Tuesday, November 30, 2010

Elected officials, traffic planners to appear at PHNDC traffic forum December 8

The Prospect Heights Neighborhood Development Council is sponsoring an Atlantic Yards traffic forum on Wednesday, December 8, 2010, from 7:30 to 9 pm.

The location is P.S. 9 at 80 Underhill Avenue in Prospect Heights.

From the blurb:
Can the traffic really get worse? Unfortunately, the answer is "yes." The Prospect Heights Neighborhood Development Council presents a forum on traffic and transit issues raised by Atlantic Yards construction and the planned opening of the Barclays Center in 2012.

* What impacts are already being felt?
* What is coming from the arena and future construction?
* What does the recent court decision mean to the community?
* What can we do now?

Speakers include Assemblymember Hakeem Jeffries, Councilmember Letitia James, and Ryan Lynch, Senior Planner with the Tri-State Transportation Campaign.

Meaningful news on timetable lawsuit and CBA failure, meaningful press avoidance

Was it meaningful that two coalitions of civic groups just asked state Supreme Court Justice Marcy Friedman for a stay on Atlantic Yards construction?

Sure. It's a longshot Friedman will stop the arena, but the petitioners--coalitions organized by Develop Don't Destroy Brooklyn and BrooklynSpeaks--have to be taken seriously.

The Empire State Development Corporation (ESDC) and developer Forest City Ratner (FCR) knew that the project could take 25 years but only studied the impact of the official ten-year construction period.

So the ESDC must either appeal Friedman's stinging November 9 ruling on the project timetable or, more likely, produce a document that claims that a 25-year buildout would create no more burdensome impacts than the ten-year one.

Given the track record of ubiquitous environmental consultant AKRF, which always produces the reports its clients want, it's likely such a document can be finessed.

But it's also likely that document will be highly questionable. After all, the state never studied the impact of an "interim" surface parking lot that could last for decades.

Press avoidance

And publications like the Brooklyn Paper and New York Observer, which readily covered the Forest City Ratner press release last week that steel had arrived at the arena site, have so far ignored the latest story on the lawsuit.

The only news outlet to cover it so far is the Brooklyn Daily Eagle, via Ryan Thompson (FCR executive MaryAnne Gilmartin's favorite reporter), who called the decision an "unusual, but possibly meaningless, legal victory."

No, no matter what happens, it's not meaningless.

Journalists and others who think the Atlantic Yards story is ovah simply have closed their minds.

The CBA story

And nobody followed up on my scoop yesterday about how the Community Benefits Agreement was being violated, given that it requires an Independent Compliance Monitor that hasn't been appointed.

Well, maybe the press isn't interested, but those who follow CBAs certainly were. It's another reason why Atlantic Yards is an example to be avoided.

Monday, November 29, 2010

In request for stay on Atlantic Yards construction, DDDB attorney charges ESDC and FCR with malfeasance, says their lawyers breached ethical conduct

Maybe the Barclays Center arena should never have gotten started.

Maybe the arena construction is proceeding thanks only to the "malfeasance" of the Empire State Development Corporation (ESDC) and developer Forest City Ratner (FCR) in withholding the Atlantic Yards Development Agreement until after a crucial court argument in January.

Those are the messages of a blistering legal motion filed by the attorney for Develop Don't Destroy Brooklyn and allied groups, urging state Supreme Court Justice Marcy Friedman to follow up her November 9 ruling on the project timetable and stay construction on the entire project.

Friedman, partly reversing a March 10 decision that endorsed the ESDC's claim that a ten-year buildout of the project was reasonable (despite the Metropolitan Transportation Authority's agreement to allow 22 years to sell FCR Vanderbilt Yard development rights), on November 8 declared that the ESDC had failed to address the impact of the Development Agreement, which it had kept under wraps and which allows 25 years for project construction.

Friedman remanded the proceedings "to ESDC for findings on the impact of the Development Agreement and of the renegotiated MTA agreement on its continued use of a 10 year build-out for the Project, and on whether a Supplemental Environmental Impact Statement is required or warranted."

Why a stay is needed

Leaving the timetable to the ESDC, however, is not what the petitioners want.

(The parties met this morning with Friedman to establish a hearing schedule in the case; an argument on the motion for a stay, has been scheduled for noon on December 22.)

Argues DDDB attorney Jeff Baker in an Affirmation (below), a stay of all construction is needed to maintain the status quo, not just to prevent further harm to the environment, "but to assure that ESDC makes an honest appraisal of the potential environmental impacts of the project and seriously considers the consequences of a 25-year construction schedule."

Baker argues that, had the Development Agreement (referred to as the MDA, or Master Development Agreement), been presented to the court in a timely manner, and had the ESDC and FCR been truthful to the court, the project would not have gone forward without a new evaluation of environmental impact.

And that would have delayed project approval beyond the end-of-2009 deadline to get crucial tax-exempt bonds issued.

“Put simply, the ESDC colluded with Forest City Ratner to deceive the Court. Unless and until the ESDC follows the Court order, any work at the project site would be in violation of state environmental law and an affront to the community that would have to live with Ratner’s developer’s blight for decades,” said DDDB legal director Candace Carponter in a statement.

BrooklynSpeaks, the coalition of groups in a companion case, also filed for a stay.

“Because the ESDC approved the 2009 MGPP without a reasoned basis for assuming Atlantic Yards would be complete in ten years, the agency violated New York State environmental law. As such, the work proceeding at the site now is underway illegally,” said attorney Al Butzel, in a statement. “ESDC and FCRC had a responsibility to disclose the true extent of the renegotiated construction schedule. They should not be rewarded and allowed to continue as if they had complied with the law.”

At issue is the 1100-space "interim" parking lot slated for Block 1129, the southeast block on the site. "[I]t could stay that way for up to 25 years," said Gib Veconi of the Prospect Heights Neighborhood Development Council. "The State needs to disclose the noise, traffic, and air quality impacts of that likely scenario before moving forward."

(Presumably the parking lot would begin to shrink should construction continue on that block.)

Ethical breach

Baker lays out the sequence behind the case, noting the lawsuit was filed in a timely fashion after ESDC's September 2009 approval of the MGPP.

The MDA, signed 12/23/09, was not released until 1/25/10, was six days after a hearing in the initial case challenging the MGPP.

At the hearing, ESDC said the developer would be required to use "commercially reasonable efforts" to complete the project by 2019.

The MDA contradicted that, but it was not entered into the court record: "upon ESDC's and FCRC's vehement objections, the Court again denied permission," Baker writes.

Perhaps because of the necessity for legal diplomacy, Baker refrains from criticizing the judge for her own error, what Friedman in her ruling called a "misapprehension" of the value of the MDA.

He blames the defendants for an ethical breach:
Considering the deference courts traditionally grant state agencies as applied in this case, it is understandable that the Court believed the representation of Respondents' attorneys that the MDA contained meaningful contractual guarantees of timely completion. However, the Court's trust in the good faith of a state agency and the ethical conduct of Respondents' attorneys, all of whom are from otherwise respected, major law firms, was misplaced. As noted in this Court's November Decision, ESDC, as the respondent, has an obligation to submit a complete record of the facts and "[i]t is axiomatic that ESDC also had an obligation to accurately summarize the bases for its determination in the proceedings before this court. Thus, once the Development Agreement was executed, ESDC had an obligation to bring it to the attention of the court in order to correct the totally incomplete representations."
Charge of collusion

Only because the state agency and the developer "colluded in their misrepresentations to the Court" could arena construction begins, argues Baker.

"ESDC failed in its public obligation to evaluate the Project honestly in the context of its known schedule for completion," he states, while FCR, "motivated by profit, used its influence with ESDC to avoid meaningful review, although it never intended to complete the project within the supposed ten-year timeframe and, to the contrary, was actively negotiating contracts providing far longer timeframes."

Is it too late?

