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Showing posts from June, 2011

Deadspin: Nets exemplify how basketball team owners use paper losses to mask profits (also see ESPN analysis of sale price)

Updated: Exclusive: How An NBA Team Makes Money Disappear [UPDATE WITH CORRECTION]

CORRECTION: Portions of the analysis below are wrong. They were based on a misreading of the "Loss on players' contracts" line item, which, it turns out, wasn't an RDA claim after all. (If you look in the audit notes for 2004, No. 8 refers to a "player buy-out and a player injury" — the former of which is almost certainly Dikembe Mutombo — totaling the same $25.1 million listed in the "Loss" line item.) The example is bad, and I apologize for that. I'm leaving the text here for a couple reasons: 1.) The roster depreciation allowance is real, even if we've misidentified it here, and it provides owners with a significant tax shelter based on a baroque logic. 2.) The Nets, like all franchises, do use large paper losses to pad their expenses. Here's what ESPN's experts found using the same set of documents (particularly the 2005-06 financials):
In other wo…

The official press release on the BAM-Barclays alliance, the imaginary new "cultural district," and reflections on Bruce Ratner's gift for irony

"I always like to put things that are a little bit ironic together" was the money quote from Bruce Ratner in today's New York Timesexclusive on the alliance in which the Brooklyn Academy of Music will bring three or four large-scale shows to fill empty dates at the Barclays Center arena.

The first irony is that this was seen as big news rather than as a question mark over the event projections for the arena. Remember, they've booked 150 shows and aim for more than 200 events a year.

The problem with those numbers is that a Moody's analyst in 2009 said its just-above-junk rating for $511 million in Barclays Center PILOT bonds depended in part on 225 events a year, and Forest City Ratner's  original projection of 225 events depended on no new arena in Newark, though one has since opened.

Eric McClure of No Land Grab found the irony in Ratner's claims of "Jobs, Housing, and Hoops."

Matt Chaban of the Observer cited, among other things, Ratner's…

The ESDC conducted an internal audit of Atlantic Yards, but we can't see it; in response to my FOIL request, most was redacted

Some web searching led me to learn that the Empire State Development Corporation had conducted an internal audit of Atlantic Yards project activity sometime last year.

So I filed a Freedom of Information Law (FOIL) request. I got a response (embedded below), but it wasn't very helpful.

Overall bill of health

As the first paragraph of the Executive Summary states:
Internal Audit completed a review of Atlantic Yards (AY) project activity processed and conducted through ESDC The review revealed that disbursements in connection with the project funding agreement were made in accordance with funding agreement terms and project costs were adequately supported by documentation.Nearly all redacted

What else did the audit reveal? Were better procedures needed at all?

Well, we don't know, because nearly everything else was redacted, under a FOIL exemption that provides that an agency may deny access to records or portions thereof that are inter-agency or intra agency materials which are n…

If Empire State Development's newly-adopted Mission Statement emphasizes job creation, shouldn't there be some oversight regarding Atlantic Yards jobs?

So, what's the mission of the Empire State Development Corporation (aka Empire State Development)?

I previously explained how the role of the Urban Development Corporation (UDC) evolved from slum clearance to business development, at one point adopting the identity NYLovesBiz.com.As the Buffalo News reported 2/2/95, new Governor George Pataki "has proposed sweeping changes that would consolidate the Department of Economic Development and Urban Development Corp. into a new agency, known as the Empire State Development Corp. Thirty initiatives will be abolished as a result."

New Mission Statement

Well, the agency no longer uses the phrase "New York Loves Business," but its Mission Statement and Performance Measures, adopted this past April and embedded below, state the following:
Mission Statement
The mission of Empire State Development is to promote business investment and growth that leads to job creation and prosperous communities across New York State.

Perf…

Ratner feeds exclusive to Times, which hypes plan for BAM to bring three or four events to Atlantic Yards arena

A front-page New York Times Arts section story coming tomorrow, headlined In Alliance, Nets Arena to Offer Arts, begins:
It’s been a springboard for Brooklyn nostalgia, a debate about urban design and the politics of eminent domain and, depending on your perspective or basketball affiliation, a community uniter or divider. Now Atlantic Yards, the development that will bring the New Jersey Nets to downtown Brooklyn, will also be a cultural center.

