Thursday, December 4, 2008

Will It Come? What the Bloomberg Administration Wills at Willets Point (Part I)


We are wondering why the Bloomberg administration wants to put the Willets Point Iron Triangle auto parts and repair district out of existence. The city wants to use eminent domain to do so.

Even a lot of wondering doesn’t make the answer obvious, but it leaves us wondering whether there are better alternatives. If there are better alternatives, as we think there are, we have to wonder whether the City Council has done its job.

This is a long post so be prepared to spend some time with this subject. The reward is that we have done our best to deal comprehensively with a subject which we understand a lot of people may not know much about. Most other reporting has been in much shorter stories. Because this piece is long, we have for the sake of convenience and ease of bookmaking, divided it into four sections. The sections flow into each other since the subject matter doesn’t readily divide itself up. If you are inclined to take a reading break, wherever you do will probably be as good as anywhere else.

Economic Downturn and Jobs at Willets Point

It is a time of economic downturn. The 62 acre* area is the home of 250 businesses which employ, it is variously reported, 1,000, 1,200, 1,300, 1,700, 1,711, 1,800 or 3,000 people. (The 1,300 figure is supposed to be the city’s though some of its documents use higher figures like 1,800. The 3,000 figure is the Willets Point Industry and Realty Association’s.) The area property owners pay taxes and receive minimal services that probably cost the city very little.

* (We will return to discuss at length the issue of how many acres are involved.)

It is only a single-story low-rise area but it is tightly packed with bustling businesses. One Sunday morning not long ago a few businesses were closed at about 10:30, but enough were open so that the whole area had a busy thriving feel to it. The jobs are blue collar. Arguable they are green collar since, technically, there is a lot of recycling going on. You don’t get the feeling that the jobs are Monday through Friday, 9 to 5.




An Isolated Area

The area is hemmed in and separated from other areas of the city on all but one side by isolating elevated major highways running along the waterfront. The elevated highways interfere with whatever enjoyment of the waterfront might be possible. On the last remaining side, the district is set apart and isolated by the newly constructed Citifield which has been built as a replacement for the Mets’ Shea Stadium. Shea Stadium was not a pretty stadium. We don’t know if Shea needed to be replaced, but it is not surprising that its replacement is better-looking. Nevertheless, it is still a stadium and not likely to be the best neighbor. The vast stadium parking lots make up about two-thirds of this final wall that completes the isolation of the Willets Point Iron Triangle area.

Relocating or Eliminating the Businesses?

Why in a time of economic downturn is it so important to the city to go after and try to eliminate a functioning economic district within the city that is working well to provide jobs? Is it that the city feels that the 250 businesses should not exist? Ostensibly that is not the case since, in theory, the city will be providing relocation payments to the businesses. (The city recently offered a $3 million relocation fund which has been described as insultingly low.) Why “relocate” what should not exist? That is perhaps not such a neat equation for more than one reason. It is doubtful that the relocation payments will adequately compensate the businesses for moving. That payments are being made at all is probably more a political salve. Also, once dispersed by relocation the businesses will probably never achieve again the kind of synergy that makes them work the way the interrelated businesses all co-located in the same area now work. A Hunter College study described the area as a "unique regional destination" for auto parts and repairs. Bottom line: “Relocation” probably means that a lot of the businesses will cease to exist when dislocated.

What would it actually cost to relocate the businesses? By one report an early study said it would cost $130 million to relocate the businesses of Willets Point at that time counting them as 83 in number. (See: City Plans Big-time Makeover for Flushing, By Donald Bertrand Daily News Staff Writer, November 19, 2003.) This figure, though it should be factored into a total assessment of the total cost associated with relocating the businesses, is apparently not actually a statement of relocation costs. It apparently refers to the estimated cost of buying the land under them. As far as we can tell, a 2003 city document this might have been taken from “Comprehensive plan for downtown Flushing” is no longer where it was once posted on the web: (http://www.nyc.gov/html/dcp/html/pub/flusing.html)(83 is likely the number of property owners, not businesses, the report found to be in the area.)

The $130 million figure which represents the cost of compensation for the real estate ownership interests would go mostly to property owners. Many of the businesses lease rather than own their space and would not receive any substantial compensation out of that amount. The true figure for the cost of relocation would have to fold in other costs associated with moving the businesses the amount of which would be much more important to the businesses that are leasing their premises. With 250 businesses $130 million would come to $520,000 per business but a City Economic Development Corporation survey reportedly calculates that over 60 percent of the Willets Point's owners are leasing their property to others (See: Yes! Redevelop Willets Point, by Julia Vitullo-Martin, September 2008.)