Friedman expressly chose not to stay arena construction in her ruling, and Baker notes that Forest City likely "will argue that it has already secured vested rights and that it is too late to halt construction."

Continuing construction, he argues, could only bolster FCR's claims to vested rights and would prejudice future review, since a legitimate analysis will entail a full consideration of development alternatives.

FCR, he says, proceeded with construction at its own risk, knowing the impact of "its own culpability."

Baker tries to argue that the project hasn't gone too far, with much of the investment state and city funds for infrastructure "germane to any redevelopment project." That's not fully clear.

He also cites an October document prepared for the ESDC and bondholders that states that, as of August 31, less than 10 percent of total project cost associated with the arena and required transit improvement had been expended. Presumably, a good chunk more has been spent three months later.

He's on stronger ground in arguing that, while Phase 1 may have more significant penalties for delay, that doesn't mean it should proceed while ESDC evaluates the impact of Phase II.

Why? The project has always been considered as a whole, with most of the long-term benefits found in the second phase, including subsidized housing and open space. Moreover, the ESDC never argued that Phase 1 or the Arena has an "independent utility."

In fact, given that most purported benefits wouldn't come until the end of the project, and such stages are even less likely, Baker states, "ESDC cannot proceed with the arena stage of the Project, where the adverse environmental impacts are greatest and the mitigation measures most uncertain."

Even if the Court agrees some kind of arena would be built, it would be appropriate to stay further construction until the environmental review is complete, since "it must be presumed that any further SEQRA review may result in changes to the Project design" and, if construction continues, its progress "will constrain consideration of the full range of alternatives."

The BrooklynSpeaks argument

A companion case was brought by members of the BrooklynSpeaks coalition. Attorney Al Butzel states in an Affirmation that the counsel for ESDC said the MDA represented added nothing new:
It was as a result of this misrepresentation--and ESDC's failure to provide the Court with a document that it had to know bore directly on the Petititioners' claims--that the Court was misled into concluding that there was enough in the record--albeit barely to support ESDC s continued use of the 10 year buildout.
Had the MDA been available, the decision in March would have been different, Butzel states, and bond proceeds could not have been released.

Like Baker, Butzel argues that the state agency and the developer "should not be rewarded for their misrepresentations to the Court and their concealing of the terms of the MDA."

And work currently under way is proceeding illegally, he states. The ESDC should have analyzed the impact of delayed construction, an extended "interim" surface parking lot, and the delays in asserted benefits.

(He also asserts that additional demolition on the southeast block, Block 1129, "will expand the area of disruption to a new area deeper in the Prospect Heights residential neighborhood." Opposing counsel surely will respond that significant demolition on that block has already occurred.)

Divergence with DDDB on arena

BrooklynSpeaks had long wanted to mend Atlantic Yards, not end it, and its legal strategy offers somewhat more flexibility.

Butzel suggests that, if the Court decided to give ESDC "a limited amount of time to comply with SEQRA [State Environmental Quality Review Act]" state law, continued work on the arena might proceed, "but all other work, including any attempt to convert Block 1129 to a parking lot, should be absolutely enjoined unless and until there is full compliance with SEQRA and ESDC has reconsidered its approval of the MGGP."

Presumably the ESDC would respond that the parking lot is needed to serve the arena.

If no stay, 45 days?

If no stay is granted, the petitioners request a schedule, no longer than 45 days, for ESDC to decide whether a ten-year buildout is realistic and if it doesn't, to identify a realistic construction schedule for the project, Butzel states.

While DDDB and fellow petitioners join the request for a compliance schedule as an alternative to a complete stay, Baker noted that it's not a full substitute, as it will allow construction to continue and "likely predetermine the outcome of any further review by ESDC, in addition to rewarding FCR and ESDC for their malfeasance."

The problem of indefinite interim parking

In an affidavit, Danae Oratowski, Chair of the Prospect Heights Neighborhood Development Council, a BrooklynSpeaks member, cites the 11/4/10 meeting of the Atlantic Yards District Service Cabinet held at Brooklyn Borough Hall.

She notes that FCR executive Jane Marshall said the surface parking lot on Block 1129 would be used for the arena and also B2 residential parking.

Oratowski states:
I and members of the PHNDC are concerned that if FCRC is allowed to build the surface parking lot on Block 1129 as described by Ms. Marshall, it may remain in place for a decade or more--perhaps as long as the 25-year schedule allowed under the Development Agreement for Phase II construction. Because the Atlantic Yards FEIS considered interim parking on Block 1129 temporary, it did not study the impact of the lot on the surrounding community. Given that the Development Agreement could, at a minimum, allow the lot to remain in place for a decade, the impact of the parking lot on neighborhood character, noise, air quality, storm water and security must be known before its construction is allowed to proceed.
Baker Affirmation Order to Show Cause 11/24/10

Butzel Supporting Affirmation Application for Stay

Oratowski Affirmation Request for Stay

Butzel Affirmation Order to Show Cause

FCR lies about Community Benefits Agreement, claims it went into effect only when arena broke ground, avoids hiring Independent Compliance Monitor

Given that the controversial Atlantic Yards Community Benefits Agreement (CBA) is such a big part of the argument in favor of the project, as suggested in The Civilians' new play, IN THE FOOTPRINT: The Battle Over Atlantic Yards, the CBA is worth another look.

Notably, developer Forest City Ratner (FCR) recently lied, despite clear evidence to the contrary, that the CBA--signed more than five years ago--went into effect only when the arena broke ground this past March. (The FCR statement is on video below.)

Moreover, the developer claims that there's no need yet to hire an Independent Compliance Monitor (ICM) to provide a credible outside analysis of the CBA, despite provisions in the document to hire one "[a]s soon as reasonably practicable."

Instead of hiring an ICM, a process that began three years ago but was apparently put on hold, Forest City Ratner instead relies on its own subcontractor, Darryl Greene and his firm, The Darman Group. And Greene has such criminal baggage he was forced to withdraw from a widely-criticized bid for the Aqueduct "racino."

Advantage FCR

So, as the developer and its supporters, in p.r. and in legal papers, continue to laud the CBA, the first-ever in New York, FCR violates the "historic" contract. (Graphic from March 2008 brochure.)

In doing so, FCR has both saved money and short-circuited a process designed to add legitimacy to the CBA. (The CBA is embedded below and also searchable here).

The CBA has generated much criticism because of its inclusion of only project supporters (most of which were created after the project was announced), its lack of transparency, its improper claims regarding the role of community boards, and its limited enforceability.

Unbalanced enforcement

The failure of anyone to blow the whistle on Forest City Ratner's violations of the CBA point out the severe flaws in a process that involves groups financially dependent on the developer.

And while some CBA experts suggest that the flaws in New York CBAs result from excessive government involvement, in this case the absence of governmental involvement, and/or signatories with significant independent financial support, means no one serves as a counterweight to the developer.

By contrast, in a somewhat controversial report, a task force organized by Comptroller John Liu recommended in September that CBAs be made enforceable by incorporating their terms into a legally-binding regulatory agreement between the developer and a public agency and/or a restrictive declaration for review by the City Council, as well as have monitoring by the Comptroller.

The role of Darryl Greene and The Darman Group

FCR publicly touts its high percentage of minority contracting (such as at 1:30 of this video), without mentioning that the firm tracking such figures is The Darman Group, headed by disgraced executive Darryl Greene.

Greene pleaded guilty in 1999 to a misdemeanor count of mail fraud for fraudulently billing $500,000 in consulting and legal fees regarding minority contracting.

His role in the Aqueduct Entertainment Group's bid earlier this year for a state "racino" contract--a contract that required no one associated with the group have a criminal conviction--led to enormous controversy and his withdrawal.

The firm's bid was eventually rejected by the state, leading to a scathing report by the state Inspector General.

The New York Post, in a 2/4/10 editorial, called it The fetid Aqueduct deal, in part because of Greene's participation. Other editorials questioned the deal.

