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Conflict of interest? $350K to CBA signatories shows departure from L.A. model

Forest City Ratner has given much more money than previously announced to signatories of the controversial Atlantic Yards Community Benefits Agreement (CBA), and the developer was negotiating that commitment before the CBA was signed last June. It's another reason to question the legitimacy of the CBA as compared with the pioneering examples negotiated in Los Angeles.

While the developer previously acknowledged giving $87,000 to the Downtown Brooklyn Educational Consortium (DBEC), Freddie Hamilton (right), the director of the group, says that that the DBEC had received a $350,000 grant. That nearly doubles the known amount of total payments to CBA signatories, to $538,000, though the amount is likely larger.

“We had discussed the support that would be coming,” said Hamilton, in an interview after the candidates’ forum Monday night at the Brown Memorial Baptist Church in Clinton Hill. “I had written a proposal and submitted it to Forest City Ratner.” After the CBA was signed, the money—which serves as a one-year planning grant--was delivered. (My assumption is that the $87,000 is part of the $350,000.)

FCR has also acknowledged—under pressure--that it gave Brooklyn United for Innovative Local Development (BUILD) $100,000, plus $38,000 to distribute the Brooklyn Standard promotional sheet. BUILD originally told the IRS it expected $5 million.

After the BUILD connection was revealed by Juan Gonzalez in the Daily News, FCR officials acknowledged giving $50,000 in “seed money” to the Rev. Herbert Daughtry’s Downtown Brooklyn Neighborhood Alliance as well as the $87,000 to the DBEC.

Conflict of interest?

That’s not that way it’s supposed to work, and one significant reason why the CBA in Brooklyn departs from CBAs negotiated elsewhere, where signatories agree to support the project but don't themselves benefit. “As a matter of principle, groups in our network don’t take money from developers. We want to avoid any appearance of a conflict of interest,” John Goldstein, National Program Director of The Partnership for Working Families, told me. “We have advocated in CBAs that developers give to the communities they’re developing in.”

The Partnership last year produced a handbook titled Community Benefits Agreements: Making Development Projects Accountable.

Though the handbook, which focuses on the pioneering CBAs negotiated for the Staples Center in Los Angeles and the Los Angeles Airport, does not specify that groups shouldn't take money, Madeline Janis-Aparicio, a co-author of the book, told former Brooklyn Papers reporter Jess Wisloski, “We have a policy of never taking money from any developer, ever, period.” Janis-Aparicio is executive director of the Los Angeles Alliance for a New Economy and helped negotiate the CBA for the Staples Center.

As Bettina Damiani of Good Jobs New York testified before City Council in May 2005:
Perhaps the most striking is that elsewhere CBAs are negotiated by one broad coalition of groups that would otherwise oppose a project, a coalition that includes labor and community organizations representing a variety of interests... In the BAY case, several groups, all of which have publicly supported the project already, have each engaged in what seem to be separate negotiations on particular issues.

Greg LeRoy, executive director of Good Jobs First, told the Brooklyn Papers last October that signatories shouldn’t be accepting favors from developers, such as the free rent that BUILD gets from Forest City Ratner: “Anytime you have negotiations in which there are competing self-interests, and one side grants a favor to the other, that’s a red flag.”

DBEC's plans

The DBEC consists of six different groups working on issues like education and health in central Brooklyn. “We already serve children and families,” said Hamilton, executive director of the Child Development Support Corporation, one of the component groups. “Our goal is to further develop the capacity of our organizations and create an endowment.”

Hamilton noted that the groups are aiming to gain 25 to 35 percent of their budget from private sources. “We’re creating the Brooklyn Children’s Zone, a geographic area where we want to expand our services.”

Hamilton said that she does not expect further funding from Forest City Ratner, just help in creating a board of corporate representatives. The one-year, $350,000 planning grant will conclude at the end of June. She said some of the funding went to each of the six groups, while another portion was devoted to core activities of the DBEC. She said the DBEC would do business as the Brooklyn Children’s Zone and is in the process of incorporating in that name.

