Sunday, July 31, 2011

Public vote (!) tomorrow to replace Nassau Coliseum; demise would boost Barclays Center; Daily News, Post, slam (!) public arena funding; economist warns of "corporate welfare to pro sports team owners"

There's a referendum Monday in tax-strapped Nassau County on a $400 million plan to replace the Nassau Coliseum (and build a minor league ballpark), and you can bet that Barclays Center backers are hoping the whole thing blows up, thus sending events--no, not the main tenant, the hockey Islanders, but concerts and shows--to that new arena rising near the Long Island Rail Road terminal in Brooklyn.

There's reason for question the plan, as I'll describe below, but it's notable how the New York Daily News and New York Post editorial pages, steady backers of Atlantic Yards, have discovered their inner Daniel Goldstein, fervently denouncing the "scheme."

(It's also notable that the public gets a voice decide--though it should be pointed out that a Monday in August is not exactly designed for mass turnout. Neither the public nor local elected officials voted on support for Atlantic Yards. Note that the Nassau County Legislature and then the Nassau Interim Finance Authority would then decide.)

Were the editorial pages just bamboozled by "Jobs, Housing, and Hoops"? Is this "good government" week? Or did someone (Rupert, Mort?) make the call?

Meanwhile, "thousands of union workers, Nassau County officials, hockey fans and Islanders players" held a rally this week, the business community is opposed, the rival teams Devils and Rangers registered their support, and Governor Andrew Cuomo stayed studiously neutral (in contrast with his office's unyielding support for Atlantic Yards, a state project).

Here's some audio on the debate.

Some contrasts

It's not at all the same funding mechanism as that for the two baseball stadiums in New York City and the Atlantic Yards arena--the questionable but legal use of tax-exempt bonds as PILOTs (payments in lieu of taxes), a magic trick that requires tax-exempt land and diverted phantom taxes.

Nor is the $400 million sought from voters to be used for land purchase and infrastructure, as the nearly $300 million in direct funding (plus much, much more in indirect support) for Atlantic Yards.

Rather, Nassau Coliseum backers want voters to pay for construction--but, unlike with Atlantic Yards and the two stadiums, at least the government would get a percentage of rent.

Not a simple call, but reasons for skepticism

The Long Island Press, in a 7/28/11 article headlined A Hard Look at Ed Mangano and Charles Wang’s Plan to Rebuild Nassau Coliseum, concluded:
An analysis by the Press—consisting of dozens of interviews, from residents and business owners to lawmakers, Isles fans, county officials and members of LI’s building and business sectors, including [owner] Wang and [county executive] Mangano themselves and a review of all published assessments of the proposal outlining its positives and consequences, should there be inaction—reveals strong arguments on both sides of the heated debate. By its designers’ own admissions, there are still additional documents yet to come (including a much-touted non-relocation agreement that would theoretically bind the team to the Coliseum), along with further details to be explained. Yet, simply put, the upcoming much-hyped referendum raises more questions than proponents have answers.

Nassau voters are being asked to evaluate an incomplete proposal on a building with no architectural rendering, differing projections from varying county departments and a loosely defined financial guarantee from the team the arena is supposed to house.
Well, we know the value of architectural renderings--not much, since they can always be replaced, as with Frank Gehry's Atlantic Yards plan.

And it's interesting to see the press latch on to differing economic projections--an ongoing issue with Atlantic Yards.

The article, by the way, points out how the establishment does not support the plan. Association for a Better Long Island (ABLI), which represents some of the largest developers and real estate professionals on Long Island, thinks the county has much more pressing needs:
“This has nothing to do with the Islanders,” says [ABLI's Desmond] Ryan. “He [Wang] bought the team. It’s costing him money. He made a bad deal now he wants the taxpayers to bail him out.”
Hence the value, in the case of Atlantic Yards, in spreading the costs/tax breaks among larger entities: city, state, and federal government. Were "Brooklyn" independent--the way AY proponents and naming rights sponsor talk about presenting the arena "to Brooklyn"--we'd have to pay for it, and maybe think harder.

deMause's take

Not dissimilarly, sports facility skeptic Neil deMause, writer of the Field of Schemes blog and book, is critical, but says it's not a simple call:
Oh, it's way less swindleous than the Yankees deal, surely. But it's still the public putting up 100% of the cost and getting back 11.5% of the revenues, and likely ending up with a loss of at least a few million dollars a year. That might or might not be a cheap enough price to be worth holding your nose and voting for if you're an Islanders fan (or just want this whole soap opera to be over with), but it's hardly a gift to Nassau County.
On his blog, deMause added:
If the Islanders were to leave — and I'm not so sure they'd bolt immediately if they lost next Monday, if only because there are so few other options to move to — then having a bunch of county-owned land as an asset wouldn't be the worst thing in the world, especially in a land-hungry market like greater NYC. You'd RFP it out, and see what you come up with.

As I've said repeatedly, I don't think the Wang proposal is the worst deal in the world. But as it looks like the county would end up taking a loss, even if not a huge loss, it's certainly worth exploring what the alternatives would be — whether involving the Islanders or not. Otherwise you're just bidding against yourself.

...If anything, this is a good example of how hard it is to fashion a stadium/arena deal that's fair to taxpayers: Here you have a proposal where the team would be paying significant rent, and where the governing body has a legit worry about losing economic activity to neighboring areas (unlike, say, Minnesota, which is just surrounded by more Minnesota), and it's *still* tough to make the numbers pencil out on the public side. People really need to get over thinking of sports facilities as cash cows and realize that, once you factor in construction costs, they're money pits — going halfsies on a money pit might well be preferable than taking on the full load, but it's still nothing to get excited about.
The Daily News

The Daily News editorial, headlined Nassau County Exec Edward Mangano's $400 mil gift to billionaire Charles Wang is bad for taxpayers, makes some reasonable points:
Why should the voters of Nassau reject County Executive Edward Mangano's plan to borrow $400 million to build a new arena for the National Hockey League's Islanders?

Because, according to the Islanders' own figures, the deal would be a bonanza for team owner Charles Wang while saddling taxpayers with huge risks.

Why else should voters reject Mangano's scheme at the polls Aug. 1?

Because, according to the county's Office of Legislative Budget Review, a new Nassau Coliseum would produce too little revenue to spare taxpayers from having to subsidize Wang's profits.

As with so much of Mangano's pig-in-a-poke proposal, the financial projections are as squishy as they come - one more reason for voters to be wary.
Funny, but skeptical analyses of the Atlantic Yards arena by the New York City Independent Budget Office didn't provoke similar editorials.

In the Post

The New York Post, in an editorial headlined Vote 'no' on Nassau boondoggle, opined:
Yes, the Nassau Coliseum, where the team now plays, is obsolete and needs to be replaced. But Nassau is a fiscal train wreck, even beyond its killer taxes -- with a projected budget deficit of $225 million and a $4 billion debt load.

Voters would have to be fiscal masochists to want to borrow and spend just under half a billion dollars more on a risky, private-sector venture.
Hmm, isn't Forest City Ratner getting a lot more than half a billion dollars in (direct and indirect) benefits? Sure, but the costs are spread out.


The Post writes:
Meantime, there's scant evidence to back the claim that the project, about the size of the current coliseum, would create 3,000 jobs.
Well, there's scant evidence to back claims of Atlantic Yards jobs, too.

A columnist's warning

Raymond J. Keating, an economist and conservative columnist, wrote a 7/28/11 op-ed in the Post headlined Madness in Nassau: Nix giveaway to Islanders:
When they dole out corporate welfare to pro sports team owners, politicians always promise huge economic benefits, which never materialize, while ignoring or playing down costs to taxpayers -- or simply wishing them away.
And sometimes they muddy the water with outlandish projections about benefits for an entire mixed-use complex, right?

In the Times

The New York Times editorial page hasn't weighed in, but Times Sports columnist George Vecsey today writes, in Where Many Things Besides the Islanders Need Fixing:
Questions about priorities are always worth asking before the public agrees to build new facilities for team owners. The questions seem particularly vital as Nassau County holds a bond referendum on Monday that seems jiggered to produce a new arena for the Islanders.