However, as I wrote 3/4/10, despite evidence that the Vanderbilt Yard deal was more scandalous, neither it nor Greene's role in Atlantic Yards has drawn similar scrutiny.

A public question about the ICM

FCR had not been publicly questioned about the ICM until a 9/29/10 public information session at Brooklyn Borough Hall, mainly concerning the planned arena plaza.

As shown in the video below, Carlo Scissura, Chief of Staff to the Brooklyn Borough President, read a question submitted by an audience member (me).

"Forest City Ratner was supposed to hire an independent compliance monitor for the CBA. What happened to that monitor and who is it?"

The misleading, somewhat uncertain response came from Forest City Ratner executive Jane Marshall.

(Video shot by Jonathan Barkey)

CBA timetable

"The CBA agreement was signed a long time ago," Marshall responded. "It didn't actually go into effect until we broke ground for the arena."

The CBA, as shown in the copy embedded below, was signed 6/27/05. The ceremonial arena groundbreaking was held 3/11/10.

The CBA clearly contradicts Marshall's claim:
TERM. This Agreement shall commence on the date hereof and continue until either (i) the Developers abandon their efforts to acquire or lease from the Metropolitan Transportation Authority and to obtain a rezoning of the Project site for large-scale development, or (ii) thirty (30) years from commencement of construction of the first residential building to be constructed by Project Developer or its Affiliates at the Project.
(Emphasis added)

Beyond that, in several places the CBA indicates that implementation would begin soon after it was signed, rather than some unspecified later groundbreaking. For example:
G. Project Implementation Plan. (1) Upon signing of this Agreement, the Developers, in consultation with the Coalition members, shall create a manual for the implementation of the programs and goals described in this Agreement (the “Project Implementation Plan”).
Additionally, job training was to begin immediately:
Commencing upon execution of this Agreement, Developers and BUILD [Brooklyn United for Innovative Local Development] shall initiate and coordinate a job training program....
FCR's reports

Also, Forest City Ratner was required to submit quarterly status reports:
Quarterly Reports. Within thirty (30) days after the end of each calendar quarter, the Developers will prepare and submit to the Coalition and the ICM a status report which shall analyze the then relevant initiatives broken down by Development Phase, and, if relevant, specify actions taken by Developers to fulfill their obligations under this Agreement...
Such reports are apparently the source of the developer's public statements.

The Darman Group, as indicated in the 2/6/08 report (embedded below) has been regularly reporting to the CBA executive committee regarding minority/local hiring and contracting with minority-owned and women-owned businesses.

For example, numbers touted by FCR executive MaryAnne Gilmartin at an 11/4/10 meeting of the Atlantic Yards District Service Cabinet (see 3:58 of this video) almost certainly come from The Darman Group.

Missing, however, is any oversight, even though such oversight was required by the CBA.

Monitoring "not appropriate right now"?

However, on September 29, Marshall continued, with some uncertainty in her voice, "And so now we are putting together a plan for kicking off the--with each group--the responsibilities and how and what they want to effectuate over the first year, the second year, other years. So far, we're engaged in a planning activity with them and we--so therefore it's not appropriate right now to have hired somebody or retained somebody to do--be the independent monitor because we have to first figure what they can be monitoring."

Not so. The reliance on The Darman Group short-circuits the more independent process laid out in the CBA, which clearly states what the ICM should be doing:
Independent Compliance Monitor. As soon as reasonably practicable after formation of the Executive Committee, the Executive Committee shall publish a Request for Proposals (“RFP”) to qualified, independent persons or entities with experience in overseeing compliance with similar arrangements or who have other experience deemed by the Executive Committee to be sufficiently relevant. The terms of employment and evaluation shall be determined by the Executive Committee. Such Independent Compliance Monitor (“ICM”) shall be selected and hired by the Executive Committee, at an annual payment of up to $100,000 to be paid by the Project Developer, and shall be responsible for oversight of the Project Developer’s, Arena Developer’s and Coalition members’ obligations under this Agreement, investigation of any complaints brought against the Developers or a Coalition member regarding implementation of this Agreement and review of the Developers reports required under Article X (the “Developer Reports”). After review of the Developer Reports, the ICM shall provide a report to the Executive Committee and the DBOAC [sic], as defined below, on the status of the implementation of all initiatives.
(Emphasis added)

The ICM, not The Darman Group, was supposed to provide a report to the Executive Committee and the Downtown Brooklyn Advisory and Oversight Committee, or DBAOC.

The role of the DBAOC

The DBAOC, according to the CBA, "shall be the community liaison for the Arena and the Project and shall provide periodic status reports to the Community on compliance by the Developers and the Executive Committee with this Agreement."

Has the DBAOC provided periodic status reports? It's provided a few to some community boards, but not to my knowledge at any publicly announced meetings regarding this topic.

Meanwhile, the DBAOC, as indicated in statements by its Chairman, Bill Howell, has long been a supporter of Atlantic Yards, not an independent analyst.

The role of the ICM in bidding

Moreover, the ICM was supposed to help monitor the bidding process. According to the CBA:
NOTICE OF UPCOMING BIDS. During the construction period, the Developers will prepare and submit to the Executive Committee and the ICM a monthly updated schedule of the contracts that Developers expect to obtain bids for over the upcoming three month period and the expected scope and value of each contract. Developers shall provide a copy of this report to BUILD and NYSAMC, and other locally based business organization as the Executive Committee shall direct.
Given that minority- and women-owned businesses have been hired for such things as demolition work, clearly the "construction period" began well before groundbreaking.

Indeed, the CBA states:
(1) Upon execution of this Agreement, Developers will seek to award not less than five (5%) percent of the total dollar value of pre-construction service contracts for each Development Phase of the Arena and the Project to Minority owned professional service firms and three (3%) percent of the total dollar value of pre-construction service contracts for each Development Phase to Women owned professional service firms.
Effort actually began in 2007

FCR's Marshall finished up: "And the other thing is that, when we do that, it will be something that the executive committee, the groups themselves, probably issue an RFP and select a monitor, based on the scope of work that they--have deemed is directly related to everybody's mandate, and hopefully we'll get it done soon, but I don't have the timetable right now."

Actually, such an RFP began three years ago.

In March 2007, a press release issued by a Forest City Ratner-paid public relations firm was headlined "ATLANTIC YARDS CBA COALITION SEEKS INDEPENDENT COMPLIANCE MONITOR: 'Watchdog' To Ensure Community Benefits for Local Community and Residents." (I wrote about this 3/8/10.)

The RFP for the ICM was to be handled by Greene's firm, The Darman Group.

The planned escrow account

According to the CBA, Forest City Ratner was supposed to put money down for an ICM when the document was signed:
ESCROW ACCOUNT. At the commencement of this Agreement, the Project Developer shall deposit $100,000 into an interest bearing escrow account to be maintained at Carver Federal Savings Bank. Such funds shall be used solely for the compensation of the ICM, and shall be replenished by the Project Developer, as necessary, to maintain a minimum balance of $100,000. Upon expiration or termination of this Agreement, the current ICM’s employment will be terminated and all funds in the escrow account shall revert to the Project Developer.
A query from the ESDC

Three years ago, that process was already in progress.

As the screenshot at right shows (click to enlarge), in August 2007 the Empire State Development Corporation (ESDC) agreed to meet with the Executive Committee of the Community Benefits Agreement Coalition. In preparation for that meeting, the ESDC asked Forest City Ratner about the status of various CBA action items.

The first item on the list: the ICM.

The message to FCR notes that Pat Foye, then ESDC's top official (later to be followed by Marisa Lago and Dennis Mullen), "will stress that while the State is not a party to the agreement, ESDC does support the agreement and spirit of cooperation between the community and FCRC."

That suggests that ESDC thinks that the CBA signatories are a legitimate proxy for the "community"--a questionable claim.

(I obtained the email messages posted here via a Freedom of Information Law request.)

