Thursday, June 30, 2011

Deadspin: Nets exemplify how basketball team owners use paper losses to mask profits (also see ESPN analysis of sale price)

Updated: Exclusive: How An NBA Team Makes Money Disappear [UPDATE WITH CORRECTION]

CORRECTION: Portions of the analysis below are wrong. They were based on a misreading of the "Loss on players' contracts" line item, which, it turns out, wasn't an RDA claim after all. (If you look in the audit notes for 2004, No. 8 refers to a "player buy-out and a player injury" — the former of which is almost certainly Dikembe Mutombo — totaling the same $25.1 million listed in the "Loss" line item.) The example is bad, and I apologize for that. I'm leaving the text here for a couple reasons: 1.) The roster depreciation allowance is real, even if we've misidentified it here, and it provides owners with a significant tax shelter based on a baroque logic. 2.) The Nets, like all franchises, do use large paper losses to pad their expenses. Here's what ESPN's experts found using the same set of documents (particularly the 2005-06 financials):
In other words, $41.5 million of the Nets' $49 million operating loss in 2005, and $40.2 million of its $57.4 million in 2006, is there simply to make the books balance. It is part of the purchase price of the team, being expensed each year. This doesn't mean they cooked their books, or that they tried to pull a fast one on the players. It is part of the generally accepted accounting practice to transfer expenses from the acquisition to the profit and loss over a certain time period. However, it's an argument that doesn't hold water in a discussion with Hunter and the players association, who would claim that the Nets didn't really "lose" a combined $106.4 million in those two years, but rather that they lost $7.5 million and $17.2 million, respectively.


Deadspin provides Exclusive: How (And Why) An NBA Team Makes A $7 Million Profit Look Like A $28 Million Loss:
Tommy Craggs — We've obtained audited financial data for the New Jersey Nets covering the three fiscal years from June 2003 to June 2006. Though the numbers end five years ago, you can still see the roots of the argument that will have NBA owners, come midnight, again locking out their players. You can also see how a team makes money and how it pretends not to be making any money at all.
They key? A $25 million cut in the owners' tax obligation under the roster depreciation allowance, or RDA.

In the midst of this came the sale to Bruce Ratner. Craggs writes:
This includes the Atlantic Yards land grab in Brooklyn, the future home of the Nets and the best explanation for why a buccaneering real estate developer like Ratner might buy a middling franchise like the Nets in the first place. As Neil deMause, co-author of Field of Schemes, explains: "If Ratner had gone to Brooklyn politicians and said, 'Hey, I want to build offices and residential buildings on public land,' they'd have hung up on him. But when he says, 'I'm going to bring professional sports back to Brooklyn,' suddenly here's [Brooklyn Borough President] Marty Markowitz holding press conferences and sobbing about the Dodgers. [Buying the Nets] helped him get a foot in the door with Brooklyn politicians."
Also see comments and links from NetsDaily.

ESPN analysis

Larry Coon of adds some analysis:
Brooklyn Basketball (the Nets' parent company) paid $361 million for the team. In order for the balance sheet to balance, it had to show assets in that amount. Some of these are real, physical assets; accounts receivable; and the like. Other parts are "intangible" assets, which represent the amount the buyer paid above the value of the tangible assets. These assets (but not the franchise itself) are amortized over their "useful lives," with a portion of their value (a total of $200 million for the Nets) counted as an operating expense each year. For the Nets this expense added up to $41.5 million in 2005 and $40.2 million in 2006.

In other words, $41.5 million of the Nets' $49 million operating loss in 2005, and $40.2 million of its $57.4 million in 2006, is there simply to make the books balance. It is part of the purchase price of the team, being expensed each year. This doesn't mean they cooked their books, or that they tried to pull a fast one on the players. It is part of the generally accepted accounting practice to transfer expenses from the acquisition to the profit and loss over a certain time period. However, it's an argument that doesn't hold water in a discussion with Hunter and the players association, who would claim that the Nets didn't really "lose" a combined $106.4 million in those two years, but rather that they lost $7.5 million and $17.2 million, respectively.

...Unless the players can share in the profit when a team is sold, they don't want to be burdened with the costs associated with buying the team in the first place. And if they don't have a say in the team's management decisions, they don't want to pay the cost when those decisions go awry.

The official press release on the BAM-Barclays alliance, the imaginary new "cultural district," and reflections on Bruce Ratner's gift for irony

"I always like to put things that are a little bit ironic together" was the money quote from Bruce Ratner in today's New York Times exclusive on the alliance in which the Brooklyn Academy of Music will bring three or four large-scale shows to fill empty dates at the Barclays Center arena.

The first irony is that this was seen as big news rather than as a question mark over the event projections for the arena. Remember, they've booked 150 shows and aim for more than 200 events a year.

The problem with those numbers is that a Moody's analyst in 2009 said its just-above-junk rating for $511 million in Barclays Center PILOT bonds depended in part on 225 events a year, and Forest City Ratner's  original projection of 225 events depended on no new arena in Newark, though one has since opened.

Eric McClure of No Land Grab found the irony in Ratner's claims of "Jobs, Housing, and Hoops."

Matt Chaban of the Observer cited, among other things, Ratner's ability to get "a rapidly gentrifying stretch of Brooklyn declared blighted, and then condemned" and how he gets "the light touch from the newspaper of record whose headquarters he built."

All those leap the irony threshold, but there's much more.

The new cultural district?

The press release below invents a new cultural district, claiming:
Set to open on September 28, 2012, the Barclays Center will be located two blocks from BAM, creating one of the most vibrant and unique cultural districts in the U.S.
Well, there's already a cultural district around BAM, so no need to create one with a couple of giant malls (Atlantic Terminal and Atlantic Center) in between that district and the arena.

After all, the Downtown Brooklyn Partnership (which includes Forest City Ratner as a member) states:
The Downtown Brooklyn Partnership keeps a master plan for the BAM Cultural District, a vibrant, multicultural arts district in the neighborhood surrounding BAM. This effort involves the conversion of underutilized, city-owned properties into affordable performance and rehearsal space for a diverse array of non-profit visual, performing, and media arts groups.

In other words, just because they claim to be creating a cultural district doesn't mean it's happening. Click on the map at left (from the Downtown Brooklyn Partnership) to expand; it's annotated to show the arena in a red circle below the malls.

Channeling Roger Green

There's an even greater irony. The alliance with BAM could turn the Barclays Center into the "18,000-seat opera house" that Assemblyman Roger Green once said Atlantic Yards protestors might embrace.

From Chris Smith's August 2006 New York magazine article, Mr. Ratner's Neighborhood:
Green isn’t quite so blunt, but he sees the divide over Atlantic Yards almost as starkly. “Here’s the question: If we were building an 18,000-seat opera house, would we get as much resistance? I don’t think so,” he says. “Basketball is like a secular religion for most Brooklynites. The opposition to the arena is actually coming from people who are new to Brooklyn, who lived in Manhattan, mostly. And who have a culture of opposing projects of this nature. People who opposed the West Side Highway project; people who opposed the Jets stadium; people who opposed a host of other things. Some of those families now live in Brooklyn. That’s the reality. There’s a class of people who are going to the opera. And there’s another class of folks who will go to a basketball game and get a cup of beer.”
To be clear, it's unlikely that any avant-garde event at the arena would go much beyond, say, 5,000 seats. For the record, there's no such thing as an "18,000-seat opera house." Most are under 3,000 seats. The Metropolitan Opera House has 3,800 seats plus 195 standing room places, for a total capacity of 3,995.

The press release
Barclays Center Forms Programming Alliance with BAM: BAM to Identify Unique and Large-Scale Global Shows for the Barclays Center

June 30, 2011

EAST RUTHERFORD, N.J.—The Barclays Center of Brooklyn has formed a strategic programming alliance with the famed Brooklyn Academy of Music (BAM), the largest performing arts center in the borough, in which BAM will serve as artistic consultants to identify unique shows from throughout the world for the Barclays Center.