Hard-core fans with long memories and hard-hat construction workers with short hopes for work may find their way to vote Monday. Polls suggest a broader swath of the population does not want to subsidize a new arena but may not make it to the booths for a craftily timed Monday vote on the first day of steamy August.
He adds:
Normally, I am on the side of public projects. I’m all for high-speed railroads and repairing the infrastructure, but not so sure about an arena for a hockey team.

This proposal reminds me of how New York City lobbied to host the 2012 Summer Olympics based on building an all-purpose stadium on the West Side of Manhattan. The Olympic powers rejected it, rightfully so. All the evidence tells me that big-box arenas and stadiums are often a mom-and-pop proposition for jobs and create dead spaces, just like Nassau Coliseum.
He's been a little less exercised about Atlantic Yards.

Would the Islanders move (and to Brooklyn)?

Some wonder whether the Islanders would move from their antiquated arena, or whether owner Charles Wang would pony up himself for a new building.

Forbes's Tom Van Riper points out that, while there's a new arena waiting for a tenant in Kansas City, the New York cable TV market is far more attractive.

Similarly, adds deMause, Kansas City is "unlikely to give the Islanders the sweetheart lease they require" and Quebec officials "want way more than 11.5% of revenues - they're looking to go halfsies."

Van Riper thinks Wang might fund a new arena himself, or that the Barclays Center might be modified to house the Islanders. A letter-writer to the Post also suggested the Barclays Center option.

The latter is impossible--the arena's too small for major league hockey.

However, in my admittedly incomplete search, I've seen no discussion of the likely outcome of the closing of the Coliseum: a significant boost in events such as concerts and shows in Brooklyn.

Saturday, July 30, 2011

Cliche alert: AP hoops writer suggests Bruce Ratner "remembers" the days of the Dodgers in Brooklyn. Nah.

Brian Mahoney, NBA writer for The Associated Press, reports, in Nets hard at work building toward Brooklyn move:
"Brooklyn certainly deserves the best of entertainment there is to offer,'' [Bruce Ratner] said.

Ratner remembers when Brooklyn had it, when the beloved Dodgers played at Ebbets Field and top musicians performed at the Paramount. He believes the Barclays Center will bring back what's been missing.

"Sports and entertainment are such a part of our lives in this country. People who say, 'Well, it's just an arena,' they're really not right,'' Ratner said. "It's a physical structure. More than that, it's a part of ourselves, it's part of what entertainment is and everyone loves entertainment.''
(Emphasis added)

Which is, why, of course, that the project was sold as "Jobs, Housing, and Hoops," with the added layer of starchitect Frank Gehry.

Does Ratner really remember the "beloved Dodgers" in Brooklyn? He was a 12-year-old Clevelander in 1957, when the team left for Los Angeles.

In an alternate universe, Nets GM Billy King, suburban Philly resident, compares AY arena setting to Chicago's United Center; sports stenography ensues

Nets General Manager Billy King, along with paid pitchman Albert King, a Brooklyn native and former Net, hosted basketball writers Wednesday at the under-construction Barclays Center.

King, who lives in suburban Philadelphia and spent a good chunk of his professional career in that city, made a stunningly uninformed comment, equating the Atlantic Yards setting to the setting for the United Center in Chicago, suggesting that the impact of the arena would be similar.

Chicago vs. Brooklyn

The United Center is located on a 46-acre parcel. The Atlantic Yards arena is located on a, what, six-acre parcel?

The United Center is located in a non-residential area west of the Chicago Loop. The Barclays Center will abut neighborhoods that have predominantly low-rise and mid-rise residential buildings.

The arena, yes, will bring changes to Brooklyn, notably event-related retail and entertainment. But there's no comparison to Chicago. (Nor, really, to L.A., but that's a different story.)

Still, the press lapped it up, as dutifully chronicled by NetsDaily, whose chief blogger, NetIncome, perhaps aiming to avoid the "Leni Riefenstahl of the New Jersey Nets" tag, did cite one of the numerous press reports of a protest by disaffected former project supporters.

In the press

Stefan Bondy of the Daily News, notorious for his article on Bruce Ratner's "vindication," headlined his With move to Brooklyn, Billy King says Nets "have all the tools" to get top free agents:“
You have the Garden and you have this,” King said. “I would equate this to the United Center in Chicago, and what this did for the area of Chicago. Or the Staples Center, and what it did to that part of L.A.

“I think this will do the same thing for this area. A lot of people fought it. But I think once it’s built, they’ll realize five or six years from now this area will be booming.”

The Post's piece was headlined Nets' new home worthy of a King:
Above all, there will be a sense of area pride, stressed Nets' general manager Billy King.

"I would equate this to the opening of the United Center in Chicago for what it did to that area or the Staples Center in Los Angeles for what it did for that area of L.A. and I think this will do the same thing for this area," the GM said. "I think a building matters. This building will give a fan base the opportunity to walk a couple blocks to a game, or jump on a subway. Brooklyn will have its own team. If you grew up in Brooklyn, there's going to be a sense of pride."
The Record's Al Iannazzone helpfully provided a transcript:
What do you think?
“This will be the first time an arena like this will be built in a New York City area. I equate this probably to the opening of United Center in Chicago for what it did to the downtown area of Chicago or the Staples Center, what it did to that part of L.A. I think this will do the same thing for this area. A lot of people fought it, but once it’s built I think they’ll realize five or six years from now this area will be booming.”
Should sports reporters really be taking King's word for it?

Friday, July 29, 2011

When it comes to sports facility deals, the devil's in the details

Daily News columnist Juan Gonzalez, in Losing $30M in annual fees shows city whiffed big-time on new Yankee Stadium, Citi Field, writes:
Well, it turns out that Shea and the old Yankee Stadium - both of which sat on park land, and were owned by the city - were the Parks Department's biggest revenue generators.

Under the old Yankee Stadium deal, the city was assured a percentage of gate receipts, a percentage of food sales, even a percentage of the team's cable revenue.
Well, the city also paid for maintenance of the publicly-owned stadiums, so there was a trade-off.

Now the teams pay themselves for maintenance, but they got nice deals that allowed them to pay for construction of new facilities, with luxury suites/boxes, via tax-exempt bonds. Ditto with the Atlantic Yards arena.

And, as Gonzalez suggests, it's negotiable--and the teams seem to have negotiated well.

For example, why did the state give arena naming rights away?

Why, if it was "part of the financing for the project," was it never counted in any subsidy analysis?

RPA's Marshall on MTA deals: "Why should the private sector reap most of the benefits from track and station improvements?"

In What Jay Walder's new city, Hong Kong, can teach us about transit: Make money, don't just spend it, journalist Alex Marshall, a senior fellow at the Regional Plan Association (RPA), observes that the outgoing Metropolitan Transportation Authority chief is going to a city-state where the transit agency works as a developer.

Writes Marshall:
While it may seem extraordinary to have a transit company operating like a profit-making company, it's not novel. Private streetcar lines made money more on real estate deals than the nickel fares they received.

...Today, governments can facilitate new versions of these old arrangements. What if the MTA had chosen to develop the land around the Hudson Yards in Manhattan instead of effectively selling it off to a developer? Or take Atlantic Yards in Brooklyn: Why should the private sector reap most of the benefits from track and station improvements?

In cases such as these, which are bound to come up again, the MTA must be both aggressive and creative in how it imagines its profit margin.
In the case of the deal to sell rights to the Vanderbilt Yard, in exchange for cash and a new railyard/station entrance, the MTA's political patrons held sway.

Had organizations like the RPA, which offered an awkward mix of support and criticism for the Atlantic Yards plan, pressed state officials on the fundamental issues, the private sector would not "reap most of the benefits."

(I'm not blaming Marshall for this.)

A caution on Hong Kong envy

Hong Kong offers some attractive examples of efficiency, but it's not an unmitigated good.

As I wrote last August in Urban Omnibus, A Caution on Hong Kong Envy, New Yorkers at a conference on Hong Kong enthused about the city-state's advances, but many from Hong Kong worried about the cost of progress, seeing their home as a place of enforced uniformity, with too little public participation.

