Tuesday, June 30, 2009

Destroying Coney: By Planning to Shrink Coney City Plays Into Sitt’s Land Speculation Schemes

(The City has a plan to fade Coney Island out of existence. Click to enlarge.)

Under the guise of wanting to “save Coney Island” the city is doing an excellent job of destroying Coney Island. How? The city is has created desolation and increased costs for itself by proclaiming that it wants to shrink the historic Coney Island amusement area down to pee wee proportions. (Those pee wee proportions that will likely spell the death of Coney because they will be unworkable.)

An Absurd and Expensive Situation for the City

An article in yesterday’s Crain’s reminds us what an absurd situation the Bloomberg administration has gotten itself into turning “preservation” of a small portion Coney Island’s amusement acreage into a huge expense, expense that should have been entirely unnecessary. (See: June 28, 2009, Coney Island keeper Thor Equities' Joe Sitt gives city a ride for its money.)
Credulous Crain’s

The Crain’s article focuses on Thor Equities’ Joe Sitt, the land speculator who has been buying up Coney’s amusement acres. The article credulously reports that “Mr. Sitt is locked in a battle with the Bloomberg administration, which plans to develop the depressed area into a thriving year-round amusement district with housing” and says that to that accomplish this the city “needs the 10.5 acres that Mr. Sitt assembled over seven years at a cost of $93 million.” For reference, those acres the city wants are acres that are zoned for amusements which the city, in its plan wants to use for amusements. So what’s happening that causes the main point of the Crain’s article to be that the city has reportedly offered to pay Sitt (a rejected) $105 million just so that the amusement acres will be used, as intended, as zoned, as they should be, as amusement acres?

Good question. What has happened is that five years ago with extraordinary ineptness the city launched a speculative furor for Coney Island’s land that has created the underlying situation where, according to the city, according to Crain’s, Sitt is now demanding “more for the property than what it's worth.”

City Tells the Story of Speculative Furor It Launched

Below are the words of Purnima Kapur, the Director of City Planning's Brooklyn Office, that describe the launching of the speculative furor. She was speaking at at “Which Way Coney Island? A Symposium on Its Future,” at New York University’s Arthur L. Carter Journalism Institute on Wednesday, April 29, 2009. (Emphasis supplied.)

[The] pace of disinvestment and loss of amusements has accelerated really deeply in the last four or five years with speculative land transactions that have gone on.

* * * *

It started about five years ago with the formation of the Coney Island Development Corporation and the mayor’s strategic plan that was issued for Coney Island. Since that time the city and its partners have been engaged in a very intensive outreach at the community level to local stakeholders, with property owners, with amusement operators . . .
Ms. Kapur probably did not intend the above juxtaposition of statements from her presentation, but it is inescapably pertinent to the unnecessary demise towards which the city is impelling Coney’s historic amusement park. (See: Tuesday, May 12, 2009, The City to the Public: “We’ve Got Your Coney Island: If You Want It Back, Better Do Exactly As We Say. . . ”)

One Set of Unbelievable Self-Described Good Motives Does Not Make Another Set Believable

The Crain’s article quotes Mr. Sitt’s self-described good motives respecting Coney: “It's my passion to make Coney Island better.” It then undercuts that with: “Trouble is, many people simply don't believe him.”

The trouble is also this: As Crain’s ought to have recognized, an unbelievable Mr. Sitt does not make for a believable Bloomberg administration.

Though the Bloomberg administration similarly says that it wants to make Coney Island “better,” that it wants to “save” it, we think it is clear that the city, like Sitt, should not be believed. We have written a great deal pointing out the obvious inconsistencies in the city’s positions. For more about this, see the list of links in our previous post about tomorrow’s City Council hearing about Coney (Thursday, June 25, 2009, July 1, Wed, 10 am: City Council Hearing on Coney Island Rezoning.)

Coney’s Hope

Perhaps the one thing that ought to give us the most hope about Coney Island’s future is that Coney is so beloved that no one wants to admit they don’t want to save and improve it, not even those like Sitt and the city, who are currently responsible for so much of the recent destruction befalling Coney. Nobody actually wants to take responsibility for Coney’s destruction.

Primer on Establishing Speculative Value for Land

So, how exactly has the city been working against itself at the bargaining table and driving up the cost of preserving amusement acreage at Coney?

Using Coney’s amusement acres for amusement has incredible value for the city and all its communities. We think of Coney as New York’s seaside version of Central Park. In fact, in recognition of this the city has invested considerably in making Coney readily accessible to all New Yorkers (just as Central Park is) by building subway infrastructure that make it easy to get to. Notwithstanding, that does not mean that the Coney Amusement acres wouldn’t be more valuable to their owners if they were converted to other uses particularly if those other uses, like housing, were heavily subsidized by the government. (We should note that while Coney could thrive in the near term as an amusement area such a proposed conversion would prevent such thriving and would likely take “generations.”)

The possible conversion to such other use is the basis of Sitt’s speculation. It is the basis for the very high sums Sitt is demanding from the city in order for his amusement acres to be restored to the amusement use for which they are currently zoned. Sitt can speculate, but that doesn’t mean that he is entitled either to a zoning change or such high sums- - But the city has played into his hands with its plan to shrink the amusement park.

All else being equal, the value of Coney’s amusement acres should be the value they have for continued amusement use. In fact, recognizing this is critical to the economics of keeping the Coney amusement area alive. As we said, the converse of this, a zoning change, or an increased price is not something Mr. Sitt or any other land speculator is entitled to.

No Entitlement to a Zoning Change: Condemnation vs. Political Probabilities

Repeat: Mr. Sitt is not entitled to a zoning change. In view of that fact is there a speculatively higher value for the land than that of acres being used for amusement? If the city condemned Mr. Sitt’s land (arguing that he was creating blight by not fully utilizing the land the way it was zoned) the value of the land awarded in the condemnation might be higher if the court overseeing the condemnation could be convinced that there was a likelihood that the land might be rezoned for another use. The court wouldn’t award the full value based on this alternative use, only a portion of it based on the degree to which there was an arguable probability that such a zoning would occur.*

(* For instance, in the case of setting values for the proposed Atlantic Yards condemnations, a very significant chance exists that the property being condemned would be upzoned were it not for the way that ESDC is trying to seize all the value of that upzoning for Forest City Ratner’s benefit via its zoning override.)

Similarly, without such a condemnation process to set value, real market value is based on a game of political probabilities as to whether land will be rezoned. Though no one is entitled to a rezoning of their land, everyone is entitled to pursue political process to have that land rezoned. To the extent that one believes that a rezoning is politically probable the market value of the land goes up.

