Skip to main content

Decoding "shovel-ready": AY railyard may seem eligible, but with a huge bailout asterisk (and wouldn't be "fully vetted")

Last Wednesday, the Empire State Development Corporation's (ESDC) Atlantic Yards Ombudsman, Forrest Taylor was asked the definition of “shovel-ready,” the term used in discussion of projects eligible for federal stimulus funding.

“I think that ‘shovel-ready' will be a federal term,” Taylor said.

Perhaps, but there's no formal federal definition of shovel-ready, according to NPR. But the Federal Highway Administration's (FHA) "ready to go" designation seems a rough equivalent, NPR suggested last week, encompassing projects that have gotten through design work and environmental approval. And a New York definition, as I describe below, seems similar.

AY bailout?

The Atlantic Yards railyard might seem to qualify, though not the project as a whole, given that Forest City Ratner does not control the property. But the railyard would require a huge bailout asterisk, connected to FCR's lobbying.

As I've written, the difference between using federal funds for "shovel ready" city/state/MTA transit projects and using them for Atlantic Yards-- is that the former, unlike the latter, would not relieve a private developer of a previous commitment. (And, of course, federal aid to a private developer that relieves the developer of its costs and boosts the value of the team should mean federal ownership of the project and/or team.)

[Develop Don't Destroy Brooklyn quotes former Forest City Ratner point man Jim Stuckey, who said in September 2005, "That's not built with funny money - that's built with real cash."]

Rather, as Rep. Mike McMahon told the Brooklyn Paper, federal money should pay for not-yet-funded Metropolitan Transportation Authority (MTA) projects like renovation of train stations.

The railyard wasn't on a draft list of eligible projects, according to the New York Observer.

$182 million savings?

The reconstruction of the Vanderbilt Yard would be a $182 million project, at first. Forest City Ratner claimed its bid of $100 million cash plus the $182 million yard and other enhancements was worth $379.4 million. FCR's cash bid was doubled from $50 million after the MTA agreed to negotiate exclusively with the developer; though rival Extell, which bid $150 million in cash, was not given the opportunity to negotiate.

The MTA’s own appraiser calculated the value of the railyard site at $271.2 million and the cost of a new yard at $56.7 million, saying the agency should have gotten $214.5 million in cash.

Quizzical ignorance

Governor David Paterson and Senator Chuck Schumer, who last week expressed quizzical ignorance of whether Atlantic Yards would be eligible for infrastructure funding, should know better.

And beyond that, they skate on thin ice by advocating funds for a project which has no timeline and no design.

More legitimate scenario

Consider a more legitimate alternate scenario. What if, prior to putting the railyard site up for bid, the MTA had decided to invest public funds into moving the railyard function and building a deck, thus making the package far more attractive to investors?

In that case, federal funds could supply the jump-start. Instead, Forest City Ratner's bid for the railyard included a pledge to move and modernize the railyard, part of a package claimed to be worth $435 million to the MTA. A federal bailout would go directly to the developer's bottom line.

Transparency along the way

The apparent plan faces another significant hurdle. An overview of the stimulus package released by House Speaker Nancy Pelosi's office points to the need for transparency and fair dealing:
Governors, mayors, or others making funding decisions must personally certify that the investment has been fully vetted and is an appropriate use of taxpayer dollars.

But there's already evidence that work at the railyard has not been "fully vetted." Consider that the ESDC asserted, taking a cue from Forest City Ratner, that "the temporary suspension of work at Atlantic Yards is due to pending litigation. Once it has been resolved, work will continue. Stating that this site is not 'shovel-ready' was inaccurate."

Did Forest City Ratner explain to the ESDC why it had stopped work, and whether it was caused by litigation? No.

The only document I could find, after filing a Freedom of Information Law request, was an email (right) that quoted an FCR employee saying the developer "had completed the work needed thus far."

There was no explanation, for example, of how and why litigation had stopped work on a partially completed trestle (right).

(Photo by Tracy Collins)

In other words, the evidence suggests that the developer ran out of money, or decided not to spend any more money, while waiting for either new funding and/or the close of litigation.