BAM will recommend several artistic event options for the Barclays Center, such as distinctive, large-scale music, dance, and theater productions – all to make premieres in New York -- and will facilitate communication between the arena and the artistic companies.

Set to open on September 28, 2012, the Barclays Center will be located two blocks from BAM, creating one of the most vibrant and unique cultural districts in the U.S.

“We are excited to differentiate the Barclays Center by presenting programming unique to any major sports and entertainment venue in the country,” said Bruce Ratner, Chairman and CEO of Forest City Ratner Companies, the developer of the Barclays Center. “I have had a long association with BAM and recognize its extraordinary knowledge of the global arts scene. We are tapping into its resources to identify spectacular and interesting events that are appropriate for a larger venue than BAM’s main theaters. Our alliance furthers our goal to offer the community with a dynamic cultural experience in the heart of Brooklyn.”

“With the construction of the Barclays Center, there will be a remarkable array of arts and entertainment venues, ranging from 250 to 18,000 seats, within a two-block radius here in Fort Greene,” said Karen Brooks Hopkins, President of BAM. “We are very pleased to contribute to the Barclays Center’s offerings by identifying spectacular large scale, artistically-driven events that have never been seen in New York City.  Through these events, BAM will have the opportunity to work on a giant canvas, and the Barclays Center will distinguish itself as a venue for unique programming well beyond the traditional arena fare.”

“This collaboration with BAM is another example of the Barclays Center becoming a global destination that will offer some of the most exciting and varied programming among entertainment and sports venues worldwide,” Barclays Center CEO Brett Yormark said. “From concerts to family shows, from college sports to boxing, and, of course, to NETS basketball, we have already confirmed more than 150 events per year and we fully expect to host more than 200 events annually. It makes great strategic sense to align with our neighbor, BAM, and continue to bring the best of everything to Brooklyn.”

The ESDC conducted an internal audit of Atlantic Yards, but we can't see it; in response to my FOIL request, most was redacted

Some web searching led me to learn that the Empire State Development Corporation had conducted an internal audit of Atlantic Yards project activity sometime last year.

So I filed a Freedom of Information Law (FOIL) request. I got a response (embedded below), but it wasn't very helpful.

Overall bill of health

As the first paragraph of the Executive Summary states:
Internal Audit completed a review of Atlantic Yards (AY) project activity processed and conducted through ESDC The review revealed that disbursements in connection with the project funding agreement were made in accordance with funding agreement terms and project costs were adequately supported by documentation.
Nearly all redacted

What else did the audit reveal? Were better procedures needed at all?

Well, we don't know, because nearly everything else was redacted, under a FOIL exemption that provides that an agency may deny access to records or portions thereof that are inter-agency or intra agency materials which are not:
  • statistical or factual tabulations or data
  • instructions to staff that affect the public
  • final agency policy or determinations
  • external audits
OK, I get it, but then why redact nearly all of it? Why not simply deny me the document? Otherwise it leaves the impression that there may be some less positive news that's not getting out. ESDC Atlantic Yards Audit

If Empire State Development's newly-adopted Mission Statement emphasizes job creation, shouldn't there be some oversight regarding Atlantic Yards jobs?

So, what's the mission of the Empire State Development Corporation (aka Empire State Development)?

I previously explained how the role of the Urban Development Corporation (UDC) evolved from slum clearance to business development, at one point adopting the identity the Buffalo News reported 2/2/95, new Governor George Pataki "has proposed sweeping changes that would consolidate the Department of Economic Development and Urban Development Corp. into a new agency, known as the Empire State Development Corp. Thirty initiatives will be abolished as a result."

New Mission Statement

Well, the agency no longer uses the phrase "New York Loves Business," but its Mission Statement and Performance Measures, adopted this past April and embedded below, state the following:
Mission Statement
The mission of Empire State Development is to promote business investment and growth that leads to job creation and prosperous communities across New York State.

Performance Measures
  • Customers served: number and types (private, public, not-for-profit); size of entity by number of employees; MWB status
  • Financing provided and leveraged: amounts of ESD support, other public support, private investment
  • Jobs projected to be retained and created
  • Regional and industry breakdowns of assistance, jobs retained and created, and leveraged investment
Hearing on jobs needed

If that really is the mission, then shouldn't they be concerned about the number of jobs created by the Atlantic Yards project, and whether the help offered to get Forest City Ratner low-cost financing under the federal government's EB-5 program actually creates new jobs?

Maybe Brooklyn Assemblyman Jim Brennan, who now chairs the Corporation's Committee, can hold an oversight hearing and ask a few questions.

April 2011 ESDC Mission Statement and Performance Measures

Wednesday, June 29, 2011

Ratner feeds exclusive to Times, which hypes plan for BAM to bring three or four events to Atlantic Yards arena

A front-page New York Times Arts section story coming tomorrow, headlined In Alliance, Nets Arena to Offer Arts, begins:
It’s been a springboard for Brooklyn nostalgia, a debate about urban design and the politics of eminent domain and, depending on your perspective or basketball affiliation, a community uniter or divider. Now Atlantic Yards, the development that will bring the New Jersey Nets to downtown Brooklyn, will also be a cultural center.

The Barclays Center, the 18,000-seat arena at the heart of the project, will host performances by artists selected by the Brooklyn Academy of Music in a programming alliance between the two neighboring institutions, their directors said. The collaboration will include three or four shows a year and allow the academy to bring to Brooklyn work that would not fit into its theaters — the largest of which has 2,000 seats — with costs underwritten by the arena.
Three or four shows a year? This is the Arts equivalent of the "six to eight percent cut" in the project's bulk, which the Times supremely overhyped in 2006. (And didn't the Times agree the project was in Prospect Heights?)

Ratner claims arena will be different

The Times explains that CEO Bruce Ratner used to chair the BAM board, which explains why the collaboration began. But why does it not apply any skepticism to a Ratner-stroking quote?
Karen Brooks Hopkins, the academy’s president, said in a telephone interview that Mr. Ratner “called me and said that he really was hoping that this arena would be different from every arena, from the basic commercial fare.” She said she expects the performances to be “on a very large scale, large nouvelle cirque kind of work, big dance kind of things, music.” 
Well, Ratner already said he wanted the arena to be different from other arenas because it would be designed by Frank Gehry, and we know how that worked out. Adding a couple of avant-garde shows because arena operators can't find enough "family shows" to reach the magic total of 200 (or is it 225?) events does not a sea change make.

No bad news?

The Times does disclose its parent company's business relationship with developer Forest City Ratner, and perhaps we can conclude that the Times eagerly jumped on an exclusive fed by Forest City.

But we're left wondering why the Times didn't see fit to put its coverage of the "rat tsunami" into print, much less cover the effort to convince 498 immigrant investors into thinking they're buying into an arena. (The Times's sins of omission are greater than its sins of commission.)

Is June "no bad arena news month"?

Obligatory effort to find a doubter

The article does quote a critic:
But as with all things related to Atlantic Yards, the cultural plans have their doubters. Michael Galinsky, the director with his wife, Suki Hawley, of the new documentary “Battle for Brooklyn,” which chronicles the years-long fight against the project, was skeptical that the Barclays Center would deliver on all its promises to the neighborhood.

He pointed to the changes in the original Atlantic Yards plan, from the departure of the architect Frank Gehry to the exclusion of a rooftop track to the number of jobs created.

“Any time the arts has more of a venue that’s a wonderful thing,” Mr. Galinsky said. “But the question then becomes at what cost to public process.” He added, “this is a much greater benefit to Ratner from this P.R. perspective than it is to BAM.”

Mr. Ratner said the partnership with the Brooklyn Academy was not meant to appease critics. “I don’t care,” he said, then corrected himself. “We care a tremendous amount about the community, but we don’t do it to get credit,” he said. “We must do stuff here because we think it’s good to do, not because it just happens to make a splash. Everything has to be substantive. Most of it has to be as substantive as possible.”
Actually, Ratner doesn't respond to Galinsky's substantive points, which should've led the reporter to be skeptical of the enterprise she'd embarked on. But they didn't fit the presumed storyline.