So, added to the $130 million figure above is the actual relocation $3 million fund which will be much more important to the average business in the Willets Point Iron Triangle. How much on or off the mark is the proposed $3 million relocation fund figure that has been described as insulting low? It has been pointed that, evenly divided, that comes to a mere $12,000 in relocation per business. It is predicted by plan opponents that smaller businesses might get only $9,000. As noted, there is a difference between land owners and renters since renters have a particularly rough go in terms of ever being reimbursed for anything.

The city currently plans to establish a larger fund ($5 million) to cover the effects of “traffic mitigation” in connection with the plan than it plans to establish for relocation. (See: June 30, 2008, Willets Point project faces key test Monday night, by Daniel Massey, Crains New York.)

(For a longer description of current conditions in Willets Pont see: Melting the Iron Triangle: Amid Willets Point 'blight,' pride and vow to fight redevelopment, by Jarrett Murphy, Tuesday, June 6, 2006)



Relocate Where?

If relocation rather than elimination is truly the city’s honest objective, is there a better place for the businesses to go than where they are now? Some would more cruelly shorthand the description to refer to the businesses as “junk yards” rather than describing them as “green collar recycling.” That probably shortchanges their value, but the businesses would likely be rejected as such if and when they try to relocate themselves into many other neighborhoods. Even though the businesses may perform useful functions for society, how many good citizens will embrace them as neighbors? Does it then make sense that having found a neighborhood where they have virtually no neighbors, the city now wants to eject them from them from it? Will they find such a perfect fit again?

Bloomberg Administration Fought to Overcome City Council Opposition; Why?

The City Council was for a long time widely reported to be resistant to approving a plan that involved eminent domain. Whatever tactics of persuasion were used by the Bloomberg administration, the City Council just voted to permit the use of eminent domain to rid the area of these businesses. Without elaborating on what would likely be important details, the New York Times reported that the Bloomberg administration “spent considerable time and money in recent weeks to arrange support for the plan.” (See: Willets Point Project Foes Reach Deal With the City, by Fernanda Santos, November 12, 2008)

Is the city so bursting at the seams in this time of economic downturn that there are no other places in the area to develop and a 60-acre development can’t wait? Does approval mean that the city has all the necessary resources to proceed so that this should take priority over all the other opportunities that might be available? What makes this such a good area to develop that eminent domain should be used to remove the businesses for what might replace them?

City View of Willets Point as Extension of Downtown Flushing Development: Muss Development

The city views the development as an extension of Downtown Flushing, which is on the other side of the remnant of Flushing Creek, now sometimes referred to as the Flushing River. What is left of the waterway is a canal/inlet at the south end of Flushing Bay. It passes under the Van Wyck Expressway, which also separates the Willets Point Iron Triangle from Downtown Flushing.

Development is going on in Downtown Flushing, but nothing on the scale of the large island of development proposed for the Willets Point triangle. Downtown Flushing development doesn’t use eminent domain. It is driven by what is permitted under the current zoning. Most of the development that has occurred has been done by local Korean and Chinese developers. A more ambitious development is being done by Muss Development, which is doing a project for on the edge of the neighborhood for which it will receive brownfield clean-up tax credits. Interestingly, though the Muss project is all the way over on the Downtown Flushing side of the creek, a New York Sun article provides this description of the project: “The development is planned for a site near the No. 7 subway line, and is within walking distance of Shea Stadium and Flushing Meadows-Corona Park.” (See: Developer Plans $600M Queens Project, by Staff Reporter of the Sun, February 10, 2005)

According to the Sun, the Muss “complex, located at the corner of College Point Boulevard and Roosevelt Avenue along an abandoned industrial strip” and will be:
a $600 million mixed-use development on a 14-acre brownfield site in Flushing, it announced yesterday. The project will create 725,000 square feet of retail space, six condominium and rental buildings with 1,000 residential units, and a 55-footwide waterfront esplanade along the Flushing River.
Willets Point a Separate Neighborhood?


