Skip to main content

Looking at the Crain's coverage of Atlantic Yards economic benefits: another bad example of "he said, she said" journalism

As with The Real Deal's remarkable puff piece on Bruce Ratner, published last May, yesterday's article in Crain New York Business, Barclays Center takes shape at Atlantic Yards: Eight years after it was proposed, the arena is selling tickets. presents a dismaying example of what press scholar Jay Rosen criticizes as
“He said, she said” journalism, in which "No real attempt is made to assess clashing truth claims in the story" and "The means for assessment do exist, so it’s possible to exert a factual check on some of the claims, but for whatever reason the report declines to make use of them."'
The Crain's article, which I addressed in full yesterday, is a particularly bad example of that, since it positions the "he said, she said" claims about economic benefits in a rather illogical manner.

The impact of delays

Let's look more closely at the first two paragraphs at issue:
Foes say the economic benefits depend on unrealistic timetables for completing the 17-building project—which includes office and retail space for which there is currently no market.
"[All the positive] projections depend on Atlantic Yards being built in full within 10 years,” said Norman Oder, a journalist who is writing a book on the controversy and keeps tabs on his Atlantic Yards Report website. “We know that won't happen.”
Ok, what about non-foes? Wouldn't any reputable analyst agree that the timetables are unrealistic? Newsflash: Bruce Ratner said 9/28/10, “I would say it's really market-dependent as to when it will really be completed.”

WNYC's Matthew Schuerman at that point added a bit of skepticism:
But the 10-year-timeline was also used by the city, state and Ratner’s own consultant to determine that the financial benefits to the public outweighed the roughly $300 million in direct subsidies the project is receiving.
Not only that, the housing is delayed, and state documents give a 25-year timeline to complete the project.

So Crain's could have looked at the evidence, and tried to assess whether my analysis was correct. It didn't.

Whom do you trust?

The article continues:
A September 2009 study by the city's Independent Budget Office focused strictly on the arena. It showed the city losing $40 million over 30 years on its $170 million investment, with an additional $181 million loss of potential revenue, primarily from the arena's property tax exemption. But a 2010 study by the city's Economic Development Corp. showed a net gain of $411 million from the arena and other buildings.
“There are incredible community benefits—from the housing creation to the job creation,” Mr. Yormark said.
Crain's could have applied my general analysis about the timing of benefits--which would be shared by a number of neutral economic analysts--to the IBO and NYC EDC studies. It didn't.

It could have applied some scrutiny to the NYC EDC claims, as I've done, and Council Member Brad Lander has followed up.

It didn't. It quoted an enthusiastic generalization by Brett Yormark, who unlike "foes" earns his salary by promoting the arena.

Crain's could have analyzed whether the "housing creation" was an "incredible" community benefit. The housing has been steadily delayed, even though the first tower, still on the drawing board, was supposed not to be delayed.

Crain's could have could have analyzed whether "job creation" was an "incredible" community benefit, pointing, for example, to lowered numbers of construction jobs, the impact of modular construction on union jobs, and the indefinite delay facing the office tower, and thus the largest chunk of permanent jobs.

Crain's even could have tried to assess whether Brett Yormark is a credible source or, as I've documented, a regularly unreliable one.

The journalistic path not taken

The thing is, even with all that lousy journalism, Crain's could have become a wee bit skeptical about Forest City Ratner.

I was asked to respond to a claim from Forest City Ratner:
Atlantic Yards will be an economic engine for Brooklyn, New York City and the State generating more than $5 billion in new tax revenues over the next 30 years. In addition to tax benefits, the project will also create thousands of new jobs: upwards of 17,000 union construction jobs and up to 8,000 permanent jobs. 
Notice how Crain's didn't even quote the developer on that? Maybe because even Crain's realized that, as at the arena groundbreaking in March 2010, even Gov. David Paterson, who surely drew on official state projections, came up with a vastly different numbers: $1.5 billion.

That has its own questionable logic, but it should, at minimum have been a red flag regarding the developer's claims.

My response to Crain's

I was asked to be brief, so in my response to the Crain's query I bolded the sentences to consider for quotations, but provided more backing:
Forest City Ratner's numbers have no basis in reality. No one should take them seriously. The developer provides no documentation. And the numbers differ dramatically from city and state projections, which themselves are over-optimistic. For example, the state estimates $1.2 billion in net revenue (of $1.74 billion total) over 30 years, and 4277 permanent jobs.

(Forest City's $5 billion figure represents cumulative revenue, rather than the industry standard of "present value." In other words, their figure is like saying you have a home loan of $1 million rather than $400,000 because the cumulative total of your payments on your $400,000 loan is $1 million.)

This shouldn't be a "he said, she said" debate. It's possible to test their assumptions. All three projections depend on Atlantic Yards being built in full, within ten years. We know that won't happen. Atlantic Yards was last approved in 2009, and only one building of 17, the arena, is under construction. The Development Agreement signed with the state gives Forest City 12 years to build three towers around the arena, and 25 years to build the project, though they can build a project smaller than 16 towers without penalty.

Moreover, the state's permanent job estimates are based on the project including an office tower (which is indefinitely delayed) and Forest City's permanent job estimates are based on the project including three office towers (which is a configuration that has not been part of the plan since 2006). The city's fiscal analysis, oddly enough, assumes more office space than does the state's analysis.

As for the construction jobs, those numbers are job-years: 1700 jobs a year over ten years, or fewer over a longer buildout. However, as I and others have reported, they're way behind projections. And if Forest City chooses modular construction, as has been discussed, the number of construction jobs--and tax revenues--would go way down.

As for the Independent Budget Office's conclusions, note that Forest City Ratner in 2005 had no trouble embracing them, but in 2009 attacked the IBO's methodology.

Forest City will continue its fantasy math, but government agencies owe the public more than spin: they should have provided, and should be providing, a range of best-case and worst-case scenarios.
When a journalist does it right

In yesterday's New York Times Business section, reporter David Segal, in an article headlined Law School Economics: Ka-Ching! looked skeptically at claims by New York Law School (N.Y.L.S.):
For instance, although N.Y.L.S. is ranked No. 135 out of the roughly 200 schools in the US News survey, it asserts in figures provided to the publisher that nine months after graduation, the median private-sector salary of alums who graduated in 2009 — which is the class featured in the most recent US News annual law school issue — was $160,000. That is exactly the same figure cited by Yale and Harvard, the top law schools in the country.

[Dean] Mr. [Richard] Matasar stood by that number, but acknowledged that it did not give a complete picture of the prospects for N.Y.L.S. grads. He noted that the school takes the over-and-above step of posting more granular salary data on its Web site.

“In these materials and in our conversations with students and applicants,” he wrote, “we explicitly tell them that most graduates find work in small to medium firms at salaries between $35,000 and $75,000.”

Determining exactly how many graduates make even those relatively modest salaries isn’t easy. The information posted online by N.Y.L.S. about the class of 2010 says that only 26 percent of those employed reported their salaries. The nearly 300 students who reported being employed but said nothing about their salaries — who knows?

Like all other law schools, N.Y.L.S. collects this job information without anyone else looking at the raw data or double checking the math. Which gets to another dimension of the law school business that other companies might envy: a lack of independent auditing, at least when it comes to these crucial employment stats. It’s kind of like makers of breakfast cereal reporting the nutrition levels of their products, without worrying that anyone will actually count the calories.
Or like proponents of Atlantic Yards projecting economic benefits without worrying that anyone will actually do the math.

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…

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…

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 …