Monday, June 30, 2008

FCR consultant Zimbalist adds millions to AY subsidy total, calls for ULURP hearings (not quite)

Andrew Zimbalist, the sports economist Forest City Ratner hired to produce a dubious study of Atlantic Yards costs and benefits, mostly dismissed a very big thing: the economic value of the tax-exempt bonds used to build the arena. And when writing about a very similar financing plan for the West Side Stadium, he called such bonds the equivalent of a public contribution.

So, would the $800 million in tax-exempt bonds for AY count as a public subsidy? Not under Zimbalist's logic, given that, in a 1/22/06 New York Times op-ed, he blessed a similar financing plan for the new Yankees Stadium, contrasting it with the West Side Stadium by noting that "the Bronx is already in a tax abatement zone."

But maybe that's not quite right--and it deserves scrutiny as the State Assembly takes up tax-exempt financing for the Yankees, if not the Nets, during a hearing on Wednesday.

There's increasingly less justification for such tax exemptions. Just as the city's longstanding 421-a tax exemption for outer-borough residential construction recently got an overhaul, given that the residential market had long since improved in certain neighborhoods, so have there been recent calls to reform the city's Industrial and Commercial Incentive Program (ICIP), on which the AY arena tax exemption would rely.

The PILOTs game

Let's recap. Neither Zimbalist's May 2004 report nor his June 2005 update looked deeply at the financing arrangement: the use of tax-exempt bonds repaid via PILOTs, or payments in lieu of taxes. Atlantic Yards critics, notably lawyer and urban planner Michael D.D. White, have argued that this essentially would give Forest City Ratner the arena for free, since it would be paying only the equivalent of real estate taxes, rather than both taxes and construction bond repayments.

The government's argument is that the waiving of taxes is an inducement to build (of course that should've raised the value of the railyard bid), while the PILOT arrangement--now questioned by federal regulators--allows the issuance of bonds. In fact, the Independent Budget Office, in its September 2005 report, did not treat it as the equivalent of a direct subsidy.

Zimbalist on the West Side Stadium

However, consider this contrast. In an 11/14/04 New York Times op-ed on the West Side Stadium headlined Games People Play, Zimbalist attacked PILOTs:
The proposed financing plan for the stadium contains other hidden public costs. Under the plan, the city and state would form a local development corporation. Among other things, this quasi-public entity would issue bonds to finance roughly $400 million of the Jets' $800 million contribution. The team would cover the debt service on those bonds. But it would do so under a financial arrangement known as a "pilot," or payment in lieu of taxes. To the extent that this payback scheme is in place of the Jets' paying sales and property taxes, doesn't it make sense for the $400 million to be considered a public, rather than a private, contribution?
(Emphasis added)

Note that, of the projected $950 million cost of the Atlantic Yards arena, Forest City Ratner CEO Bruce Ratner told the New York Times that $800 million in tax-exempt bonds would be sought.

Zimbalist didn't address that issue in his report. Rather, he suggested that only $200 million in direct contributions was expected and also inaccurately speculated that additional contributions were unlikely.

Foregone property taxes?

Zimbalist stated in his report on AY:
Second, FCRC will pay no property tax on the improved value (the arena) on the land. Nonetheless, to be cautious, I add the foregone property taxes as a cost to the city, after taking account of the as-of-right ICIP tax abatement program that would apply to any commercial building project on the site.

Zimbalist calculated a 2006 net present value of $24.6 million for those foregone property taxes; the only property taxes that would count would be the modest ones outside of the ICIP abatement. Thus the PILOTs disappear.

IBO's George Sweeting explained the arena tax benefit:
ICIP in that part of Brooklyn provides for 16 years of full exemption followed by a 9 year phase-in towards full taxes. There is also 'inflation protection' in the first twelve years.

ICIP reform

ICIP, which was created in November 1984 (its precursor was created in 1976), was due to expire today: June 30, 2008. A report, titled Senseless Subsidies, issued 5/29/08 by Manhattan Borough President Scott Stringer criticized the tax break:
Finally, in the spring of 2007, prior to the most recent reauthorization of ICIP, the City's Economic Development Corporation working with the Office of Management and Budget and Department of Finance, completed a study that identified ways to restructure and streamline ICIP to better target the types of development most in need of incentives. While the proposed reforms were not widely released, reportedly because of fear that they would be unpopular with developers, they were cheered by progressive and good-government groups. In the end, the state and the City failed to adopt the proposed reforms and passed legislation extending ICIP in its current form for one year, until June 30, 2008.

Stringer's report recommended some changes:
Already, in a large portion of Manhattan, ICIP exemptions are available only to businesses making a construction expenditure that is proportionally larger than expenditures made elsewhere in New York City. Other parts of the City benefiting in past years from strong real estate development should be similarly identified, and the qualification criteria for ICIP exemptions in these areas should be expanded to include a determination of need made by the NYC Economic Development Corporation. Such a determination of need would temper ICIP's unrestrained as-of-right approach, which has produced enormous fiscal losses for the City.
(Emphasis added)

Among the provisions driving the fiscal loss to the city, according to NYC EDC's report, include long benefit periods and inflation protection, both of which can cost the city but are worth little to developers as they make their decisions. The report recommends a shorter benefit period and elimination of inflation protection.

Both could shrink the tax exemption for the arena site, and thus could cap the amount of the PILOTs that would essentially be subsidies.

Only modest changes

As it turns out, the city supported only modest reforms, according to the New York Observer, citing both political pressure and the fear of slowing development. Mayor Mike Bloomberg, however, called the changes the result of "a hard look." (Here's the bill.)

Still, it's worth recalculating the amount of foregone property tax. And, as Zimbalist should have done, it's worth analyzing whether such incentives are in fact necessary for building on what Forest City Enterprises executive Chuck Ratner calls "a great piece of real estate."

In other words, if the financing for the West Side Stadium was a "payback scheme," wouldn't the same apply to the financing for the AY arena?

Zimbalist on democracy

In the West Side Stadium op-ed, Zimbalist wrote:
When Rudolph W. Giuliani was mayor, he opposed the idea of a referendum on public financing for a new Yankee Stadium on Manhattan's West Side. His reasoning was that were it put to a referendum, New Yorkers would vote it down.

Now Mayor Michael R. Bloomberg is doing Mayor Giuliani one better. He plans not only to avoid a popular vote but also to bypass a budgetary vote of the people's elected representatives on the City Council.

If the stadium's economic benefits are as obvious as Joe Namath asserts, the project's supporters should have no problem with standard democratic operating procedures and full disclosure.

Of course, with Atlantic Yards, the financing was not put to a referendum.

Nor did the City Council get a vote, as the project bypassed ULURP, the city's Uniform Land Use Review Procedure. If the arena's economic benefits are as obvious as the city, state, and developer assert, then there should have been full disclosure and democratic oversight, according to Zimbalist's logic.

But he's said nothing of the sort regarding Atlantic Yards.

To federal regulators, ESDC claims Forest City Ratner has "acquired" 85% of AY site

I've already pointed out how, in a 5/8/08 letter to the Internal Revenue Service and U.S. Treasury Department, the New York City Industrial Development Authority and the Empire State Development Corporation (ESDC) cite Forest City Ratner's chimerical ten-year timetable in arguing that the PILOTs (payments in lieu of taxes) plan for arena financing should stand, even though the feds want to change the rules for tax-exempt bonds.

Here's another stretch. According to the "Atlantic Yards Chronology" (p. 6 of this PDF):
Forest City Ratner Companies ("FCRC"), the developer of the Project, has already acquired approximately 85% of the project site.

The word "acquired" covers a lot of ground. On the developer's own web site, the FAQ states:
With recent acquisitions included, FCRC now owns or controls 86 percent of the land needed for Atlantic Yards.
(Emphasis added)

What's the difference?