FCR's response

The response (at left) to the ESDC from Forest City Ratner executive Scott Cantone: "FCRC and the CBA Partners are currently reviewing RFP responses and the $100,000 has been placed in an escrow account."

Also, he wrote, the Project Implementation Plan "is before the CBA Executive Committee for review and approval."

The unanswered question: why has no ICM been chosen in three years?

The bottom line

The CBA was supposed to ensure that an Independent Compliance Monitor would be hired.

No such ICM has been hired.

FCR has saved tens of thousands of dollars.

The statistics regularly presented by the developer come from a source that is 1) beholden to the developer and 2) unworthy of participating in other state-approved projects.

Failure of oversight

At an 11/4/10 meeting of the Atlantic Yards District Service Cabinet, a quarterly body of agencies and officials monitoring Atlantic Yards issues, Community Board 6 District Manager Craig Hammerman questioned why future meetings would address the CBA, given that community boards and the involved agencies aren't signatories to the contract.

"So, while I understand the importance of the CBA, I have to question the relevance of it to this body," Hammerman said. "And if there's an enforcement issue, it sounds to me like more of a legal matter, and not something of public planning concern. So I have to really question the appropriateness of using the venue for future CBA discussions."

Carlo Scissura, Chief of Staff to the Brooklyn Borough President, responded, "Well, I think the CBA is an important part of this whole project. At some point in these meetings, we will be updating people on where we are with it. I think it's something that's come to us."

City Council Member Letitia James added, "In all fairness, the concerns that I've received in my office include, but are not limited to, parking, traffic, security, et cetera. But they've also included the status of the CBA, in fact I've received a number of calls… Even though I was not a party to it and. as you know, was not even in support of this development project. I have a duty and obligation to respond to all constituents. So some constituents have asked, what is the status of the CBA, where are we in respect to hiring, WMBEs, affordable housing, et cetera. So I am just putting all the issues before Forest City Ratner."

However, the issues need not be put solely before Forest City Ratner.

An independent entity, the ICM, was and is supposed to answer such questions.
Atlantic Yards Community Benefits Agreement (CBA)

Report on the Atlantic Yards Community Benefits Agreement to the Downtown Brooklyn Advisory & Oversight Com...

Sunday, November 28, 2010

"Sidewalk Sale": A critic's observant walk around the Atlantic Yards site

In a smartly observant essay headlined Sidewalk Sale, published initially in the New Museum's broadsheet New City Reader, critic Alexandra Lange (notable for her Design Observer takedown of Nicolai Ouroussoff this past winter), takes a walk around the Atlantic Yards site.

Among her observations:
  • "the sidewalks had in fact been sold, in the sense that they had disappeared"
  • the railyard, "properly called the Vanderbilt Yard, was always a psychological moat. Now it is a physical one too."
  • the name Atlantic Yards has "vanished," supplanted by Barclays Center, "a name designed for TV, for overhead blimp shots of the 'helmet,' (which the new arena design clearly resembles)."
(I'm pretty sure Atlantic Yards isn't completely gone, and that there are plans to play it up after the arena's established.)

"Downtown Brooklyn"

And Lange agrees that p.r. and uncritical press coverage located the buildings in "Downtown Brooklyn" in order to:
naturalize the height of Gehry’s Miss Brooklyn tower, and invoking the threat of eminent domain to argue that they would be saving a blighted area.

Everything possible was done to ignore the real context, the adjacent neighborhoods of Fort Greene and Prospect Heights, which look better today than they did in 2003.
Art and its contradictions

And the new Urban Canvas program, turning a construction fence into art, presents its contradictions:
I love the Op-Art design, and Urban Canvas’s goal of beautifying construction sites, but it has double meaning deployed here. It is artsy, just like the original choice of Gehry, and has the latent suggestion that it is a gift to the neighborhood. But the graphic appeal shouldn’t distract us from the urban implications of a 228-foot, multi-year construction fence...
The entire issue

The entire issue (below) is worth a read, given its democratic take. From the intro:
Can we afford to leave the stewardship of public resources to backroom deals brokered with big private development interests? Or can we, through a more participatory process, merge our individual desires into a shared vision about a new “urban common,” one that enriches the lives of all New Yorkers...

New City Reader Real Estate Issue

On Flatbush Avenue, small plazas slated for an upgrade; unlike plaza slated for arena block, this involved community consultation

The (temporary) plaza planned for the Atlantic Yards arena block isn't the only plaza along Flatbush Avenue that's getting a makeover.

Several small plazas at the intersections of Flatbush and four cross streets, from Sixth Avenue to Eighth Avenue, are getting makeovers.

And these makeovers come about via a much different process, a public charrette, meetings with the public.

The Atlantic Yards plaza was dispensed from on high, though the decisionmaking process was discussed by developer Forest City Ratner and Gregg Pasquarelli of SHoP Architects.

The meeting on the Flatbush plazas was held on September 28, one day before the arena plaza event, at a joint meeting of the Transportation Committees of Community Boards 6 and 8.

More from Brownstoner here.

From the BID

As stated on the North Flatbush Business Improvement District (BID) site:
On Tuesday, September 28, NY Department of Transportation Downtown Brooklyn Coordinator, Christopher Hrones, unveiled the new conceptual designs for the corridor along Flatbush Avenue from Atlantic Avenue to Plaza Street. These conceptual designs calls for the transformation of the 6, 7 and 8 Avenue Triangles into public space and the redesign of the Carlton Avenue for pedestrian safety.

This plan came out of a charette the BID hosted in June 2008 partnering with Project for Public Space. With a grant from SBS, The North Flatbush Avenue BID hired New York based urban landscape designers, W-Architecture and landscape LLP. Now with almost 3 million in capital funding, DOT has contributed conceptual plans for the 6th, 7th and 8th Avenue Triangle parks as well as the small Carlton Avenue triangle.

Many of the plans calls for expanding the triangle, adding new planters, benches, tables and chairs, bike racks and reconfiguration of the 6th Avenue Victorian clock. In the future, the BID hopes to host events and sidewalk fairs in these public spaces.
North Flatbush Avenue Capital Project Scoping, 9/28/10

North Flatbush Avenue BID Master Plan 6/24/09

Saturday, November 27, 2010

Flashback: How scout Khalid Green got hired by the Nets; his father's Ratner connection made the difference for a successful high school coach

I missed this when it was announced, but veteran Bishop Loughlin basketball coach Khalid Green, son of longtime Assemblyman Roger Green, a leading local political backer of Atlantic Yards when it was announced in 2003, got a job two years ago as a scout for the Nets.

And his father helped connect him to the job.

All evidence suggest Khalid Green, as a successful high school coach, was qualified, but, as with so much about Atlantic Yards, it sure helps to know the right people to nudge ahead on the line.

(Remember how former Forest City Ratner point man Jim Stuckey said in 2005 that he didn't know whether railyard contract McKissack & McKissack was chosen by a bidding process?)

As No Land Grab's Lumi Rolley pointed out two years ago, "A 'casual introduction' to Bruce Ratner is one of those tangible 'community benefits' of the Atlantic Yards project."

The announcement

The New York Daily News, in a 10/15/08 article headlined Bishop Loughlin coach Khalid Green Nets a new job as NBA scout, reported:
Green, who starts his new job Nov. 1, first made inroads with the Nets four years ago when his father, former Brooklyn assemblyman Roger Green, casually introduced him to Nets owner Bruce Ratner in downtown Brooklyn.

"He plugged me in and let me shake hands with people that normally I wouldn't have been able to meet," Green said. "I took it from there. I know how to grind. One thing led to another. I'm happy to leave Loughlin better than I found it and eager to learn more with the Nets.
A little more detail

Green elaborated in more detail, in a 6/23/09 interview with the website Box of M.E.S.S. (The typos below are in the original.)
Q: How were you offered the job of becomming a scout for the Nets?