The Barclays Center, the 18,000-seat arena at the heart of the project, will host performances by artists selected by the Brooklyn Academy of Music in a programming alliance between the two neighboring institutions, their directors said. The collaboration will include three or four shows a year and allow the academy to bring to Brooklyn work that would not fit into its theaters — the largest of which has 2,000 seats — with costs underwritten by the arena.Three or four shows a year? This is the Arts equivalent of the "six…

Contentious meeting on traffic/parking issues around east end of AY site; ESDC says Forest City's "in violation" without daily on-site community liaison (updated)

Note: I did not attend the meeting but listened to an audiotape and spoke with a couple of attendees.

Five nights after a contentious meeting (about rats) in the Soapbox Gallery on Dean Street, Prospect Heights residents gathered in the same space last night to express concerns about parking, traffic, and pedestrian issues in the eastern end of the site, notably the planned 1100-space parking lot in the block bounded by Carlton and Vanderbilt avenues and Dean and Pacific streets.

The two-hour meeting was periodically contentious, with residents expressing frustration at vague, incomplete answers, and promises of future solutions.

Beyond that, a representative of the Empire State Development Corporation (ESDC) indicated that developer Forest City Ratner (FCR) was in violation of the Memorandum of Environmental Commitments by not having a daily on-site representative to interface with the community.

(Update: see bottom for an ESDC statement, in response to my follow-up question, that av…

Atlantic Yards Watch gets $4000 in discretionary funding from Council Member James

Among the many member items in the City Council's just-passed 2012 discretionary budget [PDF] is $4000 from City Council Member Letitia James to Atlantic Yards Watch:
The Atlantic Yards Watch is an initiative currently co-sponsored by the Prospect Heights
Neighborhood Development Council, the Boerum Hill Association and the Park Slope Civic
Council to collect important data about the impacts from the construction and operation of
the Atlantic Yards Project. The goal is to ensure the health and sustainability of the
neighborhoods the project impacts. Surveying a few of her other discrectionary items, James allocated $15,000 to the 71st Precinct Community Council, $26,000 to Fort Greene Senior Citizens Council, Inc. (at four locations), and $8,000 to the Brooklyn Steppers, which has appeared at a good number of Nets/Atlantic Yards events.

Last year [PDF], James allocated $3000 to the 77th Precinct Community Council for youth and $5000 for seniors. The 77th got no allocations this yea…

New wayfinding signage coming to Prospect Heights; it will focus on cultural area, but I bet there will be directions to the arena

New pedestrian signage is coming in 2013 to Prospect Heights, notably the cultural area near Grand Army Plaza. I'll bet the signage also helpfully mentions the arena site up Flatbush Avenue.

In a 6/27/11 press release, NYC DOT Announces Search for Innovative Pedestrian Information System to Improve Walkability, Economic Vitality of City Streets: Sign system to make it easier to navigate and discover New York’s neighborhoods; Initiative is first in a series to help New Yorkers on foot, on transit, on a bike or in a car, the Department of Transportation announced:
New York City Department of Transportation (DOT) Commissioner Janette Sadik-Khan today announced a Request for Proposals (RFP) to bring a comprehensive pedestrian information system to sidewalks in key New York neighborhoods. The initiative is a critical first step in making New York City’s world-class streets easier to navigate and even more accessible for New Yorkers and visitors alike, and the first in a series of steps …

Observer makes fun of rat complaints, claims "hysteria has reached such epic proportions"

So, Matt Chaban of the New York Observer, who can be a decent reporter, didn't attend the meeting last Thursday about rat problems in the area around Atlantic Yards.


But he had to write about it, so today he applied a little 'tude, headlined Atlantic Yards ‘Rat Tsunami’ Plagues BroBos [Brooklyn Bourgeois Bohemians or Brownstone Brooklyn], providing a list of the complaints, ending with:
Two stolen Bugaboos, with babies attached.O.K., so we made that last one up, but the hysteria has reached such epic proportions, it seems possible. After all, The Brooklyn Paper is worried about the hantavirus infecting BroBos this summer if things don’t get better. Given their weak constitutions, it is bound to be a deadly epidemic.My comment

As I commented:
Matt, this is really beneath you.