Here's a December 2006 property ownership map from the Empire State Development Corporation, which shows that the Metropolitan Transportation Authority railyard and city streets are not owned by the developer.

Also, remember that the developer once claimed 90% before a court said that property it claimed to control (Lots 5, 6, & 13 on Block 1129) was improperly leased. That case is under appeal. More background here on the difference between ownership and control.

In other words, the project isn't quite as far along as claimed.

Tax-subsidized stadiums vs. early childhood education? An expert's view

During the 10/10/07 hearing, Professional Sport Stadiums: Do They Divert Public Funds From Critical Public Infrastructure?, held by the Subcommittee on Domestic Policy of the Committee on Oversight and Government Reform, Arthur Rolnick, Senior Vice President and Research Director, Federal Reserve Bank of Minneapolis (but speaking for himself only), explained why early childhood education is a much better public investment than sports stadiums.

Ranking minority member Rep. Darrell Issa (R-CA) was a bit skeptical.

Issa: Did you also look at physical fitness, health and welfare, aspirations of young people, everything else that goes when they go to one professional baseball game and they say, "I want to be like that. I'm going to join my Pop Warner and I'm going to do this." Did you look at any of the other -- did you apply those same metrics to that?

Rolnick’s response didn’t mention, uh, steroids, but he still knocked it out of the park.

Rolnick (below): Yes, we did. Actually, we did. And we do know that baseball is going to exist in this country whether we subsidize it or not. It was interesting when the Minnesota hockey team left Minneapolis for Dallas a number of years ago.

So what happened with those kids who loved hockey? They started to go to the high school games, they started to go to the college games. It isn't that entertainment, sports entertainment disappears. They started to go to some of the minor league games.

So recognize this entertainment is going to exist, but if you don't educate those kids starting at prenatal to five, and they start school behind, the market doesn't fix that. Those are the kids that end up behind. Those are the kids that cost society a huge amount of money.

Entertainment will be there. I will guarantee you, if we end the bidding war between cities and states, you will still see virtually every one of these teams in the major cities, as they are today, and your kids will be able to root for them.

Seriously, is the absence of professional basketball keeping young Brooklynites from playing hoops?

Former FCR executive Stuckey aims to cash in on insider info

Develop Don't Destroy Brooklyn points us to a web page for former Forest City Ratner executive Jim Stuckey's latest venture, Verdnat Properties, and questions his commitment to "sustainable, harmonious development."

The more important asset Verdant brings, however, may be the inside track. To quote the company's web site:
With over three decades of proven experience, and relationships with property owners and tenants; brokers and appraisers; architects and attorneys; title companies and accountants; and, lenders and investors – the principals of VERDANT PROPERTIES, LLC™ frequently learn of opportunities to acquire properties long before their competitors, and often times, these assets are never publicly marketed.
(Emphasis added)

Remember, Forest City Ratner was anointed developer of the Metropolitan Transportation Authority's Vanderbilt Yard 18 months before an RFP was issued.

So, would Brooklyn be 2010 or 2011?

A New York Times sports section article on Saturday, headlined By Adding Yi, Nets Hope to Expand Their Market, offered that not-so-credible 2010 date for the Nets' assumed Brooklyn move:
With sizeable Chinese communities in North Jersey and Brooklyn, where the Nets are scheduled to begin playing in 2010, Yi could be the Nets’ marketing answer to the Houston Rockets’ Yao Ming.

Yesterday, a Boston Globe article headlned His next stop, Brooklyn? gave a more realistic date:
While the struggling Knicks are New York City's longtime franchise, the Nets will get a piece of the Big Apple by moving to Brooklyn, probably in 2011. But in two years, don't be surprised if Jay-Z helps bring his buddy James to a franchise that will be attractive to play for by then.

I think 2011 is a more likely best-case scenario. Remember, the Nets are promising only "calendar year 2010," which might just be New Year's Eve.

Sunday, June 29, 2008

AY photobloggers Collins, Kinloch get their due

Check out the Brooklyn Review's A Walk Around the Blog to see Adrian Kinloch of Brit in Brooklyn and Tracy Collins of Not Another F*cking Blog talk about their work photographing the Atlantic Yards footprint and responding to Forest City Ratner's surveillance cameras with some counter-surveillance of their own.

Without "citizen journalism" of such high quality, the AY story wouldn't be told.

Saturday, June 28, 2008

The Post's Brooklyn Tomorrow advertorial is back

As I wrote last June, Brooklyn Tomorrow, the promotional magazine inserted in the New York Post and the Post-owned Courier-Life chain, is not labeled advertorial though it certainly reads as such. But the latest edition of the annual publication, featuring enthusiastic articles from bylined Courier-Life staffers, certainly helps explain why, despite considerable reason for skepticism, the Post editorial page last week twisted its way to an Atlantic Yards hooray.

The issue includes three pages of advertising from Forest City Ratner, one page for the New Jersey Nets, and a two-page article that is essentially advertorial, mimicking the developer's talking points: While some local critics complain they were not included [in the Community Benefits Agreement], few, if any, were not invted to sit at the table initially in this effort.

Oh, and what about this critique from Bettina Damiani of Good Jobs New York?

Last year's issue

Last year's issue (right) had Atlantic Yards on the cover, with Forest City Ratner or Barclays buying the back cover and the inside front and back covers.

What about the outdoor ads?

Interestingly, on neither of the covers, nor in the centerspread article in the current issue, does the Urban Room at the prow of the flagship tower show any advertising, even though we know that 150-foot tall signage is possible.

Forest City Ratner, in its two-page advertisement in this issue, at least hints at some of the advertising. Note the blue Barclays signs at the bottom of the rendering (below).

However, the perspective of the rendering, from above, obscures the fact that the signage would be quite imposing from a ground-level view.

What else is missing?

It would be unfair to single out the Post's gentle treatment of Forest City Ratner, because other developers get the same care. For example, the publication cheers the Toren, "a new angle on modern living," the 38-story tower at Flatbush and Myrtle Avenues, without mentioning any concerns raised about the 421-a subsidy that produced it or, as the Village Voice just reported, the use of non-union labor.

"Brutally weird" block party quietly canceled, as FCR apparently has second thoughts

The "brutally weird" block party scheduled for yesterday--on a to-be-demapped AY footprint block--by Community Benefits Agreement (CBA) signatories was canceled without public explanation yesterday. Apparently Forest City Ratner and its surrogates recognized that 1) it was bad form and 2) block parties usually involve residents celebrating their block, and there weren't any of them. (Image from DDDB.)

Well, there was some largesse distributed. As told to DDDB and to me by an eyewitness, CBA signatory BUILD (Brooklyn United for Innovative Local Development) and Forest City Ratner representatives "were out in front of the [homeless] shelter at 603 Dean handing out pizza, drinks and Nets tote bags to shelter residents." The shelter is on the block just below the block where the party was to be held.

Another eyewitness says the FCR rep acknowledged that the party idea was inappropriate. However, since party planners had put flyers up in the shelter promising food at the party, aiming to entice shelter residents, they had to come through in some way. Interestingly enough, flyers had not been put up elsewhere in the neighborhood, though they were circulated Monday by email.

A lie from Ratner's surrogate

According to the Real Deal, it was all about sensitivity:
Delia Hunley-Adossa, chairwoman of the Atlantic Yards Community Benefit Agreement, said the block party had been planned for months, but was canceled after the U.S. Supreme's Court decision Monday not to hear an eminent domain petition presented by property owners and tenants challenging the government's ability to seize their homes. The ruling followed a string of legal losses for the project's opponents.

"We wanted to be sensitive to the community that the decision came down Monday," said Hunley-Adossa, who works with both the developer and the community.

Daniel Goldstein of community group Develop Don't Destroy Brooklyn, a plaintiff in several lawsuits against the project, said that flyers were first emailed out Monday afternoon, soon after the Supreme Court's decision.