City’s (Repeated) Announcements that Land Will Be Rezoned Resets Equation

By announcing (each respective time) that it was going to shrink Coney Island’s amusement acres, the city reset the expectations and probabilities of rezoning in Sitt’s favor. It was now no longer a question of whether Coney Island amusement acres would be rezoned; it was now just a question of whose amusement acres would be rezoned, Sitt’s or somebody else’s. When the city says that Sitt is demanding too much money for the restoration of his acres to amusement use it is therefore decrying a situation of its own making.

What’s Up in Albany

Right now Sitt has enlisted aid in the New York State senate where there is opposition to city’s plan. That plan cannot be effected unless the senate approves a parkland designation for the few scant acres the city wants to preserve as amusement area. (See: Traffic Jam on Coney: Parking Lot or Parkland? Fate Could Foil Mayor's Plans, by Eliot Brown, June 2, 2009.)

We are not deluding ourselves: The senate opposition to the city plan (led by State Senators Carl Kruger and Diane Savino) even though characterizing the city’s inept plan as “as pie in the sky” is not about preserving Coney Island or assisting in any serious desire Sitt has for a better Coney Island plan. It is only about assisting Sitt in the political game to get a higher speculative price. But the Albany opposition is something that the city and Coney Island Amusement park supporters can wind up benefitting from. The best thing to happen now would be for the city’s plan to die..

Steering Into the Skid

The city has played into Sitt’s hands with its plan to shrink the amusement park. Its best tactic at this point would be to announce that it is not going to shrink the amusement acreage, even to announce that the city plans to grow the amusement acres. Given the changes that have occurred in the economy this is exactly what the city should do.

Monday, June 29, 2009

Is New York Coming or Growing? The Bloomberg Administration Is of Little Mind

(Picture, now a “little altered,” is from the Brooklyn Paper.)

Just what does the Bloomberg administration have on its little mind? Does it think that New York will grow and will it then plan for growth accordingly? Or is the Bloomberg administration planning for a shrinking New York? We think we can perceive some unfortunate consistency in the Bloomberg administration’s inconsistent answers.

For a while now the rhetoric of the Bloomberg administration is that the city will be growing in size to nine million people (from 8.2 million in 2005). (See: Bloomberg Administration Is Developing Land Use Plan to Accommodate Future Populations, by Sam Roberts, November 26, 2006.)

It was proclaimed that land use policies therefore needed to fall in line to support this growth. Here in 2006, from the above Times article is what Daniel L. Doctoroff, the Deputy Mayor for Economic Development (and the head of the mayor's Sustainability Advisory Board) had to say on the subject:

Responding to the mayor's pledge in his State of the City address last January to produce a ''strategic land use plan'' to deal with a city of nine million people, Mr. Doctoroff said: ''We have the capacity through rezoning and underutilized land to go well over that number. But you cannot simply divorce the issue of growth from the infrastructure required to support it.
The Bloomberg administration found the idea that New York is going to grow convenient to promote actions to turn more land over to real estate developers. When the above Doctoroff quote was provided, the Times explained further:

City officials declined to publicly elaborate on their proposals in advance of the advisory board's announcement. But some of its goals were foreshadowed by two of the largest rezoning revisions in city history -- of the Brooklyn waterfront in Greenpoint and Williamsburg and the Far West Side of Manhattan -- both driven by Mr. Doctoroff.

The two major zoning changes, coupled with other development proposals, including the Atlantic Yards project in Brooklyn, were aimed at revitalizing underutilized land for economic development and expanding the city's property tax base.
But if New York is growing and if, as Doctoroff said, “you cannot simply divorce the issue of growth from the infrastructure required to support it” why is the Bloomberg administration busy shrinking the city’s infrastructure? Why specifically is the Bloomberg administration spearheading:

1. A reduction of the MTA’s trainyard capacity below what, only a few weeks ago, the MTA clearly considered was needed to accommodate the flexibility essential for future expansion for a growing city? The MTA Vanderbilt railyard is currently 10 tracks. Since 2005, when the MTA said that it would allow Forest City Ratner to develop over those tracks, the plan was for Forest City Ratner to give back to the MTA a nine-track railyard. Last week, in a turnabout whereby the MTA gave the financially faltering FCR a colossal package of freebies, this went by the wayside. FCR will now only be required to give back an inadequate, much lesser capacity seven-track railyard. BTW: Atlantic Yards is not actually expected to be developed for “decades.” (See: Friday, June 26, 2009, Deciphering Words of a (Campaigning) Bloomberg on Atlantic Yards: “Enough Already” Means, “Bruce, We Have Another $180 Million Plus To Give You! and Wednesday, June 24, 2009, Noticing New York Discloses What MTA Chairman H. Dale Hemmerdinger Has in His Closet)

2. The shrinking (almost certainly out of existence) of the Coney Island amusement area, New York’s Central Park by the sea? The Coney Island amusement area is supremely accessible to the rest of the city, made so by the investment in a substantial subway infrastructure. Why, in a time of growth, should we be shrinking this park out of existence? There is only one apparent reason: Getting rid of the Coney Island amusement area will allow the Bloomberg administration to turn it over to real estate developers for other purposes- But it will probably be “generations” before that development actually occurs. For more of what we have written about this and for information about the City Council hearings scheduled of this Wednesday morning on the proposed shrinkage out of existence of Coney see: Thursday, June 25, 2009, July 1, Wed, 10 am: City Council Hearing on Coney Island Rezoning.
Why shrink New York’s infrastructure? Consistency is the hobgoblin of little minds. The Bloomberg administration actually has such a little mind (and apparently little on its mind)- - It is always consistent about one thing: When it comes to the real estate industry and big developers, the Bloomberg administration is always looking for what it can hand out and give away.

Sunday, June 28, 2009

Naming a Problem: The MTA Gives Ratner the Right to Name Brooklyn Subway Stations “Barclays”

We don’t want to be instantly negative about something that arguably might have some appreciable positives, especially if we only just heard about it. We need time to think. And taking time to think is what we believe the MTA board should have done when it was proposed (upon 48 hours notice to the board) that the board approve sale of the right to name Brooklyn’s interlinking Atlantic Avenue and Pacific Street subway stations to Bruce Ratner’s Forest City Ratner in connection with the Atlantic Yards Nets arena he is hoping to build.

The MTA Board Was Told. . .

This is all the extent of the description supplied to the MTA board in the “Staff Summary” providing information about the transaction:

. . . FRC will also pay a fee of $200,000 per year to have the subway station at Atlantic Avenue/pacific Street include the name “Barclay’s Center.” (Sic)
. . . Not Much- Not Much

Not much. We mean not much information and perhaps not that much money either. The price for a 30-second Super Bowl ad this year is $3 million. Also, in significant contrast, Forest City Ratner sold Barclays the right to name the arena the Barclays Center for $20 million a year for 20 years (totaling $400 million). Although the above description that went to the MTA board doesn’t say so, the information about the subway naming rights deal is that it is also similarly a 20-year contract. In other words, the MTA negotiated a naming rights deal for the subway that is 1/100th the value of the naming rights deal Ratner negotiated for the arena.

