Thursday, October 25, 2012

Is Islanders' move a vindication of Atlantic Yards? No, it vindicates the arena, and Brooklyn. And it suggests NYC/NYS should have driven a harder bargain.

Is the planned move of the New York Islanders to Brooklyn by 2015--or earlier, if Islanders' owner Charles Wang breaks a lease with the Nassau Coliseum, which he didn't rule out--a vindication of the Atlantic Yards project?

No--not at all, when Atlantic Yards developer Forest City Ratner pushes plans to build over the "blighted" railyard further back and acknowledges the arena deal has nothing to do with promised public benefits like housing.

Is it a vindication of the Barclays Center arena? Surely.

Is it a vindication of Brooklyn as a brand and a home? Indeed. And that raises questions about whether the city and state should have tried to get a better deal, and whether the public deserves more.

The Times pronounces

In today's front-page (in the New York edition) article, Brooklyn Lures a Second Team to Barclays Center, the New York Times reported:
The announced move of the hockey franchise... was heralded by city leaders as an unexpectedly rapid vindication of the controversial development project that opened last month with the promise of transforming the heart of the borough.
The language there's a little vague--the "controversial development project" with transformative properties is the larger Atlantic Yards project, though only the arena opened last month. And, as indicated in the web site blurb excerpted below, the Times meant Atlantic Yards:


"A hockey team is getting Brooklyn"

The Daily News, sponsor of the Barclays Center plaza, also front-paged the news, albeit in a headline only, while the New York Post steered clear, promoting its Mitt Romney endorsement on the front and announcing the hockey news in a small banner on the back (below right). In an editorial, the Daily News was thrilled, stating "Bruce Ratner’s splendid Barclays Center is now an electromagnet." (No mention of the business relationship, of course.)

The Wall Street Journal's Jason Gay suggested, in
Here Comes Hipster Hockey, that the New York Islanders, despite promises to retain their name, consider the example of the Nets and the "great potential in a Brooklyn rechristening."

He wrote:
There is an undeniable marketing and merchandising opportunity with a Brooklyn re-branding, especially for a once-dominant hockey franchise that won its last Stanley Cup in 1983, when Jay-Z was 14.... Brooklyn may be getting a hockey team, but that's not really the story. The story is that a hockey team is getting Brooklyn.
In Newsday, marketing experts cautioned that a hockey re-branding would be challenging,  given that the Nets came first, basketball's more popular than hockey, and the Islanders won't change their name. But a marketing campaign to expose hockey to new audiences could work. (Looks like they need to fix the logo to add Queens and Brooklyn, though, as noted by Deadspin.)

In the Daily News, columnist Filip Bondy noted that the hockey relocation trend is now "anti-suburban" and found a few ironies:
And even on Wednesday, as seven officials from the club, league and city spoke with political correctness about the diversity of Brooklyn, it was hard not to notice that none of them was a woman, black or Hispanic.
Still, the Isles are coming to Brooklyn and do not sound particularly afraid about whether their fans will come with them.
Dodgers redux and public vote? Not quite

Times Sports columnist George Vecsey enthused:
Every time I go past the new arena, I cannot help thinking that the Brooklyn Dodgers could have been playing atop the Atlantic Avenue station. Now the borough is scooping up the Islanders from farther out on the Island. At least the taxpayers got to vote on this move.
Actually, the Dodgers wanted to move to what is now the site of the Atlantic Center mall. And the only taxpayers to vote were in Nassau County, turning down a new, subsidized arena for the Islanders. Taxpayers in Brooklyn and New York City didn't get to vote, nor did they see how the Atlantic Yards deal got revised.

The NYC exception and the Brooklyn bonus

Yesterday, in Islanders announce 25-year “ironclad” lease in Brooklyn, starting in 2015, Neil deMause of Field of Schemes observed:
So, obviously I was dead wrong when I said that an Islanders-to-Brooklyn move was unlikely, and any concerns over capacity and the Islanders being tenants in someone else’s building paled in comparison to being able to tap into what’s looking like a lucrative Brooklyn market. If there’s a lesson here, it’s that while most stadiums and arenas aren’t cash cows once you take construction costs into account, and most team owners’ goal is to be the primary tenant in their own arena, not all buildings — and markets — are created equal, and things can work very differently when a market the size of New York City is involved.

