"My humble fiction": Markowitz imagines lost opportunity for AY compromise, posits arena as corporate magnet
In his now-traditional end-of-the-year interview with the Brooklyn Paper's Gersh Kuntzman, Borough President Marty Markowitz offers some curious comments on Atlantic Yards, notably the suggestion that project opponents missed an opportunity to compromise on a smaller project, and that the presence of a basketball team would draw corporations to Brooklyn.
Those, I submit, are "humble fictions," the counterpoint to Markowitz's catch-phrase, "in my humble opinion."
More soberly, he bows somewhat to reality by acknowledging that the project could take "12 to 16 years" to build. That's a distinct contrast with the approved ten-year construction timeline, which was reiterated by Forest City Ratner CEO Bruce Ratner this past May, but it doesn't acknowledge that the State Funding Agreement gives the developer 12+ years to build Phase 1 and imposes no deadline for Phase 2.
Markowitz also puts in a few words for the "mend-it-don't-end-it" BrooklynSpeaks coalition, which, while slumbering, could still supply a framework for tweaking the project design and government oversight.
While the Brooklyn Paper's transcript is extensive, the comments on BrooklynSpeaks and other matters are not included, so I listened to the podcast and augmented the excerpts quoted below. The relevant passage starts at about 16:30.
Projects slowed
GK: The economy is affecting development, especially here in Downtown Brooklyn. What are you seeing out there?
MM: Getting credit is very difficult, but construction costs are beginning to come down. … When I look at Fourth Avenue, it doesn’t take a rocket scientist to know that not everything is selling out. It’s also true on Flatbush Avenue and it’s also true on Eastern Parkway at the Richard Meier building and I’m sure we can look at other examples.
GK: That’s true of individuals. But it’s true about developers, too. We have developers who haven’t started projects.
MM: We saw that with the Clarett Group on Court Street, as an example. And Atlantic Yards, though the lawsuits have prevented it. Those people who want to stop it did not know the economy was going to turn. They got lucky that the economy turned. But the truth of the matter is that, had it not been for the law cases, had it just been starting now... there still would be a problem today in terms of the credit market.... It has slowed down dramatically.
Reduced commitment
GK: Forest City Enterprises, the parent company [CEO] Charles Ratner said the other day that after the lawsuits are all settled... he’ll still wait and see where he’s at. I thought that was a big change. How did you read that?
MM: Obviously you know that I am a tremendous supporter. I think we need Atlantic Yards more this year coming than we needed it at any time before. It will be a generator of jobs, both during the construction phase and post-construction. Many industries will feed off of Atlantic Yards. The volume of people visiting the area, retailers and other industries, will be enhanced.
Arena as corporate magnet?
MM: And having an arena and a national team is a great selling point to corporations that are looking to either relocate or to expand. You know as well as I do that basketball has become in many ways the sport of corporate — corporate sport, meaning that men and women that work for corporations eagerly look forward to going to games and people bring clients there. So having an arena and a national team would be an unbelievable incentive, in my opinion, a catalyst for jobs and new companies coming and staying in Brooklyn — my humble opinion!
That's the first time that argument's been made regarding Atlantic Yards, as far as I know. And the reason it hasn't been made is that it's bogus. (It hasn't exactly turned East Rutherford, NJ, into a corporate magnet, has it?)
Economist Arthur Rolnick, testifying before Congress earlier this year, said that Minnesota attracted several Fortune 500 companies not because of sports teams but because of investment in education.
Why, the Treasury Department's Eric Solomon was asked at the hearing, are cities bidding against each other for sports teams even though the city spending might be a bad investment? Solomon responded:
Because the cities believe that there are various benefits. Perhaps they cannot be specifically identified, but there are various intangible benefits. And they -- of course, there are political constraints on their decisions as well as financial constraints.
Creating jobs
MM: And the affordable housing that also would be a component of it — although it will take somewhat longer now — is still job number 1 1/2. Job 1 is creating jobs. Job 1 1/2 is creating affordabe housing so we can continue to live here.... We still significantly lack affordable housing.... So of course I’m not happy to hear what Mr. Ratner said in Cleveland. I know that it’s a tough time for everybody. But I’m hoping once the president firmly sets his policies and the banking industry starts churning out again and investments are beginning to be made, Atlantic Yards can get back on track and we can have the shovel in the ground in the not too far distant future. I can’t tell you when but I hope it would happen soon.
While construction would create jobs, as would retail and building services, keep in mind that the one promised office tower--which likely would house more relocated than new jobs--is on indefinite hold, and that the developer initially announced 10,000 office jobs.