Compared to Some Real Money

The first year’s $200,000 to name the subways may seem a paltry trifle, but in 20 years’ time that $200,000 will assuredly be a truly trivial sum to pay for advertising. The price for a Super Bowl ad this year is 11% higher than last year’s (whatever they say about the network television being a fading medium). The price for a 2008 30-second Super Bowl ad year was $2.7 million. The arena would take about two years to build and the notion is that the station names would not change (or payments start?) until 2012. Going back to 1988 we find that the cost of a 30-second Super Bowl ad was only $625,000 to $675,000 (with NBA projecting the 1989 figure at $700,000). Projecting this trend forward, we can estimate that in 2029 the price of a Super Bowl ad would presumably be more than $14 million, at which time the annual payment for naming the subways stations would still be $200,000- 1.4 one-hundredths (or just 1.4%) of that $200,000 amount. . .

. . . Not bad if you are Barclays! 10 million people pass through the stations every year.- By 2029 who knows?

Getting Kinda of A Feeling?

How did the MTA negotiate handing Ratner the right to put the Barclay name on New York’s Brooklyn transit hub subway stations? WNYC reports that the MTA’s Gary Dellaverson, the MTA’’s Chief Financial Officer, explained: “We kinda felt our way into it.” That may be an understatement: Even as the MTA’s board meeting to approve the deal was underway, an MTA staffer was in the hallway outside the meeting on his cell phone trying to find out exactly what the deal was and what the board in the room next door should be told about it. When the board bothered to ask, it was clarified that the right to have the Barclays name on the subway station did not extend to the right to have the Barclay name on the interconnecting Long Island Railroad Station/Terminal. (Could it then still be named something else?) There were obviously a lot of other questions the board should also have been asking.

Boostering and Boasting Doesn’t Make It So

The MTA was promoting its ad-hocing of this questionable deal as if it was some sort of achievement:

The 20-year contract is the first naming-rights deal for the cash-strapped Metropolitan Transportation Authority, which has unsuccessfully tried to find sponsors for other stations around the city.

Board members and staff heralded the arrangement, approved on Wednesday, as a major victory for the chronically underfunded mass transit system.
(See: June 25, 2009, Next stop! Barclays Station,/Print: “Bruce will pay to name subway” by Mike McLaughlin, The Brooklyn Paper.)

Just a Boondoggle’s Party Favor

No Land Grab deftly cut the legs out from silly arguments that this was any sort of achievement. We quote at length:

Metropolitan Transportation Authority Chairman H. Dale Hemmerdinger (who was recently sued by two family members who accuse him of bilking them out of millions of dollars), made a big deal at yesterday's MTA board meeting about the deal to append the name Barclays to the Atlantic Avenue/Pacific Street subway station:

"We’ve been trying to make money off naming rights for quite a while. This is the first time we’ve been successful... It’s a very important point."

It sure is an important point. Because all the MTA had to do to be "successful" in selling naming rights to the station for $4 million over 20 years was to throw in development rights to an eight-acre railyard for $114.5 million less than the MTA's own appraisal, reduce the down payment for said yards by 80%, and extend the payment terms by 22 years at a below-market interest rate.

With that kind of "successful" sale, we can expect the MTA to be coming back to the taxpayers for another of their own massive bailouts very soon.
(See: June 25, 2009, Naming Rights... or Wrongs?)

We have to note that the MTA (and ESDC) are also “heralding” their arena deal itself as if it is some sort of achievement even though the city’s Independent Budget Office has said that it will be a net financial loss for the public and the city’s economy, notwithstanding what a tremendously good deal it is for Forest City Ratner.

The “Present” Presently Valued

In its boosterish accounts, the MTA has attempted to inflate the apparent benefit of the subway deal by describing it as a “$4 million” deal. But obviously the present value of $200,000 paid over 20 years starting in 2012 or afterwards is not $4 million. Previously we have not wanted to overstate the $20 million-per-year figure Ratner is getting from Barclays as a “$400 million” deal. Accordingly we have noted that it should be viewed as having a present value of about $187.3 million. Similarly, the MTA’s new deal on a present value basis would be about $1,873,000, still much less than the price of one 30-second Super Bowl commercial.

Questions: Why Does Ratner Always Get the Right to . . .

There are, of course, those who properly asked why collecting $20 million per year to have Barclays name on the arena was a privilege that was accorded to Ratner since the public was paying to build the arena and it was ostensibly owned by a public authority. There is a convincing argument that the $20 million per annum should be going to the city or a public agency.

Now there is another question: The right to name the subway is being sold to Ratner for $200 K per year but it is arguably worth 100 times more and will presumably be passed on by Ratner to Barclays at a markup whose premium reflects the much greater value. How should the value of this additional giveaway to Ratner be calculated? $187.3 million minus $1.873 million= $185.427 million? Subsequent documentation that may later become public is unlikely to make the amount of Ratner’s markup, ($185.427 million or whatever) entirely clear: Some of the markup’s value is likely to be used to compensate Barclays for the fact that Ratner is no longer building an arena by a name architect or an arena that is considered to be high-quality design.

Ways to Find Value: for Instance, a One-Month Deal for $95,000

There are, of course, ways other than entirely by feel to negotiate such advertising transactions. For instance, there is a service, Standard Rate and Data, that provides a huge amount of information about such things. And, of course, the public can use the MTA’s site to get information about all the opportunities to advertise in transit facilities the MTA has been selling for years.

Alternatively, the MTA could refer back to an MTA plan discussed by the New York Times as recently as 2008 to line lengths of New York City subway tunnels with ads. (See: Advertising: The Train Is Coming. And With It, More Ads, October 16, 2008. According to that article it was envisioned that: “It will probably cost around $95,000 for a full month of ads in a tunnel.” The article talked about the short length of tunnel for the Times Square - Grand Central shuttle service.

This Practically Means. . .

In practical terms, WNYC reports that by selling the right to put the Barlcays name on the station, the MTA “has committed to using to using the name on streets, on signs on maps and on schedules, but they haven’t committed to using the name yet in announcements.” This creates some practical problems. Putting the name on maps and schedule will clutter them. Also, what sort of time lags will there be if the deal terminates? (WNYC reported on how a Boston naming rights deal was simply abandoned by the sponsor.) With stations and maps all labeled Barclays, how long after payments stop is everything put back the way it was and when does the public cease referring to the stations by the Barclays name? For instance, in terms of lag, the New York City subway map still refers to the “World Trade Center,” which is eight years gone.

