Atlantic Yards governance bill, round two; new version aims to establish ESDC subsidiary to enhance accountability (& ESDC is supportive)

Update: Here's Jeffries' take, noting that more negotiation will be necessary.

A new bill establishing a different version of a governance entity to oversee Atlantic Yards and make it more accountable has been introduced in the state Assembly by Assemblyman Hakeem Jeffries. It's already passed the Corporations, Authorities and Commissions Committee.

(A companion bill has been introduced in the state Senate by Senator Velmanette Montgomery.)

It may mean a different fate than the bill that died last year.

Empire State Development Corporation (ESDC) spokesman Warner Johnston stated, "We are aware and have been working with Assemblyman Jeffries and other electeds on elements of this bill. We are extremely supportive of what this bill will mean for the future of the Atlantic Yards project. More details will be forthcoming at a later date."

I'm waiting to learn whether powerful Assembly Speaker Sheldon Silver has expressed any opinion on the bill.

The rationale and the structure

The essential argument, pushed by BrooklynSpeaks in the summer of 2007, is that projects like Atlantic Yards can change enormously over decades, which is why all other major projects, from Brooklyn Bridge Park to Battery Park City, have their own governance entities and are more accountable to the public.

A lack of such a governance entity leaves more power in the staffers of the ESDC, who have multiple responsibilities and (ultimately) will leave, and thus in developer Forest City Ratner.

The entity would oversee implementation of the design guidelines, coordinate the involvement of state and city agencies responsible for the environmental impact mitigations, coordinate policies regarding transportation, and approve changes to the General Project Plan.

(Today, the Empire State Development Corporation board is expected to approve changes to the Atlantic Yards state and city funding agreements, but those changes have not been made public in anticipation of the vote.)

The big change in the new bill is that, rather than set up a new public benefit corporation, it directs the ESDC to establish a subsidiary corporation for planning and oversight of Atlantic Yards.

Also, unlike the previous Atlantic Yards Governance Act, it does not specify how members of that corporation are appointed, but leaves that to be resolved later. That may be part of why the ESDC is supportive.

BrooklynSpeaks comments

“Today, we are beginning a public campaign to see that the legislation passes both the Assembly and the State Senate and becomes law. For the last three years, BrooklynSpeaks sponsors have advocated for transparency with respect to project governance, as well as for the involvement of the public in the decision-making process. This legislation is an important first step towards those goals,” said Jo Anne Simon, District Leader of the 52nd Assembly District, who pointed to an online petition supporting the legislation."

“Atlantic Yards is still the only State project with no formal oversight or meaningful public representation in decision-making. It is long past time that the special treatment enjoyed by this developer end, and Atlantic Yards is brought onto the same platform as other large ESDC projects,” said Gib Veconi, of the Prospect Heights Neighborhood Development Council.

Bill details

A 11431 (the same as S 8193) authorizes the Urban Development Corporation (aka ESDC) to create a subsidiary corporation for the purpose of the further planning, design, and oversight of the Atlantic Yards land use improvement and civic project.

It was introduced on June 14 and passed a first committee vote on June 22.

The bill states:

TITLE OF BILL: An act to amend the public authorities law, in relation to creating a subsidiary corporation for the planning and oversight of the Atlantic yards project

PURPOSE OR GENERAL IDEA OF BILL: The purpose of this bill is to establish a project oversight entity, to supervise the Atlantic Yards Project in order to create increased accountability and oversight in the project's governance.

SUMMARY OF PROVISIONS: Section 2827-a of the public authorities law is amended by adding a new subdivision 8 to read as follows: Creation of a subsidiary corporation, in 'accordance with section twelve of New York state urban development corporation act, for the purpose of the further planning, design and oversight of the Atlantic Yards land use improvement and civic project.

JUSTIFICATION: New York State projects in New York City are typically governed in one of two ways. The State can pass specific legislation relating to the project, as it did with Battery Park City and Hudson River Park. Alternatively, the State can govern projects under the powers granted to it by the UDC Act of 1968, which it does with Brooklyn Bridge Park, Queens West, Moynihan Station, and other projects. In many cases, the Empire State Development Corporation (ESDC) has established subsidiaries to formally involve the city and local elected officials in the governance of these projects.

However, they are not obliged to do so by law and, unique among the large state projects in New York City, there is no project subsidiary for Atlantic Yards. The result is that the project is governed in a less transparent, less accountable manner than comparable projects, and without any vehicle for coordinating the city and state agencies involved in the proposed development, or involving local elected officials and the relevant community boards. Further, changes in administration in State government, as well as changes in the ESOC's internal organization, pose risks to the continuity of project oversight which may threaten the realization of Atlantic Yards' stated goals.

To address this, the proposed legislation would establish a subsidiary corporation for the oversight of the Atlantic Yards project. The entity would be created to undertake four primary responsibilities.

