Part 1 concerned the overall plan. This addressed the curious politics of a Community Benefits Agreement. Part 3 addressed the astonishing pitch in China for EB-5 investment. Part 4 discussed Forest City's claim, at the Nassau County Legislature, it wasn't making much profit on EB-5, and its defense of a sketchy fundraising partner. Part 5 concerned the brazen effort by EB-5 promoters to use an excerpt from this blog.
Remember how much Forest City Ratner hyped its Atlantic Yards Community Benefits Agreement (CBA), as in the brochure excerpted at right?
Well, Forest City has firmly rejected a proposed CBA in Nassau County, where its Nassau Events Center affiliate is revamping the Nassau Coliseum and developing nearby property.
Developer Bruce Ratner in September 2013 fudged his answer when asked about a CBA. Today Ratner and his staff firmly reject it.
Now they pronounce the malleable rhetoric of "community benefits" to encompass the jobs that any real estate project must produce, as well as the provision of free tickets--a trickle-down benefit to be sure, but hardly approaching the transformational aspirations of the CBA.
It has signed an unenforceable side letter regarding certain commitments, but that is not part of its contract with Nassau County, owner of the Coliseum.
(Not that the Atlantic Yards CBA, it turns out, was enforceable, as it was signed without government involvement and the signatories couldn't or wouldn't enforce it. Nor was the Atlantic Yards CBA as transformative as promised.)
|"CBA Good Enough for Brooklyn, Not L.I." FiOS1 News|
They held a rally 4/13/15 wielding signs like "CBA Good Enough for Brooklyn, Not L.I."
Yes, some of their support requests--demolishing abandoned homes, helping small businesses, and revamping a community center--may seem somewhat disconnected to arena impacts and thus the rationale of a CBA.
(The price tag, $10 million according to one account but also potentially much less, was ambitious, though far less than the savings Ratner would reap after successfully revising the Coliseum lease--more on that in another part.)
And yes, Forest City makes the case that the Atlantic Yards project, involving perhaps $5 billion in spending, is far larger and impactful than the Coliseum-related project, which will cost under $300 million, which makes arena-connected benefits the most comparable.
Race and politics, inverted in Nassau
The significant difference, I believe, relates to the different political and racial configuration.
|"FCRC Do The Right Thing"; Screenshot from Newsday video|
In Nassau County, Ratner has all the public approvals he needs, with backing from the Nassau County Legislature and the Town of Hempstead. So there's no need to "court" support, as the New York Times generously described Ratner's strategy in organizing groups in Brooklyn.
Thus, Forest City doesn't need to care about the majority black town of Uniondale, from which CBA backers seek compensation for environmental burdens, parking, and noise.
In fact, it might be politically treacherous for Forest City to care: Uniondale is represented by Democrats, and the majority-white county is controlled by Republicans.
The request for a CBA, in fact, has been met with scorn by most commenting online, which likely signals some of the polarization on Long Island. (Some CBAs, such as in Los Angeles, have more clearly been attached to project impacts.)
Nassau legislators, even some in the minority Democratic Party, treated Ratner with enormous deference and respect, the savior to rehab their aging Coliseum, rather than recognize, as the New York Times pointed out in September 2012, "his reputation for promising anything to get a deal, only to renegotiate relentlessly for more favorable terms."
The irony is that Forest City Ratner heavily promoted the Atlantic Yards Community Benefits Agreement. Backers like then-Council Member de Blasio called it historic.
At the Barclays Center groundbreaking, 3/11/10, Ratner declared, "As Reverend [Al] Sharpton said, it is going to be a model for what's done in rest of this country, and it's got to be a model, because it's really important."
Not so much any more. Consider how promises of affordable housing have been altered, and a much-promoted plan to train pre-apprentice construction workers led to a bitter lawsuit.
The September 2013 discussion
When Nassau County Legislature was voting on the Coliseum lease 9/28/13, according to the transcript, Minority Leader Kevan Abrahams, a Democrat who represents Freeport, brought up efforts by GUACC to get a formal community benefit.
"They received commitments from I guess the Hub developer in Mr. Monti and they wanted to know if that's something that you would take a look into and possibly consider," he said, referring to a plan announced in 2012 that had not gone forward. (See graphic below right).
