Monday, April 21, 2014

Accountability, trust, and oversight: the Independent Compliance Monitor is not the state's business, and neither is new Atlantic Yards construction promise

In Saturday's New York Times, we got official confirmation that Forest City Ratner's ambitious modular construction plan isn't working too well, given that the B2 tower, long said to be finished by December 2014, is a year late.

But we also learned that Forest City's new partner, the Chinese government-owned Greenland Group, is planning to start not one but three towers this year, using conventional construction techniques, building one condo tower and two towers with subsidized housing.

That's a reflection of the market in Brooklyn, the cheap financing they've raised through EB-5, presumably commitments from the city for tax-exempt housing bonds, and--who knows--maybe a desire to make a splash.

It also changes the equation for the hearing April 30 on the court-ordered Draft Supplemental Environmental Impact Statement, which aims to analyze the potential impacts of a 25-year project buildout.

From Draft SEIS, showing two towers on Block 1129,
well ahead of slow-buildout scenario; the open space
appears to be mainly courtyards for tower residents
It suggests that more affordable housing will come online, and some open open space will become available.

(Based on the graphic at right, it looks like Pacific Street will be used as a staging area, not open space, and the open space created will serve mainly as courtyards for the towers.)

The real issue: accountability

The suggestion seems to be: if they can start three towers this year, maybe they can get three more started in two years, and have the whole project finished in a decade.

Maybe, maybe not. But here's the thing: that schedule--even the start of three towers--is not memorialized in any contract or document. We have to take it on trust.

That raises the fundamental issue regarding Atlantic Yards: accountability, trust, and oversight.

And Forest City Ratner, and by association its new partner, has proven unaccountable, sacrificing that trust, and deserving of new oversight.

The compliance monitor

The clearest, most basic example of Forest City Ratner's failure of accountability is the failure to hire the Independent Compliance Monitor required in the Community Benefits Agreement, a monitor Forest City executives initially promised again and again.

According to the Response to Comments document that's part of the environmental review, BrooklynSpeaks dutifully raised the issue:
Comment 125: On June 27, 2005, FCRC signed a Community Benefits Agreement (CBA) with eight community groups. The CBA requires the board to establish an executive committee, and the executive committee is supposed to hire an independent compliance monitor (ICM) whose job is to ensure the contractual obligations in the CBA are met. The monitor's job covers a range of issues from the delivery of benefits and jobs to meeting environmental commitments. The ICM is responsible for oversight of the project developer's, arena developer's and coalition members' obligations under the agreement, investigation of complaints brought against the developers, and review of the developer's reports. FCRC is obligated to pay the ICM's salary. At the commencement of the agreement, FCRC was supposed to place the equivalent of a year's salary into an escrow account and to replenish the account as necessary.
The monitor was supposed to be hired "as soon as reasonably practicable" following the signing of the agreement in 2005. Later, FCRC stated the monitor would be hired six months after the groundbreaking of the arena, which occurred in the spring of 2010. In November 2011, the developer stated the monitor will be hired for the residential phase of the project. However, at an Atlantic Yards Quality of Life Committee meeting in February 2013, a representative for the developer stated that the ICM had not been hired and there was no date planned to do so. The SEIS must assess the impact of failing to hire the ICM on the incidents of violations of the MEC [Memorandum of Environmental Commitments' during arena construction.
The SEIS must also propose how an environmental compliance function  accountable to the local community will be provided for future phases of construction that will not suffer the same fate as the ICM. (Brooklyn Speaks)
The response, a stonewall

Empire State Development said, as it has in the past, that the Community Benefits Agreement is none of its business:
Response: ESD is not a party to the CBA. The SEIS will not examine commitments that the project sponsors have made in the CBA.
By contrast, as I wrote, an August 2007 message from ESD staffer Jennifer Maldonado presaged a meeting that Pat Foye, then ESDC's top official, planned to have with the CBA Executive Committee.

Foye, according to the message, "will stress that while the State is not a party to the agreement, ESDC does support the agreement and spirit of cooperation between the community and FCRC."

Looking at the CBA promise, on video

Consider former Forest City point man Jim Stuckey at a public meeting in November 2004.

"Let’s talk about Community Benefits Agreements," Stuckey said. "We doing something here that is historic. Never been done in New York City before. And what we’re doing is that we’ve agreed to enter into a legally-binding Community Benefits Agreement that will be monitored by an independent monitoring group not associated with anybody who actually negotiates that agreement."