Singing a Bluesy Jingle?

The idea touched upon by WNYC that subway conductors might be required to announce the Barclays Center is amusing: Perhaps someone has thought of having them sing or play a Barclays jingle when the train comes in?

Got Subway Change?

A lot of what happens as a practical matter depends on Barclays remaining in existence and doing business under the same name. We wrote about this previously:

If this is appropriate the MTA could sell off the entire subway system at $200,000 a year per station. Columbus Circle will now be the Columbus Circle/AOL Time Warner Station. Oops- - No AOL anymore, just Time Warner then. Grand Central could be Grand Central/Pan Am Station. Oops- - No Pan Am anymore, Met Life then. Given all the turmoil in the financial world, will Barclays be around for “20 years”? Maybe so. If they have been around long enough to have been involved in the slave trade, maybe it can be argued they will be around for a few more years.
(See: Tuesday, June 23, 2009, Thoughts on the MTA’s Finance Committee Meeting Wherein Atlantic Yards Was Considered as an “Information Item.”)

Prior Barclays Name Changes: Not to Be Too Slavish

We probably should have pointed out that although Barclays has, in fact, been around for a while, actual names change: The slave trade operations where not under the name of Barclays. Here from the Brooklyn Paper:

The Restitution Study Group, headed by Deadria Farmer-Paellmann, a former Brooklynite, alleges that Heywoods Bank — which is believed to have merged with Martins Bank in the 1800s, which, in turn merged with Barclays Bank in 1969 — took part in 125 slave-trading voyages, enslaving more than 38,000 Africans, more than 6,000 of whom died en route to the Americas.
(See: April 7, 2007, Barclays linked to slavery — again, by Dana Rubinstein, The Brooklyn Paper.)

Defanged and Fluffy: A Sign of the Times

After our story contemplating the renaming of the Columbus Circle and other major stations, the New York Times wrote something similar, a sort of defanged, fluffed-up version. From the Times story:

And if a company can pay to get its name on any station, a New Yorker might wonder what’s next: Coca-Cola Presents 59th Street-Columbus Circle?

The answer is maybe. Once upon a time, geographic relevance determined a station’s name, but now, the authority says it is open to any naming agreements that can raise revenue for its transit system, including ones not directly tied to location.

* * * *

“It’s not like Taco Bell saying it wants Grand Army Plaza or something like that,” said John H. Banks III, a board member since 2004.

. . . . “To rename the 59th and Lex stop the McDonald’s stop — it ain’t going to work. I don’t think it will stick.”

* * * *

A few New York businesses contacted on Tuesday said they were not interested in a piece of the underground. Zabar’s, the Upper West Side food emporium, said it was not interested in the 79th Street station. Macy’s said a sponsorship deal at 34th Street was not in the cards.
(See: M.T.A. Sells Naming Rights to Subway Station, by Michael M. Grynbaum, June 23, 2009.)

Depends on Whether There Will Be an Arena: Footnoting the “Conclusory”

Both the Times article and WNYC report made the same mistake of stating in “conclusory” terms that the arena will soon be built.* As noted, the naming deal kicks in only if the arena is built. (See: Wednesday, June 24, 2009, The Times gets conclusory: "There will... soon be a Barclays Center" and Friday, June 26, 2009, WNYC, following the Times, gets conclusory: "basketball arena... will soon be built".)

(* In terms of the likelihood of the arena being built we think that Develop Don’t Destroy Brooklyn made worthwhile points in assessing that essentially there has not been an advance of the project but a rewinding of the clock back to circa 2005-2006 with some additional difficulties for the developer slathered on top. Lawsuits are still outstanding and there are also a number additional factors that make it a more uphill battle for Ratner.

Initial approvals for a redesigned project have just been issued, the project is substantially worse than it ever was before, the process has been even worse, opening the public agencies up for lawsuits on multiple grounds that didn't exist before, there has been a political shift pretty much across the board (including those running for various pertinent offices) excluding only Bloomberg, Paterson and Markowitz, the tax code is now explicit that the arena financing is NOT permitted except for a grandfathering of a previously permitted loophole that will close 12/31/’09, the credit markets are rather unreceptive, with especially good reason to be vis a vis Ratner whose stock has gone down to zero and whose debt rating is entirely speculative, there is a scandal on the Yankee Stadium bonds’ underlying real property assessment that may blow up further causing those bonds to be declared taxable which would also make the arena bonds almost impossible to issue in this time frame.

And public hearings are coming. Hearings which the New York Times, WNYC and the rest of the media will be covering.)

NBC New York did a good job of putting the Times account in perspective via the included comments of Norman Oder. (See: MTA Sells Subway Station Names, Sells Out Public: Agency expected to vote on Atlantic Yards project today, by Jennifer Millman, Wed, Jun 24, 2009.)

(Image above from NBC report. Click to enlarge.)

A Bigger Story: MTA’s Stewardship of Public Assets

This transit advertising story is actually a much bigger story and does not deserve to be treated as lightly as the Times did. To be fair, the Times article briefly acknowledged that the MTA’s stewardship is an issue with the following (emphasis supplied):

“It’s always a question of balancing our need for revenue and our stewardship of public space,” said Jeremy Soffin, a spokesman for the agency. Advertising may make the most sense for a company associated with a station, he said, “but we’re not closing anything out.”
The Times covered this issue of stewardship better in its (earlier mentioned) 2008 article about putting advertising in the subway tunnels. To wit:

“The subways are not a wholly noncommercial site already,” said Robert Weissman, managing director of Commercial Alert, a nonprofit advocacy group in Washington. “But there’s a big difference between signage and traditional billboards, and the new digital media and turnstile wraps and other innovations.”

Mr. Weissman added, “It just contributes to the overwhelming assault on people and their everyday lives that makes it increasingly challenging to escape commercial messaging.”
The Joy of Advertising

We are not, per se, against advertising. We support the sensory onslaught of advertising in Times Square for the joy of its pure garish absurdity. It is something the Municipal Art Society had to fight the city administration to achieve. But the advertising of Times Square, like its unparalleled level of jostling density, can be enjoyed because it is something that can be walked away from and left behind.

In other contexts, groups like the Municipal Art Society have worked to constrain, for instance, the clutter of “nasty” newsracks taking over the new York’s city streets or “Billboards Gone Wild.” It isn’t really that long ago, only the days of Ladybird Johnson, that the public consensus was to pass a law preventing the advertising clutter of billboards on our the national highways.