Abrahams was not clear as to the requests, but he cited access "to the entire development" and said it should be extended to the entire county.
"I'm not doing their statement enough justice because they specified a lot of things in their community benefit agreement but I think that should come out when you get a chance to meet with them," Abrahams continued, "or I can give it to you now, but is that something that you would be --"
"Yes, we have done community benefit agreements before, access to community is very important," Ratner declared.
A CBA promise?
I haven't seen a video, but Ratner's statement can be read in two ways. Those pushing for a CBA, plausibly enough, consider Ratner's initial "yes"--in response to a question about a whether he'd be supportive--as a confirmation that he would sign a CBA.
Then again, Ratner, a lawyer and savvy businessman, quickly redefined the request to one regarding "access to community."
"We have a certain number of tickets set aside for many of the events at Barclays," he continued. "As a matter of fact, I just went to the equivalent of almost a GUAAC [AYR: not at all, since it's a Ratner funded group] in which they our company an award for basically giving thousands of tickets equal by a lottery to community groups and it was wonderful."
Thus, his rhetoric narrowed the notion of a CBA to free tickets to arena events.
Abrahams, however, said the coalition was interested in support for M/WBEs, or minority- and women-owned businesses, as well as a job training and business referral center and educational programs.
The community, the legislator said, "has also been trying to get a community center for a long time. I have been working with them to try to do that."
"A project of this magnitude which is going to be hundreds of millions of dollars, from our standpoint, there should be some type of community benefit agreement that, if Forest City is going to be able to be with us for 30some-odd years in this lease," Abrahams said, "that they are going to be a responsible and good community partner, which I know you have demonstrated in other areas that you have been in. So we look forward to that same demonstration."
"We do too," said Ratner, offering rhetorical encouragement but by no means any commitment.
Unfortunately Abrahams did not do sufficient due diligence to figure out that Forest City is not exactly a "responsible and good community partner."
Even a consultant hired by Forest City noted the perception that the CBA groups were “fronts” for the developer. At least half of the groups are moribund or out of business.
Local hiring and MWBEs
Legislator Robert Troiano, another Democrat, asked about local hiring in both construction and retail. Ratner noted that unions must hire from a designated list, but "we work really hard with the unions for... the entry level jobs, particularly, to be local. "
Troiano noted that the Village of Hempstead was establishing a training program for local residents and suggested, "Perhaps we can piggyback whatever your efforts are with theirs and get a better effect."
"That would be great," Ratner sunnily replied, adding a caveat: "Really, it's union dependent."
Troiano expressed appreciation for Ratner's commitment to local and union hiring, but expressed disappointment that the lease agreement was silent regarding MWBEs, since it's generally part of county contracts.
Chief Deputy County Executive Rob Walker said it wasn't omitted on purpose, but said goals are often hard to reach.
Troiano suggested it was "a real omission" to have it excluded such a large contract.
Josh Meyer, an attorney for the county, said M/WBE provisions are part of the standard county contracts but not standard county leases, as in this case. "It may have been more prudent to include it, but we were basing it off of prior leases," he said.
Troiano noted that the lease includes provisions for using union labor. Meyer said that was typical.
"Well, if that is in fact the case, which I'm doubtful of, then I would suggest that the county," Troiano said, "establish a process whereby we always ensure that MWBE programs are provided for." Walker agreed to look at it.
"Would you consider opening up this contract to include that language now?" Troiano pressed.
Walker demurred, saying it was something they could talk about later.
Ratner made a pledge: "We will sit down with you in the next three days and we will make our commitment as a goal of 20 percent, we'll create a monitoring mechanism in a way that we openly show you what we're doing... We're more than happy to sit down and we'll give ourselves a 30 day period to try to come up with something that tracks pretty much what lease language may or might have done, and give it to you in a signed letter form. It's very important and we're happy to do it."
Troiano expressed appreciation, saying that, "when we met about two weeks ago, you at that point said to me you are committed to this, and I saw a look in your eye [AYR: danger!] and I believe that you are, I've seen that again today." He noted "substantive" recent discussions with Ratner staff.