The Willets Point development the city is proposing does not really seem like an extension of the Downtown Flushing development that has occurred to date. It may rather have more in common with the as yet uncompleted Muss development. Or it may be viewed as something more separate and apart. The city Economic Development Corporation also prominently described the proposed development as a separate neighborhood “Willets Point is poised to become New York City’s next great neighborhood.” although the city says that this would be “Through an area-wide approach to redevelopment.”

Vision of the “Next Great Neighborhood

The proposed development is supposed to have the “first non-Manhattan convention center ” (talked about as being 125,000 square feet) and a “high quality” hotel (talked about at different times as being 250 rooms or 700 rooms). There are supposed to 5,500 housing units. 500,000 square feet of office space is also being talked about. The development is supposed to contain a new school. The City EDC site speaks of the development as including “open space, parks, and playgrounds.” In respect thereto the Bloomberg administration released information to the press in May of 2007 saying there would be, according to the Times, a two-acre park. From the city’s renderings it appears that the Flushing Creek wetlands around the highways would be preserved. It is also proposed to create a new pedestrian bridge over the creek, connecting it to Flushing. A city rendering shows the pedestrian bridge going underneath the elevated Van Wyck Expressway to connect to the redeveloped area. In time, the area surrounding the Flushing side of the pedestrian bridge is likely to be more developed and the city says it is planning to clean up and revitalize the waterfront in that area. (The pedestrian bridge idea may be on a back burner since newer renderings don’t show it.)


Residential units, 15% for Above-Average Income Families Overcomes Eminent Domain Abuse Objections

Previously it looked as if the issue of eminent domain was going to pose an insurmountable hurdle to the Bloomberg administration’s procurement of City Council approval for the plan. Approval was obtained when a promise was made to set aside additional housing units that are to be considered affordable.

Almost invariably, when low-income units are provided by developers it is done so in conjunction with programs that meet the requirements of federal tax code benefits. The same would be expected here as a matter of course. For federal tax code purposes at least 20% of the units under these programs must be set aside for households with incomes at 50% or less of the local Area Median Income (AMI), adjusted for family size. Such financing is a limited resource, but the math works out that if it is available a developer will opt for it. If the financing is not available, the developer probably won’t proceed at all. Resources to finance units under these programs are scarce though it is likely the city is hoping that the financing may become less scarce with Democrats and an Obama administration in Washington.

The accord that was reached to allow eminent domain was based on an agreement that in addition to the 20% of the units that would normally be required as affordable housing under the federal programs, an additional 15% of the units will be set aside for families who make less than 130 percent of the city’s median income. In other words: families with the above-average incomes that would currently be $99,840 a year for a family four (less for a smaller family and more for a larger one). Is that below the income for which the Flushing market would provide units on its own? That question and whether these additional units would be subsidized are worth thinking about.

We will revisit this City Council compromise in a bit.

Enough Residential Units to Create a Workable Neighborhood?

When they are eventually constructed, the proposed 5,500 housing units should be sufficient in number to comprise a workable neighborhood unto itself. When they are all constructed, the number will be sufficient to support services. An insufficient number of services was a criticism when Roosevelt Island, starting up in the 1970's, had only an initial 2,141 units; also when Battery Park City was just being built. The Battery Park City situation was less problematic in that it was near already existing developments and more connected with the rest of the city in other ways.

Challenges of Building at Willets Point

The proposed Willets Point development is close enough to the LaGuardia Airport flight path so the buildings there will have to be moderate in height rather than hi-rise. The land will be more expensive to build on than typical because piles will have to be driven deep into the soft soil. Low-rise buildings will make it harder to amortize the cost of the site preparation, but unless bedrock is reached the soft soil conditions are another reason not to build hi-rises. Construction for residential use will also entail greater-than-usual expenses to reclaim the land environmentally. There is debate about how much cleanup is necessary. Should we suspect that Muss Development, which is doing nearby brownfield clean up on the other side of the creek, would consider itself on the inside track to clean up this area if it were to bid on the development?

One last thing about the problematic nature of building in the triangle area; it is in a flood plain. According to the EDC site: “Most of Willets Point lies within the 100-year flood plain, necessitating a significant increase in grade across the site before modern infrastructure can be installed.”

EDC’s Stated Reasons for Building New Neighborhood at Willets Point

Why does the Bloomberg Administration see the triangle area as a priority area in which to build? The EDC website observes that the area is close to the #7 train and the Long Island Railroad. That’s true, you can get to it by walking (under elevated infrastructure) the length of about two baseball stadiums.

