Metro IAF's Gecan: outcomes of projects obfuscated, counterfactuals absent. Same goes for Atlantic Yards, where a rigorous study of past and future is needed.

There's an important lesson for Atlantic Yards/Pacific Park watchers in the New York Daily News op-ed yesterday, Development’s struggle for sites and subsidies: New York should not copy projects like Baltimore’s struggling Harborplace but aim for those like Nehemiah, by Michael Gecan. senior adviser to the leaders of Metro IAF.

The latter, which organizes low-income communities on affordable housing, education, and other issues, is an affiliate of the Industrial Areas Foundation, founded by Saul Alinsky in Chicago in 1940.

Gecan notes the big plans, approved or floated, that come with major promises and major public subsidies (both direct and indirect): a stadium for the Buffalo Bills; a soccer stadium (and more) in Willets Point; casinos around the state.

He sets out a basic template:

Why, after decades of examples, many falling far short of original projections, there is not a clear, public upfront way to examine each proposal and to weigh each against other plausible alternative uses for both scarce sites and limited subsidies remains a mystery.

While he doesn't mention Atlantic Yards/Pacific Park, that of course applies to the megaproject in Brooklyn, which, more than 19 years after its announcement and ten years after its (second) approval, faces a new reckoning, with questions about its viability, its affordable housing timing and affordability, and the willingness of Empire State Development (ESD), the state authority that oversees/shepherds the project, to waive or extend fines that were supposed to incentive that below-market housing.

Past misgivings

Gecan points to the extravagant promises, unfulfilled, for Baltimore’s Harborplace development, whose developer, James Rouse, "had won the respect of the leaders of our fledgling citizens power organization, Baltimoreans United In Leadership Development (BUILD)."

(Note: that organization was unrelated to Brooklyn United for Innovative Local Development (BUILD), a prominent signatory of the Atlantic Yards Community Development, which closed after a lawsuit from disgruntled job trainees was filed, but before that suit was settled.)

Gecan cited initial "grave misgivings about the Rouse plan," because it focused on a flashy downtown project, not "a campaign of fundamental neighborhood reconstruction," as his organization has pursued in East Brooklyn neighborhoods like Brownsville and East New York, notably with the Nehemiah project.

The paradox

Writes Gecan:

Why do these initiatives like Harborplace generate so much attention, political support, massive subsidies, and media hyperventilation and so little rigorous analysis and clear-eyed assessment of both their costs and their benefits?

I asked this question to one of the nation’s most astute observers of economic matters: David T. Flynn, the Research Director for the Department of Economics and Finance at the University of North Dakota. Prof. Flynn said, “Most project outcomes are ill-defined...There is a deliberate obfuscation of the outcomes making actual quantification….almost impossible to trust and verify…..”

Such deliberate obfuscation is a hallmark of Atlantic Yards/Pacific Park. Indeed, as academic analyst Geoffrey Propheter pointed out, the failure of the public sector to assess accurately before or after the subsidy debate has costs: "oversupplying subsidies, because an investment looks better on paper than what it would be in fact."

The absent counterfactual

Writes Gecan:

The second comment Flynn makes is: “There is typically an improper counterfactual offered up. In locations where projects are proposed to occur, there is an attitude like no other activity will happen there if not for this project. Essentially that every aspect of the project is a net gain because the alternative was zero.

Indeed, as I wrote in 2006 and 2009, the same thing happened in the Atlantic Yards environmental review, by the Empire State Development Corporation (ESDC), now Empire State Development (ESD):

The project site is not anticipated to experience substantial change in the future without the proposed project by 2016 due to the existence of the open rail yard and the low-density industrial zoning regulations.

That, as critics pointed out, was hogwash, since a city-sponsored rezoning could have pursued changes, with more recognition of the public interest. 

What next

Gecan suggests that the city should today pursue the example of Nehemiah:

The answer to what ails the city and region today, as we have written in these pages before, is hiding in plain sight — vacant land owned by NYCHA, by religious institutions, by the state itself, both in the city and in the nearest suburbs, land that could support the next generation of affordable homes for the city’s working class and working poor.

It's much harder today, it goes unmentioned, because of the rising cost of land and construction costs, not to mention rising Area Median Income (AMI), used to calculate affordability. But he's right to point out that some land is, indeed, available.

What next, for AY/PP

The lesson, I think, for Atlantic Yards/Pacific Park is that not only is a feasibility study regarding the future of the project, as suggested by Atlantic Yards Community Development Corporation Director Gib Veconi, worth pursuing--at least, in my opinion, if it's rigorously vetted.

But a clear-eyed assessment of past and future public costs, promised benefits, and actual benefits is in order.

As a state judge wrote in 2010, " Whatever the pace may be for the delivery of the many public benefits of the Project, the nature of those benefits remains the same."

That, of course, discounted the impact of delay on benefits like tax revenues and affordable housing. It was a glaring lapse then, and even more glaring now.