KG: At Loughlin I secured a sneaker contract. Thanks to the help of Gary Charles (NY Panthers). I was asked to coach in ABCD camp. The structure of the camp featured high school coaches as assistants and the NBA scouts served as head coaches of some of the most talented high school players from the nation. Such players included Lebron James, Dwight Howard, etc…. I maintained several relationships with scouts I met at the camp. They explained their jobs to me and right away I felt it was “up my alley”. I had always been blessed with an eye for talent. I felt I would be good at scouting. About 4 years later, Mr. Bruce Ratner bought the Nets. Mr. Ratner had a prior relationship with my father and soon I was introduced to him. Here preparation met opportunity. After many emails, phone calls, and actual letters, Mr Ratner set up a sit down with first Mr. Ed Stefanski and then Mr. Kiki Vandeweghe who both served as GMs respectively. Both men gave me a chance to prove myself by doing consultant work after my highschool seasons were done in 2006 and 2007. In the year 2008 Kiki offered me the east coast scouting position which I greatfully accepted.
(Emphasis added)

Note that the "prior relationship" also includes campaign contributions from Bruce Ratner's brother, the eminent civil rights attorney Michael Ratner.

Friday, November 26, 2010

Coming soon? Still waiting for Best of Brooklyn web site

The web site for Marty Markowitz's not-so-transparent Best of Brooklyn charity (logo at right) is apparently "coming soon," I wrote in February 2009.


Thursday, November 25, 2010

Two front pages, two weeks apart, two AY stories

The Brooklyn Paper cover this week. (Click on images to enlarge.)

The Brooklyn Paper front page two weeks ago.

Draw your own conclusions.

From theater critics, "In the Footprint" draws raves and mixed reviews; no one agrees with BPaper's claim that play would "appall" project opponents

Updated Dec. 3

Well, after a dubious pan by the Community Newspaper Group's Gersh Kuntzman (oddly and hastily endorsed by the Observer) and my mixed but appreciative review, theater critics are either raving or offering mixed reviews about IN THE FOOTPRINT: The Battle Over Atlantic Yards, by The Civilians.

The key review, from the New York Times's Charles Isherwood, sums it up:
This simple, scruffy-looking but smartly put-together production, written and directed by Steve Cosson and featuring songs by Michael Friedman (“Bloody Bloody Andrew Jackson”), is as fresh, inventive and frankly as entertaining as any new work of musical theater to open this fall.
(He does, erroneously, refer to the "the redevelopment of the Atlantic Yards, the abandoned railway lines near downtown Brooklyn." The Vanderbilt Yard is in continuous use, and the project would be over and around the railyard. Remember, "Atlantic Yards" is a brand, not a place.)

Some mixed feelings

TheaterMania's review calls the show "often-compelling" though it acknowledges the challenges:
There's a lot of material here to squeeze into 100 minutes, and while director Steven Cosson does an admirable job, the staging can feel unfocused.
Similarly, the Village Voice's review focuses on the challenges:
Though Cosson provides much innovative staging, his attempts to cram so many viewpoints into the show and create balance among them produces a somewhat jumbled piece
Backstage offers:
Steve Cosson and co-writer Jocelyn Clarke have expertly curated the views and feelings (taken from interviews and the public record) of a wide array of people about the plan to use eminent domain to secure the land for the development... The company... consistently delivers these individuals' words with passion, but a lack of specificity in characterization sometimes leads to confusion.
People's history

All the reviews counter (as I and "Rebecca from Boerum Hill" did) the curious Kuntzman conclusion that the play would appall Atlantic Yards opponents. The L Magazine's review states:
In the Footprint is necessary viewing for every Brooklynite and, really, every American—it's a Times-hating, Markowitz-trashing People's History of the Atlantic Yards Project that lays out, in plain and often emotional terms, a decade of corruption, activism and David-and-Goliath loggerheads.
New York Magazine's review states:
Footprint is social theater at its querulous best, picking up the significant slack left by a vitiated journalism.

Ratner, Brooklyn Borough President Marty Markowitz, and Mayor Michael Bloomberg come off the villains of the piece (they're played by a backhoe, a basketball, and an empty suit, respectively, if not respectfully), but there's precious little demonizing going on here. The Atlantic Yards debate was and is monstrously complex, turning black political leaders against black community coordinators, white liberals against progressive city fathers, and made unlikely bedfellows of ACORN, Jay-Z and Frank Gehry.
And writer Sean Elder, a member of the Develop Don't Destroy Brooklyn advisory board, observes:
But having just come back from In the Footprint: The Battle Over Atlantic Yards at the Irondale Center, next to the Lafayette Presbyterian Church, was kind of like having personal history repeat itself, practically in my bedroom.

As my wife said when we went to see Fair Game, the movie about the Valerie Plame affair, “It makes you mad all over again.”

From the Architect's Newspaper, Review> Ratner to Neighborhood: Drop Dead:
Audiences who followed the dispute will be familiar with the play’s sentiments, but not with its dramatic architecture. Steve Cosson structures In the Footprint as a no-budget framework of available materials for his dozen energetic young performers (none looked over 30) who play characters speaking, singing, and shouting their lines, with Cosson as the sole accompanist on piano. The show advances briskly enough to avoid overkill by tears or speechmaking. If developer Bruce Ratner sees In the Footprint, he might leave wishing that his Atlantic Yards project were just as streamlined.
More raves

TimeOut New York offers five stars:
In the hands of the incisive docutheater company the Civilians, this ongoing struggle between residents and developers is less about politics and real estate and more about the fragility of communities and the ephemeral nature of home. Assembled from interviews with neighbors, politicians, activists and business owners, In the Footprint combines low-tech theatrics with intimate monologues to create a profoundly personalized collage. Supplemented by documentary video and zippy pedagogical songs by Michael Friedman (Bloody Bloody Andrew Jackson), the show cuts through the political spin to expose the backroom machinations and racial tensions beneath the surface of the Atlantic Yards controversy.
The New York Post's brief review calls it A thrilling look at a boro haul:
Performed just several blocks away from the project site itself, "Footprint" is as entertaining as it is enlightening. Clearly impassioned, it never stoops to polemics.
The New York Daily News (belatedly) calls it Urban planning made fun!:
Leave it to the ace docutheater company the Civilians to turn a convoluted and contentious saga of urban planning into something concise, juicy and entertaining.

And with playful tunes, to boot.
Critic Aaron Riccio writes on his That Sounds Cool blog:

It is also one of the year's most sincere, clever, and enjoyable shows, period.
Some gaps

I can't say I find the reviews fully astute. They don't grapple with the play's unresolved tension between the specific Atlantic Yards "footprint"/project and the larger issues of gentrification and Brooklyn identity.

That means "The Neighborhood Song," the show's tuneful, poignant closing number, is, when you think about it, something of a muddle.

And the Times's review closes with a straightfaced recounting of what I thought was one of weakest scenes in the play:
But there is a chorus on hand, at least briefly. This being Brooklyn, it is an assembly of bloggers, all with firm opinions on the matters at hand. Which does not mean that they can be bothered to get out of their bathrobes.

In the latest issue of Marty's promotional Brooklyn!! "newspaper," some Nets cheerleading but no mention of "In the Footprint"

Maybe the best way to analyze Brooklyn Borough President Marty Markowitz's promotional "newspaper" Brooklyn!! (latest issue embedded below) is to consider it a giant block association newsletter, with Markowitz as the president of the confederation of block associations.

A year ago, I pointed out (as in the past) that Brooklyn!! avoided any mention of Atlantic Yards. That's not so this issue.