The EDC site says that there is good highway system access. That is probably a reason the existing car-oriented services and businesses currently thrive there. It is not a good reason to create a dense new urban residential community there. The city is promoting the development as “green” and environmentally oriented; creating a dense new car-reliant community is not.

The EDC site says that the location is “minutes” from the LaGuardia and JFK airports. It is very close to LaGuardia but while it is closer to JFK than some other parts of the city it is not a dependable short trip. Google Maps tells you to plan on 40 minutes if there is traffic. Technically, however, that is still “minutes.”

The EDC site also promotes the site for its connections with Flushing.

An Environmental Reason Debated

It is also being argued that the development should proceed in order to clean up pollution at the site. According to the EDC site:

* Willets Point suffers from widespread petroleum contamination, with additional potential contamination from paints, cleaning solvents, and automotive fluids.

* Environmental hazards are exacerbated by a high water table that spreads pollution throughout the site, endangering adjacent water bodies.
The city continued this theme more accusatorially in public testimony:

Deputy Mayor Robert Lieber and members of the Economic Development Corp. compared the pollution at Willets Point to a state Superfund site in their testimony on Friday, deriding the property owners for years of poor housekeeping while stating their case for a sweeping environmental cleanup of the area.
(See: The Iron Triangle Tracker: Property owners dispute city’s pollution claims after hearing, Posted on October 22, 2008 by Stephen Stirling)

The same Iron Triangle Tracker article covers rebuttals on behalf of the resident businesses:

“No one has ever talked about the Flushing River being contaminated from Willets Point until recently. Flushing River was contaminated for years,” (according to Dan Scully, vice president of Tully Environmental)

* * * *

In a statement, an environmental attorney representing the property owners, Michael Gerrard, said the city is overstating the contamination that exists.

“The only times the government tears down communities because of contamination is when there is a horrible chemical legacy, such as at Love Canal,” Gerrard said. “The key point here is that if Willets Point had that kind of legacy, the city would never want to take title to it because of the liability it would be assuming.”
The businesses in Willets Point pose environmental problems because cars use petroleum products. There may be an extra challenge to a proper environmental handling of things given the limited infrastructure and maybe because the land is so low-lying. One has to wonder, however, whether it will be easier or harder to deal with these businesses in an environmentally friendly and appropriate fashion if they are dispersed over a wide range of locations.

Does Bloomberg Not Know Willets Point Reality?

It is possible that Bloomberg wants to develop by eliminating the existing businesses at Willets Point because he doesn’t actually know what is now there that would be eliminated. Evidence of this is that in a radio interview Bloomberg referred to the Willets Point unknowledgeably as follows:

a haven for "chop shops and deserted warehouses" . . . . "There's no real economic activity there”
(See: The New York Times: Square Feet, A Redevelopment Scuffle in Queens, By Terry Pristin, May 17, 2006.)

“Chop Shop(s)” a Motivating Factor?

The Bloomberg quote mentions “chop shops.” The use of that term may be intentionally disparaging and factor in as an influence for people who want to see the area eliminated. They may believe that area businesses there are illegally carving up stolen cars for car parts. Bolstering this perception is a critically well-received 2007 independent movie, Chop Shop, filmed on location in Willets Point that depicts such illegal activity going on.

The teenage star (12 years old in the film), Alejandro Polanco, actually worked in Willets Point for six months as preparation for the film. He doesn’t agree with the city’s plan for eliminating the district:

"They shouldn't do it," he said, noting that the existing shops might perish if scattered across the city because they rely on a network of customer sharing.

"You're not going to know where to find them," Polanco said. "That's taking business from a lot of people - taking jobs away - just for building big towers for no reason.

"We already got a lot of high-rises in New York."
(See: 'Save Iron Triangle' - 'Chop Shop' star, by Jess Wisloski, April 29, 2008.)

How much illegal activity goes on in Willets Point? Does the rather timely “Chop Shop” reflect a documentary level of truth? It is filmed in a neorealistic style. Not everything about it is realistic. In the film Alejando and his sister take up residence in the area. That would triple the area’s official population since it is supposed to have only one resident.

High Crime or Misdemeanors?