Better process?
GK: Is there any part of you that or other people you talk to, [that says], “Maybe if this project had been done differently. A little smaller. Gone through a ULURP [city land-use review] process rather than a state process.” Are there any regrets on that level that this could have been done by now?
MM: I’m going to back to remind you, during the beginning, a lot of the people that expressed their opposition don’t want an arena. Because they don’t want the traffic. They don’t want the people. They don’t want it. And there’s the other group that don’t want the apartment buildings because they’re going to cast shadows. It’s too much. The bulk is too much. The density is too much. So I have to tell you, when it was first proposed, attempts were made by me and my office to reach out to the very best we can, but the immediate response was, “We’re not interested. Shove it! We don’t want it. How many times do we have to tell you, Mr. Markowitz, we don’t want it. We don’t the buildings. We don’t want the arena. We don’t want it.” And when you have folks that say absolute no, not, “Maybe we’ll take some housing, six stories high, eight stories high, y’know, that was OK, but we don’t want the arena.” Obviously, I wanted it all. And I still feel that we need it sooner rather than later.
(Emphasis added)
When it was first proposed. The project started with Forest City Ratner's idea, not any public process regarding some valuable public land. Had there been an RFP, multiple projects might have been proposed; ULURP would have provided a framework for a rezoning. In this case, the state, at the behest of the city and the developer, would override city zoning.
Is Markowitz suggesting that public input could've created a smaller project? There was never room for negotiation; the size of Atlantic Yards has always been decided by the developer. When the project was publicly announced in December 2003, Markowitz told Brian Lehrer that there had not been any place for public input in the design:
To involve the community and get them involved initially, in the planning, when it was far from anywhere completed… I have a pledge, that I’ve made to the residents of that neighborhood, as well as to Bruce Ratner, that is, that my office, me personally, will be coordinating the efforts, through a task force with our community to make sure that their concerns to the fullest degree possible are resolved.
To the fullest degree possible. Not even Markowitz's own concerns on traffic and parking have been resolved, at least at last report.
Yes, some people just wanted row houses, but project opponents and critics quickly created the low- and mid-rise UNITY plan in 2004; developer Extell drew on the principles for its 2005 bid for the Vanderbilt Yard, and a revised UNITY plan, featuring some high-rises, emerged in 2007. All would be more dense than Markowitz's "six stories high" formulation.
Issues of density
GK: But the density is an issue. You make it sound like — this would be the densest Census tract in the country.
Not quite, because it wouldn't be its own census tract, but it would be more dense than the densest, according to the New York Observer.
MM: You know what? There are those that would disagree with you on that. I don’t have my statistics here.
You'd think he'd have checked the statistics by now.
Maximizing affordable housing
MM: But what I can say is that one of the guiding principles of Atlantic Yards was to maximize the units of affordable housing. If the opponents--if the community--was willing to say — I don’t want them to say — if they said, “You know what, forget about the affordable housing, scratch it all, make it all market rents or market coop price, or condo,” there is no doubt in my mind that the bulkiness would have been significantly less. But it was our demands, and you can blame me indirectly and others, that, absolutely made, as a holy grail of Atlantic Yards, that there must be a maximum affordability of apartments. Maximum!
He's got it backwards. Affordable housing was used to justify the scale Forest CIty Ratner proposed (even if it's not required, according to the City Funding Agreement, to build at that scale, which would mean less housing and thus less affordable housing). Had affordable housing had been the goal, the government would've set the parameters.
Meanwhile, Markowitz, a former tenant advocate, has been pretty sloppy describing the affordable housing. Two years ago, he inaccurately described AY as containing “thousands of affordable units for people of very low income.” (Actually, it would include 900 units for people of low income, not very low income.)
"The jobs and the housing will go to those that need it the most," Markowitz said at a City Council hearing, suggesting $80,000 should be the household income cap. That number is well over six figures. He also never commented on the switch that assigned 450 apartments once aimed at moderate-income households instead to middle-income housholds.
MM: Listen, if it was up to me, it would be 75 percent affordable. We got that pledge, we got that promise, and that was one of the guiding principles of Atlantic Yards. And we’ll see what the future brings. I am confident that it is going to happen. I really am. I really am. I was hoping it would have happened in 2006, 2007, 2008, 2009, so if it’s 2011, it’s 2011, as long as I know it’s on track, and I hope it is.
It it was up to him, he should be trying to analyze the tradeoffs between density and affordability, and where subsidies get the best bang per buck. I don't have any proof that other affordable housing organizations could build two or three times as many units for the same money (as NoLandGrab says, as has DDDB), but the cost-benefit analysis remains worth pursuing.