"So I do believe that it is your intent to comply with your verbal commitment," Troiano noted, " but a great leader, a great president of ours from the last century, I'm dating myself now, operated by the philosophy and the statement, 'trust but verify.'"
Ratner reiterated his pledge for a promise in 30 days. Troiano said it should have been done already. "It shouldn't come down to, my caucus negotiating an agreement with you at the last minute that really kind of adds salt to the wound for me."
"I hear you," Ratner said equably.
Troiano, who said he'd walked in intending to vote against the lease, said that, "because of what I sense as being the sincerity and the seriousness of your staff and you," he intended to vote yes. The vote indeed was unanimous.
Ratner than acknowledged that, while the county may have ignored the issue, "so unfortunately we did too and I apologize for that. We take responsibility too. But having done that, let's correct it, and we will correct it."
In Nassau, a belated CBA push
It turns out that Forest City's Nassau Events Center needed to get the Coliseum lease revised to incorporate $90 million in financing via immigrant investors under the EB-5 program. (I'll write more about that shortly.)
Activists saw an opening. As Newsday reported 4/12/15, Civic groups want Coliseum deal to include $10M for Uniondale, the Greater Uniondale Area Action Coalition, which was about to hold a rally to push for a CBA.
Forest City instead said it would provide jobs and internships. "We have a long track record of bringing community benefits to the neighborhoods we build in and look forward to doing the same in Nassau," Forest City spokeswoman Ashley Cotton told Newsday, thus muddying the term "community benefits" and the concept of a CBA.
At the rally, as shown in the FiOS1 News report below, Greg Maney of GUACC named some of the issues, including sci-tech internships for Uniondale High School students and small business incubator. Abrahams said that benefits would offset traffic burdens and other potential impacts.
Cotton promised "jobs, benefits, and many other great things."
Maney said Forest City had committed to enter into a CBA, which is a plausible though not ironclad reading of Ratner's slippery testimony in 2013. As noted in an online petition (with just a handful of signatures):
When the Nassau County Legislature was voting on the Coliseum lease, Mr. Ratner publicly testified that he would enter into a Community Benefits Agreement. Now that the lease has been approved, he has reversed course. When asked about the change of heart, a representative said that it is “a business decision” and refused to elaborate. If he can’t be trusted to follow through on his promises to the County, how can be trusted by the Town of Hempstead.I followed up with Maney, who told me that quote came from Terence Kelly, the community relations representative for the Barclays Center. Kelly is well down the decision tree for the developer.
At the hearing
At the April 13 legislative session, as shown in the video, Abrahams noted there was no CBA, but rather a side letter indicating that FCR would engage in a 20% MWBE contracts, "but that side letter is not enforceable, am I correct?"
Attorney Meyer agreed that it was a goal and "not contractually part of the existing lease."
"What exactly is the host community... Uniondale, receiving in this Community Benefits Agreement," Abrahams said, mischaracterizing the sets of promises as a CBA.
"I received a letter from Mr. Ratner," Abrahams recounted, quoting “FCR has a history of delivering community benefits regardless of government or stakeholder mandate.” Abrahams suggested that was "a shot at us."
Forest City's Nassau Events Center, according to the letter, will seek to maximize local hiring, as well as in Nassau County and Long Island, and will make tickets available to local community groups. It also will make the arena available for such groups at a discounted rate. (Note that the latter, while promised in Brooklyn, has still not yet come to fruition.)
"Some folks think this is enough," Abrahams said, indicating dissent. "Let me ask you this, is any of this in the lease?"
No, said Meyer.
Abrahams pressed regarding what commitments have been made to Uniondale. Meyer noted that the lease had been unanimously approved, and the issue had not been raised at the time.
Abrahams said Forest City "gave the impression they would pursue many of the community benefits."
"It was not a commitment to enter in one," Meyer noted.
Abrahams again asked how many local residents would get hired. Forest City Ratner's Cotton and Jim Lester then went up to the podium. "We are happy to talk about any of the benefits written in the letter," she said.
Cotton also pointed to the presence of union leader Dick O'Kane, and noted that it was impossible to identify specific workers without a project labor agreement.