If you'd attended the meeting, or read the coverage (including mine) more carefully, you'd know that many of the people affected have been there more than 40 years, and that they represent a spec…

FCR's Gilmartin makes the Crain's list of NYC's Most Powerful Women, along with Tighe, Wylde, Burden

Forest City Ratner's Atlantic Yards point person, as well as some key supporters, make Crain's New York Business's list of the 50 Most Powerful Women in New York 2011.

35. MaryAnne Gilmartin
Executive vice president
Forest City Ratner Cos.
A fellowship at a city economic development agency provided the springboard for Ms. Gilmartin’s career, which has changed the texture and skyline of New York City.

The 47-year-old Queens native has worked at Forest City for nearly 17 years and developed properties totaling more than 5 million square feet, including The New York Times’ headquarters and the new Frank Gehry-designed residential tower downtown.

Her toughest assignment has been overseeing the controversial $4.9 billion Atlantic Yards project. In a testament to her savvy negotiating skills, Forest City officially broke ground on the project last year, and its focal point, the Barclays Center, will open in fall 2012.

NEW TO THE LIST THIS YEAR No Land Grab's Eric McClure comme…

Another press valentine for Amanda Burden: Wall Street Journal profile of City Planning Commission Chair ignores Atlantic Yards example

In a 6/23/11 article headlined Champion of Cities: With New York's High Line park expansion, Amanda Burden's urban revitalization efforts set a model for the world, the Wall Street Journal reports:
This elegant blonde with a mellifluous voice is steelier than one might expect, a useful trait for someone who is spearheading Mayor Michael Bloomberg's far-reaching effort to rezone nearly a quarter of New York City and reclaim the city's waterfront. Her populist achievements span all five boroughs and include zoning for new affordable housing in East Harlem, Brookyln and the South Bronx, as well as the massively popular High Line, an abandoned railroad track that has been transformed into a popular tourist destination in the once-gritty meatpacking neighborhood, which has seen commerce move in and property values soar in the past decade.

Chairing the City Planning Commission since 2002, Burden, age 67, has revolutionized its role in the city, transforming a once-sleepy bure…

Brooklyn Paper: DOH says bait applications for rat problems around arena site have jumped

Five days after the meeting last Thursday on rat problems, the Brooklyn Paper follows up with Rats! Atlantic Yards site is full of rodents.

The headline's a bit off, since the dispute is over whether Forest City Ratner will take control measures outside the site perimeter. But the newspaper did add some statistics that bolster the ample anecdotes:A spokeswoman for the Department of Health said that the department saw an increase in 311 complaints and increased its exterminations significantly in the ZIP codes on and near the project.

The department increased its bait applications from 190 in fiscal year 2010 to 313 in 2011 for the area directly around the arena.

To the east of the arena, bait applications jumped from 179 in 2010 to a whopping 501 in 2011.

Dave Zirin in Slam: "residents see [Atlantic Yards] more like an exercise in ethnic cleansing" (um, that's a bit broad-brush)

In Sleep Till Brooklyn: Putting an NBA team in BK may not be a no-brainer business move., Edge of Sports columnist Dave Zirin (a DDDB advisory board member) writes:
My father was born and raised in Brooklyn. I grew up just across the bridge in Manhattan, but spent more time in Brooklyn than an agoraphobic hipster. I know Brooklyn and I know its wary relationship with the world of sports. This is a place that’s never quite gotten over Walter O’Malley, the owner of the Brooklyn Dodgers, abandoning Ebbets Field and Flatbush Avenue for Chavez Ravine and the movie stars of Los Angeles. Yet in the decades after the Dodgers betrayal, the area built its own sense of identity.

...The borough has become the new Manhattan: the place you can’t afford to live. It’s become a magnet for chain stores and fancy restaurants. Unlike Travolta’s Tony Manero, Brooklyn isn’t the place ambitious kids dream of leaving anymore. It’s where entitled college grads dream of moving to.