If Ratner does "care a tremendous amount about the community," maybe he should be asked about paying for rat abatement. Or how people are going to walk on narrow Dean Street sidewalks to the arena. But the Times didn't cover the meeting last night.

Contentious meeting on traffic/parking issues around east end of AY site; ESDC says Forest City's "in violation" without daily on-site community liaison (updated)

Note: I did not attend the meeting but listened to an audiotape and spoke with a couple of attendees.

Five nights after a contentious meeting (about rats) in the Soapbox Gallery on Dean Street, Prospect Heights residents gathered in the same space last night to express concerns about parking, traffic, and pedestrian issues in the eastern end of the site, notably the planned 1100-space parking lot in the block bounded by Carlton and Vanderbilt avenues and Dean and Pacific streets.

The two-hour meeting was periodically contentious, with residents expressing frustration at vague, incomplete answers, and promises of future solutions.

Beyond that, a representative of the Empire State Development Corporation (ESDC) indicated that developer Forest City Ratner (FCR) was in violation of the Memorandum of Environmental Commitments by not having a daily on-site representative to interface with the community.

(Update: see bottom for an ESDC statement, in response to my follow-up question, that avoids the issue of how to get FCR out of violation. Patch reported that
This morning, Joe DePlasco, a Forest City Ratner spokesman said via e-mail that while the company already has “two people who are on the site consistently and full time at least two days a week,” from now on the developer “will ensure that there is at least one person always on the site during working hours.”
Meanwhile, the ESDC’s top spokeswoman, Elizabeth Mitchell, denied that the mega-developer was ever in violation, saying that the agreement never specified how many hours the liaison had to be on site.)

The meeting was sponsored by the Carlton Avenue and Dean Street Block Associations, with two ESDC and two FCR representatives present, along with an FCR contractor and a Department of Transportation rep. About 60 people attended.

Dan Schack of Sam Schwartz Engineering led off with the PowerPoint description of changes already announced, changes focused on the north and west edges of the project site. Attendees were far more interested in other issues.

Parking issues

Meeting host Peter Krashes of the Dean Street Block Association repeated the results of a survey of illegal parking around the site done with the help of Transportation Alternatives. Of 87 cars, all but four were parked illegally. Among the rest, twelve had some sort of construction gear. Others, including fire and police offers, had either phony placards or had parked improperly even with the placard

Arana Hankin, Director, Atlantic Yards Project for the ESDC, said she's spoken to the local precinct at least five times and Forest City at least ten times. The issue of construction workers, she said, "we've tried to solve."

As for police and fire, she noted that the arena site sits at the confluence of three precincts, and an emergency services plan must be established, with one precinct taking jurisdiction. "When that happens, illegal parking will be enforced," she said.

"I totally understand the nervousness," said Forest City executive Jane Marshall. "We are concentrating on a very significant effort to put together a demand management plan, and event-day management plan, security, safety, for pedestrians, vehicles, transit riders, and the third thing is loading dock, how things go in and out of the arena."

"That plan has to cover this area," she added. "It has to respond to this block's concerns and your blocks concerns, because you are the community it's in. We don't want a building that doesn't operate well and we don't want to upset the community."

She allowed that "there's going to be, probably, many uncomfortable moments," but plans will be amended. She couldn't provided an estimate for when plans would all emerge, though the demand management plan--with free MetroCards and other incentives not to drive--should arrive in six months.

"We ask construction workers to move," Hankin added. "Many illegally parked vehicles are police and fire… Whenever our [environmental] monitor is there, we ask them to move."

"It's very simple," Krashes said somewhat facetiously, suggesting the Department of Transportation's Chris Hrones, the three precincts, Hankin, and Forest City Ratner "just stand right in that intersection and work that out."

Delays from parking lot?

Won't it take a while to fill the 1100-space lot, causing congestion?

Marshall said the goal is to use reservoir spaces inside the block so no one is waiting on the street. Parking will be pre-paid, and license plates will be read, so, there's no money changing hands. "We understand it's our obligation to make this work," she said.

Details missing

"Has anyone analyzed long it's going to take for 1100 cars to come in, discharge passengers, and have everyone walk to the arena?" asked gallery owner Jimmy Greenfield later in the meeting.

"I don't have anything I can say to you right now," responded Marshall.

Hankin said it was all part of the operational plan being developed.

"How are you going to make it all work?" Greenfield asked. The failure to provide assurances is the "reason's there's such distrust," he said. "What if nothing works? What is the scenario then?" What is the worst-case scenario?"

"I don't think the situation will ever be perfect, unfortunately," Hankin responded.

"Living in Brooklyn is not perfect, but we all make do," Greenfield responded. "What is the worst case? Be honest."

"People who live on Dean Street and Carlton are going to be inconvenienced," Hankin said, noting there would be "a lot of traffic and a lot of pedestrians… We're trying to mitigate as best we can." The issue, she noted, was analyzed in the EIS [environmental impact statement].

Residential permit parking

What about residential permit parking (RPP), which would limit spaces to locals?

The DOT's Hrones acknowledged that RPP has been proposed. "It's more complicated than people think," he said. "Basically, we are prepared to look at residential permit parking in the context of the arena, but I don't want anybody to get the impression it's a done deal.

He said complications involve accommodations for non-resident employees and businesses. RPP would require state legislation.

Will traffic signals be equipped with countdown timers?

Hrones said pedestrian countdown clocks are scheduled for Atlantic, Flatbush, and Fourth avenues.

Air quality

One resident, who pointed out that increased traffic would decrease air quality, asked what's being planned in terms of trees and green space.

There will be street trees on Atlantic Avenue, said Marshall, but "not that many on Flatbush… The rest of these sidewalks are just being built out, not being landscaped."

Could they be?

"Not before the arena opens," Marshall responded. "It's very complex plan."

Open space

Marshall added that "air quality was analyzed in the FEIS" and that "we are doing, ultimately, eight acres of open space." And while the arena block won't have open space, it will have a plaza area.

Krashes commented, "I think it's important to say the open space you referred is--"

"In Phase 2," Marshall chimed in.

"- is in Phase 2, there's a 25-year timeline," Krashes continued.

"That's not what" we plan, Marshall interjected.

"--in 2012, you guys can actually leave the second phase," Krashes continued. [Forest City would have to forfeit an $86 million letter of credit for the new railyard.]

"Peter, we're not deserting the project," Marshall said with exasperation.

Krashes asked about landscaping in the surface parking lot.

Marshall said the lot would be set back four feet from the sidewalk, so there's a buffered landscaped zone."

"How about inside the parking lot?" Krashes asked.

"No," responded Marshall. "There's no room. There's no room."

Krashes pointed out that recent city regulations require landscaping in parking lots.

"--and we overrode zoning," Marshall responded.

Actually, the state overrode zoning on behalf of Forest City Ratner.

Sidewalk width

"I know you passionately believe the environmental analysis studied everything," Krashes said, adding that not everything was in the EIS, and some things are wrong.

Regarding mitigations, he asked, was Sam Schwartz asked to look at sidewalks and pedestrians at the eastern end of the project?

"No," said Marshall, indicating that the contractor was implementing what DOT and ESDC directed.

Krashes said the ESDC assumptions deserve tweaking because the 2006 analysis was wrong and the construction timetable had changed.

Rachel Shatz, the ESDC's Director of Planning and Environmental Review, said the EIS laid out the widths of sidewalks and streets, "before having the benefits of an actual survey." If field conditions are different, "that's when you have opportunity to make adjustments."

Krashes said that the sidewalks between Block 1129 and the arena on Dean and Pacific Streets are substantially smaller than described in the Final EIS.

"We can look at the material that you have," Hankin said.

"Hang on a second," Krashes said. "This is very obvious… there's been articles."