Train at the station?
GK: Is it on track?
MM: I hear that. I understand that. It’s sort of--the train is at the station. It’s moving very slowly.
It's an interesting metaphor, given that a temporary railyard at Vanderbilt Yard has yet to be constructed and is well behind schedule.
MM: And we have to see what the future brings. Listen, Forest City Ratner can’t do it if it’s not there. It’s very, very simple. So let’s see what the next six months, a year, bring us. We need the jobs, we need the economic activity. I do know that the beginning phase, just a few buildings, as you know, and the arena, then, y’know, it would be over the course of 16--12 to 16 years, for a full workout of Atlantic Yards.
In essence, Markowitz is recognizing the truth of Forest City Enterprises CEO Chuck Ratner's March 2007 acknowledgment--quickly but dubiously clarified--that the project would take 15 years to build.
Enter BrooklynSpeaks?
MM: And I know that, as you go down the line and you begin the first phase, y’know, the community is much more involved, I must tell you, in a systematic way. And I would not be surprised that Forest City Ratner, as they move ahead on it, would be... There’s now--Gib Veconi, I happen to like and respect very, very much, what is that [group], Brooklyn Voices?
GK: BrooklynSpeaks.
MM: BrooklynSpeaks. Listen, they’re not crazy about Atlantic Yards, for sure. But they’ve got some valid, viable ideas, they’re reasonable people, they are. You don’t know, as things go ahead and as plans adjust and amend, whatever, as they move forward, that here and there, you tweak it here, you tweak it there.
BrooklynSpeaks, among other things, suggests that the project "be substantially reduced," that Pacific Street (except under the arena) and Fifth Avenue be left open, that new streets be created to connect surrounding neighborhoods, and that existing buildings "such as the historic Ward Bakery" should be reused. (That last one is a little too late.)
Does Markowitz think those are reasonable?
BrooklynSpeaks hasn't posted anything new since June.
Still confident
GK: You really tweak it, we hear that Gehry’s fired--
MM: I read that. It seems to me that Forest City Ratner has done what they could at this. What more should they do right now when the future seems to be somewhat unsure? So, I’m assuming that, once the green light’s there, the rest of this could be done in a relatively reasonable amount of time. We’ve waited this long already, so it’ll be a little longer. I’m confident it’s going to happen.
What more should they do? Well, at least admit that work is stalled because of economics, not because of litigation. Actually, they pretty much did.
Those, I submit, are "humble fictions," the counterpoint to Markowitz's catch-phrase, "in my humble opinion."
More soberly, he bows somewhat to reality by acknowledging that the project could take "12 to 16 years" to build. That's a distinct contrast with the approved ten-year construction timeline, which was reiterated by Forest City Ratner CEO Bruce Ratner this past May, but it doesn't acknowledge that the State Funding Agreement gives the developer 12+ years to build Phase 1 and imposes no deadline for Phase 2.
Markowitz also puts in a few words for the "mend-it-don't-end-it" BrooklynSpeaks coalition, which, while slumbering, could still supply a framework for tweaking the project design and government oversight.
While the Brooklyn Paper's transcript is extensive, the comments on BrooklynSpeaks and other matters are not included, so I listened to the podcast and augmented the excerpts quoted below. The relevant passage starts at about 16:30.
Projects slowed
GK: The economy is affecting development, especially here in Downtown Brooklyn. What are you seeing out there?
MM: Getting credit is very difficult, but construction costs are beginning to come down. … When I look at Fourth Avenue, it doesn’t take a rocket scientist to know that not everything is selling out. It’s also true on Flatbush Avenue and it’s also true on Eastern Parkway at the Richard Meier building and I’m sure we can look at other examples.
GK: That’s true of individuals. But it’s true about developers, too. We have developers who haven’t started projects.
MM: We saw that with the Clarett Group on Court Street, as an example. And Atlantic Yards, though the lawsuits have prevented it. Those people who want to stop it did not know the economy was going to turn. They got lucky that the economy turned. But the truth of the matter is that, had it not been for the law cases, had it just been starting now... there still would be a problem today in terms of the credit market.... It has slowed down dramatically.
Reduced commitment
GK: Forest City Enterprises, the parent company [CEO] Charles Ratner said the other day that after the lawsuits are all settled... he’ll still wait and see where he’s at. I thought that was a big change. How did you read that?
