Hold on--did the New York Observer really publish The Op-Ed: Atlantic Yards—It Is Happening, by Forest City Ratner Executive VP MaryAnne Gilmartin?
Well, yes--and no. Her self-serving essay appeared in the Commercial Observer, a spinoff weekly aimed at the commercial real estate market, which started up last September.
The Commercial Observer is delivered free to approximately 10,000 commercial real estate insiders and members of REBNY (Real Estate Board of New York). Maybe that's why Gilmartin's byline also describes her as "an active member of the Real Estate Board of New York."
In other words, Gilmartin was talking to peers.
The missing timetable
I'll go through her essay below, but first recognize one contrast between Atlantic Yards—It Is Happening and Bruce Ratner's May 2008 Daily News op-ed headlined Atlantic Yards dead? Dream on.
Ratner claimed that the developer aimed to break ground on the Barclays Center later that year, and open both the arena and the first residential tower in 2010. "We anticipate finishing all of Atlantic Yards by 2018," he wrote.
Gilmartin offers no timetables, no prediction of how long interim surface parking might linger.
Nor does she mention that the Development Agreement signed with the Empire State Development Corporation gives them 25 years to complete a much smaller project than approved.
Leading off
Her op-ed begins:
And the "inherent difficulty of building in the most densely settled city in America," while undeniable, shouldn't be seen in a vacuum. Forest City Ratner and its government partners agreed to avoid the city's Uniform Land Use Review Procedure, which would have conveyed more legitimacy and staved off some community opposition.
Moreover, that phrasing distracts from an alternative view: "the densest residential community in the United States" if built as approved, according to planner (and DDDB board member) Ron Shiffman.
"Litigious opponents"
Gilmartin continues:
Moreover, the "mend-it-don't-end-it" BrooklynSpeaks, which AY booster Brooklyn Borough President Marty Markowitz in December 2008 said were "reasonable people" with "some valid, viable ideas," last November finally changed policy and went to court.
What they're building
Gilmartin continues:
And while Forest City has proceeded as if there are no remaining potential snags--and it's a good bet they and the ESDC will prevail--the fact is that the condemnation remains on hold. It's quite possible that Gilmartin's op-ed was submitted under the presumption that title would pass on January 29.
What's AY about?
Gilmartin continues:
Forest City Ratner's funding of BUILD helps people get job training, but that funding is made possible--indirectly--by significant government subsidies to the developer. Forest City Ratner just got another $31 million in cash for property acquisition. That frees up a lot of money for the questionable CBA.
Why not provide public funding directly to job training organizations--ones that do not supply cheerleaders for the developer?
Affordable housing
Gilmartin continues:
If Atlantic Yards takes 25 years to build--and it could go longer, with eight opportunities to get one-year Affordable Housing Subsidy Unavailability extensions--that's 90 affordable units a year, with 45 a year for those quarter of a million families on waiting lists.
In other words, it can't make much of a dent. even if built in 15 years, the numbers are 150 and 75.
The question of blight
Gilmartin continues:
Why was there never any attempt to market the Vanderbilt Yard, which almost surely would have generated multiple bids, as with Willets Point or Hudson Yards?
Why are there million-dollar condos next door? Wouldn't a historic district literally adjacent to the site invite investment? There were spot rezonings for buildings like the Newswalk condos, but never a rezoning that would spur investment.
What about the cappuccino nearly next door?
About the site
Gilmartin continues:
The future
Gilmartin continues:
The Nets have been essentially dismantled in order to clear cap space for free agents and to hope for the first lottery pick in the draft; the three players used to sell the project--Jason Kidd, Richard Jefferson, and Vince Carter--have all been jettisoned.
Work on the site
Gilmartin continues:
Estimates of jobs
Gilmartin pretends that Forest City Ratner is some kind of charity:
Yesterday, I dissected the incredible claim of 8000 permanent jobs. Forest City, perhaps chastened by the inquiries from the Washington Post, now claims "up to 8,000 permanent jobs," which leaves an enormous amount of wiggle room.