"Our goal is to improve the situation," Hankin said. "If you feel sidewalk widths are not wide enough--"

"--the sidewalk widths are not wide enough," Krashes continued.

"--bring it to our attention," Hankin added. "Our goal is to resolve problem… This is first time I've heard these complaints."

Krashes read a definition of effective sidewalk width, which is calculated by taking total width, subtracting obstacle width and a 1-foot to 1.5-foot buffer. While the sidewalk on Dean Street is described as having a 10.5-foot effective width, as I've written, in places it narrows to six feet.

"The goal is to improve the conditions for the residents," Hankin responded a little testily. "The goal is not to mitigate every little thing."

Construction worker lot

Where's Forest City's parking lot for construction workers?

The parking lot is on Block 1129, Shatz replied, and up until a certain threshold, "there was assumed to be parking available in the neighborhood."

Rumbles of criticism came from the audience.

While officials say construction workers aren't parking in the neighborhood, they are doing so, said Wayne Bailey.

The parking analysis said there was available space, Shatz responded.

The number of workers, Marshall said, has not triggered the requirement to provide worker parking.

The Response to Comments in the Final EIS stated:
The project sponsors do not intend to promote parking for construction workers. Extensive research was undertaken for the DEIS to estimate the likely travel patterns and characteristics of construction workers throughout the construction period. This research concluded that a substantial number of construction workers would likely travel via auto, irrespective of the abundance of transit options in the area and the costs associated with driving. To avoid overtaxing nearby on- and off-street facilities, the project sponsors would provide on-site (southern half of Block 1129) parking for construction workers at a fee that is comparable to other parking lots/garages in the area. By charging a fee and also limiting its parking capacity only to accommodate the anticipated demand, the on-site parking facility would help in minimizing the number of construction worker vehicles circulating for on-street parking in the area, while at the same time not encouraging the use of private automobiles as the means of travel to the project site.

Going green?

One audience member noted that the "community has been asked to accommodate parking and driving." and suggested "we should be thinking completely out of the box." Why not make Pacific Street a greenway?

Several people clapped.

Another asked about the impact of Dean Street traffic, including arena drop-off, on the Dean Street bike lane.

It's something to address in demand management, Marshall said.

Sanitation issues

One resident suggested there would be a problem if property owners are ticketed by the Department of Sanitation for garbage put out by arena-goers.

He suggested a moratorium on ticketing individual properties.

Hankin said it was a "great idea." Marshall said "those issues will be part of the arena operating plan."

Next steps

What happens next?

Hankin said officials would talk about suggestions that were made at the meeting and respond in writing.

Prompted by Krashes, most people present said they preferred an in-person meeting. "When you hear people directly, it's really more effective," he said.

"It's much more helpful if I receive complaints, questions, suggestions directly from the community, as opposed to being thrown a thousand suggestions one evening," responded Hankin.

One audience member suggested that questions could be lost in paperwork

"It would be helpful to have these handouts before the meeting," said Hankin, referring to issues raised.

Krashes said he'd passed on the same questions at the meeting earlier this month at Borough Hall.

"There isn't a sense there's transparency, accountability, and responsiveness," he said.

Krashes noted that he's gotten the impression that FCR/ESDC think he's the only one who's bringing up such issues, but the block association has held more than 150 meetings.


"I was not satisfied with answer about trees and green space," added one attendee, who noted that "the country is facing a climate crisis… We're asked to make a huge sacrifice… where's the high bar? maybe then there'll be something good… because I don't see anything good."

There were vigorous claps.

Krashes said it was good to have a meeting with the ESDC. He noted the ombudsman wasn't present.

Hankin said a replacement is being sought "as soon as possible."

"It would be an incredible sign or gesture if you move your office to Brooklyn," Krashes said. "Why not consider that?"

"Because I have other responsibilities," Hankin responded.

Forest City in violation?

How often, Krashes asked FCR's Brigitte LaBonte, is she on site? (She serves as the Community Liaison.)

"At least once a week," she responded, adding that staffers talk every day about onsite conditions.

The Carlton Avenue Block Association's Tom Boast read from the 2009 Amended Memorandum of Environmental Commitments (embedded below), which indicates the requirement for an on-site construction coordinator:
8. FCRC shall maintain an on-site construction coordinator to function as a liaison between FCRC and the community with respect to construction-related issues. The coordinator shall be available to consider specific concerns raised by the community with respect to the construction issues and seek to resolve such concerns.
Krashes pointed to Shatz. Boast, he said, had "just cited… an on-site community liaison."  (Actually, a construction coordinator is not the same title, but they seem to have the same function.)

"Brigitte said she's here one or two days a week," Krashes continued. "So, Rachel, what about this disparity between what's described… at the last District Service Cabinet meeting, you said it was a contractual obligation.... So, the fact that there's not a community liaison on site on a regular basis, just one or two days a week, does that meet that contractual obligation?"

"They're in violation," Shatz said, in a matter-of-fact manner.

"They are in violation, huh," Krashes repeated. "So this has been going on for a while."

ESDC's murky response

The meeting ended without an explanation of what that exactly means. I followed up with the ESDC at 10:04 am, asking for any clarification of the statement, as well as what will be done to get FCR out of violation.

ESDC spokeswoman Elizabeth Mitchell responded at 3:06 pm:
There is a comprehensive program in place to liaise with the community. Forest City Ratner has as full time employees an Overall Environmental Monitor (OEM) and two engineers who oversee the responsibilities of the Memorandum of Environmental Commitments (MEC). In addition, ESD has HDR and STV who are a consistent presence on the site and report back to us on a regular basis so that we know when there are construction or community issues. Arana Hankin, Director, Atlantic Yards Project, is available and accessible to hear any community concerns, and Empire State Development has a phone number and email address that has been advertised widely for this purpose. Therefore, Forest City Ratner’s Community Liaison is one important part of a larger oversight program. 

I'm not sure if any of those positions qualifies as "maintain[ing] an on-site construction coordinator," however.
Amended Memorandum of Environmental Commitments for The

Atlantic Yards Watch gets $4000 in discretionary funding from Council Member James

Among the many member items in the City Council's just-passed 2012 discretionary budget [PDF] is $4000 from City Council Member Letitia James to Atlantic Yards Watch:
The Atlantic Yards Watch is an initiative currently co-sponsored by the Prospect Heights
Neighborhood Development Council, the Boerum Hill Association and the Park Slope Civic
Council to collect important data about the impacts from the construction and operation of
the Atlantic Yards Project. The goal is to ensure the health and sustainability of the
neighborhoods the project impacts.
Surveying a few of her other discrectionary items, James allocated $15,000 to the 71st Precinct Community Council, $26,000 to Fort Greene Senior Citizens Council, Inc. (at four locations), and $8,000 to the Brooklyn Steppers, which has appeared at a good number of Nets/Atlantic Yards events.

Last year [PDF], James allocated $3000 to the 77th Precinct Community Council for youth and $5000 for seniors. The 77th got no allocations this year. James said their paperwork didn't come in on time and she's still working on the issue.

New wayfinding signage coming to Prospect Heights; it will focus on cultural area, but I bet there will be directions to the arena

New pedestrian signage is coming in 2013 to Prospect Heights, notably the cultural area near Grand Army Plaza. I'll bet the signage also helpfully mentions the arena site up Flatbush Avenue.

In a 6/27/11 press release, NYC DOT Announces Search for Innovative Pedestrian Information System to Improve Walkability, Economic Vitality of City Streets: Sign system to make it easier to navigate and discover New York’s neighborhoods; Initiative is first in a series to help New Yorkers on foot, on transit, on a bike or in a car, the Department of Transportation announced:
New York City Department of Transportation (DOT) Commissioner Janette Sadik-Khan today announced a Request for Proposals (RFP) to bring a comprehensive pedestrian information system to sidewalks in key New York neighborhoods. The initiative is a critical first step in making New York City’s world-class streets easier to navigate and even more accessible for New Yorkers and visitors alike, and the first in a series of steps to improve mobility whether you’re on foot, on a bike, in a car or taking mass transit. A coordinated pedestrian information network, known as “wayfinding,” will help pedestrians crack the code for traveling to, from and around the city’s neighborhoods, business districts, transit stops and landmarks on foot. By providing clear, readable signs, pedestrians will be able to better orient themselves to determine how long it takes to walk to key locations. The RFP calls for a system and its elements to be designed and implemented in four New York City districts: Long Island City, Queens; Prospect Heights/Crown Heights, Brooklyn; and Chinatown and parts of Midtown in Manhattan.