100 Years Plus of MAS “Stolidtude”

The Municipal Art Society’s efforts to curtail advertising clutter specifically in the subways go back to the very beginning of the subways in the early 1900s: The first New York subway line opened in 1904. When ads starting springing up obscuring the terra cotta subway stations and their incorporated art, the Municipal Art Society objected on the grounds that under the Rapid Transit Law the subway lines had been turned over to the companies operating them as a “public thoroughfare.” In Shaping the City: New York and the Municipal Art Society by Gregory F. Gilmartin we find the following:

“Legally the subway is the highway of the city,” explained John Martin, the chairman of MAS’s Committee on Advertising Signs, “and it is no more lawful to put advertising signs in it than it would to place frames along the curb of Broadway and fill them with posters. Doubtless a large revue might be got if the gutters were so adorned; but . . . the law forbids such a misuse of the streets.”
Good Governance Reactions? No Chance!

With the naming rights deal being sprung even on the MTA’s own board with only 48 hours of notice, groups like the Municipal Art Society were certainly denied sufficient time to weigh in on the issue the station naming rights. We wonder who did. For instance, was the ($185.427 million) subway naming rights for Ratner simply tacked onto the approvals going to the MTA board after it was determined that MTA members would be directed to vote for it, or did Mayor Bloomberg and Governor Paterson actually know this was part of the deal when the MTA members were getting their direction to vote for it?

Not Just Aesthetics; An Interference With Mass Transit Functions

Excessive advertising clutter in the subways is not only a matter of aesthetics; it is also a question, going right back to MAS’s involvement with the subways in the early 1900s, of how the subway functions. Again, from Shaping the City:

Orr [President Orr of the rapid Transit Commission] admitted that so many signs had been installed that, in the ensuing clutter passengers were having great difficulty locating the terra-cotta and mosaic plaques that announced the stations.

Whee! Did It Before, Can Do It Again

Maybe some things never change. And we still have advertisements in the subway. In 1976, in the process of writing a paper in Urban Planning school for Sigurd Grava, our research turned up an interesting little scandal. A central premise of our paper was that proper mass transit information was critical to proper and full utilization of the transit system. When looking at the paucity of subway maps on display in the subway system we discovered that the Transit Authority did not have the ability to add additional maps on the walls of the stations because they had sold all the wall space to a separate independent company that in turn, resold all the space for the posting of advertising. If the public officials running the subway system wanted more maps on the walls they would have been required to buy the space back for that purpose. We remember that the public officials and the company seemed rather defensive of this arrangement.

Similarly, on buses, especially the buses that existed back in 1976, the best information system for finding your way, looking out the windows at the street signs, was impeded by advertising. Advertising placards hung low in the corners of the buses: Any reasonably tall individual who was standing while riding the buses had their view of most of the street blocked by the advertising because of the way the buses were designed, putting low-placed advertising placards exactly where windows would have been helpful.

Mapping a Problem

The renaming of the subways stations with the name “Barclays” may not itself create an insurmountable amount of clutter that interferes with the public finding its way at the station but the requirement that the name be put on the subway map is a problem.
“Yankee Stadium” is on the current subway map. “Madison Square Garden”and a lot of other key sites are not. Even Ratner’s “MetroTech” which has its name on a station does not show up on the map. Designing a workable subway map is an exercise in critical economy. There is so little space available on the map and it is essential to communicate the most vital information without allowing the clutter of too much information to blot out those essentials. We know this because we were communicating and conferring with one of the designers of the current subway map as it was being designed. The map is a phenomenal exercise in the careful selection of what is left out and what is put in. The idea that the designer’s right to come up with the best way to present information should be contracted away (for a score of years) for a trivial amount of advertising dollars is preposterous.

“Yankee Stadium” and the “World Trade Center” which are both on the current map are on some of the map’s less cluttered `real estate.’ The Barclays Center would be in one of the most cluttered sections, a hub, with a tight confluence of line where a lot of other things are going on. There are also a lot of things going on there in real life. For instance, the Brooklyn Academy of Music shares the same location. Does putting the Barclay Center on the map rate to the exclusion of citing the that the location is BAM’s? In fact, was BAM offered a chance to bid to have its name on the stations? If not, shouldn’t it have been given an equal shot at such cheap advertising?
Getting with the Program?
The MTA speaks of the sale of this right to Ratner as the beginning of a program. We can just imagine the confusion in trying to find your way when all the important subway stations in the system are overlaid with corporate brand names shifting faster than those in a drug store toothpaste or shampoo aisle. We are not talking about whether anyone remembers Bucky Beaver’s Ipana here: What if the 59th and 5th N, R W stop was named the General Motors Building?

Remember “Manufacturers Hanover Plaza”? Manufacturers Hanover merged with Chemical Bank. The resulting Chemical Bank then acquired Chase bank. You can still find One Chase Manhattan Plaza. It has been around long enough to be landmarked though, given the acquisition by the bank could easily now be called “Chemical.” Where are Chase’s headquarters now and what about its threats to relocate?

Headaches of Confusion When Information Systems Are Toyed With

The New York Times wrote in 1988 about the confusion caused because of how “All over Manhattan, buildings are wandering around in a state of address migration.” (See: How Builders Invent Vanity Addresses, by Richard D. Lyons, Sunday, May 22, 1988.) The Times article notes:

. . while some developers see profit in these location mutations, they are giving headaches to other groups, such as taxi drivers and mailmen.
After documenting this with comments from Steven Brauch, the head of the Taxi Driver Institute at La Guardia Community College, the article goes on:

Such permutations were viewed more seriously, however, by John M. Nolan, who as postmaster of the New York City Division of the United States Postal Service is responsible for mail delivery in Manhattan and the Bronx. ''These changes have been going on for a long time,'' said Mr. Nolan, ''and are becoming a big problem for us because they lead to misunderstanding and duplication.''

He said location mutation both slowed down mail delivery and drove up costs for the Postal Service, and thus ultimately the public.
As Marla G. Simpson, director of land-use planning for the Manhattan Borough President in 1990, said about the problems (that are still being complained about):

''We are concerned about out-of-sequence and vanity addresses. They're really proliferating. It's hard even for old-timers - but particularly for newcomers - to find their way around town.''
Scandalously Named . .