A paean to the New York Times in a New York Magazine cover story; missing is any recognition how the Times fails to cover Brooklyn (and AY)

Seth Mnookin's New York magazine cover story this week is headlined The Kingdom and the Paywall: Some people thought that on Arthur Sulzberger Jr.’s watch, the New York Times could actually become extinct. They might need to issue a correction.

According to the article, thanks to the new paywall that gets readers to pay for online access, new hires, and a commitment to international reporting, the Times has stood out in a shaky newspaper landscape, and turned the corner on its finances.

And all is well. Mnookin concludes:
As a profession, journalism of the kind the Times practices can be dangerous. And as a business, in a metaphorical sense, more so... The current Sulzberger’s bets have at times seemed the most outlandish, as if he’s willfully refused to read the writing on the wall. But for the Sulzbergers, whatever their faults, even when the paper was making money, it has always been a calling rather than a business.
Missing: a New York focus and Brooklyn scrutiny

Maybe the paper is a calling, but, as Mnookin observes, Sulzberger transformed "the Times from a regional paper with national scope to a national paper that happened to be headquartered in the Northeast."

The article could have gone further to analyze how coverage of New York has been diminished.

Now the Times gives tougher scrutiny to Baghdad than to Brooklyn.

I'm not saying the Times doesn't publish Brooklyn feature, trend, and real estate stories. I'm saying their Brooklyn bureau is far smaller than their Baghdad bureau. And there's no priority on continuity and institutional memory.

And that leads to Atlantic Yards coverage (by a newbie to AY coverage) like the article I dissected 7/19/11, featuring lousy reasoning (why is it Atlantic Yards "opponents" are the only ones asked about the public interest?), basic factual errors (no, Sen. Chuck Schumer's promised 10,000 jobs had nothing to do with construction), and perfunctory wave at a complex controversy (Forest City Ratner's questionable use of the EB-5 program for immigrant investors).

Shouldn't the Times do a better job?

And isn't there another reason: Shouldn't the Times, given the parent company's business relationship with Forest City Ratner, in building the Times Tower, be exacting in its scrutiny of the developer?

What if Rupert cared? A few Atlantic Yards story ideas (!) for the New York Post (or other tabloid)

What if... in some kind of alternate universe, media mogul Rupert Murdoch made Atlantic Yards a special priority?

After all, as Azi Paybarah reports in this week's New York Observer, Rupert’s Post Game: His Royal Pie-ness Story on Page SShhh, the New York Post responds to its owners whims and directives. And the Post, not surprisingly, played down a great tabloid moment: the pie in the face Murdoch received when testifying before the U.K. Parliament.

When Rupert cares

And, on the flip side, Murdoch could focus attention, sometimes even more than merited. From the article:
One reporter was told by his editor that “Rupert ordered” a look into the connections between then-governor David Paterson and the lobbying activities of his father, Basil Paterson, according to a Post insider. It was, in fairness, a sound story to investigate, but there was an implied understanding that the reporter should turn up something, since his editor felt the need to mention where the idea came from.

Mr. Murdoch’s influence was so unambiguous and obvious, that often times, his preference was simply assumed.

One former reporter said his own editor requested a week’s worth of stories about the New York City public schools because “Rupert was going to be in town.” It was coveted real estate in the paper, and the reporter reluctantly obliged.
A few ideas for the tabs

Herewith, a few Atlantic Yards story ideas that could fit in the limited space and short attention span of the Post (or other tabloid):
  1. Baldfaced lying! Brooklyn Borough President Marty Markowitz, on tape, claims that "Brooklyn is 1000 percent behind Atlantic Yards."
  2. Scandal shift! Darryl Greene, whose role in the Aqueduct "racino" was so toxic it helped scotch the bid he was part of, continues as minority contracting consultant for Atlantic Yards.
  3. Convenient amnesia! Despite obligations to fund an Independent Compliance Monitor to evaluate the Community Benefits Agreement, Forest City Ratner has not done so.
  4. Delusionary behavior! Forest City Ratner, as if in some time warp, continues to maintain that tax revenues, as well as jobs, will be delivered as promised.
  5. Stunt! What might it be like for a few thousand arena-goers to walk down residential Dean Street, with its narrow sidewalks, from the surface parking lot to the arena? (Send a few hundred flash mobbers down the block!)

Thursday, July 28, 2011

At protest outside Atlantic Yards site, former project supporters angrily call for local jobs and contracts

The big news from yesterday's protest (other coverage) of the lack of jobs at the Atlantic Yards site (and other sites), held by People for Political and Economic Empowerment (P.P.E.E.), was less the content of the protest than the fact that it occurred: formerly vocal (and disruptive) supporters of the project were now holding a protest, as I noted in my preview piece.

But the protest (videos below), which focused on Atlantic Yards (and went to one other site, near the Brooklyn Academy of Music), was notably angry, as P.P.E.E. President Allen and others excoriated developer Forest City Ratner from outside the gate and, at times, admitted regret for their formerly pro-project stance.

About 60-70 people attended, though Allen and others vowed future protests, with larger crowds. If so, Forest City--which may have tried to avert the protest--will have more on its hands.

Note that, despite the sign above, the Community Benefits Agreement (CBA) shouldn't be void because Bruce Ratner and his company sold 80% of the Nets and 45% of the arena to Russian oligarch Mikhail Prokhorov. But it is tough to monitor, or enforce.

The protesters gathered at the northeast corner of Sixth Avenue and Atlantic Avenue, with a good number of reporters present, most if not all drawn by a Develop Don't Destroy Brooklyn press release based on my preview article. (P.P.E.E. did not, to my knowledge, send out a press release.)

One onlooker, with back to camera in right foreground, was Develop Don't Destroy Brooklyn's Daniel Goldstein.

The protest then moved down Sixth Avenue to the gate--at Pacific Street--to the Barclays Center arena construction site, with different people taking the bullhorn to address those inside. Construction workers, understandably, tried to ignore it; they had jobs to do.

At the direction of the police, the protesters aimed to stay on the sidewalks; after more than half an hour, they made their way to a site near BAM. While the protest was planned--and the posters indicated--to encompass multiple projects, the event focused on the Atlantic Yards site

One speaker, as noted in the final video below, was Robert Cornegy, the 56th Assembly Male District Leader and 2009 candidate for the 36th District Council seat in Bedford-Stuyvesant held (and retained) by Al Vann.

On video

Videos below shot by Jonathan Barkey; I took the photos above.

FUREE, looking for "missing jobs" promised in Downtown Brooklyn rezoning, protests Forest City Ratner, focuses on Downtown Brooklyn Partnership

In contrast to yesterday morning's protest by People for Political and Economic Empowerment regarding the lack of local jobs and contracts, an afternoon protest held by FUREE (Families United for Racial and Economic Equality), was more organized, with protesters wearing t-shirts, planning with the police, chanting and singing, and offering both agitprop theater and concrete demands.

FUREE, which brought 40-50 people to several sites around Downtown Brooklyn, including the offices of Atlantic Yards developer Forest City Ratner, focused on the Downtown Brooklyn Partnership (DBP), asking (unsuccessfully) for a meeting with DBP President Joe Chan.

They contrasted the promises of 18,500 new jobs with the reality, which includes a claimed 7000 new jobs--I'd like to see the statistics.

The press release below points out that, instead of jobs (via office towers) the main result of the 2004 Downtown Brooklyn rezoning was luxury housing.

I'd add that planners and the City Council neglected to require that, should developers take advantage of increased development rights and build luxury housing, they should have been required to share the fruits of their increasingly valuable property and build affordable housing, as via the now-standard practice of inclusionary zoning.

On video

The two videos below, which I shot, combine several different episodes during the protest. "Shirley Holmes" (aka a female version of investigator Sherlock Holems) is portrayed by Latisha Butler, while the gentleman wielding the signs with developers' faces, and holding the "moneybag," is Alvin Bartolomey.

From the press release
Unemployed and underemployed area residents and youth searched for missing jobs in Downtown Brooklyn. The event targeted development sites that received over $3.4B in private investments and $300M in public subsidies and claimed to create local jobs and other community benefits. Organized by Families United for Racial & Economic Equality (FUREE), the "Where the Jobs At?" job hunt stopped at sites of shuttered small-businesses, the CityPoint development, MetroTech Center and others. Following the hunt, residents held a press conference and hand-delivered demands directly to the Downtown Brooklyn Partnership (DBP), a quasi-public local organization responsible for development in Downtown Brooklyn.

