In New Rochelle, Forest City billing city after demise of Echo Bay plan

Everyone knows that Forest City Enterprises--and its subsidiaries--answers to its shareholders and the bottom line, and plays hardball when it counts, as exemplified in its Yonkers project and in Atlantic Yards. (So much for corporate social responsibility.)

So in the aftermath of a relatively unusual project failure in New Rochelle, it's not unsurprising to read the 2/13/14 Journal News article, New Rochelle gets $2M bill for axed Echo Bay project, doesn't plan to pay: City says there's 'no legal basis' for claim:

NEW ROCHELLE — Forest City Residential — which spent the better part of a decade trying to win approval for a massive waterfront development at Echo Bay — now wants New Rochelle to pick up the tab for its failed proposal.
In a Feb. 5 letter, Forest City demanded New Rochelle “immediately” reimburse the company $2 million in expenses, citing the terms of a memorandum of understanding the two sides signed in 2008 and amended over the years.
New Rochelle isn’t buying it. A statement issued by City Hall on Wednesday night pointed out that Forest City invested in the project voluntarily and maintained that there is “no legal basis” for the developer’s claims.
Forest City is pinning its claim for reimbursement on the City Council’s refusal to approve a land disposition agreement in November, which would have moved the project forward..

The city said it did nothing wrong. The newspaper couldn't get any more explanation regarding the plan, which--as the newspaper described it--started as a hotel, 700 residential units and more than 100,000 square feet of retail space, then was cut to 285 residential units and a quarter of the retail space. 

Ultimately, the city council voted 6-1 against Echo Bay, with only Mayor Noam Bramson for it. Forest City spent a total of $3.2 million--which, compared to Atlantic Yards pre-development costs, is a drop in the bucket.

A columnist's take

In a 2/15/14 column, Journal News columnist Phil Reisman wrote, Echo Bay suit is Forest City v. the people

In its quest to get its money back, Forest City has sicced its lawyers on the city. Mark Weingarten, an attorney with the powerful Democratic law firm of DelBello Donnellan Weingarten Wise & Wiederkehr (the DelBello stands for Alfred B. DelBello, the former Westchester County executive) fired off a three-page letter to City Manager Chuck Strome. It’s packed with angry modifiers and adverbs, accusing the city of “peremptorily, willfully, arbitrarily and without any rational basis” and so on.
...The billable hours it took to compose that monumental letter must’ve cost Forest City a pretty penny all by itself, but they’ve got the right guys on the case: a law firm that effectively spreads campaign donations around like magic fairy dust and, it seems, has an interest of one kind or another in just about every town in Westchester County.

Reisman takes a look at the larger picture:

Forest City’s hardball reputation was earned by other large-scale, mixed-use development projects in the metropolitan region, namely Atlantic Yards in Brooklyn and Ridge Hill in Yonkers. One of the loudest critics has been Cause of Action, a Washington, D.C.-based government accountability group, that produced a three-part report on Forest City’s tactics.
In the case of New Rochelle’s Echo Bay, Cause of Action concluded that the developer used political contributions and lobbyists to secure a “sweetheart deal.” When the city finally rejected the deal, Cause of Action commented that the city’s citizens “have delivered a stunning rebuke to cronyism that benefits the politically connected at the expense of the taxpayers.”

His conclusion: when a "fiscally beleaguered but proud city" wants to fix its downtown in an economic downture, "add a dash of hubris from an earnest but out-of-touch mayor and the situation is just begging for a fast-talking outfit like Forest City to come knocking."

Yup, a fast-talking outfit.