Skip to main content

The CBA angle to the Seabrook indictment, Liu's effort to reform CBAs, and the lingering clouds over the AY CBA

It is no coincidence that today, a day after news of the indictment of Bronx City Council Member Larry Seabrook for money laundering, extortion and fraud, City Comptroller John Liu issued a statement calling Community Benefits Agreements an "embarrassment" and urging more standards.

While a contract associated with the Yankee Stadium CBA was but a part of the Seabrook indictment (press release), it was another questionable episode in the saga of CBAs, which Mayor Mike Bloomberg--once an enthusiastic witness to the Atlantic Yards CBA--now calls "extortion."

And given the allegedly criminal behavior, it raises a question as to why a convicted criminal ($500,000 in fraudulent billing), Darryl Greene--the subject of huge controversy regarding the deal for an Aqueduct video casino--has played a key role in the Atlantic Yards CBA.

The indictment

The New York Times headlined the news Councilman Charged With Money Laundering:
Most of the charges in the 13-count federal indictment revolve around Mr. Seabrook’s use of Council discretionary funds, known as earmarks, to finance a string of nonprofit groups that city and federal authorities say ultimately did little for the communities they were supposed to aid.

...Mr. Seabrook, 58, and others were able to do this, prosecutors contend, in part by repeatedly inflating expense claims to the city on the part of the nonprofit groups, including rent costs.
The New York Post, seizing on an allegedly doctored receipt from $7 to $177, headlined its article Bagel, borrow & 'steal' for pol.

The CBA angle

According to the indictment, Seabrook lobbied the Yankees to award the Yankee Stadium boiler contract to a Bronx boiler manufacturer which was not among the four previously-identified bidders.

A developer serving as a representative of the Yankees asked the team for authorization to award the boiler subcontract to Seabrook's choice, noting that there was a $13,000 premium because the firm was "a Local Business Enterprise and heavily supported by a local politician."

The Contractor paid the Bronx Boiler Manufacturer in excess of $283,000 for the boiler subcontract. Seabrook allegedly got $50,000.

With the Atlantic Yards CBA, Greene remains in charge of a Minority/Women/Local Business Enterprise database, according to the web site of his firm, the Darman Group.

Who dropped the dime on Seabrook?

The Times reported on its CityRoom blog:
The Yankee’s spokeswoman, Ms. [Alice] McGillion, noted that the boiler contract was “of a type that had been encouraged by the Community Benefits Agreement and was performed satisfactorily.”

She said that when the baseball team learned of the situation, they asked the independent construction monitor they had hired to oversee the project, Edwin H. Stier of Thacher Associates, to look into the matter and he confirmed it.
I'm not sure what the construction monitor confirmed: that the contract was performed satisfactory? The Yankees cooperated with the U.S. Attorney on the investigation, but it doesn't look like the Yankees dropped the dime on Seabrook.

That apparently came from another angle, as the Times reported:
In June, federal investigators issued subpoenas to landlords who leased space to Mr. Seabrook and several nonprofit groups closely linked to him after an article in The New York Times detailed the inflated rent payments and the use of nonprofit money to pay salary and fees to Mr. Seabrook’s family members.
The Liu statement

Liu issued a statement:
“Community Benefit Agreements have become commonplace whenever private developers seek public assistance, ranging in form from tax subsidies and no-bid contracting to zoning changes and invocation of eminent domain. In the absence of standards, however, these agreements will become more problematic and ultimately irrelevant.

“From Atlantic Yards to Yankee Stadium to the Columbia University expansion, the public has seen a string of broken promises to communities and questionable involvement by some government officials. Furthermore, an additional layer of unpredictability confronts developers when they engage in private negotiations over benefits associated with their projects. In fact, studies have singled out New York City’s community benefit agreements as examples of what not to do.

“It is time for this embarrassment to end. In the coming months, I’ll establish standards for community benefit agreements that are accountable, transparent, consistent and inclusive. To that end, I will form a task force including business, labor and community representatives that will thoroughly examine the issue of community benefit agreements and propose best practices. It is simply common sense to have clear standards that ensure benefits for the public when private developers receive benefits from the public. I look forward to working with the Mayor and the City Council to implement a new approach that will place our city at the forefront of community engagement in economic development projects.”
Liu has a lot to investigate, including the enforceability of CBAs, their scope, and their representativeness.

Clouds over the AY CBA

Most of the signatories of the AY Community Benefits Agreement did not exist before the project arose, and all are funded by the developer, Forest City Ratner's MaryAnne Gilmartin finally acknowledged last July.

Most of the groups had been closemouthed. In March 2009, I asked Ben Beach, staff attorney at the Community Benefits Law Center, the legal program of the Partnership for Working Families, if it was appropriate for CBA signatories to accept funding from the developer and, if they do, if they should disclose it.