In 2004, the city passed the Downtown Brooklyn Rezoning Plan that, according to the City, was designed to encourage new office development within the existing commercial area. The plan also projected the creation of 18,500 jobs. Contrary to the expectations of city officials, luxury housing has been the predominate type of development, steadily erasing the permanent job prospects of community residents that is further impacted by the recession and rising unemployment rates in the area. The Downtown Brooklyn Partnership, under the leadership of Joe Chan, formerly of the NYC Economic Development Corporation, touts bringing in 7,000 new jobs to the area but members of FUREE pointed out that over 11,000 are still missing.

One stop on the hunt included properties of United American Land on Bridge and Willoughby Streets and the small businesses that were evicted over three years ago. Today, the businesses remain closed and diminish foot traffic to other area businesses. Washington Square Partners and Acadia Reality of CityPoint were also targeted, as members of FUREE highlighted the loss of 731 jobs when the former Albee Square Mall was demolished to build mixed-used business and luxury housing development on the site. CityPoint received over $20M in economic stimulus funding where only a handful of the 108 constructions jobs have gone to locals.

Three additional developers were “hunted” at MetroTech Center: JPMorgan Chase, Forest City Ratner Companies and the Downtown Brooklyn Partnership. Chase received tens of millions of dollars in subsidies for its MetroTech offices that were to bring 5,000 office jobs to the area. Ratner, who despite having received over $675M in government aid, currently employs only 430 workers, a far gap from the 17,000 jobs cited, and has broken a host of other community benefit pledges.

The job search stop that residents really had their eyes on is that of the Downtown Brooklyn Partnership. Joe Chan, known as the main cheerleader of the area’s “redevelopment.” FUREE members hand-delivered a letter to the Partnership requesting that they hold developers accountable, including those that sit on their board, commit to transparency and develop better ways to ensure community-involvement in decision-making in area developments.

The letter also demanded that Chan co-create a jobs plan with community residents and make public the number of actual jobs created in the community, including how many of the jobs provide living wages, are permanent and are full-time much like how they promote luxury condominium developments on their website. It also demanded the preservation of small businesses, the creation of small-business protection fund and help small businesses find affordable space in the area.

Did Forest City Ratner try to avert yesterday's rally? There were hints, plus an FCR associate shadowing the protest

Did Forest City Ratner or others try to stop yesterday's protest, led by People for Political and Economic Empowerment (P.P.E.E.)?

P.P.E.E. president Martin Allen, in the interviews below, hinted as such, though he wouldn't name names. He said they wanted to avert the protest, and call him in for a negotiation.

He said he wanted a public negotiation, with promises for local jobs and hiring fulfilled as promised. If such another project arose, I asked what he'd do differently? Get it in writing, he said.

But Forest City did sign a Community Benefits Agreement, so the devil's in the details.

Shadowing the protest

At one point, the woman pictured at left, along with an associate walked along, observing the protest.

One of the protesters identified her to me as Yvette, the daughter of Darryl Greene, the controversial minority hiring/contracting consultant who was so toxic, because of his criminal record, that his role in one firm's Aqueduct "racino" bid led to the demise of that bid.

Greene's firm, The Darman Group, has long worked for Forest City Ratner and was supposed to help the firm hire an Independent Compliance Monitor to report on the Community Benefits Agreement.

A records search indicates that Darryl Greene has a relative named Yvette Dennis. Beyond that, the program (excerpted below) from a conference on women in construction indicates that Yvette Dennis is part of The Darman Group.

Was the woman yesterday Yvette Dennis? The two photos look somewhat similar, but I can't be certain, because when I tried to query her, she refused my questions and then walked into the Atlantic Terminal Mall.

Update: a reader tells me, "I can confirm the woman in both photos in your piece is named Yvette and that she appears to run the Community Labor Exchange on site."

The Ratner response to yesterday's protest: there are 543 workers, 217 from Brooklyn (really?); one report asks, Where's the ICM?

Several news organizations covered the protest yesterday (my coverage) by former vocal supporters of the Atlantic Yards project, and got Forest City Ratner's questionable response.

The Daily News, in Atlantic Yards project's former supporters turn on developer over lack of local jobs, reproted:
Advocates and would-be workers who loudly backed the project at years of public hearings turned their bullhorns yesterday on developer Bruce Ratner.

"We feel like idiots because we supported you, we listened to you, we thought your word was gold," said Martin Allen, president of People for Political and Economic Empowerment. "Now that you got the job moving, you turn into a rat."

There are 543 workers on the site, Ratner officials said - compared with 1,620 predicted in state documents by this summer. Officials said 217 of the workers live in Brooklyn, but residents who aren't already members of construction unions can't get the jobs.
I question those statistics.

Keep in mind that, at the 7/14/11 Atlantic Yards District Service Cabinet meeting, Forest City reported 430 workers on site. Even if that number has increased, keep in last month a more independent source--the consultant to the arena bond trustee--reported 320 workers--while in May Forest City had reported 500.

As for the number of Brooklyn workers, aid Forest City Ratner executive MaryAnne Gilmartin, stated, verbatim. "[S]ince construction began approximately 180 Brooklyn residents have been working on site."

(Emphasis added)

Cumulative totals are not the same as current statistics.

And yes, there are fewer buildings under construction than predicted, meaning fewer workers, but that raises the question: were Forest City's timetable promises credible? And, as the Daily News notes, should modular construction be used, the number of workers would decline.

Where's the ICM?

The Epoch Times, in Atlantic Yards Construction Jobs Not Delivered, Protesters Say, made a couple of errors--no, the marchers weren't from Boerum Hill; no the "Community Board Agreement" (actually: Community Benefits Agreement) wasn't signed by Community Board 2 (or any CBs), but did make an important point:
All of the contract stipulations rest on the oversight of an Independent Compliance Monitor (ICM). The ICM is a committee composed of representatives of each benefit category, explained Perris in a phone interview. The ICM is responsible for assessing whether Forest City Ratner has sufficiently fulfilled its duties.

“The ICM has never been funded,” said Perris. “I'm not sure if they've ever met. We've not been apprised of any meeting or of how successful any commitments have been.”
Indeed, as I've reported, Forest City has claimed that the CBA went into effect only after the arena broke ground.

The Epoch Times reported:
Should the ICM meet and find that Forest City Ratner has not fulfilled its end of the deal, the developer would be required to pay $500,000.

“Some people have said it's a buyout,” quipped Perris. Echoing concerns of many opponents of the development, Perris noted that government involvement in the project has been minimal and no officials were party to the CBA.

“Nobody in government has any sort of leverage to say, 'You guys haven't done what you said you're going to do,'” Perris said.
The $500,000 refers only to job training, which FCR has funded, but the larger point is important: there is no government leverage.

Other coverage

Patch, in Workers Rally Against 'Broken Promises' on Atlantic Yards Jobs, was first off the blocks.

The Brooklyn Paper oddly headlined its coverage Unions to Ratner: Hey, where are the jobs?; while a few of the protesters were also members of unions, the rally was organized by a group that includes mainly non-union workers.

Where were you in 2005? Times's skeptical coverage of jail bid in New Jersey contrasts markedly with willingness to downplay parallel issues in Vanderbilt Yard bid

A front-page (in the New York edition) article in today's New York Times Metro section is headlined Political Links and a Jail Bid in North Jersey.

That skeptical piece contrasts notably with the Times's coverage of the process by which the Metropolitan Transportation Authority sold rights to develop its Vanderbilt Yard.

Consider, for example, the Times's perfunctory news brief, headlined Metro Briefing | New York: Brooklyn: Atlantic Yards Proposals Sought and published 5/26/05, in its entirety:
The Metropolitan Transportation Authority is seeking competitors for the development of its Atlantic Yards site, and has set a deadline of July 6 for proposals. A proposal by Bruce C. Ratner to build 6,000 housing units and a stadium for the Nets basketball team on the site has already won endorsements by the city and the state, which have each offered to pay $100 million for site improvements. But Tom Kelly, a spokesman for the authority, said yesterday that the agency had decided to consider other proposals in part because of its experience with its West Side railyards, which became the focus of a bidding war before an agreement was reached to sell the property to the New York Jets. Mr. Kelly said he knew of no other bids that were being prepared for the Atlantic Yards site. Thomas J. Lueck (NYT)
(Emphases added)

The MTA never had an Atlantic Yards site, nor could other bids have been prepared for "the Atlantic Yards site," which is 22 acres, while the Vanderbilt Yard is about 8.5 acres.

