Upzoning agreements negotiated by CM Hudson include local/MWBE contracting goals, but record suggests much wiggle room beyond Community District 8 focus.

In my City Limits article on the belatedly-released details regarding the spot rezonings at 870-888 Atlantic Avenue and 1034-1042 Atlantic Avenue (as well as other rezonings in the area), I didn't address one smaller but still important aspect of the agreement negotiated by Council Member Crystal Hudson, and with two nonprofit housing groups as signatories.

The summary for each agreement states that, during construction, the developers will aim to involve local or M/WBE (Minority or Women's Business Enterprises) contractors, but there's a lot of wiggle room.

They've "agreed to use good faith efforts to achieve local and/or MWBE participation in construction of the development equal to a minimum of 30% local businesses/employees and/or 10% of the total cost of construction with priority given to employees and businesses first from Community District 8, then Brooklyn-wide." 

For the 1034-1042 Atlantic agreement, developed by EMP Capital's Elie Pariente, there's additional wiggle room: "The agreement understands the 30%/10% goals shall exclude proprietary materials, materials and services that cannot be supplied by local and/or MWBE businesses as well as all soft costs." 

For whatever reason, that was not negotiated by the more neophyte developer of 870-888 Atlantic, Y&T Development's Yoel Teitelbaum, though they were both represented by attorney Richard Lobel. But the initial, if provisional, conclusion, is that, based on his experience, Pariente wanted additional protection against criticism for not meeting the goals.

Lack of candor at Council

The bottom line is that leaves a lot more wiggle room that Hudson initially sought.

As I wrote in April, during the Council Subcommittee hearing on the projects, Hudson asked, "Do you have a plan in place to ensure local hiring and MWBE participation during construction and by MWBE, I specifically mean locally-owned Black and brown subcontractors?"

The answer she got was hardly candid.

Yes, said Pariente, noting that he had earlier told Subcommittee Chair Kevin Riley that, on the under-construction Pacific Grand project in CD 8, they arewere 25% to a third "MWBE trade and subcontractors. We absolutely intend on doing the same for this project. And as a matter of fact, one of them is signed on to testify on the project later."

Hudson had to leave the virtual hearing, so she missed the MWBE subcontractor signed up to speak: a Hasidic woman from Borough Park, Blima Perlstein, whose company Perfect Enterprises qualifies as Women-Owned Business Enterprise--but hardly reflects "locally owned Black and brown subcontractors."

Perlstein managed her own word salad, conflating the notion of "women" and "minority." "My company is Perfect Enterprises. I'm a minority women’s-owned city-certified constructor, construction business company," she said. "I've been working with Mr. Elie at his Pacific Street project right now.... I'm doing the entire envelope of the building."

At another point in the hearing, Hudson asked the same question regarding 870-888 Atlantic: "Do you have a plan in place to ensure local hiring and MWBE participation during construction and specifically locally owned Black and brown subcontractors?"

Attorney Lobel said that developer Teitelbaum had executed a letter of consent to retain Brooklyn-based contractors and subcontractors, especially local business enterprises and MWBE, no less 20% but with a goal of 25%. 

As I wrote then, that doesn't keep them from fulfilling the letter, but not the spirit, of the law. Today, even with a 30% goal, that leaves some slack, since the city's definition of such contractors is broad.

What's LBE & W/MBE?

Those goals roughly conform to requests made by then-Borough President Eric Adams, according to the City Planning Commission reports for 870-888 Atlantic and 1034-1042 Atlantic: the Council should get "written commitments... to retain Brooklyn-based contractors and subcontractors, especially those designated LBE and MWBE."

Note that a "Locally based enterprise" is a business under a certain revenue threshold that has "earned at least twenty-five percent of its gross receipts from work performed in economic development areas"--economically depressed areas--or "employed a workforce of which at 25% were economically disadvantaged persons."

The City's Online Director of Certified Businesses offers a lot of leeway. 

The city has nearly 11,000 City-certified M/WBEs. Besides location in the five counties of New York City, other listed counties include, in New York, Westchester, Rockland, Nassau, Suffolk, and Putnam; in New Jersey, Bergen, Essex, Hudson, Middlesex, Monmouth, Morris, Passaic, Somerset, and Union; and in Connecticut, Fairfield,

That's a potentially long way from Brooklyn Community District 8.