MM: Obviously you know that I am a tremendous supporter. I think we need Atlantic Yards more this year coming than we needed it at any time before. It will be a generator of jobs, both during the construction phase and post-construction. Many industries will feed off of Atlantic Yards. The volume of people visiting the area, retailers and other industries, will be enhanced.
Arena as corporate magnet?
MM: And having an arena and a national team is a great selling point to corporations that are looking to either relocate or to expand. You know as well as I do that basketball has become in many ways the sport of corporate — corporate sport, meaning that men and women that work for corporations eagerly look forward to going to games and people bring clients there. So having an arena and a national team would be an unbelievable incentive, in my opinion, a catalyst for jobs and new companies coming and staying in Brooklyn — my humble opinion!
That's the first time that argument's been made regarding Atlantic Yards, as far as I know. And the reason it hasn't been made is that it's bogus. (It hasn't exactly turned East Rutherford, NJ, into a corporate magnet, has it?)
Economist Arthur Rolnick, testifying before Congress earlier this year, said that Minnesota attracted several Fortune 500 companies not because of sports teams but because of investment in education.
Why, the Treasury Department's Eric Solomon was asked at the hearing, are cities bidding against each other for sports teams even though the city spending might be a bad investment? Solomon responded:
Because the cities believe that there are various benefits. Perhaps they cannot be specifically identified, but there are various intangible benefits. And they -- of course, there are political constraints on their decisions as well as financial constraints.
Creating jobs
MM: And the affordable housing that also would be a component of it — although it will take somewhat longer now — is still job number 1 1/2. Job 1 is creating jobs. Job 1 1/2 is creating affordabe housing so we can continue to live here.... We still significantly lack affordable housing.... So of course I’m not happy to hear what Mr. Ratner said in Cleveland. I know that it’s a tough time for everybody. But I’m hoping once the president firmly sets his policies and the banking industry starts churning out again and investments are beginning to be made, Atlantic Yards can get back on track and we can have the shovel in the ground in the not too far distant future. I can’t tell you when but I hope it would happen soon.
While construction would create jobs, as would retail and building services, keep in mind that the one promised office tower--which likely would house more relocated than new jobs--is on indefinite hold, and that the developer initially announced 10,000 office jobs.
Better process?
GK: Is there any part of you that or other people you talk to, [that says], “Maybe if this project had been done differently. A little smaller. Gone through a ULURP [city land-use review] process rather than a state process.” Are there any regrets on that level that this could have been done by now?
MM: I’m going to back to remind you, during the beginning, a lot of the people that expressed their opposition don’t want an arena. Because they don’t want the traffic. They don’t want the people. They don’t want it. And there’s the other group that don’t want the apartment buildings because they’re going to cast shadows. It’s too much. The bulk is too much. The density is too much. So I have to tell you, when it was first proposed, attempts were made by me and my office to reach out to the very best we can, but the immediate response was, “We’re not interested. Shove it! We don’t want it. How many times do we have to tell you, Mr. Markowitz, we don’t want it. We don’t the buildings. We don’t want the arena. We don’t want it.” And when you have folks that say absolute no, not, “Maybe we’ll take some housing, six stories high, eight stories high, y’know, that was OK, but we don’t want the arena.” Obviously, I wanted it all. And I still feel that we need it sooner rather than later.
(Emphasis added)
When it was first proposed. The project started with Forest City Ratner's idea, not any public process regarding some valuable public land. Had there been an RFP, multiple projects might have been proposed; ULURP would have provided a framework for a rezoning. In this case, the state, at the behest of the city and the developer, would override city zoning.
Is Markowitz suggesting that public input could've created a smaller project? There was never room for negotiation; the size of Atlantic Yards has always been decided by the developer. When the project was publicly announced in December 2003, Markowitz told Brian Lehrer that there had not been any place for public input in the design:
To involve the community and get them involved initially, in the planning, when it was far from anywhere completed… I have a pledge, that I’ve made to the residents of that neighborhood, as well as to Bruce Ratner, that is, that my office, me personally, will be coordinating the efforts, through a task force with our community to make sure that their concerns to the fullest degree possible are resolved.
To the fullest degree possible. Not even Markowitz's own concerns on traffic and parking have been resolved, at least at last report.
Yes, some people just wanted row houses, but project opponents and critics quickly created the low- and mid-rise UNITY plan in 2004; developer Extell drew on the principles for its 2005 bid for the Vanderbilt Yard, and a revised UNITY plan, featuring some high-rises, emerged in 2007. All would be more dense than Markowitz's "six stories high" formulation.
Issues of density
GK: But the density is an issue. You make it sound like — this would be the densest Census tract in the country.