"Regarding local hiring, she said, "that’s our intention, that's our record." Cotton said one in four construction workers in Brooklyn is a local union member from Brooklyn, which of course is a county, a rather broad jurisdiction.
O'Kane referenced an inaugural class, Opportunity for Long Island, training 15 people for construction work.
In an impolitic choice of words, or recognition of the universe of construction workers and companies, the rough-hewn O'Kane essentially dismissed the goals: “I get amused sometimes when I hear about 20%, and 30%, how do you take 20% or 30% of people who who don’t have any training and put them on a project of that magnitude with no training?”
Grilling Forest City
As shown in the video below, Abrahams said the NEC letter referenced the promises of community tickets and making the arena available to community groups at a discount. Given that such clauses are not in the lease, "there's no one forcing you to do it," he continued.
"Again, these are the kinds of benefits are exactly what our company believes in, exactly what our company dreams up, it's exactly what our company’s done in Brooklyn," Cotton responded, ignoring that the arena discount plan has not actually begun.
"That’s exactly what we want to bring to Nassau," she said. "We’d be happy to engage with you, as we've said many times," and identifying the community groups you're interested in.
"They're right behind you," Abrahams said, referencing GUAAC.
"In the case of Nassau Coliseum... Uniondale and other towns, they are going to see these benefits, that is our pledge, that is what we do," Cotton continued. "We look forward to working out those sort of details with you guys."
Abrahams cited GUAAC's request for facade/signage upgrades, an enhanced community center, internships, and help with vacant homes, aka "zombie properties."
"Is there any discussion... about how any of that stuff will be considered?" he asked.
Cotton said Forest City happy to discuss internships and programming around the Coliseum. "We were never asked to come and develop STEM [sci-tech] jobs," she said, adding that Memorial Sloan-Kettering is interested in coming to the site.
"As it relates to funding for what I would call off-site developments that aren’t related specifically to the work we’re in the lease to do," she added, "those issues have not progressed… we’ll continue to talk about them, but I have no commitments here."
The Brooklyn example
"Were those concepts considered in Brooklyn?" Abrahams asked, citing projects "outside of your scope."
"Nope," said Cotton. (Not true. There were ambitious plans for things like a Brooklyn Children's Zone and new high schools, though many of the initiatives were somehow related to the project.)
"What exactly did the people of Brooklyn get?" he asked.
Cotton sent on to describe Atlantic Yards as a 22-acre site with an 8-acre park (not really), a public school, an arena, and 16 housing towers. (Wait--isn't one supposed to be an office tower?)
The project costs over $4 billion, and is "entirely different" in scale and actual substance, Cotton noted. "The benefits that we are proud of in Brooklyn relate to 2240 [actually 2250] units of affordable housing, relate to a school in the base of one of those housing buildings."
"We'll take that," Abrahams interjected.
Nor is Forest City building a school, they're building space for a school, to be funded by the School Construction Authority. And the affordable housing is financed significantly by scarce, publicly provided tax-exempt bonds, as well as city subsidies. (Those two components are only a fraction of the CBA.)
"We’re zoned [in Nassau] to build entertainment uses and an arena," Cotton pointed out, noting that the most comparable thing is an arena, so there can be tickets and school tours.
Abrahams noted that Forest City was asking the legislature to reopen the lease so it could raise money from a new source, and save money in doing so. If Forest City could save, he suggested, why can't the community get a portion of the gain?
"The community is thankful Mr. Ratner took the time to write this letter," Abrahams said, "but I've got to be honest with you. I can't tell these folks out here that this will happen, based on Mr. Ratner's word. I don't know Mr. Ratner that well... he hasn’t given me any reason that he would break his word." (Really?)
Tickets and internships are "by no stretch of the imagination even close to...what the community deserves," Abrahams said. "And 'maybe we’ll do a goal of 20% on the MWBE'… That being said, I just find it hard to believe that you expect a community to accept that."
Some in the audience clapped.
"Everyone’s allowed to have their own opinion about how good they think those benefits are," Cotton responded. "Obviously a lot of people in Brooklyn have enjoyed these in a great way, including leaders like Reverend Daughtry of the House of the Lord Church, who administers our own ticket program... and has given out tens of thousands of tickets to groups that couldn't have gotten them."