“I’m generally not in favor of signatories accepting money,” Beach said, saying it “undercuts the integrity of the deal.” However, if they do get money from the developer, yes, they should disclose it, he said.

Similarly, John Goldstein, National Program Director of The Partnership for Working Families, has said, “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.”

Forest City Ratner, which signed the Affordable Housing Memorandum of Understanding with New York ACORN, bailed out national ACORN with a $1.5 million loan/grant.

Delia Hunley-Adossa, chairperson of the Atlantic Yards CBA, says a significant chunk of the $400,000 her dubious nonprofit, Brooklyn Endeavor Experience (BEE), has raised has gone to rat and rodent abatement and air conditioner installation at her building, First Atlantic Terminal.

Given that such tasks are not really part of BEE's mandate, wouldn't those contracts be worth a closer look?

An RFP for an Independent Compliance Monitor was issued by Greene's Darman Group in March 2007, nearly three years ago, but no such position was ever announced.

The AY warning

Bettina Damiani of Good Jobs New York offered testimony at a 5/26/05 City Council meeting that was ignored at the time. She raised questions about transparency:
The negotiations surrounding the development of the BAY project have been marked by secrecy, with elected officials providing privileged access to one developer for the site. Rather than working with local stakeholders to create a vision for community-driven development and then issuing a Request For Proposals (RFP) to locate the developer that can best meet those community needs, the city instead chose to pursue one idea – that of a sports arena coupled with a prime residential real estate opportunity – that fails to take many local concerns into account and partnering with one development company, Forest City Ratner Company (FCRC), to put that idea into action. Unsurprisingly, this process has contributed to a fragmentation of community responses, as some groups have been able to work with the “designated developer” to advance their concerns while others have not.
And she raised a red flag about the CBA:
As a sponsored project of Good Jobs First, which provided support for the CBAs negotiated in California and continues to act as a clearinghouse for information on CBAs, we feel it is important to draw the Council’s attention to several major differences between CBAs as they have been used in other parts of the country and the series of negotiations that FCRC is calling a CBA. 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. The coalition hammers out its points of unity in advance and then each member holds out on settling on its particular issue until the issues of the other members are addressed. This way, the bargaining power of each group is used for the benefit of the coalition as a whole. 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.

...We do not mean to say that negotiations on affordable housing and local hiring are without value. Housing and jobs are among the most important reasons to pursue development projects of any kind. However, to use the “CBA” model set forth by the landmark STAPLES Center agreement in Los Angeles for a series of non-binding side agreements between already-supportive community groups and a developer can only set a low bar for future attempts to negotiate for broad-based benefits from major development projects. Without broad, cross-cutting organizing, such “CBAs” can become a mechanism for dividing the community rather than uniting it, and devolve into a mere publicity tool for developers of controversial projects.
The bigger picture

Lobbyist Richard Lipsky suggested that Manhattan District Attorney's investigation of Mayor Mike Bloomberg's $750,000 personal campaign contribution to the state Independence Party was bigger news than the Seabrook indictment:
It's time that our local media understand that the living large style of personal and charitable spending-self aggrandizement at its finest-that has characterized the Bloomberg era is as big a threat to democratic process as the sleazy activities of, say, a council member such as Larry Seabrook who was accused yesterday of money laundering. In fact, it is actually greater since it transcends one individual and tends to thoroughly corrupt the entire system.

Comments

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…

No, security guards can't ban photos. Questions remain about visibility of ID/sticker system.

The bi-monthly Atlantic Yards/Pacific Park Community Update meeting June 14, held at 55 Hanson Place, addressed multiple issues, including delays in the project, a new detente with project neighbors,concerns about traffic congestion, upcoming sewer work and demolitions, and an explanation of how high winds caused debris to fly off the under-construction 38 Sixth Avenue building. I'll have more coverage.
Security issues came up several times at the meeting.
Wayne Bailey, a resident who regularly takes photos and videos (that I often use) of construction/operations issues that impact residents, asked representatives of Tishman Construction if the security guard at the sites they're building works for them.
After Tishman Senior VP Eric Reid said yes, Bailey asked why a guard told him not to shoot video of the site, even though he was on a public street.

"I will address it with principals for that security firm," Reid said.
Forest City Ratner executive Ashley Cotton, the …

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 Matzav.com 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…

Atlantic Yards/Pacific Park graphic: what's built/what might be coming (post-dated pinned post)

Click on graphic to enlarge. This is post-dated to stay at the top of the blog. It will be updated as announced configurations change and buildings launch. The August 2014 tentative configurations proposed by developer Greenland Forest City Partners will change, and the project is already well behind that tentative timetable.


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 …

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…