Phase 1 affordable housing
Gilmartin continues:
Gilmartin refers to "low-income and working families." But she strenuously avoids explaining that, even as early as July 2006, those seeking subsidized housing at the project were shocked that so many of the apartments would be unaffordable to them. A good chunk would be at or above market.
Just an arena?
Gilmartin continues:
The future penalties may be well-defined, but they're hardly onerous. The damages Forest City Ratner faces in most cases--less than $10 million for an arena that's up to three years late, $5 million for each of three buildings if they're late--don't represent a lot of money.
Note that the Development Agreement explicitly states that the damages are not designed to be penalties.
Investment
Gilmartin continues:
Public costs
Gilmartin continues:
No one's conducted a full cost-benefit analysis of the project, but the New York City Independent Budget Office--the least partisan of any organization to take a look--concluded that the arena would be a significant net loss to the city.
The need for agility
In closing, Gilmartin writes:
She concludes:
In all our dealings with all stakeholders, we will uphold the highest possible standards of ethical behavior. Our interactions will be characterized by an attitude of openness, candor and honesty.
Don't those values come into conflict with self-serving op-ed pieces aimed at the Real Estate Board of New York?
Well, yes--and no. Her self-serving essay appeared in the Commercial Observer, a spinoff weekly aimed at the commercial real estate market, which started up last September.
The Commercial Observer is delivered free to approximately 10,000 commercial real estate insiders and members of REBNY (Real Estate Board of New York). Maybe that's why Gilmartin's byline also describes her as "an active member of the Real Estate Board of New York."
In other words, Gilmartin was talking to peers.
The missing timetable
I'll go through her essay below, but first recognize one contrast between Atlantic Yards—It Is Happening and Bruce Ratner's May 2008 Daily News op-ed headlined Atlantic Yards dead? Dream on.
Ratner claimed that the developer aimed to break ground on the Barclays Center later that year, and open both the arena and the first residential tower in 2010. "We anticipate finishing all of Atlantic Yards by 2018," he wrote.
Gilmartin offers no timetables, no prediction of how long interim surface parking might linger.
Nor does she mention that the Development Agreement signed with the Empire State Development Corporation gives them 25 years to complete a much smaller project than approved.
Leading off
Her op-ed begins:
The recession, the credit crunch and the inherent difficulty of building in the most densely settled city in America: These are just a few of the challenges that have dogged the Atlantic Yards project since its announcement, in December 2003.This is a bit of a dodge. The recession and credit crunch hardly dogged the Atlantic Yards project in December 2003.
And the "inherent difficulty of building in the most densely settled city in America," while undeniable, shouldn't be seen in a vacuum. Forest City Ratner and its government partners agreed to avoid the city's Uniform Land Use Review Procedure, which would have conveyed more legitimacy and staved off some community opposition.
Moreover, that phrasing distracts from an alternative view: "the densest residential community in the United States" if built as approved, according to planner (and DDDB board member) Ron Shiffman.
"Litigious opponents"
Gilmartin continues:
Add to these general obstacles a small group of litigious opponents who vowed to sue early and often to stop the project, and the six-year project inception period makes more sense.As DDDB's Daniel Goldstein commented, the organization "never vowed anything like that."
Moreover, the "mend-it-don't-end-it" BrooklynSpeaks, which AY booster Brooklyn Borough President Marty Markowitz in December 2008 said were "reasonable people" with "some valid, viable ideas," last November finally changed policy and went to court.
What they're building
Gilmartin continues:
But the wait is over. We are building Atlantic Yards. And the project is more important than ever.What exactly is the "Atlantic Yards" that they're building. There are no renderings, just "vaportecture." She doesn't mention that they have three or four years after the delivery of property via eminent domain to start building the first tower and 12 years to build Phase 1.
And while Forest City has proceeded as if there are no remaining potential snags--and it's a good bet they and the ESDC will prevail--the fact is that the condemnation remains on hold. It's quite possible that Gilmartin's op-ed was submitted under the presumption that title would pass on January 29.
