Early Atlantic Yards investor Londell McMillan won't go to Nets games. "It breaks my heart to have been a part of the project."

A briefly prominent Atlantic Yards investor, who was presented early on as representing "inclusion" in ownership, is not happy with Atlantic Yards, not at all.

In a Crain's Q&A, Prince's former manager Londell McMillan explains Jay-Z's beef with him, the Brooklyn-born lawyer, who famously extracted Prince from an onerous recording contract, not only defends himself in a dispute with Jay-Z regarding Prince's estate, he answers a few bonus questions from Aaron Elstein:

You’ve had so much success, but what’s your biggest setback?
Atlantic Yards and Barclays Center. I am an investor in that project, and what was promised was not delivered. It was presented as a public-private partnership to create not just a sports facility but housing—affordable housing—jobs and economic opportunities to benefit the community. Today the Nets are owned by a Russian industrialist, the property sold to a Chinese conglomerate, and the public officials who advanced the project are nowhere in sight. 

Do you go to Nets games?
No. It breaks my heart to have been a part of the project.

Wow, that's striking and sad, especially since McMillan is a sports guy--played football at Brooklyn Tech and Cornell--and presumably likes basketball.

A financial hit

I suspect there's another dimension to his frustration: if small investors like McMillan face the same fate as larger ones, they've lost money on the project.

Remember the 2016 letter from elected officials noting that "22-24 'class A' investors invested between $1 million - $1.5 million and became minority shareholders in the housing and arena projects," but were later twice told they could sell at a loss or see their shares lose value.

That struck me as an issue of contract law more than anything. But lesson for the investors may be the same as that for public officials and the public: public-private partnerships need to be evaluated and monitored far more rigorously.

That also, ironically enough, may be a lesson for original developer Forest City Ratner (now Forest City New York): it and parent Forest City Enterprises pursued a project that didn't work economically, because--I speculate--various factors, including conception, execution, lack of corporate patience, and bad luck.

Flashback, March 2004

McMillan did not play much of a public role in Atlantic Yards, to my knowledge, other than his appearance at a March 2004 event at an elementary school in Park Slope, the first meeting in which members of the public could hear from--and question--the developer. (I was there, and I've also drawn on video for the book I'm writing.)

The atmosphere was tense, as Borough President Marty Markowitz, the project's leading political supporter, faced boos from a decent fraction of crowd, some 200 people, many from Park Slope, mostly white, middle- and upper-class.

Jim Stuckey, the Forest City executive overseeing the project, first introduced an architect from Frank Gehry's office.

The melding of an oval arena and a triangular site allowed for “a new, iconic office building" at Atlantic and Flatbush, which would “develop a language of talk with the Williamsburg Savings Bank,” declared Tensho Takemori.

Some chuckled cynically, recognizing the new tower--later to be dubbed "Miss Brooklyn"--would trump the bank. (Now, of course, Miss Brooklyn won't be built, the arena plaza will persist, and the Chinese conglomerate--as McMillan put it--aims to build a much bigger building across the street.)

Citing the goal “to be inclusive” in ownership, Stuckey introduced McMillan, a black Nets investor who'd risen from public housing to hip-hop business success. McMillan, in a grey suit, said he was “grateful” to join a project that meant "much more than a sports arena."

"Land grab," heckled an audience member.

Making a case for Atlantic Yards, but then...

Later, after a panel mostly criticized the project, Stuckey let McMillan respond. "There is no progress without a struggle," McMillan declared. “We have to look at how to keep us Brooklynites back in Brooklyn."

That argument would strike a chord with many struggling Brooklynites but had less impact with that crowd, which was distinctly skeptical not just of a giant project but the developer's slick presentation (and giving less weight to equity arguments).

Today, despite 780 or so nominally affordable units built, that goal just wasn't realized, at least not significantly, not with expensive middle-income units unable to find takers. There was an argument to foster equity through development, it's just that public parties ceded too much responsibility to a private developer rather than set a framework up front.

As for the jobs and contracts, well, they're fewer than promised in the Community Benefits Agreement (CBA), and the developer never hired the promised Independent Compliance Monitor to report back on the promises in the CBA. The path to well-paying union jobs, via a coveted Pre-Apprenticeship Training Program, wound up in a bitter lawsuit.

So today, McMillan joins a small but distinct group, including a publicly fervent Atlantic Yards supporter and a state project manager, who've had second thoughts.

Mr. McMillan, meet Umar Jordan and Arana Hankin.