"The flyer was emailed out at 4:30 p.m. on Monday," Goldstein said. "The decision came out after 10 a.m. I believe that it was scheduled because of that decision and I believe it was canceled because somebody realized it was a really bad, offensive idea."

I guess we'll have to add this one to DDDB's list of lies, most of which look inarguable to me.

Friday, June 27, 2008

No-property-tax status was supposed to raise the price of the Vanderbilt Yard

There's another obscured benefit for Forest City Ratner in the bid for the Metropolitan Transportation Authority's Vanderbilt Yard. In its September 2005 report on Atlantic Yards, the city's Independent Budget Office (IBO) stated:
IBO’s estimate of new property tax revenue lost to the arena PILOT does not include a loss of property taxes for the MTA land that would be part of the arena building foot print. The city currently receives no tax payment from the MTA for the rail yard because the MTA, like other state entities, is exempt from local property tax. Under the MTA’s Request for Proposals, any developer acquiring the development rights to the site would probably enter into a long-term lease, leaving the MTA in place as the owner. Therefore, the property would likely remain off the city’s tax roll, resulting in no impact on the city budget. Indeed, the MTA has an incentive to make a deal that maintains the tax exemption in order to maximize the price it receives for the development rights.

(Emphasis added)

That hardly happened. Forest City Ratner paid $100 million in cash for property appraised at $214.5 million, and values its total bid at $379.4 million, though that's questionable. Meanwhile, the developer expects tax breaks worth [corrected] $165 million, as $800 million in tax-exempt bonds are repaid by PILOTs (payments in lieu of taxes).

It doesn't sound like the MTA maximized much.

City says Yankees' PILOTs wouldn't exceed property taxes, but where's the backing data?

Wasn't there a chance the PILOTs (payments in lieu of taxes) used to pay off tax-exempt bonds for the Yankees and Mets stadiums would exceed the foregone real estate taxes and thus run afoul of federal rules? The city's Independent Budget Office certainly thought the annual Yankees PILOT might exceed those taxes.

And I thought that the same cap might pose a problem even if the city and state officials manage to get the feds to allow tax-exempt bonds for the planned Atlantic Yards arena under the lenient "loophole" provided to the Mets and Yankees.

Then again, you have to think that city and state officials would make sure the numbers work out. In fact, as a 5/8/08 letter to the Internal Revenue Service and U.S. Treasury Department from the New York City Industrial Development Authority (NYC IDA) and the Empire State Development Corporation shows, the estimated tax for the Yankees would be $62.5 million, while the PILOTs would be only $56.7 million. That's room to spare.

I speculated there would be much less room to spare regarding Atlantic Yards, but we can assume that numbers can be massaged.

Source of estimates

Then again, where exactly did the numbers for the Yankees and Mets come from? As the footnote says, Moody's Investors Service, a company that offers credit rating and risk analysis. The numbers are projections, rather than reports from the city tax assessor. I asked NYC IDA for more information and a look at the relevant report pages, but I didn't hear back.

The calculations behind those projections deserve a closer look. Neither the federal agencies, nor Assemblyman Richard Brodsky's Committee on Corporations, Authorities & Commissions, which will hold a hearing on tax-exempt bonds, should let the numbers stand without some backing data.

Gargano flashback: "no taxpayer money will go to build a sports arena"

Develop Don't Destroy Brooklyn points to a 8/23/04 interview with Charles Gargano, then chairman of the Empire State Development Corporation, who seemed definitive that there would be no help for Forest City Ratner's Atlantic Yards arena:
The governor and I have made it clear for nine-plus years that no taxpayer money will go to build a sports arena. We will consider helping with infrastructure improvements, like a platform over the rail yards on the West Side or new subway stations, which helps the public at large.

Direct subsidies to arena

DDDB points to the wide universe of support for the arena, such as support for tax-exempt bonds, and cites much evidence that the arena is a priority, despite Gargano's claim that "we don't care about the arena."

Even looking narrowly at only direct subsidies, Gargano should have known that the city and state committed in the project Memorandum of Understanding to more than infrastructure. According to a 3/4/05 ESDC press release:
Under the MOU, the State and the City will each contribute $100 million in capital contributions to fund site preparation and public infrastructure improvements on and around the arena site, including streets, sidewalks, utility relocations, environmental remediation, open space and public parking.

Actually, the MOU allowed some wiggle room, stating:
The City’s capital contribution shall be used for the same purposes as the ESDC’s capital contribution [site preparation and public infrastructure improvements], except that the City's capital contribution may also be used to fund a portion of the costs of acquisition of the Arena Site (other than the MTA Properties).

(Emphasis added)

That suggests that city taxpayer money would be used for both infrastructure and property acquisition. The word “except” did allow the city to use its capital contribution for property acquisition, but the phrase "may also" suggested that the city's $100 million would not be used exclusively to buy property.

Instead, that $100 million in fact was used to buy property rather than pay for infrastructure, and the city has since added another $105 million.

Congressman offers unskeptical endorsement of Zimbalist's dubious AY study

In Congress last year, Andrew Zimbalist's dubious study of Atlantic Yards for Forest City Ratner got a mindless endorsement from the ranking minority member of the Subcommittee on Domestic Policy of the Committee on Oversight and Government Reform of the House of Representatives, even though an expert witness warned that accepting studies that were not peer-reviewed was akin to federal drug regulators embracing reports created by the drug companies themselves.

It was during the 3/29/07 hearing called "Build It and They Will Come: Do Tax Payer-Financed Sports Stadiums, Convention Centers and Hotels Deliver as Promised for America's Cities?"

Subcommittee Chair Rep. Dennis Kucinich (D-OH) had elicited critical testimony from several observers. At one point, asked by Rep. Danny Davis (D-IL) whether there was room for public-private partnerships in sports facility construction, Frank Rashid of the Tiger Stadium Fan Club responded (see p. 61 of this transcript):
I think each project has to be looked at very carefully and really independently analyzed, and that is the problem. Right now, there is no independent analysis. I think if there were, we would see considerably fewer publicly funded stadiums and a lot more money from the private sector in those projects.

There is a whole set of powerful interests that can control the debate. What really needs to happen and where I think federal enforcement would be valuable is in establishing requirements that there be real solid and verifiable analysis for each project, and that is not done.

The value of peer review

During that same hearing (p. 68), Brad Humphreys, an economist and professor at the University of Illinois at Urbana-Champaign pointed out how the public can be hoodwinked:
I also want to point out for people who are trying to decide on these subsidies, that there are two types of evidence that we have about what the economic impact of professional sports facilities are. One are these promotional studies or economic impact studies that are generated by proponents of these subsidies, and they typically find huge economic benefits. This other type of evidence that we have is scholarly, peer-reviewed academic research, the kind that I do.

Often in the court of public opinion, these two types of evidence are treated equally, and I would argue that is a very bad public policy... One of the previous panelists said that we need to have independent oversight... That is what peer-reviewed academic research is....

We don't make policy about drugs and things like that just based on what pharmaceutical companies say. We have research that is peer-reviewed, that tells us about those things. We should have the same sort of standards when we are considering whether or not there is economic benefit to be gained from professional sports.

Fluffing Zimbalist

Still, later in the hearing, some non-peer-reviewed research, albeit with an academic gloss, was promoted by Rep. Darrell Issa (R-CA), the ranking minority member. He declared (see p. 123):
Mr. Chairman, I would also like to put into the record an economist's study from the Robert A. Woods professor of economics at Smith College in Massachusetts. It is from May 1, 2004, and it specifically deals with Atlantic Yards, estimating that the total of $2.93 billion over 30 years or a net present value of $1.08 billion would be the advantage for that operation. Although it may not be the one that is going to carry the day, it certainly seems that independent bodies such as university economist very much believe that there can be a net economic benefit, and I ask that be placed in the record.