What's AY about?
Gilmartin continues:
From the beginning, Atlantic Yards has been about much more than building a basketball arena. It has been about jobs and housing and an historic community-benefits agreement that ensures that the project's economic and social benefits help the folks who live here and need it most. Even during booming economic times, Brooklyn as a borough has seen unequal resources and opportunities; it is a place where good jobs and affordable housing could make a genuine difference. Now, as the economy stumbles out of the worst recession in decades, they are more necessary than ever.A project as big as Atlantic Yards surely would have some share-the-wealth impacts in Brooklyn, but it's not a charitable endeavor.
The Harsh Reality
Unemployment in the borough is over 10 percent, compared to 5.7 percent just two years earlier. Each week, more than 100 people show up at the office of BUILD, a downtown Brooklyn-based job training organization, looking for jobs. Since 2004, nearly 7,000 have completed registry forms at this one organization alone. Last year, BUILD provided more than 1,200 local residents with job training or some type of employment support.
Forest City Ratner's funding of BUILD helps people get job training, but that funding is made possible--indirectly--by significant government subsidies to the developer. Forest City Ratner just got another $31 million in cash for property acquisition. That frees up a lot of money for the questionable CBA.
Why not provide public funding directly to job training organizations--ones that do not supply cheerleaders for the developer?
Affordable housing
Gilmartin continues:
Affordable housing in the city remains scarce. Over a quarter of a million families are on waiting lists for Section 8 vouchers or public housing, a number that does not include the many cops, nurses, firemen, medical technicians and teachers who need moderate- and middle-income housing to afford to live in the city where they work.Only about half the 2250 subsidized units--or 1125--would be affordable to people seeking Section 8 vouchers or public housing (80% of Area Median Income or lower) and the first, building, at least, might far fewer such units.
If Atlantic Yards takes 25 years to build--and it could go longer, with eight opportunities to get one-year Affordable Housing Subsidy Unavailability extensions--that's 90 affordable units a year, with 45 a year for those quarter of a million families on waiting lists.
In other words, it can't make much of a dent. even if built in 15 years, the numbers are 150 and 75.
The question of blight
Gilmartin continues:
For decades, the area surrounding and encompassing Atlantic Yards has remained a blighted part of the city. It has failed to attract the investment seen in other parts of the city and the borough.Then why does Chuck Ratner, CEO of parent Forest City Enterprises, call it "a great piece of real estate"?
Why was there never any attempt to market the Vanderbilt Yard, which almost surely would have generated multiple bids, as with Willets Point or Hudson Yards?
Why are there million-dollar condos next door? Wouldn't a historic district literally adjacent to the site invite investment? There were spot rezonings for buildings like the Newswalk condos, but never a rezoning that would spur investment.
What about the cappuccino nearly next door?
About the site
Gilmartin continues:
While opponents have depicted the 22-acre site as an oasis of brownstones and quaint streets, those who live or work in the area, or who have traveled to the site, know that while a few commercial businesses and residents have made the site their home, in 2006, more than 70 percent of the project area was occupied by empty lots, gas stations, underutilized or vacant manufacturing buildings and an 8-acre, below-grade LIRR rail yard, which since the early 1900s has divided the communities to the north and south of the site.No one's depicted it as an oasis--it's a borderland, with valuable land. And, by 2006, three years after Forest City Ratner announced the project, investment had been stalled.
The future
Gilmartin continues:
Looking to the FutureReally? Architect Frank Gehry is gone, as is landscape architect Laurie Olin. There are no renderings of anything except the arena.
To those who wonder if the project will happen, we encourage a closer look. It is happening. Our commitment to the entire project remains as strong and fervent as the day we started.
The Nets have been essentially dismantled in order to clear cap space for free agents and to hope for the first lottery pick in the draft; the three players used to sell the project--Jason Kidd, Richard Jefferson, and Vince Carter--have all been jettisoned.