Note the enthusiastic claps by supporters who thought that a validation of the company's plan.


Video by producers of Battle for Brooklyn

"And we’re doing that because not only do we believe that we should do the things that we say we will do, just as we have in the past"--note Stuckey's somewhat defensive tone--"but we also believe that should set the bar. We also believe that what we do should be done by others."

Another promise, on video

In the video below, from that same event, Stuckey cited "a legally binding contract that will be enforceable the way any contract under law will be enforceable."


Video by producers of Battle for Brooklyn

"Whether or not that becomes part of the public approval process, and part of the city and state's development plan, remains to be to be seen," he continued. "But if it's not, in and of itself, we have agreed it will be a legally binding agreement, enforceable, under law, with an independent monitoring body."

"Which law?" shouted a skeptic.

Another promise

Around the same time, Stuckey spoke at a meeting of Community Board 2.

"And a Community Benefits Agreement is something that we believe is more than just talking about what few things we can do for the community," he said. "It's a chance to talk about systemic change. It's a chance to talk about the jobs and housing and the other things that will result from this project and talk about ways that those things can in fact be a part of the community."


Video by producers of Battle for Brooklyn

"So we began earlier this year," Stuckey said, "in fact, we were first invited, I guess back in April by the Downtown Brooklyn Leadership Coalition, and we were asked, Would you be willing to enter into a Community Benefits Agreement?, and we said yes. We were asked, Would would you be willing to have that be a legally binding agreement?, and we said yes. And we were asked, Would you be willing to have that be monitored, an independent monitoring, to be sure that what you say you'll agree to you in fact will do?, and we said yes."

Actually, they weren't first invited "I guess back in April" but rather helped establish the CBA in meetings that February at Forest City offices.

Forest City's deflections

“Atlantic Yards is setting a new standard for inclusion and community involvement for a development, and the ICM [Independent Compliance Monitor] will be everyone’s watchdog to ensure we reach all of the goals and benefits we have agreed to in the CBA [Community Benefits Agreement]," Atlantic Yards developer Bruce Ratner said in March 2007.

As I've written, the developer has steadily avoided that contractual responsibility. “Hopefully we'll get it done soon," executive Jane Marshall said in November 2010, claiming the CBA only went into effect when the arena broke ground.

They [FCR] are going to retain a compliance monitor per the CBA, but they are going to wait until the housing phase,” a spokesman told the Brooklyn Daily Eagle in January 2012.

The Rev. Herbert Daughtry of the Downtown Brooklyn Neighborhood Alliance told the Eagle: "The point is that I feel, whether they [FCR] have reneged on promises, I’m not concerned about it."

By contrast, in March 2005 he said of Ratner, “If he doesn’t honor this agreement I will do all in my power to make downtown Brooklyn as ungovernable as possible.”

Bertha Lewis, the former CEO of ACORN, did not respond to the Eagle's query, but in May 2006 defended the CBA by noting that it calls for an independent monitoring body that “does not have a dog in this fight” to oversee implementation.

Questioning FCR

FCR had not been publicly questioned about the ICM until a 9/29/10 public information session at Brooklyn Borough Hall, mainly concerning the planned arena plaza.

As shown in the video below, Carlo Scissura, then Chief of Staff to the Brooklyn Borough President, read a question submitted by an audience member (me). "Forest City Ratner was supposed to hire an independent compliance monitor for the CBA. What happened to that monitor and who is it?"

The misleading, somewhat uncertain response came from Forest City Ratner executive Jane Marshall.


Video shot by Jonathan Barkey

CBA timetable

"The CBA agreement was signed a long time ago," Marshall responded. "It didn't actually go into effect until we broke ground for the arena."

The CBA was signed 6/27/05. The ceremonial arena groundbreaking was held 3/11/10. The CBA clearly contradicts Marshall's claim. Also,  in several places the CBA indicates that implementation would begin soon after it was signed, rather than some unspecified later groundbreaking.

FCR's Marshall finished up: "And the other thing is that, when we do that, it will be something that the executive committee, the groups themselves, probably issue an RFP and select a monitor, based on the scope of work that they--have deemed is directly related to everybody's mandate, and hopefully we'll get it done soon, but I don't have the timetable right now."

Actually, such an RFP began in March 2007. They just never followed through.

And they still get away with it.

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