Except that Zimbalist was a consultant "retained" by the developer, not an "independent body," his study was deeply flawed, and it was never peer-reviewed (nor the subject of journalistic scrutiny).

With Jefferson gone from the Nets, the AY permanent campaign adjusts

Now that Nets forward Richard Jefferson has been traded to Milwaukee for Yi Jianlian and Bobby Simmons, the Nets page on the Atlantic Yards web site has been updated--likely temporarily--to feature one player (Vince Carter) and two owners (Bruce Ratner and Jay-Z). Click to enlarge.

In the previous iteration of the page (below), Jefferson occupied the slot currently held by Jay-Z. Of course, before team leader Jason Kidd was traded to Dallas for Devin Herris, the page featured a Carter/Kidd/Jefferson/Nenad Krstic panorama, plus a shot of Kidd alone.

A new Chinese fan base?

So what does the trade mean? Here's one comment on NetsDaily: This looks like more of a business move than anything else. We’ll make more money as an franchise now because of the chinese fanbase, but we lose a team leader. I’ll agree that RJ wasn’t a great fit with VC, and Yi has some serious potential, but it hurts to see RJ go out like this.

Well, the Nets are offering free Yi jerseys to anyone who buys a season ticket. And there is money to be made in China thanks to an association with a Chinese star.

Clearing cap and rebuilding

Here's Peter Vecsey in a New York Post column headlined EYES ON BROOKLYN today:
Clearing cap room two years ahead of time on the belief James' outwardly magnetic bond with Nets' minority owner Jay-Z (it's not as if he rhymes as tight as Biggie Smalls) will influence him to forsake his home state of Ohio is like building an elaborate spec house just across the Brooklyn Bridge in today's saggy, baggy real estate market.

Yet here we have intrepid Nets' owner Bruce Ratner (from Cleveland), no less doing both!

At the same time, Ratner and henchmen, Rod Thorn and Kiki Vandeweghe, are radically "rebuilding" the team by tearing down its foundation.

From NetsDaily:
Tonight was about divorcing the Nets from New Jersey and its recent (ugly) past and preparing the franchise for Brooklyn, getting younger, saving cap space, waiting for Lebron [James].

The permanent campaign adjusts

What's clear is that the Nets, with five new players and a young guard in Harris, are rebuilding, and two of the three stars paraded to help sell the Nets to Brooklyn, Kidd and Jefferson, will be long gone before an arena opens. But they served their purpose in the Atlantic Yards permanent campaign.

Last night, the Nets held a draft night event for fans at the Brooklyn Brewery in Williamsburg, which drew an enthusiastic crowd enjoying free food and drink and a chance to hobnob with the ubiquitous Nets vet Albert King. The two jerseys on display were those of Carter and Harris. Let's expect one for Yi pretty soon, as well.

Thursday, June 26, 2008

For Ground Zero, Paterson promises timeline candor; for AY, it's the party line

Regarding Ground Zero reconstruction, Gov. David Paterson has expressed skepticism about the professed timetable, and asked for clarifications. Despite reasons to doubt the professed timetable for Atlantic Yards, he has not merely failed to express skepticism, his administration has endorsed the chimerical timetable asserted by developer Forest City Ratner.

Two weeks ago, Paterson wrote to new Port Authority head Christopher Ward:
To this end, I am asking you – in your role as the new Executive Director of the Port Authority – to complete a comprehensive assessment to determine if the current schedules and cost estimates for reconstruction are reliable and achievable. If they are not, I would like an evaluation of what viable alternatives exist to get the project back on track or whether we need to alter our targets to meet the reality on the ground.

Last night, speaking at an event honoring the "Observer 100" in real estate, Paterson reiterated his concern. "We need to find workable and sensible and achievable goals, as opposed to what we have to lived with in the most recent past," he said. "This is why I've asked the Port Authority to come out with a report that will be available next week, on the real numbers about Ground Zero, the real deadlines, and the real timetables of that project."
(Emphasis as delivered)

The audience applauded.

"I don't know if you're going to like what you're going to hear, but it will be honest," Paterson continued. "The same type of scrutiny must go to the idea of expanding Moynihan Station..."

What about AY?

Paterson didn't mention Atlantic Yards, but some of the same concerns apply. After all, even an Atlantic Yards supporter like Comptroller Bill Thompson has said, “I’m not sure what that project is any longer."

However, in a 5/8/08 letter to the Internal Revenue Service and U.S. Treasury Department, the New York City Industrial Development Authority and the Empire State Development Corporation (ESDC) cite the chimerical timetable in arguing that the PILOTs (payments in lieu of taxes) plan for arena financing should stand, even though the feds want to change the rules for tax-exempt bonds. (Here's the letter in full.)

Part of the argument is that Atlantic Yards has already proceeded significantly. But a realistic timetable would acknowledge the project is much farther away from its completion date.

Arena 2010, project finished in a decade?

The letter states (click to enlarge):
In order to illustrate the substantial progress that has been made with the Project prior to the issuance of the Proposed Regulations, we have provided the chronology of events set forth below. The Project commenced in 2003; the Arena is anticipated to be completed in 2010, and the balance of the Project is expected to be built over the next decade.

The claim that the arena would be completed in 2010 is doubtful, and the developer's shifting rhetoric offers little confidence. (Fun flashback: in a 10/30/04 Brooklyn Paper article, uberflack Joe DePlasco claimed, "There’s no reason to think the team is not moving to Brooklyn for the 2007 season.")

The claim that "the balance of the project" would be "built over the next decade," which is extremely unlikely, given the loose deadlines for the arena and Phase 1--and the lack of any deadline for Phase 2--in the State Funding Agreement, not to mention the other snags in Bruce Ratner's projections.

A lawyer for the ESDC, in court on Monday, asserted that the developer must make “commercially reasonable efforts” to move forward. "It means you have to try your hardest,” he said, but acknowledged that “external circumstances”--presumably the credit market, among other things--"should be taken into account."

So the IRS and the Treasury Department should take the ESDC's claims with a big grain of salt. And Governor Paterson should explain why he approaches Ground Zero with much more skepticism than he analyzes Atlantic Yards.

Who spent $219 million on AY? The city and state obscure the issue

In a 5/8/08 letter to the Internal Revenue Service and U.S. Treasury Department, the New York City Industrial Development Authority and the Empire State Development Corporation (ESDC) argue that the PILOTs (payments in lieu of taxes) plan for arena financing should stand, even though the feds want to change the rules for tax-exempt bonds. (Here's the letter in full.)

Part of the argument is that Atlantic Yards has already proceeded significantly. But on more than one issue, the city and state obfuscate rather than explain. For example, consider this passage about Atlantic Yards spending (click to enlarge):
In order to illustrate the substantial progress that has been made with the Project prior to the issuance of the Proposed Regulations, we have provided the chronology of events set forth below.... Substantial amounts have been spent on the Project: approximately $99 million prior to 2006 (of which $15 million related to the Arena) and approximately $219 million prior to 2007 (of which $47 million related to the Arena).
(Emphasis added)

Note that $47 million is a little less than 5% of the cost of the $950 million arena.

Who spent the money?

More importantly, note that the passive sentence construction fails to identify who has spent such substantial amounts. The ESDC confirms that the spender is not the city or state but developer Forest City Ratner.

[Update 7/19/08: I should've pointed out that the city and state have already passed along $55 million in public funds.]

Should tax-exempt bonds not be issued and if, for some reason, Atlantic Yards goes down the tubes, the expenditure of $219 million need not represent a loss for Forest City Ratner. Yes, some expenditures, such as for legal and architectural services, may not be recompensed, but surely the value of the land has risen.