...“Heart of Brooklyn is a partnership between Brooklyn Botanic Garden, Brooklyn Children's Museum, Brooklyn Museum, Brooklyn Public Library, Prospect Park and Prospect Park Zoo,” said Ellen Salpeter, Director, Heart of Brooklyn. “As a major cultural destination in central Brooklyn, a comprehensive wayfinding system would measurably improve cross-visitation between and among our institutions and the local commercial corridors. From local residents and merchants to domestic and international visitors, everyone wins.”
The RFP doesn't present any more detail, requiring a consultant to:
Draft and submit for review and approval to NYCDOT a detailed siting plan for the Prospect Heights/Crown Heights in the borough of Brooklyn
Here's coverage in the Times, the Daily News, the Wall Street Journal, and Streetsblog.
The goal

According to the press release:
With 31 percent of all trips in New York City made by foot and 22 percent of all car trips under one mile, the city is an ideal location for launching a comprehensive pedestrian sign system to encourage walking.

The deadline to respond to the RFP is July 27. Proposals will highlight applicants’ approaches to and experiences in creating stylized, comprehensive wayfinding systems. DOT will work closely with the selected vendor and the four districts to design a standardized system based on extensive community input. Any program will be reviewed and approved by the Public Design Commission and the Landmarks Preservation Commission. The consultant will then install and monitor the sign system’s effectiveness. From there, the system will be expanded to other neighborhoods that elect to install wayfinding signage.
Community consultation

The RFP requires community consultation:
At a minimum, one public stakeholder meeting is required in each of the Neighborhoods at this stage. Such meetings may require multi-lingual materials and presentations... In addition, the Consultant will meet regularly with a small Technical Advisory Committee (“TAC”) which will guide the project. The TAC will be composed of NYCDOT staff and representatives from the local maintenance partner (usually a Business Improvement District (“BID”) in each of the Neighborhoods. The Consultant will be expected to attend approximately ten TAC meetings during the course of the Contract. In addition, the Consultant will regularly communicate with NYCDOT and each of the Neighborhood’s local maintenance partner(s);

Input now

The New York Times's City Room blog also asked for input:
In most places, though, a city sign won’t tell you what you really need to know to wayfind around the neighborhood.

That is, it won’t tell you that Grand Army Plaza is a pedestrian nightmare, or that the cat outside the bodega at the end of the block does not like to be petted, or that the Starbucks on the left side of the street has surlier baristas than the one on the right.

If the city were to put signs in your neighborhood, what should they say?

Tuesday, June 28, 2011

Observer makes fun of rat complaints, claims "hysteria has reached such epic proportions"

So, Matt Chaban of the New York Observer, who can be a decent reporter, didn't attend the meeting last Thursday about rat problems in the area around Atlantic Yards.

But he had to write about it, so today he applied a little 'tude, headlined Atlantic Yards ‘Rat Tsunami’ Plagues BroBos [Brooklyn Bourgeois Bohemians or Brownstone Brooklyn], providing a list of the complaints, ending with:
  • Two stolen Bugaboos, with babies attached.
O.K., so we made that last one up, but the hysteria has reached such epic proportions, it seems possible. After all, The Brooklyn Paper is worried about the hantavirus infecting BroBos this summer if things don’t get better. Given their weak constitutions, it is bound to be a deadly epidemic.
My comment

As I commented:
Matt, this is really beneath you.

If you'd attended the meeting, or read the coverage (including mine) more carefully, you'd know that many of the people affected have been there more than 40 years, and that they represent a spectrum of ethnicity and class.

So the Bugaboo reference is not just a cheap laugh, it's way, way off.

As is making fun of people who are plagued by rats.
 The issue, actually, is who's responsible for fixing the problem.

FCR's Gilmartin makes the Crain's list of NYC's Most Powerful Women, along with Tighe, Wylde, Burden

Forest City Ratner's Atlantic Yards point person, as well as some key supporters, make Crain's New York Business's list of the 50 Most Powerful Women in New York 2011.

35. MaryAnne Gilmartin
Executive vice president
Forest City Ratner Cos.
A fellowship at a city economic development agency provided the springboard for Ms. Gilmartin’s career, which has changed the texture and skyline of New York City.

The 47-year-old Queens native has worked at Forest City for nearly 17 years and developed properties totaling more than 5 million square feet, including The New York Times’ headquarters and the new Frank Gehry-designed residential tower downtown.

Her toughest assignment has been overseeing the controversial $4.9 billion Atlantic Yards project. In a testament to her savvy negotiating skills, Forest City officially broke ground on the project last year, and its focal point, the Barclays Center, will open in fall 2012.

No Land Grab's Eric McClure commented:
NoLandGrab: OK, now we're curious. What did Gilmartin's "savvy negotiating skills" have to do with the groundbreaking? All this time, we thought it was a testament to Mikhail Prokhorov's savvy oligarching skills.
Indeed, Gilmartin played no major public role in the groundbreaking last year, and the benefits promised--the delivery of which presumably she has significant responsibility--are way delayed. Give her more credit for the Beekman Tower.

Others on the list

1. Mary Ann Tighe
Chief executive, New York tristate region
CB Richard Ellis Inc.
Condé Nast’s move to 1 World Trade Center is classic Mary Ann Tighe. The upscale publisher’s longtime broker, and counselor to numerous other high-profile firms, Ms. Tighe has a history of moving clients into nontraditional neighborhoods, transforming the face of Manhattan. This 1-million-square-foot deal is widely considered a game-changer for downtown.

The entire industry has benefited from the 62-year-old’s wisdom since she became the first female head of the powerful Real Estate Board of New York 18 months ago. The lobbying group played a key role in banishing the terrorist trials from downtown and helped elect 86% of the statewide candidates it backed last year.

2009 RANK: 3
Tighe has long represented Forest City Ratner.

9. Kathryn Wylde
President and chief executive
Partnership for New York City
Whether she’s defending Wall Street, fighting paid-sick-days legislation or debating the future of the Kingsbridge Armory, the ubiquitous Ms. Wylde is in the middle of the issues most important to the city’s business community.

In the past year, she was named deputy chair of the Federal Reserve Bank of New York and appointed to a special committee on state judicial compensation. The 65-year-old also played a leadership role as a member of the Committee to Save New York, the business-backed group that helped Gov. Andrew Cuomo pass one of the toughest budgets in years.

2009 RANK: 11
Wylde has frequently testified in favor of Atlantic Yards.

34. Amanda Burden
New York City Planning Commission
In less than a decade, Ms. Burden has spurred the rezoning of nearly 25% of the city. By her estimate, those efforts have paved the way for 57,000 housing units and 41 million square feet of commercial space.

Now that the City Council has approved her 530-block rezoning of South Jamaica, Queens, Ms. Burden, 67, is turning her attention to the lower Manhattan waterfront and the East River Esplanade.

2009 RANK: 33
Though Atlantic Yards was not a rezoning, Burden, as a good soldier, has regularly defended it. And she still gets great press.

