Skip to main content

The "modern blueprint," fungible money, and why taxpayers are helping bail out ACORN and fund the AY CBA

"Money is fungible, Judge Robert Smith declared during the oral argument on the Atlantic Yards eminent domain case October 14 at the Court of Appeals in Albany.

His point was that $100 million in state subsidies for arena infrastructure made it easier for Forest City Ratner to build the rest of the project.

Empire State Development Corporation attorney Philip Karmel responded with a verbal shrug. But the issue deserves more attention.

The CBA signatories

Money is fungible.

That's why the Community Benefits Agreement (CBA) signatories were in Albany, proxies for the project and better for p.r. than a Forest City Ratner executive.

They were shepherded by a public relations representative from The Terrie Williams Agency--which has represented CBA signatories off and on since 2005. (As I wrote in October 2005, BUILD's James Caldwell told the New York Observer he didn't know who was paying for the agency that was representing his group.)

Forest City Ratner is spending a couple of million dollars on the CBA, first on direct payments to organizations with no other visible means of support.

A few of the eight organizations do have a track record before Atlantic Yards, but the most prominent, ACORN, lost support in the wake of an embezzlement scandal, and FCR stepped in last December with a $1.5 million grant/loan package. (So much for the "modern blueprint" the Times discerned four years ago, as noted below.)

Who paid for that?

We did. Money is fungible.

The public purse

Well, of course, we didn't pay for it directly or necessarily in full, and it's not on the books. However, public dollars--some $305 million in direct subsidies, plus tax breaks, below-market land, and more--have given Forest City Ratner the flexibility to shift money around.

More? How about--to pick one of the latest examples--a speed-up in the last $25 million state funding as part of an amendment to allow that money to be used--in contradiction of the original agreement--to pay the developer's "soft costs," such as design and engineering.

Once upon a time, Forest City Ratner paid its own soft costs. But--let's think aloud--paying those soft costs left it short on cash, cash needed to pay those CBA organizations, cash needed to help fund Delia Hunley-Adossa and Charlene Nimmons so they could work on a 35th District City Council campaign (ultimately with 2013 in mind?) without having to find other day jobs.

Now the state's going to pay those soft costs. That leaves more cash for FCR.

See how it works? Money is fungible.

The CBA press release: contradictions

From the press release reproduced above:
The CBA membership is comprised of local leaders who love their neighborhood and have their fingers on the pulse of the needs of the community's most vulnerable--children and senior citizens. The CBA believes local organizations should be involved in the land-use planning process and that quantifiable benefits for the community should be identified as part of the planning process.
That's a lot of pulse-taking, but what does it mean? Could it refer to the "intergenerational center" that the Rev. Herbert Daughtry so often touts, scheduled to be built in Phase 2 of the project, which could take 25 years.

The role of the CBA

At the state Senate oversight hearing on May 5/29/09, longtime community planner Ron Shiffman said minority hiring and contracting and affordable housing “should be part of public policy” rather than part of a CBA because it “allows the developer to literally buy” support for the project. Rather, there should be a level playing field.

Was that simply a minority view from a member of the Develop Don't Destroy Brooklyn board? Not really.

After all, Mayor Mike Bloomberg is "violently opposed" to CBAs. But he still hasn't repudiated the AY CBA, nor his role as a witness--nor the city press release that inaccurately claimed he was a signatory.

And it's taxpayer funds--whether via direct city subsidy or other means--that have helped the developer "to literally buy" support for the project.

Remember, money is fungible.


  1. yet despite all these government subsidies & handouts for atlantic yards, fce's stock price is once again in freefall mode, having dropped 40% in the last 5 weeks

    perhaps this is because investors aren't too optimistic about the future of atlantic yards


Post a Comment

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…

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 …

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…

"There is no alternative": DM Glen on de Blasio's affordable housing strategy

As I've written, Mayor Bill de Blasio sure knows how to steer and spin coverage of his affordable housing initiatives.

Indeed, his latest announcement, claiming significant progress, came with a pre-press release op-ed in the New York Daily News and then a friendly photo-op press conference with an understandably grateful--and very lucky--winner of an affordable housing lottery.

To me, though, the most significant quote came from Deputy Mayor Alicia Glen, who, as the Wall Street Journal reported:
said public housing had been “starved” of federal support for years now, leaving the city with fewer ways of creating affordable housing. “Are we relying too heavily on the private sector?” she said. “There is no alternative.” Though Glen was using what she surely sees as a common-sense phrase, it recalls the slogan of a politician with whom I doubt de Blasio identifies: former British Prime Minister Margaret Thatcher, a Conservative who believed in free markets.

It suggests the limits to …