Certainly anyone who has had a car stolen and vandalized will have a strong emotional reaction to the charge that there is a lot of illegal chop shop activity in the area. Before one gets too busy assessing the relative level of crime in a community, it is important to remember that violations of the law come in a variety of flavors and can technically include even jay-walking, together all sorts of other things of various levels of seriousness: chop-shopping stolen cars, undocumented aliens, building code violations and environmental infractions of various degrees. It is hard to imagine that if there is serious illegal activity at Willets Point that the police and inspectors have not zeroed in on it. One would think they would want to resort to a crackdown as an easier instrument than relocation to shut the area down. Also, if there is crime, is the answer to disperse it?

Crime? Out of AKRF’s Environmental Impact Statement’s Mouth

The environmental impact statement for the Willets Point redevlopement plan was prepared by AKRF, Inc., Eng-Wong, Taub & Associates and HDR-LMS. AKRF is notorious for preparing, hired-gun fashion, blight-finding studies and environmental impact statements that congenially support a predetermined pro-development agenda. Their close coordination with those doing development has gotten them involved more then once in legally objectionable conflict-of-interest problems. (See: Friday, August 15, 2008, Was AKRF's work for Ratner a hindrance to hiring by ESDC? No, it was a justification)

We remember that at the September 15, 2008 oral argument for the state lawsuit challenging the Atlantic Yards environmental review hearing, Justice James Catterson expressed judicial skepticism about AKRF and its blight study findings:

“Has AKRF ever studied an area it didn’t find to be blighted?” Catterson asked, drawing muted titters from the audience.
(See: Wednesday, September 17, 2008, In appeal of case challenging AY environmental review, some justices skeptical of state’s blight claim.)

Justice Catterson followed up, explaining his skepticism by saying that he knew a lot about AKRF’s reliable propensity to find blight because he had just written about AKRF and Columbia University. (As referred to above, in both the Columbia University and Atlantic Yards situations AKRF worked for both the private entity and theoretically also for the government, raising all sorts of accountability and conflict-of-interest issues.) (See: Friday, September 19, 2008, Contrivance in the service of creating blight, real blight- Listen again- REAL blight)

one Justice asked ESDC’s attorney whether consultant AKRF has ever studied an area that it didn’t consider blighted. He said he knew a lot about this because he had just written about AKRF and Columbia University. (In both the Columbia University and Atlantic Yards situations AKRF worked for both the private entity and theoretically also for the government, raising all sorts of accountability and conflict of interest issues.)
It is certainly possible to find accounts of crime at Willets Point in the press though sources like the New York Times are not exactly overflowing with them.

Here is the way a description portrays Willets Point crime in the March 30, 2007 environmental impact statement for the Willets Point Development Plan. says:

Today, many automotive repair and service businesses and junkyard operations have continued to add contamination to the area through illegal dumping and poor housekeeping, creating unsafe and unhealthy conditions throughout the District. In 2001 the State Attorney General announced the indictment of 21 junkyards and 35 individuals for violating State environmental laws by dumping motor oil, antifreeze, transmission fluid and other materials onto the ground and into storm drains and Flushing Bay. In addition, some businesses in the area have been linked to organized crime; in the past several years, the New York State Attorney General and the NYPD have issued several indictments for auto theft and racketeering.
It’s true, Eliot Spitzer when Attorney General went after businesses in Willets Point. April 25, 2001 his office issued a press release saying that after a year long investigation those 21 junkyards and 35 individuals, were indicted for breaking state environmental laws by dumping motor oil, antifreeze, transmission fluid and other materials onto the ground and into storm drains as they dismantled cars to be recycled. According to a follow-up press release, one individual was found guilty. Prior to that incident, a 1999 police sting operation reported about in 2000 (Undercover Scrap Operation Leads to Gotti Relative, by Juan Forero, January 26, 2000) resulted in the arrest of Carmine Agnello, the son-in-law of John J. Gotti. Mr. Agnello, owner of a scrap metal shredding company in the Bronx was accused of strong-arm racketeering and extortion tactics to force scrap metal companies in Willets Point to sell scrap to him at below-market prices. The Queens District attorney also asserted that Mr. Agnello ran the Gambino family's auto theft ring.

Most recently, according to the Final Environmental Impact Statement on April 3, 2008, the NYPD seized truckloads of counterfeit sneakers, handbags, and other goods from one of the warehouses.

(Continue to Part II)

1 comment:

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