If we are going to rename parts of the city in order corporately brand them, at least it would be a good idea not to give them names that invoke recent scandals. Citibank is one of the teetering financial institutions that, quite likely to go under, was recently rescued by the Federal Government. At the same time, the New Mets Stadium was opening, named after that bailed-out bank: Citi Field. As pointed out by Brian Lehrer on the New York Times web site:

. . . in the case of New York, imagine the real estate battles à la Atlantic Yards, the pollution, and the additional public subsidies . . . . Meanwhile, the name Citi Field is fast becoming a joke. Shall we rename it Taxpayer Field? Federal Reserve Park? Cover the infield with the Henry Paulson TARP?
Prompted by the federal bailout and the public’s hostility to the way that stadium had been financed with excessive public subsidies, suggestions were being made all over the place that Citi Field should be renamed. (See: December 4, 2008, Citi Field by Any Other Name, by George Vecsey, December 5, 2008, Citi Field by Any Other Name, Part II, by Andrew Das, December 5, 2008, Answers From Brian Lehrer of WNYC, Part 3, by The New York Times, The Brian Lehrer Show, December 05, 2008, Bailout Stadium, Friday, December 05, 2008, and Mon Nov 24, 2008, So what should we, the American taxpayers, rename Citi Field? By 'Duk.)

The huge preponderance of suggestions (138 from Brian Lehrer listeners alone) for the renaming of the stadium reflect the public’s anger: “Debits Field,” “Field of Nightmares,” “Field of Schemes,” “Bailout Ballpark.” “The Field That Ruthless Built (reserved for the Yankees new stadium)” “Shea-m (Shame) Stadium,” our own “Shady Stadium” suggestion, or taking a cue from Bill Maher “SITTY Field with the H.”

Brand Tending: When Less Is More

A story last week on NPR’s Marketplace about Wimbledon mentioned the new inauspiciously named Mets Citi Field and suggested that corporate sponsorship pollution has gotten entirely out of hand. It also suggested that there is value, even financial value, to restraint. (The short piece is so good and pertinent we must apologize for quoting it at unusual length. Emphasis supplied.):

JON WERTHEIM: Last month I attended a New York Mets game at Citi Field; Citi being the TARP-assisted bank that still finds $20 million a year to slather its name on a baseball stadium. The outfield walls are adorned with signs for everything from Verizon to Pepsi. I counted eight logos on the scoreboard alone. My ticket doubled as a coupon for Subway sandwiches. When it comes to sponsorship, the Mets still trail their crosstown rivals, the Yankees. At the new Yankee Stadium, where the Mohegan Sun Sports bar blocks views from the cheap seats, even the home runs are brought to you by Geico.

But at Wimbledon? The only logos there are tiny, tasteful representations for Rolex, the scoreboard provider, IBM, stats provider, Slazenger, the ball provider, and Robinson's barley water, the provider of barley water. And while television pays a premium for weekend broadcast rights, Wimbledon not only starts on a Monday, but schedules no play for the middle Sunday so they don't disturb the neighborhood on the holiest day of the week.

Why does Wimbledon leave so much money on the table, easily tens of millions a year, when other sporting properties do everything short of look behind bleachers for extra change to boost revenue? When I asked a tournament official, he laughed gently and said, "While there are plenty of offers for sponsorship, if the tournament hung banners behind the baseline or sold naming rights to center court, Wimbledon wouldn't be Wimbledon, would it?"

Yes, there's money to be made from having a business sponsor your mascot or from carving out luxury suites. But there's also equity in tradition and dignity. Wimbledon "doesn't do costings" -- that is, make its financials available to gauche journalists -- but profits from 2008 exceeded $50 million. This suggests that protecting the brand, and keeping "Wimbledon, Wimbledon," has plenty of value as well. In short, a sporting event's soul is worth something, too.

It sure would be nice if more franchises adopted this philosophy. Even if meant that home runs were to brought us by the actual batter that hit them; not by an insurance company.
(See: Monday, June 22, 2009, Wimbledon aces sponsorship game.)

First among Non-Equals in an Advertising Arms Race?

WNYC’s recent story that we mentioned at the beginning of this post also reported that the naming rights advertising arms race is not likely to be productive for the advertisers either, putting them in a position where they are simply playing defense to keep pace with other naming rights deals. In this particular context, that of course presumes that the MTA is about to sell off the naming of the rest of the city subway stations. If it isn’t, it just gave Forest City Ratner a very special benefit.

Recommendation: MTA Ought to Have Comprehensive Guidelines and Take Time To Think

We think that before the MTA starts selling naming rights for subway stations across the city it has some really serious thinking to do about its stewardship of the public realm. If it is to be done (and we don’t think the negatives can be underestimated), it should be done only pursuant to a carefully thought-out set of comprehensive guidelines. There should be time for groups like the Municipal Art Society, which has been concerned with such issues for more than 100 years, to weigh in.

Carelessness or Bloombergian Proclivity?

We don’t see that this thoughtfulness and comprehensive approach is what actually happened. Instead, we saw what looked like a slaphappy process whereby a very valuable and substantial MTA asset was handed out to a politically favored developer for a fraction of its worth and without regard to the impact on the public. Was this pure carelessness or another example of the extreme predilection of the Bloomberg administration to sell as much of New York’s public realm as conceivably possible to real estate developers for the merest pittance?

Addendum, Tomorrow’s New York Times Editorial: Just as we posted this article it came to our attention that tomorrow’s New York Times contains an editorial, Where Geography Matters, June 28, 2009, that opposes the sale to Ratner of the right to name the subways. We are actually very surprised: This is the first time the editorial page has opposed the slightest thing about the Atlantic Yards deal though so much had been highly objectionable and worthy of more than a few editorials. But the Times and Ratner have had a business relationship.

The editorial, more serious and sensible that the earlier Times story we wrote about above, makes some key points central to what we have written here:

When you get off the train at a subway station, you want to know where you are, not who your sponsor is. Names aren’t as easily changed as all that, especially when they correspond — as the names of subway stations do — to the actual geography of the city.

The names of subway stations are beautifully utilitarian just as they are, shifting only as rapidly as the streets above them shift. The names of their sponsors are likely to shift with the economic climate . . .
It starts off with what we consider to be a mistake when it unskeptically appraises the $200,000 annual sum Ratner will pay for a 20-year period thus:

We know that is a goodly sum and times are very tough for the M.T.A.
“A goodly sum?” We believe that if the MTA were truly behaving like an agency that was cash strapped it would have negotiated a far higher sum, one that should probably escalate each year.

No matter. Congratulations to the New York Times for a small step in the right direction. We can however add this editorial to the list of New York Times editorials that ineffectually try to rein the mayor in after this same Times editorial page unleashed the mayor by endorsing his plan to overturn term limits. (See: Saturday, November 15, 2008, The Mayor, The Times’ Timing, and a Proper Ordering.)

Friday, June 26, 2009

Deciphering Words of a (Campaigning) Bloomberg on Atlantic Yards: “Enough Already” Means, “Bruce, We Have Another $180 Million Plus To Give You!

(Image from Brooklyn Paper story. Click to enlarge)

It says a lot about the unpopularity of Atlantic Yards that, even though Bloomberg has a seeming lock on a third term as mayor (given his extraordinary ability to spend on his campaign, mobilizing perhaps a half billion toward that end), Bloomberg still deems it politically prudent to disguise and downplay his support for Atlantic Yards.