If you don’t understand this …

Despite nearness to major transit hub, Forest City Ratner's Atlantic Center mall shows contrast with European counterparts transit hub

There's still too much parking around the Atlantic Avenue/Pacific Street transit hub, right?

From a New York Times article today--the lead story in the both the national and New York edition--headlined Europe Stifles Drivers in Favor of Alternatives (and in print, more pungently, as "Across Europe, Irking Drivers is Urban Policy"):Michael Kodransky, global research manager at the Institute for Transportation and Development Policy [ITDP] in New York, which works with cities to reduce transport emissions, said that Europe was previously “on the same trajectory as the United States, with more people wanting to own more cars.” But in the past decade, there had been “a conscious shift in thinking, and firm policy,” he said. And it is having an effect.

...It often takes extreme measures to get people out of their cars, and providing good public transportation is a crucial first step. One novel strategy in Europe is intentionally making it harder and more costly to park. “Par…

The demise of the New York Times's once-routine Forest City Ratner disclosure (as mandated by the Public Editor), and another reason why it's meaningful

The New York Times has much less frequently been appending a once routine disclosure to its articles about Forest City Ratner's Atlantic Yards project. And that's meaningful for a reason I haven't previously stressed.

Consider, for example, the 6/24/11 blog post headlined In Brooklyn, the Rats Move Out Before the Nets Move In. No disclosure appeared, though an 11/25/09 article, Ruling Lets Atlantic Yards Seize Land, contains such a disclosure:
The company, which was the development partner for the Midtown headquarters for The New York Times Company...Disclosure dropped

No did such disclosure appear in the 6/16/11 review of the new documentary Battle for Brooklyn, the 3/17/11 article headlined Prefabricated Tower May Rise at Brooklyn's Atlantic Yards, and, more crucially, a 3/18/11 article headlined With Federal Case and Modular Building Plan, New Attention for Atlantic Yards Project.

Why was that more crucial? Because, as the headline suggests, the Times itself is respo…

Atlantic Yards down the memory hole: Times web site erases attribution to Public Editor Byron Calame's call for the paper's full disclosure of ties to Ratner

Yesterday, New York Times Public Editor Arthur S. Brisbane devoted his column, On NYTimes.com, Now You See It, Now You Don’t, to the vexing question of how to track and manage the many changes and periodic corrections in regularly updated digital news.

His conclusion:
My preference would be that The Times do more to document and retain significant changes and corrections like those I have described.

...I realize there are other priorities. But more attention to this issue would bring two clear benefits. First, The Times could offer more transparency to its readers and stem the erosion of trust that occurs when readers don’t understand mysterious content changes. Second, by more carefully retaining important published material, including all corrections, The Times could reinforce to its staff the importance of accuracy and full disclosure when errors happen. The problem, it seems, is worse than even Brisbane thinks, since it applies to the Times's inability to properly attribute wo…

CNG issues "Brooklyn 200," including Forest City Ratner, Nets Basketball, and the Barclays Center

The Community Newspaper Group, publisher of the Brooklyn Paper and Courier-Life, has issued a new promotional supplement, Brooklyn 200, "celebrating the places and things that make Brooklyn special," with capsule descriptions.

It's not surprise, given that newspapers are in tough shape, that they produce such questionable products. (Quick, is there any correlation between full-page feature articles on a selected few of the 200 and advertisements bought by those subjects of feature articles?)

Among the 200, as detailed below, are Forest City Ratner, Freddy's Bar, Nets Basketball, and the Barclays Center.

And Marty Markowitz is the only person on the list, getting special mention in the category of "force of nature.

Questionable choices

There are other opportunities for raised eyebrows.

Why a mini-profile of the Brooklyner building but not the Brooklyn Flea (or Brownstoner)? Brooklyn Kickball but not the Brooklyn Ice Cream Factory? Downtown law firms like Cullen an…

How the New York Times's watchdog coverage of a supplements company could be transposed to the New York City Regional Center and EB-5

A lengthy 6/21/11 New York Times article about Senator Orrin Hatch R-UT), headlined Support Is Mutual for Senator and Utah Industry, described his relationship with the supplements industry, which wants freer reign to make some self-serving claims.

One passage jumped out:
But Xango’s record illustrates how companies eager to exploit the law can go too far.