Work on the site
Gilmartin continues:
Work on Atlantic Yards has been ongoing since last summer. Nearly $90 million worth of work has already been awarded to contractors on the site thus far.Yes, the developer has pursued utility work, demolitions, and a temporary railyard. Meanwhile, it's gotten the state and city to speed up subsidy payments and renegotiated the Vanderbilt Yard deal with the Metropolitan Transportation Authority, putting down $20 million instead of the original $100 million pledged.
Estimates of jobs
Gilmartin pretends that Forest City Ratner is some kind of charity:
Still, it is the jobs and the housing that matter most, all the more now with double-digit unemployment and a painful affordable housing crunch. Atlantic Yards will create 17,000 construction jobs and up to 8,000 permanent jobs when completed.Construction jobs are expressed in job-years, so that would be 1700 jobs a year over ten years, or perhaps 680 jobs a year over 25 years.
Yesterday, I dissected the incredible claim of 8000 permanent jobs. Forest City, perhaps chastened by the inquiries from the Washington Post, now claims "up to 8,000 permanent jobs," which leaves an enormous amount of wiggle room.
Phase 1 affordable housing
Gilmartin continues:
The first phase of the project, which starts with the Barclays Center Arena, will also provide approximately 1,500 residential units on the arena block, at least 30 percent of them affordable. Once completed, half of the 4,500 rental units will be available for low-income and working families.Let's assume that it takes 12 years. That would mean 37.5 affordable units a year. And most of those units would be unaffordable to members and supporters of ACORN, which signed the Atlantic Yards Affordable Housing Memorandum of Understanding.
Gilmartin refers to "low-income and working families." But she strenuously avoids explaining that, even as early as July 2006, those seeking subsidized housing at the project were shocked that so many of the apartments would be unaffordable to them. A good chunk would be at or above market.
Just an arena?
Gilmartin continues:
Opponents' charges that we will end up building only an arena are false. No developer would sustain and ultimately agree to undertake a project like this with significant pre-development expenses, costly delays and well-defined future penalties and then build only an arena.That's a straw man. Yes, some people say they'll just build an arena, but even ESDC documents indicate a scenario with an arena and at least one tower before the potential of a delayed buildout. Should subsidies become available, FCR would undoubtedly build more.
The future penalties may be well-defined, but they're hardly onerous. The damages Forest City Ratner faces in most cases--less than $10 million for an arena that's up to three years late, $5 million for each of three buildings if they're late--don't represent a lot of money.
Note that the Development Agreement explicitly states that the damages are not designed to be penalties.
Investment
Gilmartin continues:
Forest City Ratner Companies and its partners have invested upward of $500 million in the entire Atlantic Yards program since we announced the project. And millions more will be invested going forward.Yes, depending on the availability of scarce housing subsidies.
Public costs
Gilmartin continues:
While Atlantic Yards is a public-private partnership, the arena's share of public funds is a fraction of that received by other sports facilities. Direct public investments in the Atlantic Yards project, inclusive of the arena, add up to just over 5 percent of the anticipated cost.Well, there are a lot of sweet deals out there, but consider that the arena's questionable tax exemption got grandfathered in by the Treasury Department.
No one's conducted a full cost-benefit analysis of the project, but the New York City Independent Budget Office--the least partisan of any organization to take a look--concluded that the arena would be a significant net loss to the city.
The need for agility
In closing, Gilmartin writes:
Development requires agility, the willingness and ability to respond to a changing environment. On Atlantic Yards, we've done that. We've been appropriately nimble, making necessary adjustments in light of changing markets and demands.Is that a euphemism for dropping Gehry and indefinitely delaying the office building that would provide the builk of the new tax revenues claimed for the project?
She concludes:
But we've done so without abandoning our principles or our commitment to the public good we and others expect from the project.Principles? As I wrote yesterday, under the heading "Integrity and Openness" (among Core Values), Forest City Enterprises states:
In all our dealings with all stakeholders, we will uphold the highest possible standards of ethical behavior. Our interactions will be characterized by an attitude of openness, candor and honesty.
Don't those values come into conflict with self-serving op-ed pieces aimed at the Real Estate Board of New York?
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