Not quite, because it wouldn't be its own census tract, but it would be more dense than the densest, according to the New York Observer.
MM: You know what? There are those that would disagree with you on that. I don’t have my statistics here.
You'd think he'd have checked the statistics by now.
Maximizing affordable housing
MM: But what I can say is that one of the guiding principles of Atlantic Yards was to maximize the units of affordable housing. If the opponents--if the community--was willing to say — I don’t want them to say — if they said, “You know what, forget about the affordable housing, scratch it all, make it all market rents or market coop price, or condo,” there is no doubt in my mind that the bulkiness would have been significantly less. But it was our demands, and you can blame me indirectly and others, that, absolutely made, as a holy grail of Atlantic Yards, that there must be a maximum affordability of apartments. Maximum!
He's got it backwards. Affordable housing was used to justify the scale Forest CIty Ratner proposed (even if it's not required, according to the City Funding Agreement, to build at that scale, which would mean less housing and thus less affordable housing). Had affordable housing had been the goal, the government would've set the parameters.
Meanwhile, Markowitz, a former tenant advocate, has been pretty sloppy describing the affordable housing. Two years ago, he inaccurately described AY as containing “thousands of affordable units for people of very low income.” (Actually, it would include 900 units for people of low income, not very low income.)
"The jobs and the housing will go to those that need it the most," Markowitz said at a City Council hearing, suggesting $80,000 should be the household income cap. That number is well over six figures. He also never commented on the switch that assigned 450 apartments once aimed at moderate-income households instead to middle-income housholds.
MM: Listen, if it was up to me, it would be 75 percent affordable. We got that pledge, we got that promise, and that was one of the guiding principles of Atlantic Yards. And we’ll see what the future brings. I am confident that it is going to happen. I really am. I really am. I was hoping it would have happened in 2006, 2007, 2008, 2009, so if it’s 2011, it’s 2011, as long as I know it’s on track, and I hope it is.
It it was up to him, he should be trying to analyze the tradeoffs between density and affordability, and where subsidies get the best bang per buck. I don't have any proof that other affordable housing organizations could build two or three times as many units for the same money (as NoLandGrab says, as has DDDB), but the cost-benefit analysis remains worth pursuing.
Train at the station?
GK: Is it on track?
MM: I hear that. I understand that. It’s sort of--the train is at the station. It’s moving very slowly.
It's an interesting metaphor, given that a temporary railyard at Vanderbilt Yard has yet to be constructed and is well behind schedule.
MM: And we have to see what the future brings. Listen, Forest City Ratner can’t do it if it’s not there. It’s very, very simple. So let’s see what the next six months, a year, bring us. We need the jobs, we need the economic activity. I do know that the beginning phase, just a few buildings, as you know, and the arena, then, y’know, it would be over the course of 16--12 to 16 years, for a full workout of Atlantic Yards.
In essence, Markowitz is recognizing the truth of Forest City Enterprises CEO Chuck Ratner's March 2007 acknowledgment--quickly but dubiously clarified--that the project would take 15 years to build.
Enter BrooklynSpeaks?
MM: And I know that, as you go down the line and you begin the first phase, y’know, the community is much more involved, I must tell you, in a systematic way. And I would not be surprised that Forest City Ratner, as they move ahead on it, would be... There’s now--Gib Veconi, I happen to like and respect very, very much, what is that [group], Brooklyn Voices?
GK: BrooklynSpeaks.
MM: BrooklynSpeaks. Listen, they’re not crazy about Atlantic Yards, for sure. But they’ve got some valid, viable ideas, they’re reasonable people, they are. You don’t know, as things go ahead and as plans adjust and amend, whatever, as they move forward, that here and there, you tweak it here, you tweak it there.
BrooklynSpeaks, among other things, suggests that the project "be substantially reduced," that Pacific Street (except under the arena) and Fifth Avenue be left open, that new streets be created to connect surrounding neighborhoods, and that existing buildings "such as the historic Ward Bakery" should be reused. (That last one is a little too late.)
Does Markowitz think those are reasonable?
BrooklynSpeaks hasn't posted anything new since June.
Still confident
GK: You really tweak it, we hear that Gehry’s fired--
MM: I read that. It seems to me that Forest City Ratner has done what they could at this. What more should they do right now when the future seems to be somewhat unsure? So, I’m assuming that, once the green light’s there, the rest of this could be done in a relatively reasonable amount of time. We’ve waited this long already, so it’ll be a little longer. I’m confident it’s going to happen.
What more should they do? Well, at least admit that work is stalled because of economics, not because of litigation. Actually, they pretty much did.
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