First, oversee the implementation of the design guidelines for the architecture of the project. Second, coordinate the involvement of state and city agencies responsible for the environmental impact mitigations. Third, coordinate the development of policy surrounding the project, including transportation concerns. Lastly, approve changes to the general project plan.

Section 1. Section 2827-a of the public authorities law is amended by adding a new subdivision 8 to read as follows:
8. NOTWITHSTANDING SUBDIVISION ONE OF THIS SECTION, THE URBAN DEVELOPMENT CORPORATION IS HEREBY AUTHORIZED AND DIRECTED TO IMMEDIATELY TAKE ALL ACTION TO CREATE A SUBSIDIARY CORPORATION, IN ACCORDANCE WITH SECTION TWELVE OF THE NEW YORK STATE URBAN DEVELOPMENT CORPORATION ACT, FOR THE PURPOSE OF THE FURTHER PLANNING, DESIGN AND OVERSIGHT OF THE ATLANTIC YARDS LAND USE IMPROVEMENT AND CIVIC PROJECT.

S 2. This act shall take effect immediately, provided that the subsidiary corporation authorized in section one of this act must be created within 60 days of such authorization.

Subdivision One

For the record, here's Section 2827-a of the public authorities law, and the Subdivision One referenced in the bill:

§ 2827-a. Subsidiaries of public authorities. 1. Notwithstanding any law to the contrary, no state authority shall hereafter have the power to organize any subsidiary corporation unless the legislature shall have enacted a law granting such state authority such power for the organization of a specific corporation, provided, however, that a state authority may organize a subsidiary corporation pursuant to the following requirements:
a. the purpose for which the subsidiary corporation shall be organized shall be for a project or projects which the state authority has the power to pursue pursuant to its corporate purposes;
b. the primary reason for which the subsidiary corporation shall be organized shall be to limit the potential liability impact of the subsidiary's project or projects on the authority or because state or federal law requires that the purpose of a subsidiary be undertaken through a specific corporate structure;
and c. the subsidiary corporation shall make the reports and other disclosures as are required of state authorities, unless the subsidiary corporation's operations and finances are consolidated with those of the authority of which it is a subsidiary.

Last year's bill

Here are details on last year's bill, A09012, the Atlantic Yards Governance Act:

PURPOSE OR GENERAL IDEA OF BILL: The purpose of this bill is to establish a project oversight entity known as the Atlantic Yards Development Trust, to supervise the Atlantic Yards Project in order to create increased accountability and oversight in the project's governance.

SUMMARY OF PROVISIONS: Article B of the public authorities law is amended by adding a new title 5 to read as follows: (1701) Creation of the Atlantic Yards development trust. 1. There is hereby created the Atlantic Yards development trust which shall be a body corporate and politic, constituting a public benefit corporation. The trust shall come into existence upon the thirtieth day following the appointment of not fewer than eight members of its board as herein provided, and the trust as its corporate existence shall continue until terminated by the legislature.

2. The members of the board of the Atlantic Yards development trust shall be residents of the city of New York and shall be appointed as follows:
(a) Eight members shall be appointed by and serve at the pleasure of the governor, at least one of whom shall be a representative of a not-for-profit, non-governmental or civic organization.
(b) Two members shall be appointed by the speaker of the assembly, in consultation with the member of the assembly that represents the district or districts in which the project is located.
(c) Two members shall be appointed by the temporary president of the senate, in consultation with the senator that represents the district or districts in which the project is located.
(d) Two members shall be appointed by and serve at the pleasure of the mayor of the city of New York.
(e) One member shall be appointed by and serve at the pleasure of the borough president of the borough of Brooklyn, appointed in consultation with Brooklyn community boards two, six and eight.
(f) One non-voting member shall be appointed by the stakeholder council as provided in section seventeen hundred eight of this title.
(g) Each appointing authority, with the exception of the Brooklyn borough president and stakeholder council, may appoint no more than half their members as a city or state employees.
(1703) Powers of the Atlantic Yards development trust. 1. To fulfill its purpose under this title, the trust shall have the following powers, functions, duties and authority subject to the limitations set forth in this title:
(a) to plan, design, develop, construct, operate, and maintain the project;
(b) to implement the general project plan for the project;
(c) to oversee implementation of the design guidelines for the project;
(d) to establish a stakeholder council as provided in section seventeen hundred eight of this title;
(e) to approve changes to the general project plan in consultation with the stakeholder council;
(f) to oversee policies to mitigate environmental impact of the project and coordinate the implementation of these policies with the relevant city and state agencies;
(g) when necessary, to develop additional policy to mitigate anticipated environmental impacts of the projects;
(h) to adopt rules of the procedure for the consultation with the stakeholder council, established pursuant to section seventeen hundred eight of this title;
(i) to provide for the health, safety and welfare of the public using facilities under its jurisdiction;
(j) to exercise the following general corporate powers:
(i) to make and alter by-laws for its organization and internal management