Skip to main content

Forest City and pay-to-play: findings suggest, at the least, a coordinated strategy, despite claim that contributions aren't dictated by company

I expressed some skepticism yesterday over a report from the libertarian nonprofit Cause of Action that suggested a cause and effect between campaign contributions/lobbying by Forest City Enterprises (and subsidiary) Forest City Ratner) and public subsidies.

After all, as I noted, some of numbers were questionable and Forest City's gotten support without subsidies. And, of course, this seems to be standard operating procedure for real estate developers.

But that doesn't mean the developer should be absolved. Cause of Action's conclusions are less a verdict than a charge, a call for closer examination of the record, and of cause and effect. There's much reason for skepticism about the developer's tactics.

After all, questions about political contributions have long dogged Ratner. Consider this 12/28/97 article from the New York Post, headlined King of the Retail Deals:
Ask megadeveloper Bruce Ratner why questions of political donations and connections dog virtually every development his hugely successful Forest City Ratner Companies builds - or even vies for - and he snaps, "It's just silly."
Peter Slatin wrote:
In other words, Ratner has been the city's most prolific developer over the past decade. But has he accomplished that through back-room politicking, or even by buying his way to the top? Or has he made his mark by taking risks that other, more established builders have shied away from? The answer may indeed be both.... His supporters note that he has focused almost exclusively on deals and on districts that his rivals dismissed as not worth the headaches.
Contributions part of strategy

Forest City doesn't give the money out of the goodness of their heart, or out of a connection to ideology, or out of a vague support for "good government."

After all, as I've pointed out, despite Bruce Ratner's statement (paraphrased) that he "cannot imagine people, especially Jews, who are not" Democrats, in November 2010, Ratner wrote a check for $7500 to the New York State Senate Republican Campaign Committee, ensuring smooth relations with the party that controls the legislature's second chamber.

Bruce Ratner's brother Michael Ratner, the eminent human rights lawyer, and his wife, live in Greenwich Village, but have made campaign contributions to Brooklyn political hacks, using Forest City Ratner's Brooklyn office as the return address. 

Does the company coordinate donations?

In a Toledo Blade report last December, Ohio smiles on workers' political gifts: Incentives seem to follow firms with hefty political donors, Forest City Enterprises came in third in the contribution list:
Jeff Linton, a spokesman for Cleveland-based Forest City Enterprises, said donating to a campaign or political group is up to an employee’s discretion and isn’t dictated by the company. Forest City’s employees ranked third highest among the contributors, donating about $883,153. The company was awarded two grants worth a total of $1.2 million in 2010 and 2011.
I'm not sure about the evidence in the Ohio cases examined by the Toledo Blade, but evidence gathered by the press regarding New York and Washington DC projects, and compiled by Cause of Action nationally, suggests there's very much a guiding strategy.

As I reported in March, campaign finance reports suggest significant support via bundling for mayoral candidates Public Advocate Bill de Blasio and former Comptroller Bill Thompson

Notably, a prominent Republican executive in Virginia, whose steel company produces key components for both the arena and the first modular tower, has contributed $1,000 to Democrats Thompson and Quinn, in one case through an FCR intermediary.

And in Washington

In an investigation this past May, WAMU in Washington found copious examples of a correlation between campaign contributions and subsidies, and headlined its first installment Major Campaign Donors Score Hefty City Subsidies:
“This is, of course, pay to play politics in gory detail,” Bruce Cain, a political science professor at Stanford University, said after reviewing WAMU’s findings. “I doubt that anyone was so stupid as to be explicit about what was being traded...More likely [the trading] is done with quiet understanding about what is expected of people who want a subsidy.”
Forest City Washington: leading political donor
In a followup headlined In Fight For Deals, Developers Make Well-Timed Campaign Contributions,
Fred Cooke, an attorney who has represented developers, council members and other... said there is a “perfectly innocent” explanation for why some companies turn in contributions on the same day: Someone thinks a certain candidate should be elected so they recruit their friends or associates to donate.
Others called it a quid pro quo. In another graphic, below, Forest City's donations peaked in the year it needed subsidies.

From WAMU
Cause of Action's most potent finding

In laying out a pattern of spending in localities where Forest City has project, the Cause of Action report does not drill down significantly to identify cause and effect. However, the most potent finding demolishes Linton's statement about the company's professed hands-off policy:
FCE even went so far as to coordinate donations among employees in FCE project locations: $15.4 million of the [$23 million in] contributions were made by multiple employees of FCE on the same day.

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…

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…

Revising official figures, new report reveals Nets averaged just 11,622 home fans last season, Islanders drew 11,200 (and have option to leave in 2018)

The Brooklyn Nets drew an average of only 11,622 fans per home game in their most recent (and lousy) season, more than 23% below the announced official attendance figure, and little more than 65% of the Barclays Center's capacity.

The New York Islanders also drew some 19.4% below announced attendance, or 11,200 fans per home game.

The surprising numbers were disclosed in a consultant's report attached to the Preliminary Official Statement for the refinancing of some $462 million in tax-exempt bonds for the Barclays Center (plus another $20 million in taxable bonds). The refinancing should lower costs to Mikhail Prokhorov, owner of the arena operating company, by and average of $3.4 million a year through 2044 in paying off arena construction.

According to official figures, the Brooklyn Nets attendance averaged 17,187 in the debut season, 2012-13, 17,251 in 2013-14, 17,037 in 2014-15, and 15,125 in the most recent season, 2015-16. For hoops, the arena holds 17,732.

But official…

At 550 Vanderbilt, big chunk of apartments pitched to Chinese buyers as "international units"

One key to sales at the 550 Vanderbilt condo is the connection to China, thanks to Shanghai-based developer Greenland Holdings.

It's the parent of Greenland USA, which as part of Greenland Forest City Partners owns 70% of Pacific Park (except 461 Dean and the arena).

And sales in China may help explain how the developer was able to claim early momentum.
"Since 550 Vanderbilt launched pre-sales in June [2015], more than 80 residences have gone into contract, representing over 30% of the building’s 278 total residences," the developer said in a 9/25/15 press release announcing the opening of a sales gallery in Brooklyn. "The strong response from the marketplace indicates the high level of demand for well-designed new luxury homes in Brooklyn..."

Maybe. Or maybe it just meant a decent initial pipeline to Chinese buyers.

As lawyer Jay Neveloff, who represents Forest City, told the Real Deal in 2015, a project involving a Chinese firm "creates a huge market for…