Another press valentine for Amanda Burden: Wall Street Journal profile of City Planning Commission Chair ignores Atlantic Yards example

In a 6/23/11 article headlined Champion of Cities: With New York's High Line park expansion, Amanda Burden's urban revitalization efforts set a model for the world, the Wall Street Journal reports:
This elegant blonde with a mellifluous voice is steelier than one might expect, a useful trait for someone who is spearheading Mayor Michael Bloomberg's far-reaching effort to rezone nearly a quarter of New York City and reclaim the city's waterfront. Her populist achievements span all five boroughs and include zoning for new affordable housing in East Harlem, Brookyln and the South Bronx, as well as the massively popular High Line, an abandoned railroad track that has been transformed into a popular tourist destination in the once-gritty meatpacking neighborhood, which has seen commerce move in and property values soar in the past decade.

Chairing the City Planning Commission since 2002, Burden, age 67, has revolutionized its role in the city, transforming a once-sleepy bureaucratic agency into an activist department championing good design by using zoning as a weapon to enforce her vision. In her second-floor office near New York's City Hall, she reviews applications for all new buildings that come before the commission, instructing developers and architects on what they can and cannot do—something that comes as a dramatic shift in the order of business to executives accustomed to getting their way. Putting special emphasis on "how the building meets the sky" (suggesting attractive cornices or sculpted tops) and pedestrians' line of sight (engaging building materials at street level), Burden makes it her job to ensure developers have done their homework. Her oversight even extends to landscaping, where she can quibble over the placement and sustainability of plants and trees being proposed.
This article follows the storyline in previous profiles, in which Burden's detractors are developers concerned about micro-management, not urban planners who point out that the city has fundamentally failed to plan, with the City Planning Commission having no control over the city's capital budget and the New York City Economic Development Corporation having essential power.

My comment:
This valentine to Amanda Burden neglects some of more complicated aspects of her legacy, such as the city's willingness--presumably not embraced by the City Planning Commission, but with no opportunity to publicly protest--to let the Empire State Development Corporation oversee the Atlantic Yards project, with no role for the Uniform Land Use Review Procedure (ULURP).

Meanwhile, Burden has been a loyal foot soldier for Atlantic Yards, even though it does not represent the Jacobsian mantle she embraces.

10/12/06: Planning Chair Burden claims Jacobsian mantle, discards it for AY
1/15/07: Times profile of planning chair Burden maintains AY myth, suffers curious cut
10/19/09: Two profiles of Amanda Burden make and miss the same points about City Planning (and Atlantic Yards)

Brooklyn Paper: DOH says bait applications for rat problems around arena site have jumped

Five days after the meeting last Thursday on rat problems, the Brooklyn Paper follows up with Rats! Atlantic Yards site is full of rodents.

The headline's a bit off, since the dispute is over whether Forest City Ratner will take control measures outside the site perimeter. But the newspaper did add some statistics that bolster the ample anecdotes:
A spokeswoman for the Department of Health said that the department saw an increase in 311 complaints and increased its exterminations significantly in the ZIP codes on and near the project.

The department increased its bait applications from 190 in fiscal year 2010 to 313 in 2011 for the area directly around the arena.

To the east of the arena, bait applications jumped from 179 in 2010 to a whopping 501 in 2011.

Monday, June 27, 2011

Dave Zirin in Slam: "residents see [Atlantic Yards] more like an exercise in ethnic cleansing" (um, that's a bit broad-brush)

In Sleep Till Brooklyn: Putting an NBA team in BK may not be a no-brainer business move., Edge of Sports columnist Dave Zirin (a DDDB advisory board member) writes:
My father was born and raised in Brooklyn. I grew up just across the bridge in Manhattan, but spent more time in Brooklyn than an agoraphobic hipster. I know Brooklyn and I know its wary relationship with the world of sports. This is a place that’s never quite gotten over Walter O’Malley, the owner of the Brooklyn Dodgers, abandoning Ebbets Field and Flatbush Avenue for Chavez Ravine and the movie stars of Los Angeles. Yet in the decades after the Dodgers betrayal, the area built its own sense of identity.

...The borough has become the new Manhattan: the place you can’t afford to live. It’s become a magnet for chain stores and fancy restaurants. Unlike Travolta’s Tony Manero, Brooklyn isn’t the place ambitious kids dream of leaving anymore. It’s where entitled college grads dream of moving to.

If you don’t understand this dynamic, then you can’t understand the dread felt by every last Brooklynite with whom I’ve spoken about the Nets’ impending move.... Despite promises by Ratner and his flacks that the project will create “an urban oasis” in the heart of Brooklyn, residents see it more like an exercise in ethnic cleansing—the ethnicity in question being people who are actually from Brooklyn. They see rising rents, shuttered local businesses, torn down homes, and a string of the chain restaurants that seem to circle all NBA arenas. They see it making continued residency impossible.
My comment:

Dave, Please don’t fall for the cliche that Brooklyn has not gotten over the loss of the Dodgers. As Michael D’Antonio points out in his book on O’Malley, in the 1960s, the NY Times editorialized that the wounds had healed, and Brooklyn even held a rally for the ’69 Mets. D’Antonio blames Roger Kahn’s “The Boys of Summer” for the wave of nostalgia. More here.

I think the reception will be mixed–there are certainly enough sports fans in Brooklyn and environs, and high-rollers buying luxury suites, to create a fan base. The sports media and local media will mostly sign on. And Jay-Z will draw rapturous crowds if, as expected, he opens the arena with a string of concerts. (Think Bon Jovi at the Pru in Newark, amped.)

That said, despite the adjacent transit hub, they’re still putting an arena (at southern and eastern edges) into a residential neighborhood. It’s a very tight fit, and those in charge haven’t figured out solutions for the inevitable problems (like a surface parking lot that will cause people to walk down very narrow residential sidewalks to the arena).

And there’s already a “rat tsunami.”

The problems caused by that tight fit aren’t going away, and likely will galvanize even more residents in the area close to the arena.

Despite nearness to major transit hub, Forest City Ratner's Atlantic Center mall shows contrast with European counterparts transit hub

There's still too much parking around the Atlantic Avenue/Pacific Street transit hub, right?

From a New York Times article today--the lead story in the both the national and New York edition--headlined Europe Stifles Drivers in Favor of Alternatives (and in print, more pungently, as "Across Europe, Irking Drivers is Urban Policy"):
Michael Kodransky, global research manager at the Institute for Transportation and Development Policy [ITDP] in New York, which works with cities to reduce transport emissions, said that Europe was previously “on the same trajectory as the United States, with more people wanting to own more cars.” But in the past decade, there had been “a conscious shift in thinking, and firm policy,” he said. And it is having an effect.

...It often takes extreme measures to get people out of their cars, and providing good public transportation is a crucial first step. One novel strategy in Europe is intentionally making it harder and more costly to park. “Parking is everywhere in the United States, but it’s disappearing from the urban space in Europe,” said Mr. Kodransky, whose recent report “Europe’s Parking U-Turn” surveys the shift.

Sihl City, a new Zurich mall, is three times the size of Brooklyn’s Atlantic Mall but has only half the number of parking spaces, and as a result, 70 percent of visitors get there by public transport, Mr. Kodransky said.
That should have been reported as the Atlantic Center Mall, Kodransky confirms with me, as it derives from a 3/17/11 blog post. (Forest City Ratner also operates the Atlantic Terminal Mall, and sometimes conflates the two under the Atlantic Terminal rubric.)

These issues, of course, also apply to Atlantic Yards, which includes a planned 1100 spaces for the arena and additional 2500 or so spots for the announced housing.

The report

The report was released 1/19/11 and is available from the ITDP web site, as well as embedded below.

European Parking U-Turn, ITDP

The demise of the New York Times's once-routine Forest City Ratner disclosure (as mandated by the Public Editor), and another reason why it's meaningful

The New York Times has much less frequently been appending a once routine disclosure to its articles about Forest City Ratner's Atlantic Yards project. And that's meaningful for a reason I haven't previously stressed.