The parallels between 2011/Jersey and 2005/Brooklyn

However, as the annotation below suggests, there are a lot of parallels.

Yes, officials had a clear favorite. Yes, that favorite had political ties to the governor and other local officials. Yes, there was an unusually short deadline. Yes, the bidder with the inside track acted as if its selection were a done deal. (In fact, so did the MTA).

One significant difference: the deal in Brooklyn was a lot bigger.

Wednesday, July 27, 2011

FAQ: Forest City Ratner's ridiculous claims about Atlantic Yards tax revenues and jobs, and what's wrong with the (somewhat more sober) city and state projections

Atlantic Yards will be an economic engine for Brooklyn, New York City and the State generating more than $5 billion in new tax revenues over the next 30 years. In addition to tax benefits, the project will also create thousands of new jobs: upwards of 17,000 union construction jobs and up to 8,000 permanent jobs.
--Developer Forest City Ratner, July 2011, as claimed to Crain's New York Business

Will the project bring in $5 billion in new tax revenues?

Not at all. That's a variant of the notorious $6 billion lie touted by sports economist Andrew Zimbalist, Forest City Ratner's hired consultant, working well outside his expertise. Bizarrely,  FCR executives and an FCR lawyer at times claimed in legal papers that it was a state estimate. That was an extra lie.

What's wrong with the $5 billion calculation?

There are many reasons why the reasoning's flawed, such as the use of new residents' income to calculate benefits, which is like Donald Trump claiming he's creating an "economic engine" by building speculative condos.

But the calculation also violates two standard practices among economists analyzing these kind of developments.

First, economists usually calculate not "new tax revenues" but "net tax revenues," as acknowledged in the excerpt from a Forest City executive's legal affidavit above.

Second, and more importantly, they always refer to the "present value" of money: "the current worth of a future sum of money or stream of cash flows given a specified rate of return." That number is always far less than the cumulative stream.

If Forest City can claim a cumulative total of $5 billion, then anyone who gets a $200,000 mortgage loan but makes $500,000 in overall payments can claim their house is worth $500,000.

In their own analyses, the Empire State Development Corporation (ESDC) and the New York City Economic Development Corporation (NYC EDC) estimate new revenues closer to $1 billion, not $5 billion.

But those studies, as well as the Forest City one, are inherently flawed for other reasons, right?

All three projections depend on Atlantic Yards being 1) built in full, as approved, and 2) built within ten years.

There's no way the project will be built in ten years. Atlantic Yards was last approved in 2009 and only one building of 17, the arena, is under construction, though the four towers around it were supposed to be built at the same time. However, the Development Agreement signed with the state gives Forest City 12 years to build three towers around the arena, and 25 years to build the project.

Nor need they build the project in full: the Development Agreement allows for a much smaller project, less than 5.2 million square feet, not the projected 8 million square feet.

There are other flaws, right?

The most recent estimates by the ESDC suggest nearly $1.2 billion in net revenue, but that depends not only on the factors mentioned above, but the construction of an office tower, a key source of jobs and thus new revenues.

But the office tower is indefinitely delayed. Maybe it will ultimately get built, but if it's not built at the original timetable--and it's already late--the revenue calculations are already off.

Will the arena be a money-loser for the city? For the state?

According to the New York City Independent Budget Office, the city would lose $39.5 million, or $180.5 million when opportunity costs were factored in.

The combination of subsidies and tax breaks, including $194 million in federal tax breaks on tax-exempt bonds, adds up to what the IBO calculates as $726 million in savings on the arena for developer.

(Note that the IBO estimated $678 million in tax-exempt arena bonds, rather than the ultimate $511 million; that number mainly affects the cost to federal taxpayers, but it does adjust the overall savings to the developer, perhaps by 25%--or $50 million--of the $200 million in total costs to the public sector for the bonds. So call the revised total $676 million in savings.)

The IBO limited its analysis to the arena. The ESDC responded by saying it considers the whole project; here's the IBO's rebuttal.

Also note that Forest City Ratner in 2005 had no trouble embracing the IBO's conclusions that the arena would be a modest gain, but in 2009 attacked the IBO's methodology.

Will the project include 17,000 construction jobs?

No. First, that number means 17,000 job-years, or 1700 jobs a year for a decade--or, if the project takes 25 years, 680 jobs a year. (The ESDC says 16,427 new direct job-years and, yes, they use that term.)

However, as I and others have reported, Forest City is way behind projections. The developer's modest numbers even seem exaggerated compared to statistics reported by the consultant to the arena bond trustee: just 320 construction jobs.

And that's only if the project is built as announced. It could be significantly smaller--and thus the figure for jobs could be much, much lower.

Moreover, if Forest City Ratner pursues a modular construction plan, the numbers of jobs would decline further.

What does "upwards of 17,000 union construction jobs" mean?

Absolutely nothing. It means that 17,000 jobs is a goal they've announced, not that it's likely. As with the term anticipate, it should go in the Atlantic Yards Lexicon as a "placeholder we don't believe but think we can get away with."

Would there be 8000 permanent jobs? 4000?

There were once supposed to be 10,000 office jobs, a figure that was bogus from the start because there was no market for such jobs. Then Forest City decided in 2005 that three of four towers around the arena would contain housing, not office space, cutting the number of jobs severely.

(Sen. Charles Schumer's 2004 claim of 10,000 jobs was obsolete by mid-2005, though the New York Times recently quoted that claim without context.)

The figure of 8000 jobs promulgated by Forest City Ratner relies on a completely unrealistic configuration of office space, out of the plan since 2006, for which there is no market.

The ESDC's current estimate of about 4000 jobs should be discounted by one-third given the office market. Also, the number of building service and retail jobs would be dependent on a full buildout of the project, and also could be cut significantly. (The city's fiscal analysis, oddly enough, assumes more office space than does the state's analysis.)

What does "up to 8,000 permanent jobs" mean?

Absolutely nothing. It means that 8,000 jobs is a goal they've announced, not that it's likely. I'd make a very large wager against that total.

What subsidies have been left out?

They haven't started calculating subsidies for the affordable housing.

What about naming rights?

The state gave away naming rights to Forest City Ratner to sell to Barclays. The total was initially announced at $400 million, but later revised to $200 million-plus. “It’s part of the financing for the project,” an attorney for the state said in 2009.

It was never calculated as a subsidy, however, much less in the documents describing sources and uses of project funding.

What's the lesson for the public?

Forest City will continue its fantasy math, but government agencies owe the public more than spin: they should have provided, and should be providing, a range of best-case and worst-case scenarios.

What's the lesson for journalists?

That they must do more than "he said, she said" reporting. When it comes to numbers, it's possible to do the math, or to ask outside experts to help.

Following up on the Markowitz campaign fine: two editorials criticize him; Brooklyn Paper suggests wife is First Lady; poll (taken before fine surfaced) shows BP high in 2013 Mayoral rice

That $20,000 fine levied against Brooklyn Borough President Marty Markowitz for letting his wife get her expenses paid on three international trips--despite explicit advice to the contrary (which he ignores)--is still provoking discussion.

The Daily News reports, in Irked Brooklyn Borough President Marty Markowitz: Change city travel law, that Markowitz is hoping for the City Council to allow spouses to travel for free. Council Members say that's unlikely.

Is Jamie "First Lady" of Brooklyn?

In an editorial, Marty Markowitz scores another Knucklehead Award for trying to pass off his wife as first lady of BK, the Daily News simply says Markowitz is wrong, without noting how the judge in the case contrasted Jamie Markowitz's duties with that of a real First Lady.

After all, the Brooklyn Paper, in Jamie Markowitz is indeed our ‘First Lady’, reports that "anyone who knows Brooklyn and its Beep agrees with him."