And there's been no statement from either the developer or the ESDC explaining how the work suspension comports with the developer's claim, in sworn affidavits, that:
FCRC’s construction schedule has been carefully drawn to allow the arena to be ready for the 2009-10 season by commencing work now on vacant properties that are owned by FCRC, the MTA and the City, with work on properties that are owned or occupied by other parties deferred until the pending judicial challenges to the Project have proceeded to a point where ESDC is in a position to actually use its powers of eminent domain to acquire title to and possession of those properties.

The definition in New York

The ESDC and the Governor's Office for years have been working together on state program known as Shovel Ready Certification, essentially a "pre-permitting" program.

The explanation is logical:
Having an economic development site certified as a "Shovel Ready Site" means that the local developer has worked proactively with the State to address all major permitting issues, prior to a business expressing interest in the location. This advance work creates a site where construction can begin rapidly, once a prospective business decides to develop a facility there.
(Emphasis in original)

In other words, "shovel ready" means that the developer of a site has prepared it to attract new investments by businesses that would operate there. (Here's the self-evaluation checklist for developers.)

Analogously, in the case of projects eligible for federal funding, the definition would apply to a government agency that has already gotten permits but just hasn't raised the money yet.

The state's "Shovel Ready" program does involve grants from the Build Now-NY program. In the program, competitive grants "help local communities pay for professional services related to engineering studies, environmental assessments, and legal support."

In other words, the funds help get the sites "shovel ready." They don't pay for what happens next.


Popular posts from this blog

Barclays Center/Levy Restaurants hit with suit charging discrimination on disability, race; supervisors said to use vicious slurs, pursue retaliation

The Daily News has an article today, Barclays Center hit with $5M suit claiming discrimination against disabled, while the New York Post headlined its article Barclays Center sued over taunting disabled employees.

While that's part of the lawsuit, more prominent are claims of racial discrimination and retaliation, with black employees claiming repeated abuse by white supervisors, preferential treatment toward Hispanic colleagues, and retaliation in response to complaints.

Two individual supervisors, for example, are charged with  referring to black employees as “black motherfucker,” “dumb black bitch,” “black monkey,” “piece of shit” and “nigger.”

Two have referred to an employee blind in one eye as “cyclops,” and “the one-eyed guy,” and an employee with a nose disorder as “the nose guy.”

There's been no official response yet though arena spokesman Barry Baum told the Daily News they, but take “allegations of this kind very seriously” and have "a zero tolerance policy for…

Behind the "empty railyards": 40 years of ATURA, Baruch's plan, and the city's diffidence

To supporters of Forest City Ratner's Atlantic Yards project, it's a long-awaited plan for long-overlooked land. "The Atlantic Yards area has been available for any developer in America for over 100 years,” declared Borough President Marty Markowitz at a 5/26/05 City Council hearing.

Charles Gargano, chairman of the Empire State Development Corporation, mused on 11/15/05 to WNYC's Brian Lehrer, “Isn’t it interesting that these railyards have sat for decades and decades and decades, and no one has done a thing about them.” Forest City Ratner spokesman Joe DePlasco, in a 12/19/04 New York Times article ("In a War of Words, One Has the Power to Wound") described the railyards as "an empty scar dividing the community."

But why exactly has the Metropolitan Transportation Authority’s Vanderbilt Yard never been developed? Do public officials have some responsibility?

At a hearing yesterday of the Brooklyn Borough Board Atlantic Yards Committee, Kate Suisma…

Barclays Center event June 11 to protest plans to expand Israeli draft; questions about logistics

At right is a photo of a poster spotted in Hasidic Williamsburg right. Clearly there's an event scheduled at the Barclays Center aimed at the Haredi Jewish community (strict Orthodox Jews who reject secular culture), but the lack of English text makes it cryptic.

The website explains, Protest Against Israeli Draft of Bnei Yeshiva Rescheduled for Barclays Center:
A large asifa to protest the drafting of bnei yeshiva in Eretz Yisroel into the Israeli army that had been set to take place this month will instead be held on Sunday, 17 Sivan/June 11, at the Barclays Center in Downtown Brooklyn, NY. So attendees at a big gathering will protest an apparent change of policy that will make it much more difficult for traditional Orthodox Jewish students--both Hasidic (who follow a rebbe) and non-Hasidic (who don't)--to get deferments from the draft. Comments on the Yeshiva World website explain some of the debate.

