. But we all move plenty of times in our lives. It's not perfect. Not ideal. But it's part of urban development. Without eminent domain, I wouldn't have been able to build Metro Tech, which created 22,000 jobs in Brooklyn."
It didn't create 22,000 jobs. It mostly retained them, so they didn't leave Manhattan for Jersey City.

The CoA decision

Hamill continues:
In November of 2009, the judges on the State Court of Appeals gave their final decision that the last holdout had to move.
Not exactly. That came a few months later, when a condemnation judge ruled, though the Court of Appeals upheld eminent domain.

Hamill, lazily relying on his one source, couldn't be bothered to learn that even defenders of eminent domain think the decision by the Court of Appeals leaves exactly zero leeway for condemnees and represents the nadir of eminent domain jurisprudence among the states. (More on this shortly.)

Brooklyn's needs

Hamill continues:
Ratner's company quickly sold $500 million in bonds. "We had three times as many orders," he says. "We broke ground last year. So it's never easy. After I built the Atlantic Center here, I couldn't get retail stores like Target and Kmart to come in the late '90s, when everybody was riding high.

"Finally, Target came, and today it's one of the top 10 Targets in the country. I knew there was a need here for retail. There's also a need in Brooklyn for affordable and middle-income housing. And for a professional Brooklyn sports team. That's why I've stuck with it. Now it's real . ..."
Oh, come now.

There's a need for a sports team if they can get an arena essentially for free, subsidized by federal taxpayers, via tax-exempt bonds, by local taxpayers, via payments-in-lieu of taxes, and naming rights, given away by the state.

And there's a need for affordable housing, but Ratner's way behind on that.

Ratner stuck with it not to fulfill a need in Brooklyn but to fulfill some profit targets.