Sunday, May 25, 2014

When it was politically prudent in 2009, de Blasio said "no more subsidies" for Atlantic Yards; now, a hint of more

Remember how, as the Times reported 4/19/14 about another subsidy push for Atlantic Yards:
In recent days, [Forest City Ratner CEO] Ms. [MaryAnne] Gilmartin has met with Alicia Glen, the deputy mayor for housing and economic development, to talk about the next three buildings and the possibility of additional housing subsidies for apartments for poor and working-class families.“We’re going to drive a tough but fair bargain so we can get this project moving,” Ms. Glen said. “We’re not happy about the pace of construction. But we think that modular is something we should continue to pursue across the city.”
Hyping rents to immigrant investors
As I wrote 5/5/145, one thing to watch is whether the additional subsidy will be designed for Atlantic Yards exclusively or whether it will be a new citywide policy--perhaps to ensure larger apartments--applicable to all developments.

After all, the next three towers are supposed to be built via conventional construction, not modular.

And, at a July 2009 public Q&A session, Gilmartin said carefully, “Forest City does not expect to ask for more subsidy.”

In November 2011, then CEO Bruce Ratner acknowledged he didn't expect additional subsidy from the administration of Mayor Mike Bloomberg.

New subsidies, aid for Chinese government

But "expect" is one of those weasel words that allow for changing situations.

Now there's a new administration, under Mayor Bill de Blasio, with a focus on affordable housing. Then again, the value of the market-rate housing in the Atlantic Yards project has surely shot up, with Forest City and its marketing allies doing their best to hype rising rents.

The irony of course is that Forest City's new joint venture partner, the Chinese government-owned Greenland Group, will own 70% of the project going forward and thus reap the benefits. That joint venture should close in June.

de Blasio's about-face on subsidies

When it was politically prudent to be somewhat tough on Atlantic Yards, in an 8/28/09 Public Advocate debate, candidate de Blasio, then a Council Member facing two Atlantic Yards critics (and one other supporter), tried to thread the needle.

“I support the 3,000 units of affordable housing, I support hundreds and hundreds of jobs at a living wage and I think we still have a chance at achieving that,” de Blasio said. “But no more subsidies. That project has gotten all the subsidy it deserves. And they either have to figure out a way to make it work or we should pull the plug.”

(There would be 2250 units of affordable rentals, plus perhaps 200 subsidized condos.)

“And it’s never been about the arena; the arena to me is a sidelight,” he continued. “The issue is about the creation of affordable housing and the creation of jobs in a neighborhood that was rapidly gentrifying. We need to make sure there is an opportunity for people to live in this city. So many people have been forced out by the incredibly rapidly rising cost of housing.

Asked whether the housing would be built, de Blasio called it “a fair concern... We have to get evidence from the company involved that they're going to be able to create the affordable housing they committed and the jobs they committed. If not as I say, pull the plug; if yes, carry forward but no more subsidies."

Not only has de Blasio seemingly forgotten that position, he has said nothing about requiring Forest City to build the project at the original pace, or even to enshrine the more recent promises about faster construction into a document.

And, of course, Atlantic Yards is not about "the creation of jobs" compared to what was promised.

A "total surface guy"

The Public Advocate candidate repeated his posture in a 9/1/09 interview on the Brian Lehrer Show. "I have said from the beginning I believe in the affordable housing, the hiring of local residents and living wage levels. This vision has not been fulfilled so far," de Blasio said. "I think there should be no more subsidies. I think there should be no more demolitions. I think the company involved has to prove that they will keep to the original interpretation or we should pull the plug."

It was odd for him to say no more demolitions, because, in that, de Blasio was repeating talking points from April 2008.

The original interpretation? Forest City Ratner has changed its plans in numerous ways, but the single biggest one, about which de Blasio was noticeably silent, was the revision in June of the deal for the Metropolitan Transportation Authority's Vanderbilt Yard, saving Forest City more than $100 million and leading to a smaller, rather than larger (as promised), permanent railyard.

That also meant an extended timetable--21 years to finish paying the MTA and, as we later learned, 25 years to build the project.

Some of this may simply be political calculation. But, as I've noted, a profile last October in Politicker contained a quote that helps explain de Blasio's Atlantic Yards support. He was said to be "a surface guy, total surface. He’s not in the weeds."

He's never bothered to really underestand.

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