I'm not so sure about that, but the newspaper did find several supporters:
“His wife is a part of everything he does,” said Community Board 15 Chairwoman Theresa Scavo. “It’s baloney for the judge to say that she doesn’t belong.”

Jamie Markowitz doesn’t have an official title or assigned aides like the First Lady of the United States, but she has mastered the age-old adage that 90 percent of success is just showing up.

The queen of Kings County is constantly at the Beep’s side at important Brooklyn events. For instance, there she was on Sunday as the first gay weddings were held at Borough Hall. And our shutterbugs are always snapping her at galas for Prospect Park and the Brooklyn Museum.
Keep in mind that one excuse for bringing his wife on international trips is that Markowitz considers himself "not a good flyer."

Who pays for his defense/fine?

The Post, in an editorial headlined Marty Mark's freebies, writes:
Brooklyn Beep Marty Markowitz says he's paying that $20,000 Conflicts of Interest Board fine just levied against him out of his own pocket.

That's a surprise.

Because he has taken a different approach with the far-heftier sum he spent on lawyers trying to fight the case -- which involves free trips enjoyed by his wife as she tagged along on his "official business."

In fact, a spokesman admitted, the $125,000 he's doled out from his campaign treasury to lawyers went "in part" to representation before the COIB.

"In part" doubtless means most of it.
Mayoral run?

Markowitz, likely due to his name recognition, scored high in a Quinnipiac University poll of potential 2013 mayoral candidates conducted last week.

Presumably those numbers would fall off a bit after this week's publicity.

From the press release:
Police Commissioner Ray Kelly is A Number 1 in an early look at the 2013 New York City mayoral race, according to a Quinnipiac University poll released today.

Kelly gets 23 percent, including 17 percent among Democrats, when the independent Quinnipiac University poll asks New York City voters who they most want to see elected mayor in 2013. Other results are:
  • City Council Speaker Christine Quinn - 18 percent, including 20 percent of Democrats;
  • Brooklyn Borough President Marty Markowitz - 12 percent, with 14 percent of Democrats;
  • City Comptroller John Liu - 10 percent, with 10 percent of Democrats;
  • 2009 Mayoral candidate William Thompson - 8 percent, with 9 percent of Democrats;
  • Public Advocate Bill de Blasio - 6 percent, with 7 percent of Democrats;
  • Manhattan Borough President Scott Stringer - 4 percent, with 5 percent of Democrats.
If Kelly does not run, Quinn goes to the head of the class, with 23 percent of voters, including 24 percent of Democrats. Other results are:
  • Markowitz - 15 percent, with 16 percent of Democrats;
  • Liu - 13 percent, with 13 percent of Democrats;
  • Thompson - 10 percent, with 10 percent of Democrats;
  • de Blasio - 8 percent, with 9 percent of Democrats;
  • Stringer - 5 percent, with 6 percent of Democrats.

Daily News: parking summonses rise around Atlantic Yards site; now, what about cops themselves? what about trucks with contents uncovered?

In Police crack down on illegal parking around Atlantic Yards construction, the Daily News reports:
Cops have finally cracked down on the rampant illegal parking around the Atlantic Yards construction site.

The Daily News reported this month that construction workers, city employees and others were parking illegally and using bogus placards around the busy project site with no fear of enforcement - but now the NYPD is handing out the tickets.

Cops have issued 69 parking summonses in the last two weeks in the blocks around the site, and NYPD spokesman said. The spokesman said the violations "run the gamut" and include parking at a bus stop, on the sidewalk, in front of a hydrant, and in No Standing zones.

Empire State Development Corp. project manager Arana Hankin said when she visited the site last week, she saw NYPD brass directing a ticket blitz.
I've reported on the apparent improvement, which Hankin announced nearly two weeks ago.

Unclear is whether the actions of police officers themselves are being targeted.

What next?

The illegal parking was blatant, thus relatively easy to respond to. Equally blatant, it seems, is the periodic departure of trucks from the Atlantic Yards site without tarps covering dirt and dust, as required by the Amended Memorandum of Environmental Commitments.

Will Hankin's agency step up to stop that?

PHNDC's Veconi on the lessons of the latest Atlantic Yards ruling: the state "is willing to risk breaking the law" when it helps Forest City Ratner

In a July 23 op-ed in Prospect Heights Patch, Lessons from the Community’s Atlantic Yards Win, Gib Veconi of the Prospect Heights Neighborhood Development Council (a component of BrooklynSpeaks), analyzes the significance of Justice Marcy Friedman's July 13 ruling ordering the Empire State Development Corporation (ESDC) to conduct a Supplementary Environmental Impact Statement.

Among the lessons:
ESDC is willing to risk breaking the law when it helps FCRC [Forest City Ratner]. ESDC had previously shown itself willing to exploit New York State’s regressive eminent domain laws to transfer private property to FCRC. The Friedman decision shows that the agency is also willing to violate State environmental laws when doing so is economically beneficial to FCRC. Furthermore, the experience of this lawsuit shows that ESDC has no compunction about obfuscating in court to conceal what it knows when the facts are. This is a truly chilling realization when one considers that ESDC has sole formal responsibility for Atlantic Yards oversight.

The courts aren’t a substitute for responsible project governance.... Justice Friedman’s decision left ESDC with the responsibility of correcting its prior error in not preparing an SEIS, even though her previous decisions in the case had excoriated the agency for lack of transparency it is review, and for not informing the court of key facts during trial....

The collective judgment of our local elected officials should be sought and respected on major project decisions. Unlike other large ESDC projects, Atlantic Yards does not now have a dedicated subsidiary with a board including outside directors to give balance to decision-making. Instead, the agency in effect delegates its authority to FCRC.
What next?

Besides calling for an Atlantic Yards governance entity, Veconi suggests oversight hearings:
In the meantime, scrutiny of ESDC’s actions in 2009 should not end with this case. The Assembly Committee on Corporations, Authorities and Commissions is now chaired by Assemblyman Jim Brennan, who previously joined the BrooklynSpeaks groups as a plaintiff in the suit. Hearings by the Corporations Committee investigating the 2009 actions of ESDC and its later conduct during the litigation could only better inform the dialog on reform of Atlantic Yards oversight.
Who's the community?

Veconi's op-ed continues one dismaying pattern in discussion of the lawsuit. Two separate coalitions, led by Develop Don't Destroy Brooklyn (DDDB) and BrooklynSpeaks, filed separate lawsuits, which were consolidated.

Thus, the win was shared, even though DDDB ultimately let BrooklynSpeaks take the lead in court.

That said, neither coalition, in its press releases and statements, acknowledges the other. Maybe that's driven by fundraising, but it's still misleading.

Tuesday, July 26, 2011

This weekend, extended work at the Atlantic Yards site related to the removal of underground storage tanks

According to a Supplemental Report (below) to the Empire State Development Corporation's previously issued two week Construction look–ahead regarding July 18-July 31, 2011, extended work--on evenings and weekends--will be needed to remove underground storage tanks from a former gas station at the eastern end of the site, near Pacific Street and Vanderbilt Avenue.

From the notice:
New Information: work related to the removal of the underground storage tanks from the former gasoline station as required by NYS-DEC will be conducted during this period. In order to excavate for these tanks, the soil pressure on the north and south SOE (”retaining walls”) within the rail yard needs to be equalized. This will be accomplished by drilling “Tie-Backs” (“soil anchors”) into the closed portion of Pacific St to restrain the south SOE wall, then removing the “Cross-Lot Braces” (30” diameter, 80 ft long pipes) that currently run over the tracks in the yard. Preparatory work is being done to whatever extent possible during normal work hours. The actual brace removal and tie-back work must be done on nights and weekends for the following reasons:
  1. A crane and Tie-Back rig must be mobilized within the closed portion of Pacific St. If done during the week, this would block truck traffic delivering necessary construction materials to the Arena on the approved truck route;
  2. The Cross-Lot Braces (quantity 4) must be removed safely when there are no LIRR trains on the storage tracks below;
  3. The Tie-Backs (quantity 4) must be drilled safely when there are no LIRR trains on the storage tracks below.
All work will be done within the confines of the closed portion of Pacific St, within the former gasoline station property and within the rail yard itself. No work is anticipated in the public thoroughfare.