Brooklyn Beat

Nudging up against mention of the Homecrest Senior Health Fair, the Borough President’s Latino Heritage celebration, and the participation of Randazzo’s Clam Bar at the Grand Central Oyster Bar's “Oyster Frenzy" in a page labeled headlined Brooklyn Beat, we learn:
Net’s [sic] new coach Avery “Little General” Johnson (center, back row) met with students of MS 51 in Park Slope to talk about positive choices and let kids know that they can “get to the next level.” He also encouraged his future fan base in Brooklyn to get ready to cheer for future NBA champions, the Brooklyn Nets!
The September visit prompted a dubious photo and caption in the New York Times. (How to "get to the next level"? The story of the Nets and Atlantic Yards offers numerous avenues surely not explored by the coach.)

Notably, Markowitz eschews the opportunity to recommend to fellow Brooklynites that they might learn something by going to see The Civilians' somewhat less rah-rah performance of IN THE FOOTPRINT: The Battle Over Atlantic Yards. Instead, he takes the safe route and recommends The Nutcracker.

A "newspaper"

Brooklyn!!, which the BP's office terms a "newspaper," is, as always, published by the Courier-Life, one of the borough's main weekly newspaper chains.

The Courier-Life, along with the Brooklyn Paper, is now part of Rupert Murdoch's Community Newspaper Group.

It's a nice piece of synergy.

Marty Markowitz's Publication Brooklyn!!! Winter 2010-11

Wednesday, November 24, 2010

Steel goes up at arena site, Markowitz proclaims full project benefits await, DDDB will seek stay on construction

As predicted by Forest City Ratner officials, they've ordered steel for the Barclays Center arena, and erection of the steel began yesterday, according to a Nets press release.

From developer Bruce Ratner:
“The installation of steel is always a major milestone for a construction project,” said Mr. Ratner. “With the foundation work largely done, we are now poised to go vertical. Over the next several months, the Barclays Center will begin to take on the iconic shape that we believe will make the arena a worldwide destination and Brooklyn an international city.”
And Marty Markowitz takes the opportunity to leap, without foundation, from arena progress to project fruition:
“Progress on the Barclays Center spells great things for Brooklyn and its future,” said Brooklyn Borough President Marty Markowitz. “This project will bring jobs, affordable housing and economic opportunity, as well as a triumphant return to major league sports for the greatest fans in the world—Brooklynites.”
NetsDaily rounds up the ritual coverage.

Some caution from DDDB

The Brooklyn Paper offers a word from project opponents:
Project opponents were far less effusive about the work — particularly in light of a recent court ruling that found that the state agency overseeing the development withheld information to avoid having to examine the project’s negative impacts.

“We believe that they have no business going forward,” said Candace Carponter, the legal director for Develop Don’t Destroy Brooklyn, which has opposed the development. “They are rushing to get as much in the ground as they can before we seek a stay from the court.”
Well, Supreme Court Justice Marcy Friedman didn't stay arena construction in her ruling earlier this month, and I wouldn't bet on it.

But she should take more seriously arguments about the timetable for the rest of Phase 1 and Phase 2, which, according to the belatedly-released Development Agreement, could take 12 years and 25 years--not the official timetable, which is ten years.

Helping out the press

The Nets press release offers a helpful tip to the press:
Photographers and reporters interested in documenting the work, please contact Brian Moriarty via email (brian_moriarty@dkcnews.com). We can accommodate you on the roof of Atlantic Center at the intersection of Atlantic and Flatbush Avenues in Brooklyn between the hours of 12:30 p.m. and 2:30 p.m. today.
In other words, it helps to own and operate a mall across the street.

The Amanda Burden Open Space Award sets a new standard; could the Atlantic Yards plaza be a "signature public space"?

The Urban Land Institute (ULI), a developer-led organization, this year gave its first Amanda Burden Urban Open Space Award, named for and supported by the Chairperson of New York City's Department of City Planning. (The brochure is embedded below.)

The winner: Campus Martius Park in Detroit, described as "heart of downtown Detroit’s development story and its signature public space. Surrounded by offices, residential space, and restaurants, it is a magnet for everyday visitors and high-profile events."

Would the Atlantic Yards plaza serve similarly? I doubt it.

A New York finalist

One of the finalists, by the way, was from New York: Herald and Greeley Square Parks, two triangular open spaces that form a “bowtie” at Broadway and Sixth Avenue at 34th Street.

The citation states:
Upon their reopening in summer 1999, Herald and Greeley Square parks had a dramatic effect: each was immediately regarded as an urban jewel, widely used and cherished by the neighborhood’s office workers, shoppers, and tourists.
The brochure
Amanda Burden Urban Open Space Award Brochure

The announcement

The awards program was announced in January via a press release issued by the Urban Land Institute:
An awards program to recognize excellence in the design and development of urban public open spaces has been created by the Urban Land Institute (ULI) through the generosity of Amanda M. Burden, Chair of the New York City Planning Commission and Director of the New York Department of City Planning, and 2009 laureate of the ULI J.C. Nichols Prize for Visionaries in Urban Development.

The ULI Amanda Burden Urban Open Space Award recognizes and rewards an outstanding example of a public destination that has enriched and revitalized its surrounding community. The first winner of the award will be announced at ULI’s Spring Council Forum, set for April 14-16, 2010 in Boston. A $10,000 cash prize will be awarded to the individual or organization most responsible for the creation of the winning open space project.

The award is illustrative of Ms. Burden’s strong belief in the power of well-designed public spaces to serve both as gathering places accessible to all citizens as well as catalysts for economic development.

...“It has been my life’s work to celebrate the essence of city life and to create great public open spaces,” said Ms. Burden. “All great planning comes down to the granular approach of how a building meets the street, how a street feels, how you feel walking in the city and coming to public spaces that are inviting. Public space is why you stay in the city.”

The creation of the open space award immediately followed the announcement in October 2009 of Ms. Burden being selected as the winner of the ULI J.C. Nichols Prize. The prize, awarded annually by ULI, recognizes a person whose career demonstrates a commitment to the highest standards of responsible development. The prize includes a $100,000 honorarium, which, at Ms. Burden’s suggestion, ULI has devoted to an annual award honoring transformative and exciting public open spaces.
Projects must be at least 10,000 square feet and open to the public for at least one year and no more than ten years.

Should those behind the Atlantic Yards plaza--the interim substitute for the promised Urban Room--wish to enter, they'd have to wait a year.

And it would have to prove itself as "an inviting, sociable place," which has "transformed surrounding neighborhoods and communities for the better," and be "worthy of emulation."

Tuesday, November 23, 2010

In Observer profile of Gehry, Beekman Tower down the memory hole: "construction stopped" and "resumed"

From a New York Observer profile this week headlined Cheek to Cheek With Frank Gehry:
CRITICS AND NAYSAYERS suggest Frank Gehry isn't fit to sharpen his claws on the New York skyline given such failures as the Atlantic Yards arena, also undertaken with Mr. Ratner, and the Guggenheim on the East River, a project that Mr. Gehry insists "was never real. It was always more of a dream." Eight Spruce Street--the building's official name, though it was first known as Beekman Tower --almost wasn't real, either. At one point, soon after the September 2008 economic crash, construction stopped at 38 stories, prompting forlorn Curbed commenters to gripe, "so depressing, the resulting building is just going to be a huge, shiny, stumpy thing."

But after a two-month hiatus, construction resumed, resulting in a finished product taller than the design originally proposed. "When we started, it was lower," Mr. Gehry said. "It was 66 floors, and when you go from a 66-floor building to a 76-floor building, there's a big cost implication. So I had to prove it, but when you saw the models of the building, it was obvious that the proportion got a lot better."

In the November 2009 unveiling of the facade. Mr. Gehry took the stage and looked straight up at the 76 stories. After a three-second pause, he turned back to the audience, "No Viagra!"
The phrases "construction stopped" and "construction resumed" suggest some sort of independent force of nature affected construction. Actually, developer Forest City Ratner stopped construction in order to renegotiate with the unions.

The article also includes some snarky back-and-forth between Gehry and Donald Trump, who no longer has the tallest residential building in the city.

New Brooklyn open space maps call parts of AY site well-served, but don't factor in expected new population; what's the open space ratio?