In 2006, federal regulators warned Xango that brochures improperly promoted mangosteen juice as a disease cure, not just a healthy option. Xango is among more than a dozen Utah companies cited by federal regulators over the last decade for apparent violations of the law.

Xango, whose executives are the single biggest Utah-based contributors to Mr. Hatch’s political campaigns and have drawn Mr. Hatch to its headquarters to down shot glasses of their juice, blamed a marketing company that had printed the brochures. The company also insisted that it was closely monitoring distributors to make sure they did not make inappr…

CounterSpin radio show: Battle for Brooklyn filmmakers talk about the media (including me)

Susan Saladoff on Hot Coffee, Suki Hawley and Michael Galinsky on Battle for Brooklyn

CounterSpin (6/24/11-6/30/11)

This week on CounterSpin we're talking about two new films which, while journalism is not their central subject, directly engage news media's influence and real world impact as a critical part of the stories they tell....

Also on the show: Battle for Brooklyn tracks the takeover of a New York neighborhood by a real estate developer and the efforts to resist it by community members, one man in particular who becomes the last person in his building not to take a buyout. The same events and players appeared in the corporate press too, and viewers can see the difference when voices that usually appear in the last paragraph are given central place. We spoke with Battle for Brooklyn filmmakers Suki Hawley and Michael Galinsky.I'll note that the radio show (the interview starts at 12:48; also see links to audio at DDDB and NLG) begins with the host noting t…

Prokhorov to lead new Russian political party, Right Cause, seen as Kremlin creation; he claims capitalism is only for risk-takers

Mikhail Prokhorov's purchase of the New Jersey Nets continues to pay dividends, as that asset is the first thing attached to his name as he pursues a questionable political career.

From the New York Times, Nets Owner to Lead Political Party in Russia:
MOSCOW — The billionaire owner of the New Jersey Nets basketball team, Mikhail D. Prokhorov, was elected leader of a Russian political party on Saturday in the first foray of a prominent businessman into politics in nearly a decade. Not that things aren't fishy: The event suggested the start of a new political movement in Russia, and was spoken of in this way by participants, though the party’s creation was apparently coordinated with Russian government officials some time ago in preparation for Parliamentary elections scheduled for next fall. Rounding out the picture, a pro-Kremlin youth group staged a noisy protest outside.

Still, it had all the signs of a political maneuver used by Mr. Putin before, of co-opting opposition orga…

Behind the Brooklyn Paper's "world's best Cyclones coverage"

How does the Brooklyn Paper manage "the world's best Cyclones coverage"?

Well, the page in print (which contains an article that starts on the front page) is "brought to you by Municipal Credit Union," which bought what looks to be a one-sixth page advertisement on the page, and perhaps also pays for the banner at top. MCU bought naming rights to the baseball park, so there's some synergy there.

And the half-page advertisement on the bottom of the page, while hawking air conditioners, does contain a promotion for Cyclones tickets.

You can't blame a local newspaper, in a struggling environment, for seeking creative ways to bring in revenue.

But you can't help thinking that, without the advertising, the level of coverage might be lower. And maybe there'd be space for more Atlantic Yards coverage.

All of which leads to the question: what happens when the Barclays Center opens?

No suprise: NYU Schack's Stuckey intersects with EB-5 promotion

The immigrant investor law, known as EB-5, has gotten a lot more popular in the past two years, because low-interest loans from immigrants more interested in green cards than returns are now available to clever investors, and the requirement of job creation can be finagled via paper calculations.

From GlobeSt.com, 6/21/11, Shopping the EB-5 Supermarket: As access to traditional forms of capital continues to tighten, an often underlooked source of funding can help foreign investors establish themselves in the US while benefiting the American economy: the federal EB-5 Immigrant Investor Program. Panelists discussed “The Art of the EB-5 Real Estate Transaction” at a conference hosted by Akerman Senterfitt in conjunction with the Urban Land Institute and the NYU Schack Institute of Real Estate on Monday morning at the Cornell Club in Midtown Manhattan.

...When structuring an EB-5 project, Park asks two questions: Does it meet the legal requirements, and from an investment standpoint, will…