Bloomberg's desire to control board members is part of why public authorities reform bill died

Yes, the bill to reform public authorities in the state was derailed by last-minute objections raised by Mayor Mike Bloomberg, drawing a furious reaction from Assemblyman Richard Brodsky, the sponsor.

In a letter to Bloomberg Monday, Brodsky wrote:
We have been working on ways to reform public authorities for five years. The investigations we’ve conducted, often with other Committees of jurisdiction, include the activities of the MTA, the Power Authority, the Javits Operating and Construction Corporations, ESDC, the Long Island Power Authority, the Thruway Authority, the Capital Resources Corporation, The New York City IDA, the Port Authority, and many, many others. What we’ve concluded is that public authorities are making critical decisions about the daily lives of New Yorkers, and are often wildly out of control, sources of unrestrained debt, hosts to repeated incidents of malfeasance and corruption, secretive and unaccountable, and in the end as close to Soviet-style bureaucracies as anything we have in government.

We can recite the painful specifics at enormous length. At the MTA, we’ve seen the criminality of the 2 Broadway deal, the secret cash assets, the controversies about EZ-Pass and real estate deals, and others. We’ve seen massive subsidies provided for sports facilities, favoritism at the Erie Canal, intervention by powerful former public officials at the Port Authority and MTA, repeated failures to consummate development deals on the West Side of Manhattan, hundreds of millions wasted at the Javits Convention Center, the list goes on and on.

Our work has been assisted by the private sector, most notably by the Millstein Commission, and we have produced a sweeping reform bill that will fundamentally change these authorities, and return them to the control of democratic institutions. Last year the Governor and Assembly agreed on legislation which we passed, while the Senate passed a very similar bill. All this was known to the City. Now, at the last minute the City has produced a list of demands which would destroy the progress we’ve made on reaching a consensus, make the system worse than it is today, and leave the problems we’ve identified completely unchanged.
(Emphasis added)

Previous reports

Here are links to previous reports on public authorities reform: Public Authority Rreform: Reining in New York's Secret Government (2/04), by the New York State Comptroller; PUBLIC AUTHORITIES IN NEW YORK STATE: Accelerating Momentum to Achieve Reform (2/05), by the New York State Comptroller; Public Authority Governance in New York State: Members of Boards of Directors (8/04), by the New York State Comptroller; and Public Authorities in New York State (4/06), by the Citizens Budget Commission.

Fiduciary duty

As I wrote last week, notably, the bill would require a fiduciary duty of authority board members--a duty of care arguably lacking in the Empire State Development Corporation's (ESDC) treatment of the Atlantic Yards project.

Bloomberg opposed such a rule; while he doesn't have appointments to the ESDC, he does appoint members of the Metropolitan Transportation Authority and other boards.

Brodsky wrote:
First, you seek law that undercuts the fiduciary duty to the authority that permits a board member to “act in a manner consistent with the policies of the elected or appointed official” who appointed them. The laws creating public authorities sets forth a statutory mission, transportation for the MTA, economic development for ESDC, etc... . There is no basis for leaving control of those missions in the hands of local or state officials who have conflicting, if important, other goals and concerns. This would leave organizations like the MTA as mayoral or gubernatorial agencies without even the protection of legislative control of their budgets.

City Council Members propose bill that would require EIS-like reports for subsidized projects

A group of City Council members and advocacy groups yesterday announced the introduction of legislation designed to ensure that projects eased by tax breaks and bond financing are accompanied by economic impact reports. Whether such reports, which would resemble mini environmental impact statements (EIS’s), could make a major difference is an inevitable question, but proponents said it’s a start.

Such data would include housing cost impacts; anticipated resident and business displacement; number of jobs to be generated; types of jobs to be generated; wage and salary data; number of employees with health benefits; impact on community infrastructure including the provision of police, fire and emergency medical services, sanitation, water supply, waste water treatment, services provided by the Department of Health and Mental Hygiene, the Health and Hospitals Corporation Corp and privately owned hospitals, public schools and public transportation services.

Yes, it sounds a lot like the EIS’s required of certain large projects; indeed, City Council Member Charles Barron, one of the sponsors, explicitly made reference to them, saying that “this can stop things like gentrification.” He spoke at a press conference on City Hall steps that was attended, as far as I can tell, by just one reporter.

Enforcement questions

Easier said than done, given that EIS’s don’t necessarily do that (see: Atlantic Yards, which Barron has condemned). Still, it represents an effort by communities to get ahead of top-down development. “This represents grassroots planning,” said City Council Member Letitia James. “A first step toward performance-based subsidies,” added Brad Lander of the Pratt Center for Community Development (and a City Council hopeful himself).

What if the numbers are fuzzy? “We can’t prevent people from lying,” acknowledged City Council Member Al Vann, the lead sponsor, “but there has to be some truth.”

What if the expected impacts don’t come true—could there be penalties? Such provisions, Vann allowed, could be discussed at a public hearing. For now, it seemed, getting on the agenda in the first place is their goal.

On the DMI Blog, Mark Winston Griffith raised some of the same concerns:
The greatest danger in this legislation is, instead of making it more difficult for developers to usher in toxic projects, it would simply facilitate a public relations opportunity for the developers to make rosy projections and claims that they have no intention of honoring.

Still, he said it could be a positive step. One example of a state that’s gone father is Minnesota, where, as State Sen. John Hottinger described it in September 2006, subsidies in excess of $100,000 must to be subject to public hearings and a “clawback” clause requires businesses that fail to reach stated job creation goals to repay a portion of the subsidy.

Besides the Pratt Center, other organizations backing the bill include the National Employment Law Project, and New York Jobs with Justice.

Quietly, state board approves NYU's absorption of Polytechnic

Yes, the State Board of Regents, as expected, approved New York University's no-money-down absorption of Brooklyn's Polytechnic University. Yes, the dailies missed the story. Polytech brass are enthused, calling it a "partnership," a term also used by the NYU provost.

Polytech alumni say a group of alumni, former and current trustees and faculty members, independent of the Alumni Association, filed a Petition to stay the vote and remove the Polytechnic Board of Trustees under Education Law 226(4).

Wednesday, June 25, 2008

Brutally weird: a CBA block party on Pacific Street in the AY footprint

Permits for block parties in the city must be acquired 60 days ahead of time, so let's assume that the Atlantic Yards Community Benefits Agreement BLOCK PARTY! was scheduled well before the Supreme Court decision Monday not to accept the AY eminent domain appeal. Still, the event was not announced until late Monday afternoon.

That's curious. Stranger still, and brutally weird, is the location of the party: Pacific Street between Carlton and Vanderbilt avenues in the AY footprint, opposite the under-demolition Ward Bakery, where a stop-work order exists and where the handful of residents left are, as far as I know, plaintiffs in the eminent domain case or their relatives. As Develop Don't Destroy Brooklyn comments, "Call us crazy but we thought block parties were thrown by PEOPLE LIVING ON THE BLOCK."

In other words, the "community" celebration is on a block scheduled for Phase 2 of the project, without start date or deadline, threatened by "condemnation blight." (And, as I've been reminded, the block will be demapped for the project, so it won't exist.) An email informs us that the organizer is Delia Hunley-Adossa, who also MC'd the strained "Brooklyn Day" rally.

A Stadium Story: eerie echoes, curious contrasts, and cautionary lessons for AY

Remember the battle over the West Side Stadium, that 15-month donnybrook, from March 2004 through June 2005, that dominated the city’s discourse over sports facilities, leaving scant attention for the Atlantic Yards and baseball stadium controversies?

The documentary A Stadium Story, screened in 2006 but not yet in wide release, offers some eerie echoes, curious contrasts, and cautionary lessons for Atlantic Yards watchers. (The film is well worth watching; for now, it’s available for $25 from the official web site, but it should be distributed soon, according to the filmmakers.)