(The Rev. Herbert Daughtry also got jobs or work for several family members in the Forest City-funded Downtown Brooklyn Neighborhood Alliance.)
"If you don’t believe these are benefits that the Nassau community is interested in, that's certainly one opinion," Cotton said. "We don’t sign letters that we’re not going to follow through on… We have a corporate reputation that we have to stand by."
(Well, where's the promised Independent Compliance Monitor for the CBA?)
Cotton also asserted that it was untrue to claim that Ratner promised a CBA and changed his mind. (Well, Ratner's promise was slippery.)
"This is a great letter," Abrahams said. "But the fact remains, none of it is binding… You don’t want to give a binding agreement to Uniondale, and that’s unfair."
In Nassau County, given the lease with the county government, the county could likely sign and enforce a CBA. In Brooklyn, the CBA signatories, dependent financially on Forest City, could not really enforce the CBA.
Support, and leverage
Various legislators, as described in the video below, were enthusiastic about Forest City's promises. "I've heard nothing but yes from you, " one legislator said, asking for clarification that the lease amendment vote would have no bearing on a CBA.
Cotton sought to clarify: "Again, there's been confusion.. we believe in community benefits. There are many ones that we've agreed to already. There are other ideas... that are way outside the scope, or the project that we’ve been asked to do here... So without talking about specifics, it’s a little hard to say yes or no."
"We've found that there are many ways to deliver benefits: side letters, agreements with community groups, the mayor," Cotton continued, clearly distancing the company from Ratner's pledge that the Atlantic Yards CBA be a model.
"The mechanism through how it goes, I think some have a vision for it," Cotton said. "A CBA itself doesn’t feel like a necessity here, again because there are so many benefits that we’re happy to bring to the table, without that vehicle. But again, the mechanism is one that we all have different definitions for what a CBA really means.”
Indeed they do.
Abrahams noted that they could continue discussions, but that was the day of leverage. "I don’t see a CBA happening if it doesn't happen today."
It didn't. The vote passed 17-2.
Ratner plays offense
At a press conference the next day, 4/14/15, at the Town of Hempstead, Ratner headed off any CBA question by playing offense and redefining the term.
"Let's talk about community benefits," he declared, starting at about 14:18 in the video below. "So community benefits are very important to our company, they're very important to me."
"The key kind of community benefits, first of all, are jobs," Ratner said, with Hempstead Supervisor Kate Murray nodding behind him. "The most important thing, for almost anybody, is jobs. So construction jobs are very, very important. We have a whole training program, a journeyman program, with apprentices, so we get people new into the construction business. We've done that in almost every project that we've done. So that's a very big area."
Of course, with Atlantic Yards, there was a whole job-training program promised as part of the CBA to provide a new pathway to construction jobs for the disenfranchised. That program, led by Brooklyn United for Innovative Local Development (BUILD), resulted in a bitter lawsuit by trainees over promises of union careers. The lawsuit has survived the closing of BUILD.
"Second, actual jobs in the arena, there will be a number of jobs, I don't remember the exact number, I want to say 1500, but something like that," Ratner said. "We will make sure to try and do local hiring."
That's a goal, not a commitment. Surely they will hire "locally," it's just not clear what boundaries they'll draw.
(Ratner in September 2013 promised the Nassau Legislature, regarding local hiring for the Coliseum, that "the number one is to hire the existing people that are there." However, when Newsday reported recently about planned pre-renovation layoffs of Coliseum employees, Cotton coolly stated, "We cannot speak to the specifics related to the current workers since they are not our employees.")
"The third is job training," said Ratner, not offering any detail. "Those are the major benefits," he said.
Then he cited the provision of "community tickets, we do this at Barclays and it's become a wonderful, wonderful thing."
"So those are the major kinds of community benefits," Ratner concluded said, implicitly adding the tickets to the previous major benefits, "aside from just livening up the area, increasing restaurant business, increasing all the businesses in the area with respect to use."
It was a far cry from his 2010 invocation of the Atlantic Yards CBA as a model.