The logistical questions

What's unclear is how large the ev…

Atlanta's Atlantic Yards moves ahead

First mentioned in April, the Atlantic Yards project in Atlanta is moving ahead--and has the potential to nudge Atlantic Yards in Brooklyn further down in Google searches.

According to a 5/30/17 press release, Hines and Invesco Real Estate Announce T3 West Midtown and Atlantic Yards:
Hines, the international real estate firm, and Invesco Real Estate, a global real estate investment manager, today announced a joint venture on behalf of one of Invesco Real Estate’s institutional clients to develop two progressive office projects in Atlanta totalling 700,000 square feet. T3 West Midtown will be a 200,000-square-foot heavy timber office development and Atlantic Yards will consist of 500,000 square feet of progressive office space in two buildings. Both projects are located on sites within Atlantic Station in the flourishing Midtown submarket.
Hines will work with Hartshorne Plunkard Architecture (HPA) as the design architect for both T3 West Midtown and Atlantic Yards. DLR Group will be t…

Forest City acknowledges unspecified delays in Pacific Park, cites $300 million "impairment" in project value; what about affordable housing pledge?

Updated Monday Nov. 7 am: Note follow-up coverage of stock price drop and investor conference call and pending questions.

Pacific Park Brooklyn is seriously delayed, Forest City Realty Trust said yesterday in a news release, which further acknowledged that the project has caused a $300 million impairment, or write-down of the asset, as the expected revenues no longer exceed the carrying cost.

The Cleveland-based developer, parent of Brooklyn-based Forest City Ratner, which is a 30% investor in Pacific Park along with 70% partner/overseer Greenland USA, blamed the "significant impairment" on an oversupply of market-rate apartments, the uncertain fate of the 421-a tax break, and a continued increase in construction costs.

While the delay essentially confirms the obvious, given that two major buildings have not launched despite plans to do so, it raises significant questions about the future of the project, including:
if market-rate construction is delayed, will the affordable h…

Not quite the pattern: Greenland selling development sites, not completed condos

Real Estate Weekly, reporting on trends in Chinese investment in New York City, on 11/18/15 quoted Jim Costello, a senior vice president at research firm Real Capital Analytics:
“They’re typically building high-end condos, build it and sell it. Capital return is in a few years. That’s something that is ingrained in the companies that have been coming here because that’s how they’ve grown in the last 35 years. It’s always been a development game for them. So they’re just repeating their business model here,” he said. When I read that last November, I didn't think it necessarily applied to Atlantic Yards/Pacific Park, now 70% owned (outside of the Barclays Center and B2 modular apartment tower), by the Greenland Group, owned significantly by the Shanghai government.
A majority of the buildings will be rentals, some 100% market, some 100% affordable, and several--the last several built--are supposed to be 50% market/50% subsidized. (See tentative timetable below.)

Selling development …

For Atlantic Yards Quality of Life meeting Sept. 19, another bare-bones agenda (green wall?)

A message from Empire State Development (ESD) reminds us that the next Atlantic Yards/Pacific Park Quality of Life Meeting--which aims to update community members on construction and other issues--will be held:
Tuesday, September 19, 2017 @ 6 pm
Shirley Chisholm State Office Building
55 Hanson Place
1st Floor Conference Room
Brooklyn, NY 11217 The typically bare-bones, agenda, below, tells us nothing about the content of the presentation. One thing to look for is any hint of plans to start a new building on the southeast block of the project by the end of the year.

If not, ESD is supposed to re-evaluate a longstanding request from project neighbors to move back a giant wall encroaching on part of Dean Street between Carlton and Vanderbilt avenues. It's said to enclose construction activity, but, in recent months, has significantly served to protect worker parking.

Also, by the way, if you search for Atlantic Yards on Google or the ESD website, it leads to this page for the Atlantic Ya…