Broad initiatives

The CBA (p. 38ff.) outlines a range of roles for the DBEC:
--helping create four new schools, three of them charter schools
--a child health initiative that ties sports to a reduction of juvenile diabetes and juvenile obesity, as well as HIV/AIDS prevention
--a program in which youth help operate retail space within the project
--an after-school program to unite noncustodial fathers with their children
--assistance to ACORN in ensuring that grandparents get placed within the senior housing component of the project
--a collaboration with other CBA signatories to help hard-to-employ youths get jobs in the project
--an effort to get a university research center and a foundation to help evaluate the impact of these programs.

The CBA states:
During the 12-month planning phase, the DBEC members will work with consultants to help research and develop the specific requirements of these initiatives. The DBEC will identify the public and/or private funding sources for the development and operation of the initiatives...

So apparently that's been in process since last July.

Public support?

Has Hamilton been brought into the political fray? “I was very skeptical and conflicted about the Ratner development,” she said. “I have not been asked to do anything to promote the development.”

She has had a much lower profile than figures like Bertha Lewis of ACORN. Still, Hamilton, who also serves as the vice-chairwoman of the Brooklyn Democratic Party and is an ally of project supporter Assemblyman Roger Green, has been asked her position on the project. She is now running for the open seat to replace Greenin the 57th Assembly District and declared during the candidates’ forum Monday that she doesn’t think the CBA--signed by only eight groups--should be reopened. (Rivals Bill Batson and Hakeem Jeffries disagree.)

And last year, when the city announced the signing of the CBA, Hamilton provided a requisite quote: “I'm very impressed with the amount of thought and hard work that has gone into this agreement. The community will be very proud of what came out of this work.” Unlike the other signatories, Hamilton's group, was added to the negotiations at the last minute, the New York Observer reported last December.

Hamilton allowed that “the people who did come to the table were not the usual suspects,” a nod to some untested organizations that participated in the CBA negotiation. “There’s criticism around BUILD,” she allowed, “but we haven’t finished hearing their story.”

Getting what they need

Hamilton offered a larger point, saying that none of the signatories have the power to derail the project, while Forest City Ratner has collected support from “powerbrokers” such as Mayor Bloomberg and Governor Pataki. Then again, Bloomberg has cited it as a "first ever" CBA in New York, and Forest City Ratner calls the CBA "historic."

What about the example in Los Angeles, where community groups wouldn’t take developer money? “We didn’t do that,” she said, adding that “I do community work daily with very disenfranchised people… When the time comes to get what you’re going to get for the community, you have to stand up.”

Last November, signatory Charlene Nimmons of Public Housing Communities and beneficiary Darnell Canada of Rebuild both acknowledged concerns regarding the CBA but said it was important to have a seat at the table. In March 2004, Canada had left BUILD, an organization he helped found, "to distance myself from those in the organization who see this organization as financial self gain," he said in an open letter.

It's a murky line between community service and perceptions of self-dealing. Perhaps for BUILD, which denied receiving FCR funding, testified forcefully in favor of the Atlantic Yards plan, and has for months avoided questions, the CBA was a chance to establish itself. For someone from a well-established group like Hamilton, who talked about the FCR funding readily--perhaps she's never been asked--it may seem a worthwhile bargain to enhance her organization's capacity.

The community and the benefits

The question is: did the CBA represent a "broad coalition"--as in Los Angeles, where each of the agreements involved more than 20 groups--insulated from any suggestion of self-gain? The New York Observer last December reported on the Brooklyn negotiations:
A group of black ministers refused to come to the table. James Stuckey, executive vice president for Forest City, said they had demanded that they be the only party to the agreement. The Reverend Dennis Dillon, the leader of the group, gave a different reason: that it was clear from the beginning that the agreement was meant to buy support with favors.

Indeed, FCR spokesman Joe DePlasco told Wisloski that “Forest City has given money to some of the organizations, maybe all, that are involved in the CBA.” So the sum likely is larger than the $538,000. No matter the value of the programs supported, the evidence so far supports Dillon’s description and a divergence from the CBA model established in Los Angeles. And it's time for the developer and the CBA signatories to make all the support public.


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