Consider, for example, the 6/24/11 blog post headlined In Brooklyn, the Rats Move Out Before the Nets Move In. No disclosure appeared, though an 11/25/09 article, Ruling Lets Atlantic Yards Seize Land, contains such a disclosure:
The company, which was the development partner for the Midtown headquarters for The New York Times Company...
Disclosure dropped

No did such disclosure appear in the 6/16/11 review of the new documentary Battle for Brooklyn, the 3/17/11 article headlined Prefabricated Tower May Rise at Brooklyn's Atlantic Yards, and, more crucially, a 3/18/11 article headlined With Federal Case and Modular Building Plan, New Attention for Atlantic Yards Project.

Why was that more crucial? Because, as the headline suggests, the Times itself is responsible for part of the new attention and, as I wrote, the Times soft-pedaled a key issue: Forest City Ratner's apparent exploitation of the federal government's EB-5 investment immigration program.

Importance of disclosure

There are at least two significant reasons why disclosure is important, and one of them I haven't previously stressed.

The more obvious reason is that disclosure puts readers on alert, as well as reporters and editors, that Times coverage should be exacting--and sometimes it isn't.

The other is simply that it should put readers, reporters, and editors on notice that Times coverage should appear in the print paper, not, as with the article on rats, relegated to the City Room blog.

In other words, the disclosure, along with the decision to publish only online, should get readers wondering whether there's any connection. And it should get reporters and editors wondering how such decisions are perceived.

The Page One review

As Michael D. D. White points out in his Noticing New York review of the new documentary Page One:
It is easy to make that case by pointing out that the narrative of “Battle For Brooklyn” has been largely unreported by the Times... 

“Page One” convinces us that the Times is a superlative newspaper, one that can and should be held in high esteem in many regards. It is. But there is a story going on the Times own doorstep which the Times reporting is not doing justice and that may soon be discovered to be a bigger part of the story than many now imagine.

The obligation being ignored

Former Public Editor Byron Calame, in a 6/25/05 blog post, Full Disclosure of Ties with Bruce Ratner, cautioned:
The New York Times, I believe, has an obligation to alert readers when they are reading substantive articles about a company or individual with whom the newspaper has some business or professional relationship.

...The Times’s most important obligation, of course, is to make sure there’s no bias in any articles it does publish about Mr. Ratner. But avoiding the perception of any tilt toward Mr. Ratner in its pages is also essential. One of the best ways to avoid a perception problem is to make certain that substantive articles about Mr. Ratner and his real estate dealings include full disclosure about his business relationship with The Times.
That obligation is being ignored too often.

(As I point out today, the Times, thanks to a quirk in its content management system, no longer attributes that post to Calame.)

Atlantic Yards down the memory hole: Times web site erases attribution to Public Editor Byron Calame's call for the paper's full disclosure of ties to Ratner

Yesterday, New York Times Public Editor Arthur S. Brisbane devoted his column, On, Now You See It, Now You Don’t, to the vexing question of how to track and manage the many changes and periodic corrections in regularly updated digital news.

His conclusion:
My preference would be that The Times do more to document and retain significant changes and corrections like those I have described.

...I realize there are other priorities. But more attention to this issue would bring two clear benefits. First, The Times could offer more transparency to its readers and stem the erosion of trust that occurs when readers don’t understand mysterious content changes. Second, by more carefully retaining important published material, including all corrections, The Times could reinforce to its staff the importance of accuracy and full disclosure when errors happen.
The problem, it seems, is worse than even Brisbane thinks, since it applies to the Times's inability to properly attribute work to a succession of Public Editors.

The Times and Bruce Ratner: need for disclosure

On 6/29/05, then Public Editor Byron Calame, in a blog post headlined Full Disclosure of Ties with Bruce Ratner, made in important point:
The New York Times, I believe, has an obligation to alert readers when they are reading substantive articles about a company or individual with whom the newspaper has some business or professional relationship.

This obligation wasn’t fulfilled Sunday when the chatty “Questions for Bruce Ratner” in The New York Times Magazine failed to mention that the real estate developer and the parent company of this newspaper are partners in the construction of the The Times’s new headquarters in Manhattan.
However, the Times's content management system now attributes all Public Editor blog posts to the current occupant of the seat, so an unsuspecting reader likely would credit Brisbane with the insight. (Brisbane's separate bio, off to the side, indicates he began work in August 2010.)

(Click on graphics to enlarge)

A look at the Internet Archive's Wayback Machine, which crawled the page in December 2008, attributes the blog post to Calame's successor, Clark Hoyt.

Sunday, June 26, 2011

CNG issues "Brooklyn 200," including Forest City Ratner, Nets Basketball, and the Barclays Center

The Community Newspaper Group, publisher of the Brooklyn Paper and Courier-Life, has issued a new promotional supplement, Brooklyn 200, "celebrating the places and things that make Brooklyn special," with capsule descriptions.

It's not surprise, given that newspapers are in tough shape, that they produce such questionable products. (Quick, is there any correlation between full-page feature articles on a selected few of the 200 and advertisements bought by those subjects of feature articles?)

Among the 200, as detailed below, are Forest City Ratner, Freddy's Bar, Nets Basketball, and the Barclays Center.

And Marty Markowitz is the only person on the list, getting special mention in the category of "force of nature.

Questionable choices

There are other opportunities for raised eyebrows.

Why a mini-profile of the Brooklyner building but not the Brooklyn Flea (or Brownstoner)? Brooklyn Kickball but not the Brooklyn Ice Cream Factory? Downtown law firms like Cullen and Dykman and Goldberg and Cohn, but not South Brooklyn Legal Services or Brooklyn Legal Services Corporation? Nine auto dealers but no one retailer selling bicycles or organization working on transportation policy?

Forest City and Freddy's

The treatment of Forest City Ratner is fairly straightforward, and refers to Atlantic yards as "controversial," locating the arena--unlike in the official promotional material--in Prospect Heights.

The Freddy's listing cites "its impassioned fight against the Atlantic Yards project."

(Click on all graphics to expand.)

The Barclays Center

The under-construction arena gets described as "already changing the face of the borough."

Nets Basketball

Would you believe that "there's no doubt that wen the Brooklyn Nets first hit the hardwood at the Barclays Center, they'll take the floor with the support of an entire borough"?'

You might start subtracting people afflicted by rats.

Marty Markowitz

Would you believe that even Marty Markowitz's "biggest opponents will admit that [he] is"unceasingly dedicated to trying to make Brooklyn a better place to live"?

Maybe except when he's lying about support for Atlantic Yards.

How the New York Times's watchdog coverage of a supplements company could be transposed to the New York City Regional Center and EB-5

A lengthy 6/21/11 New York Times article about Senator Orrin Hatch R-UT), headlined Support Is Mutual for Senator and Utah Industry, described his relationship with the supplements industry, which wants freer reign to make some self-serving claims.

One passage jumped out:
But Xango’s record illustrates how companies eager to exploit the law can go too far.

In 2006, federal regulators warned Xango that brochures improperly promoted mangosteen juice as a disease cure, not just a healthy option. Xango is among more than a dozen Utah companies cited by federal regulators over the last decade for apparent violations of the law.

Xango, whose executives are the single biggest Utah-based contributors to Mr. Hatch’s political campaigns and have drawn Mr. Hatch to its headquarters to down shot glasses of their juice, blamed a marketing company that had printed the brochures. The company also insisted that it was closely monitoring distributors to make sure they did not make inappropriate claims.

But in his talk at Xango in March, [distributor] Dr. [Vaughn T.] Johnson — who lectures across the country at other company events — used some of the same language the F.D.A. had cited in its 2006 warning letter, and he referred the sales agents to a nearby company that still sold brochures making the improper claims.
(Emphases added)

The EB-5 analogue

Why did I highlight the above?

As I wrote 12/27/10, it's stunning how George Olsen, managing principal of the New York City Regional Center (NYCRC), could profess to be shocked, shocked that the firm's affiliates in Asia were deceptively marketing green cards in exchange for investments in Atlantic Yards.