Which, of course, raises the question of whether New York City and state should have driven a harder bargain about getting the Barclays Center built in the first place, now that it turns out that teams need Brooklyn more than Brooklyn needs teams. I’d ask Mayor Bloomberg, but he’s already left the building…
Bloomberg of course would say no, projecting $175 million in vaguely described "economic activity" (not government revenues) from the new tenant. By contrast, deMause was cautious:
As for the city making more in tax revenue, unless a ton of Long Islanders start heading to games in Brooklyn rather than Nassau (which is always possible...), this won’t help city tax revenues much, since people from Brooklyn going to games would just be reshuffling Brooklyn money.

Where it does get interesting is that assuming they can squeeze in 40 nights of hockey without displacing any concert dates — not at all a sure thing — then they’re looking at 250+ nights a year when the place is busy. At that point, it actually starts to make a little bit of sense to locate a restaurant or whatever near there just to cater to arena patrons, where it doesn’t if it’s dark most of the year. So maybe you get a little bit of extra spinoff effects, though it’s not like there were many vacant storefronts around there before the arena.
Also note that the New York Post, citing unnamed sources, reports that the Islanders will pay $6 million a year in rent, which deMause considers--well, he thought $14 million a year was a "mild coup," so this is something less. But it likely will help on the annual arena debt service.
Protecting the public interest

Consider that, in 2009, both the Empire State Development Corporation (ESDC) and the  Metropolitan Transportation Authority (MTA) agreed to revise settled deals at the request of Forest City Ratner, offering concessions without anything in return.

It didn't have to happen that way. As I wrote 6/25/09, when the MTA agreed to accept a diminished deal for railyard development rights,  Neysa Pranger, public affairs director for the mainstream Regional Plan Association (which had backed Atlantic Yards, though with reservation), suggested that the proposal for a slower payment schedule and smaller railyard meant “greatly diminished” public benefits.

“Does this new agreement retain enough benefits for the MTA and the city to proceed with a scaled-back plan?” she asked. “Based on the information available, the answer is no."

Rather than open up the site to new bids, she made four recommendations, including granting the MTA more future project revenues, conducting a new cost-benefit analysis and creating a new ESDC subsidiary, with public representation, to oversee the project and review design elements.

None of that happened, even though, as I've argued, the MTA actually had leverage, given Forest City Ratner's desperation to move the money-losing Nets to a new arena in Brooklyn, with luxury suites and sponsorships, and the end-of-year deadline to get tax-exempt bonds issued.

Proposals even to allow a new governance entity have been stymied by Senate Republicans, including Brooklyn's Marty Golden, an ally of Forest City Ratner.

In 2009, when the ESDC agreed to re-approve the overall Atlantic Yards project, issuing a new General Project Plan to accommodate slower eminent domain process (and less expenditure for Forest City), the agency could have asked for more. Instead, it asked for nothing. Months later, it quietly signed a Development Agreement giving Forest City Ratner 25 years, not ten, to build the project.

What if the ESDC had included a clause that required, if the arena got a new major tenant, some new benefit would go to the public?

Also, in the construction and operation of the arena, the push to make things work for arena operators and event-goers has meant the sacrifice of neighbors' interests: regular violations of truck protocols, idling at "No Standing" signs outside residences, and failure to regulate noise and other issues.

As Peter Krashes of the Dean Street Block Association said in a comment that appeared in an early version of the New York Times article on the Islanders' move (before it was scrubbed and replaced), Atlantic Yards is marked by an absence of governance and oversight:

Talking honestly to the public

I was interviewed the other day by a Seattle TV reporter about lessons from the Brooklyn experience.

(Fun fact: they quoted me as saying that a feared "Carmageddon" hadn't happened, but excised my subsequent statement about all the rule-stretching--waving drivers through red lights, stopping traffic on Atlantic Avenue, letting livery cabs idle on residential streets--needed to make things work.)

One lesson, I said, was that deals are never set in stone, so all revisions deserve scrutiny, and the public interest needs representation.

Also, I suggested, project proponents typically issue rosy, best-case scenarios. However, cost-benefit analyses and scenario planning should come with a range of outcomes, from best-case to worst-case.

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