Summary of the battle

The stadium, to be built on Metropolitan Transportation Authority railyards west of Penn Station--the Hudson Yards site--was to serve not only as the home of the New York Jets, to be relocated from the Meadowlands (accessible pretty much only by car), but would be the centerpiece of the city’s bid to host the 2012 Olympics and also, with a retractable roof, be home to trade shows and other events.

The battle, at least as portrayed by filmmakers Benjamin Rosen and Jevon Roush, was at essence much simpler than that over Atlantic Yards.

The stadium plan was backed by the city and state and many in the business community, with the most significant public support coming from unions seeking jobs. The opposition consisted of a community coalition wanting to preserve the neighborhood--but the film could explain more about their connections to local politicians and doesn't show their critics who saw them as sellouts.

Some rhetoric from backers and opponents sounds remarkably similar to AY watchers. However, in Brooklyn, Forest City Ratner wisely recruited community support via the “50/50” affordable housing plan and the Community Benefits Agreement (an effort praised by an unskeptical press), thus turning "community" into battle tinged by race and class, and also lined up support from many local elected officials. Thus some of the officials who looked carefully at the West Side Stadium and wound up as critics, such as Council Member (now Speaker) Christine Quinn, failed to apply such scrutiny to the fuzzy numbers of the Atlantic Yards plan.

Then again, stadium opponents had a wealthy patron, Cablevision (owners of Madison Square Garden), to amplify their criticisms. Thus what on one level seemed liked a David-and-Goliath story was, at least from the perspective of lobbying expenditures, much more of a fair fight.

If Atlantic Yards opponents had had such a megaphone, the public debate, if not the result, would have been different. Even so, the protracted Atlantic Yards battle--already three times longer than the West Side Stadium fight--suggests that the issues raised and the opponents' effort deserve to be taken seriously.

Notable lessons

The West Side Stadium story offers some notable lessons for the city and for AY.

  • First, though the "community" fought off the stadium, it hardly beat back very big development, given the re-emergence of the Hudson Yards plan.
  • Second, though union leaders suggested that the battle was between "jobs" and "no jobs," the eventual development will in fact create many jobs.
  • Third, though city officials and the Jets went to bat for a low-ball value for the railyard at issue, a test in the market--then and this year--showed that others considered the property quite valuable.
  • Fourth, as the Jets' Jay Cross observes wisely in the film, “This is my third sports facility. I learned early on that sports facilities in the context of urban environments are not about sports. They’re about metro politics.”
Opening echoes

Upon the announcement of the project in March 2004, the rhetoric offered echoes of the Atlantic Yards debate. We see construction workers chanting “Build It Now.” Mayor Mike Bloomberg declares, “This is the right building at the right place at the right time, and we’ve got the right people to build it,”sounding very much like Borough President Marty Markowitz, who has said (in multiple variants) “Atlantic Yards remains the right project, in the right place, at the right time for Brooklyn.”

Then we meet John Raskin, the (paid) organizer for the opposition (left), introduced as an affordable housing advocate. He’s a recent graduate of Harvard, reflecting on the contrast between his path and those taken by classmates who went into Wall Street or consulting jobs.

At a rally, we hear some opposition rhetoric. “I object to this mayor and deputy mayor stopping light and air of being part of the Far West Side,” says one volunteer. “It’s morally wrong.” Adds Raskin, “There is legitimacy in having a community on the Far West Side.”

While the film doesn’t circle back to this explicitly, the opposition later embraces a plan that would stop a lot of light and air--and the ultimate result expected on the site would do so as well.

Meeting Deputy Doctoroff

We get a sense of how much Bloomberg admires Deputy Mayor for Economic Development and Rebuilding Dan Doctoroff: “There is nothing that I could say laudatory enough about this next speaker and his impact on the future of eight million people, of the city, of the state, and really of this country.”

Then the film cuts to Doctoroff, at a dais and in an interview: “Literally the first day that I walked in the door as deputy mayor I was in a position to think about a much broader vision for the West Side... What we are announcing today is the centerpiece of a plan to take that area, one of the least productive, the least occupied places in New York City and turn it into one of New York’s great places.”

The plan, he reveals, was spawned a decade before, after seeing a World Cup match. There would be hundreds of millions of dollars a year of tax revenues, he asserts, and “thousands and thousands of jobs... what it does is fills this area with people, fills it with will accelerate the transformation of Hudson Yards to a place.”

More combatants

By constrast, Raskin’s employer, Joe Restuccia, a small-scale affordable housing developer suggests, “We’re not in a place where the city itself, like Cleveland, has died, and you’re desperate for some anchor to put something in,” he says. “We are New York City, we are Manhattan, on the West Side, it’s not the prairie."

Then we meet local Jim Mahoney, the salt-of-the-earth business agent for Local 580 of the Ornamental and Architectural Iron Workers. “I believe working people should have a voice,” he says. There’s a sympathetic scene in which he counsels an anxious member who’s been out of work too long.

"There’s not a lot going on, but we’re not gonna get busy,” he says, sounding a little like Frank Sobotka, the embattled union boss in the HBO drama The Wire.

Raskin acknowledges some ironies. “One of the things that makes neighborhood people really uncomfortable about these hearings is that we have to fight construction workers,” he says, pointing out that residents in nearby housing developments have a history in the labor movement.

“We’re both Democrats,” says one artsy-looking protestor after tangling with Mahoney.

“I’m borderline socialist,” admits the union boss.

Raskin offers some perspective: “I think it’s kind of disorienting for a lot of people who are politically active, because there’s no clear ideological distinction. The stadium is not a liberal idea. It’s not a conservative idea. It’s a good idea or a bad idea.... It makes for strange bedfellows, but it also makes for strange sparring partners.”

Similarly, with Atlantic Yards, many traditional liberals support the power of the state to exercise eminent domain for redevelopment, but the closer they get to Atlantic Yards, the more they're willing to challenge it and ally with libertarians like the Institute for Justice.

Public hearings

Hours of public hearings are boiled down to some sound bites, so, while I can’t say how representative the clips are, there are some echoes of the AY fight. One hearing opens with an Empire State Development Corporation representative blandly reading the description of the project--as at the AY public hearing, such boilerplate prompted cheers and boos.

What’s notable is the anti-stadium posturing by elected officials.

A finger-pointing Rep. Anthony Weiner (below), who wasn’t exactly representing the area but was running for mayor, declares, “They’re taking perhaps the most lucrative piece of real estate in the entire country, if not the world, and they’re giving it away for a bargain basement price.”

Assemblyman (and later Manhattan Borough President) Scott Stringer says scornfully, “Nobody, nobody has ever come up to me and said, ‘Scott, we need a stadium on Manhattan’s West Side.’” (The MTA’s Vanderbilt Yard had been identified in 1974 as a possible site for a Brooklyn arena.)

Doctoroff acknowledges that “the Olympics are a catalyst to getting things done. They impose a firm deadline.” We hear a debate about what benefit exactly the Olympics might bring, given mixed results in other cities.

Some outside reflection

The filmmakers gather a couple of journalists to comment on the process. “In a sense, this is the last frontier,” observes Charles Bagli, real estate and development reporter for the New York Times. “There is no other neighborhood where you have a chance to do large scale construction.”
Bagli calls Doctoroff “a very bright guy... a master of the PowerPoint presentation. When he makes a presentation, you think he’s thought of everything. But I think that he also has a very transactional view, coming from Wall Street, so that everything’s a deal, and he forgot he had to build a political coalition.”

Bagli has been saying recently that the era of the grand PowerPoint is over; apparently, he’s talking about Doctoroff.

Sweetheart deal?

“If the return is so great,” asks City Council President Gifford Miller, “why wasn’t it opened up for people to make a seriously competitive bid?” The same question could have been asked about Atlantic Yards; the MTA’s Vanderbilt Yard was put up for bid 18 months after the city and state backed Forest City Ratner’s plan.