As Reuters reported:
At a recent seminar in Seoul, an agent for the Kookmin Migration Consulting Co., working on behalf of the New York City Regional Center, told would-be investors if they invested in the company's latest project their permanent green cards were "guaranteed." He also implied the investors would be financing the construction of the new home for the New Jersey Nets NBA basketball team.
In a subsequent interview with Reuters, George Olsen, managing principal of the New York City Regional Center acknowledged the claims were "not accurate" - the investors will finance the rebuilding of a rail yard and some related infrastructure near the new basketball court -- and promised he would jump on Kookmin "with two feet."
"But that's what's frustrating," Olsen said. "You can't be at every seminar, you can't be at every meeting, you can't be in the room when one of these people is talking. To raise $100 million, you have to get 200 investors. That's a lot of people. So there's a certain amount of mass marketing that has to go on.
Nah. As I pointed out December 23, those same claims were made by Olsen's own point man in China, Gregg D. Hayden.

More here, including audio.

CounterSpin radio show: Battle for Brooklyn filmmakers talk about the media (including me)

Susan Saladoff on Hot Coffee, Suki Hawley and Michael Galinsky on Battle for Brooklyn

CounterSpin (6/24/11-6/30/11)

This week on CounterSpin we're talking about two new films which, while journalism is not their central subject, directly engage news media's influence and real world impact as a critical part of the stories they tell....

Also on the show: Battle for Brooklyn tracks the takeover of a New York neighborhood by a real estate developer and the efforts to resist it by community members, one man in particular who becomes the last person in his building not to take a buyout. The same events and players appeared in the corporate press too, and viewers can see the difference when voices that usually appear in the last paragraph are given central place. We spoke with Battle for Brooklyn filmmakers Suki Hawley and Michael Galinsky.
I'll note that the radio show (the interview starts at 12:48; also see links to audio at DDDB and NLG) begins with the host noting that "a man" at the end of the film comments that, had the media done their job, this would have been a fair fight.

That "man" is me. Later in the interview, Galinsky names me and points to my role, and the lingering, under-covered EB-5 story.

The entire interview is worth a listen. And the film is still playing.

Saturday, June 25, 2011

Prokhorov to lead new Russian political party, Right Cause, seen as Kremlin creation; he claims capitalism is only for risk-takers

Mikhail Prokhorov's purchase of the New Jersey Nets continues to pay dividends, as that asset is the first thing attached to his name as he pursues a questionable political career.

From the New York Times, Nets Owner to Lead Political Party in Russia:
MOSCOW — The billionaire owner of the New Jersey Nets basketball team, Mikhail D. Prokhorov, was elected leader of a Russian political party on Saturday in the first foray of a prominent businessman into politics in nearly a decade.
Not that things aren't fishy:
The event suggested the start of a new political movement in Russia, and was spoken of in this way by participants, though the party’s creation was apparently coordinated with Russian government officials some time ago in preparation for Parliamentary elections scheduled for next fall. Rounding out the picture, a pro-Kremlin youth group staged a noisy protest outside.

Still, it had all the signs of a political maneuver used by Mr. Putin before, of co-opting opposition organizations by arranging to have nominally independent but in fact loyal figures take charge.
The AY description

And how does his venture into basketball get described?
In 2009, Mr. Prokhorov bought the Nets and a stake in the Atlantic Yards development in Brooklyn that will include their team’s new stadium. He has promised to pour some of his personal fortune into the team and apply his business acumen to obtaining players and improving the team’s performance.
Actually, he bought 45% of the arena holding company and has an option to buy 20% of the rest of the project.

If he's putting some of his personal fortune into the team, he's also using borrowed money and benefiting from subsidies wangled by his business partner, Bruce Ratner.

The AP report

The Associated Press was skeptical:
Right Cause is seen as a Kremlin creation designed to lure opposition-minded, pro-business voters, while building an illusion of competition with the ruling United Russia party ahead December's parliamentary elections.

Prokhorov said last month he was targeting second place in that vote.

President Dmitry Medvedev said on Monday that Russia needs more political competition, but the Justice Ministry made a mockery of that only days later when it denied registration to a real opposition party.
Taking risks

The article quotes Prokhorov:
"Our main slogan, 'Capitalism for all,' is not true. That's not possible. Capitalism is only for people who like to take risks, who like to take this responsibility upon themselves. An intelligent, professional and fair state should give others social guarantees and support," Prokhorov said.
But Prokhorov's fortune is based not only on taking risks but also on benefiting from insider deals after the fall of the Soviet Union.

And Atlantic Yards--wasn't that an insider deal too?

Behind the Brooklyn Paper's "world's best Cyclones coverage"

How does the Brooklyn Paper manage "the world's best Cyclones coverage"?

Well, the page in print (which contains an article that starts on the front page) is "brought to you by Municipal Credit Union," which bought what looks to be a one-sixth page advertisement on the page, and perhaps also pays for the banner at top. MCU bought naming rights to the baseball park, so there's some synergy there.

And the half-page advertisement on the bottom of the page, while hawking air conditioners, does contain a promotion for Cyclones tickets.

You can't blame a local newspaper, in a struggling environment, for seeking creative ways to bring in revenue.

But you can't help thinking that, without the advertising, the level of coverage might be lower. And maybe there'd be space for more Atlantic Yards coverage.

All of which leads to the question: what happens when the Barclays Center opens?

No suprise: NYU Schack's Stuckey intersects with EB-5 promotion

The immigrant investor law, known as EB-5, has gotten a lot more popular in the past two years, because low-interest loans from immigrants more interested in green cards than returns are now available to clever investors, and the requirement of job creation can be finagled via paper calculations.

From, 6/21/11, Shopping the EB-5 Supermarket:
As access to traditional forms of capital continues to tighten, an often underlooked source of funding can help foreign investors establish themselves in the US while benefiting the American economy: the federal EB-5 Immigrant Investor Program. Panelists discussed “The Art of the EB-5 Real Estate Transaction” at a conference hosted by Akerman Senterfitt in conjunction with the Urban Land Institute and the NYU Schack Institute of Real Estate on Monday morning at the Cornell Club in Midtown Manhattan.

...When structuring an EB-5 project, Park asks two questions: Does it meet the legal requirements, and from an investment standpoint, will it sell? “EB-5 projects nowadays are like commodities,” Park says. “You have to think of it in the view of the investor. They want a green card and they walk into a ‘supermarket.’ You go in, look at the shelf and see all these products and if you pick a good one and you get the job, you get your permanent green card two years later.”
And if you think of it in the view of public policy, well, maybe the question is whether the project actually creates jobs.

Need for legislative update

The article notes:
While several projects across the country have benefited from the program--such as the Brooklyn Navy Yard, University of Miami Life Science Center and Battery Maritime Building--Richard Spees, chair of national government affairs and public policy practice for Akerman Senterfitt, says the EB-5 program expires on Sept. 30, 2012. A bill to extend the program was introduced in March, but since then, it has been stalled in the House and Senate. Spees called on Senator Patrick Leahy (D-VT) and Senator Chuck Schumer (D-NY) of the Senate Judiciary Committee to take action.

“They like the program, but there hasn’t been a fire under them yet. Everybody is hoping something will happen, but I don’t see a lot happening there,” Spees said. “I think the people need to get creative and deliver the message.”
As I reported, Senators seem swayed by reports of projects in their districts, with little willingness to drill down and see if new jobs are actually created

Spotlight: NYCRC

And the article combines former Atlantic Yards point man Jim Stuckey with the clever packagers at the New York City Regional Center, who helped raise $249 million for Atlantic Yards:
The most successful EB-5 projects have demonstrated creative real estate solutions in major metros, explained moderator James P. Stuckey, divisional dean at NYU’s Schack Institute of Real Estate. With a refocus on urban manufacturing, Andrew Kimball, president and CEO of Brooklyn Navy Yard Development Corporation, became the city’s first organization to access low-cost financing--about $60 million--through the EB-5 Regional Center program.
The article mentions the more legitimate Navy Yard program, but, really, shouldn't someone follow up on the revelations about the Atlantic Yards pitched raised by Reuters and by me? The Times has not.