New open space maps from the Parks Department, via the Mayor's Office of Environmental Coordination, provide an apparently accurate but ultimately misleading picture of the Atlantic Yards site.

Sections of the map delineated in red are considered "well-served areas," perhaps because of their relative proximity to Prospect Park. However, should Atlantic Yards be built as planned, the ratio of open space to population will decline, raising questions about the level of service.

Only parts of the Atlantic Yards site destined for Phase 2 are currently considered "well-served areas." The arena block, which would be the first phase developed, is not.

Remember, as I wrote November 16, the delay in project timetable means the "temporary significant open space impact" could last twice as long as the period studied in the Final Environmental Impact Statement.

The map for CB 8

Community Board 8, at its northwest tip, includes the blocks between Dean and Pacific streets and Sixth and Vanderbilt avenues. (Click on graphics to enlarge.)

Of them, the block bounded by Dean and Pacific streets, and Vanderbilt and Carlton avenues, is part of the project site--it's the second block to the east from the northwest tip outlined in blue.

The block, currently used for construction staging and parking, and slated to be a massive interim surface parking lot, is currently considered "well-served."

The map for CB 2

Community Board 2, on its southern border, includes blocks between Atlantic Avenue and Pacific Street, from Vanderbilt Avenue (bordered in blue) straight west, including the entire northern portion of the Atlantic Yards site, to Fourth Avenue.

The part of the project site bounded by Atlantic Avenue and Pacific Street, and Vanderbilt and Sixth avenues, is considered "well-served."

That piece of land represents the Vanderbilt Yard, with a few buildings and one lot occupying land jutting into the yard south of Atlantic Avenue on the block between Sixth and Carlton avenues.

However, the land west of Sixth Avenue, consisting of the northern portion of the arena block and Site 5, the four-sided, irregular plot of land west of Flatbush Avenue and bounded by Pacific Street, Atlantic Avenue, and Fourth Avenue, is not considered well-served.

The map for CB 6

Community Board 6 includes a slight portion of the project site at its northern border, the block bounded by Flatbush Avenue, Sixth Avenue, Dean Street, and the now-demapped Pacific Street--the southern half, more or less, of the arena block.

It's the eastern portion of the northeastern tip, outlined in blue. It's in white, not red, and not considered well-served.

The rationale

From the Mayor's Office of Environmental Coordination:
Open Space Maps - Brooklyn

Below are maps outlining the areas identified as underserved or well-served by open space for each community district in Brooklyn. Some community districts contain both underserved and well-served areas, while others do not have any underserved or well-served open space areas.

* Underserved areas are areas of high population density in the City that are generally the greatest distance from parkland where the amount of open space per 1000 residents is currently less than 2.5 acres.

* Well-served areas
o Have an open space ratio above 2.5 accounting for existing parks that contain developed recreational resources; or
o Are located within 0.25 mile (approximately a 10-minute walk) from developed and publicly accessible portions of regional parks.

For the methodologies used to identify underserved and well-served areas.


* If a project is located in an underserved area, an open space assessment should be conducted if that project would generate more than 50 residents or 125 workers.
* If the project is located in a well-served area, an open space assessment should be conducted if that project would generate more than 350 residents or 750 workers in a well-served area.
* If a project is not located within an underserved or well-served area, an open space assessment should be conducted if that project would generate more than 200 residents or 500 employees.
What's "well-served"?

This is rather confusing, because the Atlantic Yards FEIS does not describe Prospect Park as being within even a half-mile from the project site. Rather, the Grand Army Plaza/Memorial Arch is within a half-mile.

However, the other definition should be considered as well:
Have an open space ratio above 2.5 accounting for existing parks that contain developed recreational resources
And, as I explained, the open space ratio would be well below that.

Monday, November 22, 2010

NYC Regional Center feeling the heat? Lawyer for firm recruiting immigrant investors for AY project launches shallow attack on unnamed "blogger" (AYR)

Apparently my criticism of the emerging effort by the New York City Regional Center (NYCRC) and Forest City Ratner to raise $249 million from 498 Chinese millionaires under the EB-5 immigration program has its backers concerned.

In an 11/11/10 post on EB5info.com, a web site devoted to EB-5 issues, an attorney for the NYCRC presents a tendentious, shallow attack on me.

In the post, headlined In Defense of the EB-5 Program, Miller Mayer attorney Carolyn S. Lee disserves readers by not pointing them to my original critique, as posted in the Huffington Post under the headline Green Cards for Sale? Atlantic Yards Backers Seek Chinese Investors.

That allows her to cherry-pick the evidence, evade full responses, and deny readers the opportunity to make evaluations on their own.

Notably, Lee ignores the rising tide of concern, well beyond my alleged "false and ill-informed statements," regarding the EB-5 program, which allows immigrant investors parking $500,000 in job-creating investments to get green cards for themselves and their families.

Broad dismissal

Lee begins:
When there is misinformation in the public about the EB-5 program, attorneys in the trenches of this area have a duty to set the record straight. To permit otherwise leaves our clients – investors and regional centers – having to defend themselves against individuals and organizations maligning the EB-5 program for other ends.

I have an individual in mind. The Internet has given this person a wide-reaching forum to vent his ire against a large urban development project. His medium is his blog. As with many projects of this scale, this one involves a partnership of private and public funds. EB-5 capital is a component. In a down economy hostile to immigration, the EB-5 program has become an easy target for this individual, who is dedicated to the downfall of the overall project and who has latched onto the EB-5 part of the project for his latest criticism.
Lee, without using my name, suggests that I'm venting amateur, rather than a journalist who's covered Atlantic Yards for a blog for more than five years and has been a critic credible enough to write for the New York Times and to co-write a law review article.

So too does the pointer blog on EB-5 Visa News, headlined New York Regional Center Coming Under Unfair Attack:
It’s one thing to have a discussion, but propaganda by a lone blogger is unfair.
Rather than focus on my arguments, they prefer to attack me. Meanwhile, lawyers representing the immigrant investors stand to earn $14,750 per client, while the NYCRC would earn a project issue fee of $38,000 per client.

That means Miller Mayer and the NYCRC have no small incentive to ensure the project succeeds. (Miller Mayer represents the NYCRC and immigrant investors.)

What's valid criticism?

Lee continues:
Valid criticism is helpful. Attorneys in the EB-5 bar have offered passionate well-reasoned critiques of USCIS’s [United States Citizenship and Immigration Services] administration of the EB-5 program. The goal has been to inform USCIS of the harmful effects of some of its interpretations, unfounded in the law. So the larger goal of what I’d call “valid criticism” is to improve the EB-5 program by bringing clarity and predictability, consistent with the law and regulations.

In contrast, the individual I have in mind criticizes the general EB-5 program as a way to deter a particular project. Not surprisingly, many things he has said about the program are false. These false and ill-informed statements, however, have real impact. They taint the public’s perception of the EB-5 program, which the federal government reported as bringing an estimated $1 billion into the U.S. economy back in 2005 (see the 2005 GAO Report at http://www.gao.gov/new.items/d05256.pdf).
Like other defenders of the EB-5 program, Lee wants it to work better. That's reasonable. There clearly are legitimate EB-5 projects.

But what if individual projects are questionable? I'm not the only one to suggest caution. As the Washington Post reported 1/9/10:
That immigrant investors are more focused on obtaining visas than maximizing profits -- combined with the government's limited capacity for oversight -- has caused even some avid proponents of the EB-5 program to worry that a profusion of fraudulent or ill-advised ventures might soon flourish alongside legitimate ones.
Similarly, in an 11/20/10 article headlined Wealthy investors seek quick path to U.S. residency, the Chicago Tribune cited the rapid growth of regional centers aiming to take advantage of the EB-5 program, warning:
But with the spurt of popularity have come concerns of fraud that hark back to the late 1990s, when brokers of some regional centers were caught trying to steal millions of dollars in investments.