Then there’s glaring evidence of a sweetheart deal. “There’s a very public document we executed last March,” declares Jets president Cross. “[We] pledged to pay fair market value to the MTA for use of the site.”

“So what do you think fair market price is?” asks Quinn.

Doctoroff demurs: “I’m not an appraiser and this is really going to be an issue for the appraiser.”
“I wouldn’t speculate,” Cross continues.

“You did, you said it was worth $35 million,” Quinn responds.

“Exactly,” Cross confirms. “I wouldn’t say speculation. That was an appraisal.”

$35 million! His cool demeanor masks what is obviously a huge benefit to the Jets and a reminder that appraisals can be gamed. (See the lingering questions over "Arena land.") Indeed, in a 2/4/05 New York Daily News interview, Cross acknowledged that the Jets told their appraiser they’d offer $100 million, “which, last time I checked, is not chump change.”

Well, six weeks later, as the Times reported, Cablevision had bid $600 million and Transgas $700 million, “although those two bids contain conditions that make it difficult to compare directly to the Jets' bid.”

It’s a reminder how the MTA’s own appraiser valued the Vanderbilt Yard at $214.5 million, Forest City Ratner bid $50 million and rival Extell bid $150 million--which led the MTA board to negotiate exclusively with FCR, which upped the cash component of the bid to $100 million. (FCR values its total bid at $379.4 million.)

Exactly what the city and state were contributing, and whether the Jets were “making a private commitment totaling $800 million” (to quote Bloomberg) remained very murky. “The taxpayers are going to be stuck with this well over a billion dollar tab,” declares Assemblyman Richard Gottfried.

Stadium backers of course say the opposite. The film captures Jets owner Woody Johnson sounding ever so much like a public-spirited elected official. “We’re going to make a very handsome financial return, the city and state and country, if we get the Olympics,” says Johnson.

“And the Jets,” chimes in Bloomberg, reminding us that this would be a private business deal.

“The funny thing about these numbers is that, it didn't matter which you used, because they were all right,” Bagli says at one point. I’m hoping he meant that each number had some backup, not that more accuracy was impossible.

Enter Cablevision

City budget director Mark Paige observes that “fair market value means a value that you can obtain in the market.” Quinn notes that “the market is bigger than the Jets.” Thus came Cablevision’s bid and, as Bagli says, “the world changed.”

We see Cablevision owner James Dolan, now even more the heavy after the debacle with the Knicks, go on sports talk radio to defend the company’s image. But the smart thing to do, as the film shows, was to ensure Restuccia and Raskin would remain the more public face of the opposition.

Restuccia tells the filmmakers he did 65 takes for a Cablevision-funded commercial which reminds viewers that there is “no public vote,” there will be “massive traffic jams,” and “it’s just wrong. Say No to a West Side Stadium.”

The ad is paid for by MSG LP-NY Association for Better Choices. (Fun fact: Forest City Ratner spokesman Loren Riegelhaupt worked on this campaign.)

“It’s weird but it is the right thing to do,” Restuccia admits. An odd coincidence is the name of the Madison Square Garden VP who introduces the company’s “Hudson Gardens” plan: Hank Ratner. (Apparently, if the name “Yards” is taken, “Gardens” is always a good fallback.”)

Note that Community Board 4, which does not appear (at least by name) in the film, supported MSG’s plan.

Exactly how big

Bloomberg denounces Cablevision’s plan as “a joke... a p.r. stunt that would slow thing down.” Joke or not, with nearly 6000 units of housing, it’s clearly very big.

The Times’s Bagli is incredulous: “You had some of the community leaders supporting Cablevision’s plan to put the most densely populated apartment complex on the railyards..... You would never support this if somebody came along and just suggested this is what should happen here.”

It’s a reminder that the first iteration of the Atlantic Yards opposition would never have supported Extell’s highly dense bid, which followed only in part some of the principles developed in the Unity Plan.

Restuccia says that at least Cablevision’s plan “begins to act like there is a community here.” He adds, “If protecting this neighborhood means that you’re going to compromise, fine.”

Cablevision becomes the bogeyman. “We are not going to let any company’s selfish interest take away our future,” says Bloomberg, sounding not unlike Borough President Markowitz.

An unidentified union guy bellows: We are not about to let some greedy, deep corporate son-of-a-bitch tell us our future is for sale.”

(I guess it depends on which “greedy, deep corporate son-of-a-bitch” you choose.)

Olympic fever

“If we were to not get the stadium going very soon, we’d have to drop out,” says Bloomberg in anticipation of a 2/21/05 visit by the International Olympic Committee. The charming Meryl Streep introduces guests to a little sampling of some of the thousands of movies shot in the city. (She’s got more star power than the “Magic Lady,” AY supporter Roberta Flack.)

The committee, oddly enough makes a visit to MSG, another important Olympics venue. Doctoroff and Olympics chair Jay Kriegel note that, other than the little matter of the railyards dispute, they have a good working relationship with MSG.

The union debate

Public officials, more so than in the Atlantic Yards battle, have been willing to criticize unions. Gottfried, at a public meeting, declares: “Unions in this town, over the years, have gotten in the habit that, when a mayor or a governor dangles a construction project in front of them, no matter how sensible or unsensible it is, or whether there are better alternatives, they will go bananas and advocate for it.”

Union workers, given some time on camera, make the case that they are losing work to nonunion contractors who save on labor with workers willing to live and work in substandard conditions. That issue remains legitimate in Brooklyn; there's a lot of construction, but a lot is non-union.

The MTA meetings

Gearing up for a meeting of the MTA board, Raskin points out that the mayor and governor run the agency, and that he has to be there extra early to make sure that neighborhood residents aren’t blocked out by construction workers. As with the Atlantic Yards hearings, the MTA wisely chooses to let representatives from each side speak in alternating order.

Raskin tells MTA that “there’s no way that this organization should be taking anything less than your appraised value for the railyards.

City Council Member Larry Seabrook of the Bronx, brings up the race issue, reminiscent of BUILD’s James Caldwell in the AY debate.

“Fifty-one percent of African American males in the city of New York are unemployed,” Seabrook says. “This is going to be one of the most inclusive, comprehensive jobs program in the history of this city.” Unmentioned is that Seabrook isn't the best messenger; his questionable ethical history is well-detailed in this recent Village Voice article.

Restuccia gets an oration: “It’s is amazing that the public debate in this city has been stifled. Not stifled, because New Yorkers are speaking. When it comes to the Public Authorities, it’s a setup and it’s a sham. Completely shame on you. It’s a shame that everyone’s been divided and conquered on this.”

In another scene, on the steps of City Hall, Restuccia is met by two women, not identified, the sisters Patti Hagan and Schellie Hagan of the Prospect Heights Action Coalition, which launched the AY opposition.

“How do we get such terrible government?” Patti Hagan (center) asks.

“We’ve always had terrible government, it’s just the degree of it,” Restuccia responds.

“It’s so transparently corrupt,” Patti Hagan continues. (She has since been bounced from Develop Don’t Destroy Brooklyn and criticized the group in turn. I’ll write more about this when and if I can add beyond what's been published.)

Enter Silver

All the money and posturing may have been irrelevant, since the fate of the stadium was up to the three-member Public Authorities Control Board (PACB), controlled by the Governor, Senate Majority Leader, and Assembly Speaker, and the latter, Sheldon Silver, who thought that the accompanying plans for office space on the West Side threatened rebuilding in his Lower Manhattan district

“I don’t see a great need,” the dour and phlegmatic Silver tells a TV interviewer. “I could theoretically support a stadium, with or without an Olympics, theoretically.”

The antagonists ramp up their efforts. Raskin says opponents will bring 25,000 letters to Albany.