Work will take place during the following hours:
  • Friday, July 29th 3:00 PM to 12:00 AM
  • Saturday, July 30th, 7:30 AM to 4:30 PM
  • Sunday, July 31st, 7:30 AM to 4:30 pm
Supplemental Atlantic Yards Construction Alert 7-18-2-11

Another protest tomorrow, from FUREE, regarding the lack of jobs at Atlantic Yards site and other sites

Updated: 1:30 p.m.  Starting Point: 81 Willoughby Street, Downtown Brooklyn. Press Conference: 15 MetroTech Center.

Beyond the protest scheduled tomorrow morning by P.P.E.E. (People for Political and Economic Empowerment) and REBUILD, FUREE (Families United for Racial and Economic Equality) tomorrow afternoon will be holding "WHERE THE JOBS AT?", a "Walking Tour & Action" aimed to highlight the lack of jobs at Atlantic Yards and other construction sites.

(FUREE, unlike the other groups, has never been an Atlantic Yards supporter.)

The hunt starts @ 1PM at FUREE’s office – 81 Willoughby St., Suite # 701.

Unemployment is high... Wages are down... Our communities are struggling... IT'S TIME TO TAKE ACTION!

"WHERE THE JOBS AT?" Walking Tour & Action

Across Fort Greene and Downtown Brooklyn big developers and corporations are given millions of tax-payer dollars and tax-breaks to build in our communities.

They promise jobs and/or affordable housing in return.

But what happens when the much-hyped community benefits shrivel up or disappear? How do we hold them accountable?

Join FUREE for a neighborhood walking tour and creative action to track down the missing jobs. From the Fulton Mall to Atlantic Yards to lesser known sites in the area, we’ll hunt down the mysterious job snatchers and find the real solutions we need.

Bring your family and friends, your FUREE t-shirts and noise-makers.

MORE INFO / RSVP to FUREE at: 718-852-2960 ext. 306, lucas(at)furee(dot)org.

Where the Jobs at - July 27 Action

Formerly vocal and distruptive Atlantic Yards supporters, P.P.E.E. (and REBUILD), to rally July 27 protesting lack of jobs at AY site and other construction sites

The Atlantic Yards saga is now moving toward a version of blowback.

Saying "We need jobs, not broken promises," a group that loudly and sometimes disruptively rallied in support for Atlantic Yards is changing its tune, organizing a public protest on July 27 outside the in-progress Barclays Center site and nearby Downtown Brooklyn-area construction sites.

The rally, aimed to start at the corner of Flatbush and Atlantic avenues at 9:30 a.m., is sponsored by P.P.E.E. (People for Political and Economic Empowerment), which helps train and place hard-to-employ people, some of them ex-convicts, in construction work.

[The location may shift to the corner of Atlantic and 6th Avenue.]

P.P.E.E. is essentially interchangeable with REBUILD, an organization launched in 2004 by the late Darnell Canada, a pro-project activist who had just left BUILD (Brooklyn United for Innovative Local Development), a signatory of the Atlantic Yards Community Benefits Agreement. BUILD also works on job training, though for a broader range of jobs beyond construction.

"Don't tell me one thing one day, and then when the day comes, when the work is coming, you tell me something else," Martin Allen (right), Canada's friend and president of P.P.E.E., told me, during a recent interview at P.P.E.E. headquarters in Bushwick, on a stretch of Broadway where storefront churches vie with retail outlets.

(P.P.E.E. and REBUILD, once located on Gold Street near Downtown Brooklyn, saw that space demolished for the luxury Avalon Fort Greene, and had to seek inexpensive quarters farther away from the Fort Greene housing projects that are part of their base.)

Charge: lack of loyalty

"We was there when you called us, to go in front of the press, and speak our minds about jobs and contracts, about why Atlantic Yards was a good project for Brooklyn," added Allen, a barrel-chested man who speaks in gruff, streetwise tones. "So don't turn your back now after you feel like you got your foot in the door, and leave us standing on the other side of the doorway."

"Darnell was with me every step of the way on that," added Allen, who not only grew up with Canada but served time in prison with him.

(Canada died in late May, at 52. I'll write separately about him shortly. Allen did not seek out this interview; I contacted him to learn more about Canada.)

In fact, according to Allen, Canada told Forest City CEO Bruce Ratner within the past year or so that a protest would occur, "because it's not being done right here." While REBUILD is essentially on the shelf, given Canada's passing, Allen said he and others aimed to revive it.

As noted in the protest notice, below, the marchers aim to visit several other sites.

PPEE Protest July 27 2011

CBA impact in Brooklyn?

It's difficult to assess exactly how well Forest City Ratner has fulfilled the CBA, as it has been self-reporting, rather than funding the Independent Compliance Monitor required by the contract. (The only people who can enforce the CBA, however, are signatories that are financially dependent on the developer.)

For example, at the meeting this month of the Atlantic Yards District Service Cabinet, FCR executive Sonya Covington described percentages of MWBE (Minority and Women Business Enterprises) contracts. However, it's unclear where those companies come from; City Council Member Letitia James requested statistics on LBEs: Local Business Enterprises.

At one point, Forest City Ratner consultant The Darman Group prepared a report, on behalf of the developer, to the CBA Executive Committee. (It's not clear whether such reports have stopped, or just haven't been made public.)

In that report, the developer reported more granular figures, at least. Of 47 contracts in the New York area, 17 (36%) had gone to Brooklyn firms. One of the largest, however, had gone to a woman-owned demolition firm based on Long Island.

Murky situation

P.P.E.E.'s Allen, for example, said that, while Forest City early on hired companies with which his group had ties, it hasn't done so in years.

For example, he said the developer hired two non-minority security companies, while a Brooklyn-based security firm, that includes people placed by P.P.E.E., was bypassed.

Given the lack of an Independent Compliance Monitor, it's not easy to suss out the details. For example, in 2007, Forest City announced it had hired "the minority-owned security firm Eddington & Associates.

In a report by an FCR consultant, the company was identified as being from Westchester and, at different places in the report, either an MBE or a WBE, but not both. (The state MWBE database has an Eddington Security located in the Bronx, currently certified as both a minority- and woman-owned business.)

It's likely that the developer will blame lawsuits for delays and thus lower amount of contracting so far.

REBUILD once optimistic

In a 4/10/08 column, then-New York Daily News columnist Errol Louis wrote about how Canada and REBUILD were eagerly awaiting an improved economy:
The first of Canada's trainees were hired at Atlantic Yards but recently got laid off as the souring economy caused the project's developer, Bruce Ratner, to delay the project.
Now Forest City Ratner has been trying to cut costs, notably with announced plans to consider modular construction.

"I think that's a slap in the face, not only to the community, but to the unions," said Allen, himself a 12-year member of General Building Laborers' Local 79.

Not a CBA signatory

Canada left BUILD in March 2004, just a few months after it launched. “I am resigning out of the need to distance myself from those in the organization who see this organization as financial self gain, [rather] than for the needs of the Brooklyn community,” Canada wrote in a letter, as quoted by the Brooklyn Paper.

Allen similarly distinguished the posture of REBUILD and P.P.E.E. from CBA signatories. "We didn't get the money the other guys got, they made their deals on the side," Allen said. "Everything we did, we did it straight up."

Allen said he and Canada "wanted contracts for our people in the community," but not direct subsidies, "because if you take money, they basically own you."

While negotiating the CBA, none of the signatories was paid by Forest City Ratner, at least as has been reported. CBA signatories all later received payments from the developer, FCR has confirmed, and BUILD, for example, since August 2005 gained rent-free space from the developer.

Disruptive presence

Canada and Allen brought vanloads of their followers to be a sometimes disruptive presence at public meetings.

Canada has a couple of cameos in the documentary Battle for Brooklyn (one of them also in Brooklyn Matters), ominously warning those concerned about the environmental impact of the project that if the project didn't proceed and put the ex-cons he worked with to work, "You're the victim."

As I reported, Canada interrupted a July 2009 meeting organized by the Empire State Development Corporation to answer questions about the revised project.

FCR executive MaryAnne Gilmartin of Forest City Ratner was asked about the project, and Canada intervened.