Ergo, the mayor has basically been dishonest. Case in point? We offer to decipher Mr. Bloomberg’s words. Just weeks ago Bloomberg told the press it was time to turn off the spigot and that no additional public funds should be poured into Forest City Ratner’s Atlantic Yards. What did Bloomberg really mean? He meant that he was about to ram through a deal to give his friend Bruce Ratner more than another $180 million out of the public till.

On Wednesday, May 20th the mayor reportedly “dashed Ratner’s hopes for more” money than the “$230 million for infrastructure and land-acquisition costs” the city is putting up for the project. (See: May 21, 2009, Bloomy to Bruce: Enough already, by Mike McLaughlin, The Brooklyn Paper.) This is actually, a typical understatement of the acknowledged cost to the public of the proposed Atlantic Yards. Its true total cost needs to be calculated in terms of billions.
About how there should be no more public spending, the paper goes on to quote the mayor as follows:

“We’ve done everything,” he said in response to a reporter’s question at his daily availability on Wednesday. “We’re going to have a tough time balancing our budget.”

The mayor did add that the city needs the project, but said, “We’re not putting money in. We’re going to invest our money in better schools and in safer streets and in better parks and everything else.”
That was May 20th. On May 29th it was revealed that a deal was in the works to give millions more, what turns out to be more than $180 million more, to Ratner. That day at hearings on the Atlantic Yards held by State Senator Bill Perkins it was disclosed that there was a deal proposed for substantial additional giveaways to Ratner. Seth Pinsky, president of the New York City Economic Development Corporation (who works for Bloomberg) participated in presenting the parameters of the package of handouts to Ratner and it was announced then that the MTA’s board would be addressing the handouts at its June 24, 2009 meeting. Indeed, that meeting where the MTA, in fact, did approve the handouts occured this past Wednesday, just as then disclosed.

Consistent with what was indicated on May 29th, the MTA at that Wednesday meeting approved the more than $180 million in giveaways for Ratner (without any corresponding givebacks, quid pro quos or return obligations from Ratner. In fact, the MTA went so far as to relieve Ratner of obligations to build anything other than the arena and extended to Ratner a low-cost, very long-term option on developing the rest of- the bulk of- the site. That is a blight-inducing (not blight-preventing) decision on the MTA’s part.

At the MTA board meeting this week, Mark Page, director of the city Office of Management, and Budget, a mayoral appointee to board working for Bloomberg, did a lot of the heavy lifting to justify the MTA’s approval of the costly sweeteners for Ratner.

Mr. Page is in charge of balancing the budget for the city. As quoted above, the mayor had said no more money was to go to Ratner because, "We're going to have a tough time balancing our budget." Does it somehow make it OK that the $180 million plus in additional funds is going to Ratner from the MTA rather than out of the city’s own coffers? That would be to presume that the city, state and MTA budgets are all separate, which they are not. Or might presume that the MTA and state budgets are balanced, which they are not. . .

. . . The MTA board was dealing with another (also contentious) matter this week, which was indicative of just how problematic the MTA’s and the state’s inability to balance their budgets has become. The MTA is having to issue RANs or “Revenue Anticipation Notes,” short-term obligations to provide funds missing from its budget. Those notes will be issued at an extraordinary cost to the MTA, a $4-5 million state bond fee, underwriting and other substantial transaction costs, just because the MTA can’t balance its budget. And one reason the MTA can’t balance its budget is that the state can’t pay funds to the MTA which the state is supposed to and which the MTA is awaiting. That is because the state can’t balance its budget.

So you see, these things are all interrelated: There is no free lunch when it comes to picking the pocket of public agencies. And here is one more thing we offer you as interrelated: When Bloomberg said `enough already, we are in hard economic times and there should be no more money given to Bruce Ratner,’ what he really meant was that he had a deal in the works to give Mr. Ratner a huge stack of additional giveaways but that he didn’t want the public to know he was giving an even bigger pile of money to a boondoggle project the public doesn’t like.

Thursday, June 25, 2009

July 1, Wed, 10 am: City Council Hearing on Coney Island Rezoning

(The City has a plan to fade Coney Island out of existence. Click to enlarge.)

Just up on Amusing the Zillion: There will be City Council hearing on the proposed shrinking of Coney Island next Wednesday. It’s been confirmed by “staffers in both Councilmember Avella’s and Katz’s offices.” Comments Amusing the Zillion:

. . . . the wording on the City Council website is incredibly opaque. It’s as if the powers that be would like to keep the public hearing an insider’s secret so that fewer people will show up. This calendar listing must have gone up today [June 24, 2009], because when I looked last night nothing was listed yet for July 1.
Sort of like the way that $180 million+ of additional one-way giveaways for Forest City Ratner (absolutely no quid pro quo give-backs by Ratner) were just approved by ESDC and the MTA with less than 48 hours prior disclosure about what the new terms were.

The Bloombergian machine (assisted on Atlantic Yards by the increasingly confused and foundering Governor Paterson) is certainly revved up to shove things down the public’s throat. Recently when writing about the machinations that pushed through the rigged Dock Street deal we put together a short list of just some of the things that were in the offing concerning Bloomberg’s sell-offs of the public realm. To wit, the now already outdated list we provided just weeks ago:

In the next couple of weeks the city will be making major decisions ranging from:

1. Selling off a portion of the Greenwich Village Historic District (to subsidize St. Vincent’s)- Tuesday at the Landmark’s Preservation Commission.

2. Selling off most of the Coney Island amusement district- City Planning Commission- June 17th. (A Don't Shrink Coney! Rally will be held in the City Hall Steps Wednesday June 10, 1 p.m.- Show up 12:30 p.m. to allow time to go through security.- A parade will follw.)

3. The City Economic Development Corporation has announced condemnation proceedings against Willets Point business and property owners while Article 78 challenge is still pending in court. (This is from a media advisory from Councilman Tony Avella.) EDC has also decided to do this before negotiating with property owners and after telling many of them that negotiations will not start for more than a year.- There will be a press conference and rally in opposition Monday, June 8th at 1:30pm at the Shea Gas Station 127-48 Northern Blvd, Willets Point, Queens.

4. Giving additional substantial additional benefits to Forest City Ratner for the degenerating Atlantic Yards, including giving it more of the MTA’s assets without a proper quid pro quo.- June 24 at both the MTA and the ESDC in synchronized meetings. (Does that sound like the fix is in?)- There will be a Community meeting on Atlantic Yards, June 9- 7 PM at Lafayette Avenue Church. 85 South Oxford Street, Ft. Greene

5. Sacrificing the iconocism of the Brooklyn Bridge for Dock Street- Next Wednesday, June 10th at the City Council.
(See: Sunday, June 7, 2009, A Lambda Night: City Political Candidates and Development (Focusing on Atlantic Yards and Dock Street).)