Union leader Ed Molloy offers an observation that echoes the Robert Moses revisionists: “Everybody could think of some reason why we should not do something... cities are not built by detractors or obstructionists, they’re built by people with vision.”

Bloomberg makes the legitimate point that he cares about Lower Manhattan “but I also have a responsibility to the other parts of the city.”

The battle ramps up

The New York Post’s Fred Dicker suggests, “There’s a culture of corruption now in Albany... there is a sense that... you can buy your way into legislation.” The screen shows campaign contributions by Cablevision. (Unmentioned is Common Cause's report showing enormous spending by proponents and opponents, though Cablevision spent the most.)

Mahoney declares, “No matter what the politics are, all we want is jobs.” (That’s part of the problem--how to decide among competing interests?) Were union workers in Albany paid by their local? Raskin says yes, but a union rep says no.

Silver’s call

Silver at a press conference, with Gottfried smiling behind him, delivers the bad news, cloaked in an expression of public concern: “A short time from now, the PACB will convene and will decide whether the taxpayers of this state, at a time when New Yorkers should be working together, in the spirit of patriotic duty, to rebuild Ground Zero and revitalize a devastated lower Manhattan, arguments are being made that pit New Yorkers one against another in a highly confusing battle over which part of Manhattan should take precedence when it comes to development and building incentives.”

Cut to Kriegel, who says “the mayor’s made incredible offers” to Silver.

Silver continues: “The 2012 summer Olympic games are being used as a shield to hide another goal, to shift the financial and business capital of the world out of lower Manhattan and over to the West Side... I cannot in good conscience cast my vote in support of the proposal before us today.”

We see union guys chanting: “Whose future? Our future. What do we want? Jobs,” then we see Raskin and supporters cheering.

The battle revisited

Raskin comes off as strong-willed but genial. His counterpart in the AY fight, the goateed 30something Dan Goldstein of DDDB, comes off as more combative. Then again, Raskin was 23 and paid for his work, while Goldstein, an AY footprint resident, is a volunteer living through a battle that’s already lasted more than three times as long.

We see Restuccia summing up with a public thank you to Raskin, who could “engage such a broad range of people [that] at one point, people from Cablevision called me and asked if they could hire him.” (He’s now working for the organization ACT NOW.)


Mahoney says he thinks the “opposition was bought and paid for by MSG.” He adds, with a smile, “They had their billionaires--we needed ours. I guess their billionaires did a better job at getting things done than our billionaires did.” (Though it’s not directly comparable, it sounds like the rhetoric of ACORN New York Executive Director Bertha Lewis, who, in the documentary Brooklyn Matters, declares, “They had their bean counters and we had our bean counters.”)

Kriegel sounds like a Moses fan: “The amount of energy, the amount of effort, that it takes to get any project done in this system, given the bureaucracy, the checks and balances, the litigation, the public communal questioning. interrogation, means you’ve got to make disproportionate dedication of resources and efforts of very talented people who have many demands on their time.”

The money quote goes to the Jets’ Cross: “This is my third sports facility. I learned early on that sports facilities in the context of urban environments are not about sports. They’re about metro politics.”

Going forward

The movie ends with words from stadium supporters and opponents, with Mahoney and union members picketing at a non-union site. We see shots of a street fair in Hell’s Kitchen and hear Tom Waits’s melancholy song, “In the Neighborhood.” (Lyrics here.)

The movie is dedicated to the residents, the unions, New York's dreamers, “may they find common cause together in the neighborhood.”

But that’s not quite all. As the film fades, we see a montage of clips about other planned sports facilities, including a fleeting glimpse of Frank Gehry’s 2005 Atlantic Yards designs, as a television anchor intones, “The next step to bringing a new Nets arena to Brooklyn takes place today... the team cites more jobs and the likely revitalization of the area.”

Going forward?

The most notable closing line, however, comes from Raskin at a community meeting: “I wanted to ask everybody not to drift away and to remember that it’s not done until the neighborhood looks exactly like we want it to.”

What exactly that means is another question. The Hell's Kitchen Hudson Yards Alliance, for which Raskin and Restuccia worked, supported a plan “designed to accommodate 28 million square feet of office space and at least 12.6 million square feet of residential space”--an enormous amount, and a precursor to the current Hudson Yards plan.

And some of the protestors in the film concerned about light and air probably don’t think the neighborhood will look “exactly like we want to.” More on some of the West Side infighting from critics at

But the new plan is not so much a sweetheart deal, since it's worth more than $1 billion to the MTA--a far cry from $35 million. (Cross and Kriegel have joined winning bidder Related.)

Some post-mortems

Critics mostly liked the film. In the Huffington Post, S.T. VanAirsdale described how the filmmakers themselves differed on the stadium. Union leader Mahoney called the film “not accurate" but admitted “from an outsider's point of view, it was pretty close.” Then again, his fear that the property would be a dead zone was quickly proven wrong by a new bidding process.

In Variety, John Anderson noted that the filmmakers “leave a few grimy stones unturned in their effort to be objective -- Bloomberg's well-known friendship with Jets president Jay Cross, for instance, or the home addresses of most of those protesting construction workers, few of whom were likely to be neighbors of the protesting Westsiders.” But he thought the film a good explanation “for why it's so hard to build a consensus, or a building, in today's political climate.”

The Times, in its 6/8/05 postmortem on the stadium, concluded that the project was doomed because Doctoroff didn't think that lawmakers in the city and state needed to be cultivated.

And what about AY?

As noted, there are some significant contrasts with Atlantic Yards. Bloomberg, Doctoroff, and Ratner did their homework, lining up political support and creating community support beyond simply union members wanting jobs. On the other hand, there is a savvy and resourceful opposition.

The day after its West Side post-mortem, the Times, ran a seriously underinformed 6/9/05 article headlined Unlike Stadium on West Side, an Arena in Brooklyn Is Still a Go:
While the Brooklyn plan still has hurdles, its progress so far is providing an object lesson in how to navigate big projects through the often treacherous and choppy waters of New York state and city politics. In the Brooklyn project, backers have aggressively courted the local community since the project's inception, trying to placate those who could be its most aggressive foes. Perhaps most important, they have reached out to Mr. Silver.

The article quoted Dan Cantor, executive director of the Working Families Party, as saying that the 50/50 housing deal gained community support--but didn’t mention that ACORN, signatory of the housing deal, is a founder of the WFP.

The Times also reported:
Others noted important differences between the West Side stadium and the Brooklyn arena. For example, the Brooklyn arena would require a $200 million public investment as opposed to the $600 million investment the West Side plan was calling for.

That’s up to $305 million in direct investment and far, far more in public support.

The article also included this dubious generalization:
Manhattan also has an especially practiced antidevelopment movement on its West Side and is already home to Madison Square Garden and countless world-renown cultural institutions. Brooklyn, still smarting from the loss of the Dodgers nearly 50 years ago, is generally more welcoming to projects that could help put it on the national map.

Brooklyn is “still smarting”? If Brooklyn is a proxy for Borough President Marty Markowitz, maybe. (More critique of the article from Scott Turner of Fans for Fair Play.)

Finally, the article got to a home truth:
But opponents say all of this ignores this crucial advantage that Forest City Ratner had over the Jets: It did not have to face an opponent such as Cablevision, the owner of Madison Square Garden, which has money to wage such a battle.

The arena may still be “a go,” pending dismissal of other litigation and the availability of tax-exempt bonds, but it has been four and a half years--54 months--since Atlantic Yards has been announced. Even with the announcement Monday that the Supreme Court wouldn't review the case, the AY “done deal” remains in some question.

Were Atlantic Yards to fail, the possibility of jobs would not vanish. Rather, there would be some serious fighting over the future of what Chuck Ratner of parent Forest City Enterprises calls “a great piece of real estate."