“We need the jobs, we need to start working," he shouted. "Same old questions. Same old questions. Same old questions--when’s it going to change?”

When moderator Craig Hammerman, District Manager of Community Board 6, remonstrated with him, Canada retorted forcefully, "You’re taking time--and doing nothing--holding up the project.”

Later in that meeting, Canada joined those disrupting the meeting with chants of "Go Home" and "Jobs." (At :52 of the video below, he's smiling, standing next to Forest City Ratner executive Scott Cantone.)

Who was responsible?

No one at the time reported who organized the disruption, but Allen, in response to my query, said the men were associated with P.P.E.E., and he drove them there.

"We came really to disrupt the meeting, because we felt that what was being discussed was not in our best interest," he said, crediting Canada for the idea. Forest City Ratner officials, he said, hadn't known of those plans.

"We knew, for us to get to get jobs for our people, that any time we heard any kind of meeting was going on, about any development in Brooklyn, that we had to let our voice be heard," Allen added, not without pride. "Only the squeaky wheel gets the grease."

I told Allen that, while I respected the desire for jobs, "interrupting people who are asking questions, that's not very democratic."

"I know," Allen allowed, his voice softening. "But you gotta do what you gotta do."

It's the "by any means necessary" explanation that has been used by various Atlantic Yards supporters.

And, I wouldn't be surprised, it's been used in Forest City Ratner corporate offices itself, given the developer's successful effort in 2009 to renegotiate deals with the Metropolitan Transportation Authority and Empire State Development Corporation, saving tens of millions of dollars, or halting construction at the midpoint of the Beekman Tower to play hardball with construction unions.

The rise of coalitions

P.P.E.E. and REBUILD have their roots in movements, based in minority communities, that demonstrated and even threatened to get work on construction sites in an industry long dominated by white workers.

Some in the construction industry considered such coalitions inherently extortionate, while at other times, they ran afoul of the law.

As the New York Times reported 4/22/88, in 13 Named in Extortion Case On Minority Building Pacts:
Thirteen people, many leaders of community groups seeking construction jobs for minority-group workers, were accused yesterday of schemes to extort payoffs from building projects in Brooklyn and Queens by threatening demonstrations and disruptions.
…The defendants, affiliated with five groups in Brooklyn, were charged in a Federal indictment and in a separate criminal complaint with having extorted more than $112,000 from contractors since 1981. The indictment said those and other groups had ''banded together to form a Citywide Coalition of Community Construction Workers.'
Four of the accused were affiliated with a group called Free at Last, a group Allen said he and Canada had been associated with, later succeeded by Power at Last.

In an 11/8/93 article, Mortar and Mayhem: How Minority-Labor Coalitions Throw a Wrench Into New York Construction, New York magazine described how the Police Department in 1978 launched a special Construction Task Force, and that a series of indictments in 1993 were seen as cleaning up the industry.

"If we don't work, nobody works!" was the chant, as described in New York magazine, and Allen confirms that's the way it was.

"At the time, we had to go on sites and fight to get work," said Allen, who was wearing a t-shirt with the slogan "No History Without Black History." "We had to go onto construction sites … we made people stop, put their tools down, and told them they had to employ someone from the community."

Among the places that occurred, he said, was Forest City Ratner's MetroTech project, where a relatively small number of people, perhaps 50 to 60, were hired.

Multiple coalitions, he said, banded together, and split up work. "We would force them, back in them days," he said, "to take men. There was no choice."

From coalition to organization

The government crackdown, said Allen, prompted a change. "So now we go at it with a different approach; we started educating our people." In partnership with the firms Homeland Safety, which advertises that applicants can draw on individual training grants, P.P.E.E. gets workers trained and equipped with multiple certificates.

Coalitions, or organizations, have been coming back. In the 2/4/07 New York Times, Louis Coletti, president and chief executive of the Building Trades Employers Association, called the coalitions "extortionists in most cases."

Union activist and blogger Gregory A. Butler wrote 5/13/11 about Return of the Coalition: Are New York City's minority construction workers organizations making a comeback?"

From 1965 to 1998, "these coalition protests were an ever present feature of the construction scene in this city," Butler wrote, thus leading to racial integration in construction. Their role dampened, but now, he suggested, "With all the mass joblessness and misery in the inner cities and the extreme decay of the unions, the coalitions have a niche to fill."

How they work

Allen, who spent three stints in prison (for armed robbery) totaling nearly 30 years, said he learned from his mistakes, and also lucked out, getting work, and a union position in 2000 just ten days after he completed his last sentence.

Those seeking work must get up before sunrise and join a van--P.P.E.E. now has three, but once had five--for at least two weeks. "If they can wake up to look for a job, if they can wake up, 4, 5 in the morning, we know they're going to be on time," he said.

Meetings at P.P.E.E. average 40 to 60 people a week, coming from all over Brooklyn, including Fort Greene, where Canada lived, and Bed-Stuy, where Allen lives. (P.P.E.E. made a presentation at the 2/16/11 of Brooklyn Community Board 4, in Bushwick, according to meeting minutes.)

On the day I met with Allen, he said he'd put dozens of people to work on a construction site in Bed-Stuy. "What we do-- we find out when the job is coming to the area, we approach the developer, he might direct us to the GC [general contractor], we put in a proposal, we say This is what we do, these are the people that are in this community we would appreciate very much, if you get any funding, state, federal, or city we'd like you to employ some of our people from the community. A lot of them will say yes."

Given how Canada, at Atlantic Yards meetings, got threatening in his rhetoric, I asked Allen exactly how far their group would go dealing with a general contractor unwilling to add new hires.

"We say, We're not here to force you... but we're asking you to give us an opportunity, maybe not on this job, maybe somewhere down the line," he said, noting that the group has a track record it can point out. "It's a different program now. You can't force nobody to take a person… but if you're getting federal and state money, and you're not taking people from the the community, we're entitled to make some noise."

Hiring from Brooklyn

"The problem that we've been having, a lot of developers, or GCs, that are coming in from in from Manhattan," Allen said, "they're trying to bring people with them across the bridge, we're saying we're not allowing it to happen."

Hence the protest tomorrow.

Beyond that, he said, the non-union workers organized by P.P.E.E. now compete with immigrant construction workers, often undocumented, willing to work for $10 an hour, when once the wage was closer to $20 an hour.

"We're no longer a coalition, we're organizations," Allen said, noting that P.P.E.E. does contracting work itself, in small teams, to pay for the eight-member office. "It's killing us, because each guy you put to work, it costs money," he said. "You've go to have insurance and worker's comp."

The path not taken

At one point, Allen said, Forest City even discussed a joint venture with Canada and Allen, as long as they brought in a "black developer." They found one, not from New York, but the developer aimed to squeeze out his local partners, and the deal never proceeded. A prefab plan would kill any chance of a joint venture reviving.

Getting past the "thug" label

When pro-project people at Atlantic Yards hearings were seen in hardhats and reflector vests, they weren't union guys, they were from P.P.E.E./REBUILD.

"That was our trademark," Allen said. "We tried to show professionalism, because we didn't want contractors to think we was thugs when we came to these jobs."

Some, he allowed in response to my question, have histories of being thugs: "That's what we do. We work along with the hard to employ… we try to train the hard to employ how to be employable."

(In the photo by Adrian Kinloch, taken at the 5/29/09 state Senate oversight hearing held at the Pratt Institute, Canada is at left, with the earpiece.)

"A lot of guys that we deal with have either been in prison with us, or they know somebody who's been in prison, they know what we tell 'em is right," observed Allen. "We tell them: you can't keep knocking your head against the prison walls, prison is gonna outlast you."

P.P.E.E., he said, tries to give people the skills they need, so they can stop the cycle from streets to prison. "It's a terrible thing to see your son, your step-son, and you're in prison, and they're coming through the same prison doors," he reflected, "because, honestly, as a man, you felt you didn't do your job. We're trying to block that."

Before parting, I asked if there was anything he wanted to add. "It's hard when you come up in the inner city," Allen observed. "So we try to build a bridge for that big step and to help them by giving them the basic training they need, so when someone gives them that opportunity, it won't be a letdown, and it's there to encourage the next contractor" to work with P.P.E.E.