"Frankly, I think there's fraud in a lot of these," said Anna Morzy, a Chicago-based attorney with Fragomen, Del Rey, Bernsen & Loewy, a world leader in immigration law. "A lot of these regional centers, I don't know if I'd recommend them" to her overseas investment clients.
Smearing reputations?

Lee continues:
They paint USCIS as lax guardians of immigration, when more astute observers have criticized the Service for its undue and arguably unlawful restrictions of the EB-5 program. They undermine investors’ confidence in the program, deterring capital and job creation in rural and high unemployment areas. Finally, they smear the reputations of conscientious regional center operators who work hard do everything right with one hand tied behind their back, partially blindfolded on treacherous terrain.

The regional center unfairly smeared in this instance is the New York City Regional Center, a client my firm has worked with closely for the past three years to obtain initial designation and subsequent amendments.
If the NYCRC were conscientious, wouldn't it be a little more transparent in its activities? Its managers don't answer questions. They don't post information about the Atlantic Yards deal on the NYCRC web site.

And, as I've argued--and will argue further--they mislead people. And, while Lee may cite "undue and arguably unlawful restrictions," note the Washington Post's observation regarding "the government's limited capacity for oversight."

Indeed, though regional centers have until recently faced little oversight, the USCIS recognizes there may be a need for more scrutiny, stating in an October 14, 2010 quarterly presentation to stakeholders: "Many USCIS External Stakeholders have expressed concerns regarding the potential for fraud and misrepresentation within the EB-5 program."

U.S. vs. Canada immigrant investor programs

Lee writes:
Here are just some things the blogger has gotten wrong:

1. “Not only does it look like the United States is selling visas, but the terms are easier than in other countries.”

Wrong. For example, the federal Canadian investor program has three basic requirements: (1) business experience, (2) minimum net worth of CN$800,000 (US$560,000), and (3) investment of CN$400,000 (US$281,000). There is no requirement that any jobs be created. The Canadian government holds the money for five years, after which it is returned to the investor without interest. The low threshold is responsible for the vast oversubscription of the Canadian investor program, resulting in a current three-year backlog.
I didn't say the terms were easier than in all other countries. I was merely quoting from her client, the NYCRC's Gregg Hayden:
Hayden also said that, unlike the immigrant investor programs in other countries which have "certain meaningful requirements," here investors need not speak English or intend permanent residency.
Also, Lee's comments about Canada's program deserve some analysis. First, the day she posted her response, Canada announced a doubling of its investment and net worth requirements, after not having revised the program in more than a decade.

According to Immigration.ca:
The Federal Investor program is passive in nature and requires an investment of $800,000 CAD which is deposited with the Receiver General of Canada and a personal net worth of $1.6 Million CAD with two years of suitable management or business experience. The investment bears no interest and must be maintained for five years.
Immigrant investors to the United States are not required to have any business experience, so that's a lower burden.

Guarantees in Canada

Moreover, there likely are other reasons that the Canadian immigration program was oversubscribed. Notably, investors receive government guarantees that they'll get their money back in five years, after the money's used in public works.

Under the Regional Center program authorized by the USCIS, there's no government guarantee the investors will get their money back from the private borrower (such as Forest City Ratner).

Indeed, Florida immigration attorney Jose Latour, in a 10/27/10 post on his Immigration Insider blog, warned:
Today, you have a virtual smorgasbord of lame projects from which to choose…and a handful of cherry-picked good Regional Centers.

...I suggest to my clients that they begin by separating immigration objectives from investment objectives. Today, I can show you a handful of EB-5 RC Programs which are proven and successful green card vehicles but terrible investments; I can also show you some pretty smart investment structures in terms of ROI and protection of the EB-5 Limited Partner's investment…but with questionable job creation logic and projections which are heavily academic (i.e., pretty unrealistic.)

How many EB-5 Regional Centers deliver on both fronts? Very few.
(Emphasis in original. Latour hasn't written specifically about the NYCRC.)

Misreading the controversy

Lee continues:
2. “The EB-5 controversy.”

Wrong again. In a Congress notable for partisan bickering, the EB-5 program is among the few that both Republicans and Democrats endorse. Senator Patrick Leahy (D-VT), Senator Jeff Sessions (R-AL), Representative Zoe Lofgren (D-CA) and Representative Steve King (R-IA) are all on record as EB-5 supporters. No one in Congress has criticized the EB-5 program.
Without a link to the original article, Lee's reference remains unmoored.

The section labeled “The EB-5 controversy” in my article refers to the EB-5 controversy with respect to the Atlantic Yards project.

Misreading "profit maximization"

Lee continues:
3. He quotes with disapproval an unnamed person related to the project who purportedly said or wrote that “[t]he costs of using investment funds are relatively lower than the costs of bank loans. … [W]e are in pursuit of profit maximization.” The blogger adds a condemning gloss: “That may impress potential investors, but sure seems to contradict the spirit—and perhaps the letter—of the EB-5 program.”

Wrong again. The law requires the EB-5 new commercial enterprise to seek a profit. Nonprofits are barred as proper recipients of EB-5 money in the regulatory definition of “commercial enterprise.” So both the spirit and the letter of the EB-5 program embrace the profit-making drive and in fact require it.
That ignores my point. The NYCRC's Hayden was asked why money from Chinese investors was needed in the first place, given the role of Russian billionaire Mikhail Prokhorov in the project.

He dodged the question. Given Hayden's essential non-answer, the transcript on the website of a Chinese immigration broker offered this dubious explanation, which was excerpted by Lee only in part:
The costs of using investment funds are relatively lower than the costs of bank loans. Although the NBA project funds are sufficient, business is business, and we are in pursuit of profit maximization.
Yes, the spirit and the letter of the EB-5 program require profit-making, as Lee writes, but if project funds are sufficient, there's no need for immigrant investors--and thus they wouldn't create any jobs.

My comment on whether it "seems to contradict the spirit—and perhaps the letter" of the program regarded not the issue of profit, but the need for immigrant investors to create jobs in the first place.

Need for scrutiny

Lee continues:
4. “That’s why the USCIS and the rest of the press should give this ‘project’ serious scrutiny.”

He apparently doesn’t know that USCIS did give this project serious scrutiny. The USCIS approved the project in an amendment filed by the regional center in question – a filing called an “exemplar” I-526 petition for pre-approval of a project. Or perhaps the blogger thinks that The Wall Street Journal is not serious enough press? The Journal recently covered the development project in an article dated May 10, 2010, including the EB-5 component.
Whether the USCIS pre-approval represents serious scrutiny remains in question, given the growing concerns about fraud and misrepresentation.

Should Lee be willing to make documents regarding the project available, we might be able to better evaluate it.

Regarding the Wall Street Journal, Lee refers to a 5/10/10 article, headlined Navy Yard Finds Green In Green-Card Program, which refers not to "the development project" at issue but a NYCRC project separate from Atlantic Yards.

A later Wall Street Journal article, on 9/21/10 and headlined Ratner Mulls Visa Financing, the article, clearly fed by the developer to undermine my longer article in preparation, offered no scrutiny of whether there would be sufficient job creation.

Proper administration

Lee closes by writing:
Everyone involved in the EB-5 program – regional center operators, investors, attorneys, advisors, and the USCIS– have much at stake in the proper administration of this program. When there are inaccuracies about the program, or the program as applied to certain projects, it harms everyone doing their best to contribute to a clean system. It’s one thing if we have disagreements about what the program should look like. It’s another thing when someone tries to tear down the program to further another agenda. Let’s at least agree to resist the latter.
The "inaccuracies about the program" could be clarified by Lee's clients, who've been acting in a somewhat opaque manner. Consider that the only project listed publicly on the NYCRC's web site involves the Navy Yard.

Why don't they want anyone other than Chinese investors, burdened by distance and language, to look closely at their "Brooklyn Arena and Infrastructure Project"?