We figure it is meant to be too much to keep up with.

Enjoy the summer. The Bloomberg administration no doubt hopes the public will be spending its time on vacation or at the movies seeing action film summer blockbusters. We suggest that next Wednesday, rather than going to the beach, everyone show up to save that great seaside amusement community, historic Coney Island.

Five Noticing New York Posts As Background

Here are five recent Noticing New York Posts (which will in turn link to more) about how the City’s plan for Coney makes no sense if you are looking for inspiration for what you might want to say at the hearing:

Tuesday, May 12, 2009, The City to the Public: “We’ve Got Your Coney Island: If You Want It Back, Better Do Exactly As We Say. . ”

Saturday, May 16, 2009, City Is Rezoning So Coney Island’s Lower-Income Residents Will Have Place to Buy Back-to-School Shoes, Clothing and Stationery? Right. Sure Thing!

Tuesday, May 19, 2009, City Officials in Their Own Words on “Creating” a Coney Island Amusement Area: We Will Do Again What Hasn’t Worked Before

Tuesday, May 26, 2009, Who Took My 27 Acres? City Officials Confuse the Dialogue

Thursday, May 28, 2009, A Second, But Not Seconding, Opinion: A Stolerian Eyebrow Raised, Real Estate Professionals Say Coney Island Development Will Take “Generations”

Wednesday, June 24, 2009

Noticing New York Discloses What MTA Chairman H. Dale Hemmerdinger Has in His Closet

(Click on image to enlarge)

(This post has been updated as of June 25, 2009 at 12:30 P.M.)

Yesterday we promised to disclose today what MTA Chairman H. Dale Hemmerdinger has in his closet and today we will do so. It may have seemed a little bit personal, which is exactly what we intended. When we made our promise we wanted to remind the MTA board members who were about to vote today that the exercise of their fiduciary duty in their role as members of the MTA board is not something that can be compartmentalized and separated from personal honor and integrity.

(Since we posted this article yesterday, Atlantic Yards Report posted a comprehensive account of the MTA board meeting: Thursday, June 25, 2009, MTA approves deal 10-2 despite warnings from Brennan, Straphangers, RPA; DDDB offer disdained; see video of testimony and board justifications. References in this post to that more recent Atlantic Yards Report post are updates.)

Resplendently Not So Resplendent

We have no doubt that all the evidence is resplendently stark that the bailout for Forest City Ratner approved* by the MTA board was a wired deal. We think that you would have to be a pretty dim bulb for that not to be clearly apparent. As such, we believe that members of the MTA board voting affirmatively today for all the additional giveaways to Forest City Ratner (the dim bulbs among them excluded) violated their fiduciary duty. This was pointed out by many of the public addressing the board before its vote today, including Assemblyman Jim Brennan, who spoke first and reminded the MTA members that they were lowering the price for the sale of the MTA property without first obtaining an appraisal.

(* We were among those commenting- twice- on the New York Times article linked to.)

MTA Approved More That $180 Million in Giveaways For Ratner (Including a Low-cost Very Long-term Option!)

The price the MTA is requiring Forest City Ratner to pay for the property it happens to want right now for the arena was lowered by more than $180 million. Ratner will not have to provide the greater capacity railyard the MTA wanted and until just weeks ago. That extra capacity is important for flexibility as the city grows. The new deal permanently precludes such flexibility for the MTA to expand when the city grows and, as one board member pointed out, the alterative of buying more land later in a growing city will be a highly expensive proposition. The MTA is also now going to forego another $80 million (hence the previously mentioned $180 million figure): It will only charge Forest City Ratner for the land Ratner presently wants for its immediate goal, which is the arena. The MTA is, in fact, charging a proportionately diminished amount at that. With respect to the rest of the property, the MTA is simply giving Forest City Ratner a low-cost very long-term option to continue its monopoly on the potential development of a big hunk of some really good Brooklyn real estate. Though this will forestall alternative development by others and contribute to blight, Forest City Ratner is not really obligated to do anything with the option it may never use. (Forest City Ratner being financially weak, there is the possibility it will simply go under. Unless bailed out yet again?)

The above described sweeteners do not end the list of what the MTA members approved for Ratner today.

No Other Alterative Developers?

Not only did the MTA provide Forest City Ratner with these freebies (there was no corresponding quid pro quo where Ratner agreed to give something back in exchange) without getting the appraisal to which Assemblyman Brennan referred (or planning ever to do so in the future), the MTA did so without testing the market for alternative developers interested in the site. In fact, when today Develop Don’t Destroy Brooklyn actually offered to pay the $120 million for the MTA property (vs. the Ratner $20 million and lesser capacity railyard proposal) the board did not even mention or discuss the DDDB offer before it voted.

Would alternative developers be interested in paying more for the MTA railyard property than Forest City Ratner? The MTA would like to say that such would not be the case. But they never put the supposition to the test and approached no one else. ESDC and the MTA are also promoting certain expedient fictions (like the idea that Atlantic Yards will be built within ten years rather than multiple decades) in order to avoid legal problems. The idea that there would not be any other interested alternative developers if the MTA ever inquired is one of those fictions important for the board’s breach of fiduciary duty not to be more blatantly obvious.

Would alternative developers (other than DDDB) be interested in paying more for the MTA railyard property than Forest City Ratner? We strongly believe such eager developers are actually out there champing at the bit. This we believe is a bigger story we will have to return to at another time.

Chairman Hemmerdinger Unchairs to Leave the Room

The Atlantic Yards Report account of the meeting includes the following description of the Chairman Hemmerdinger/board reaction to the DDDB offer presented by Mr. Goldstein:

MTA Chairman Dale Hemmerdinger had a sour look on his face. No one on the board seemed to looking directly at Goldstein.
In very short order after Mr. Goldstein spoke Chairman Hemmerdinger left the room leaving the chairing of the meeting to another board member. Presumably, Chairman Hemmerdinger left to make a call to whomever was coordinating and orchestrating for the governor (or mayor). The moment was reminiscent of one that occurred on Monday at the MTA Finance Committee meeting when (at 1:20 P.M.), just after the Atlantic Yards portion of the meeting, Chairman Hemmerdinger Chairman Hemmerdinger and Gary Dellaverson, the MTA’’s Chief Financial Officer (who “negotiated” the Ratner deal and presented it at the meeting arose on tandem and jointly left the room while meeting was still in progress. On Monday, Chairman Hemmerdinger returned after about 10 minutes and Mr. Dellaverson did not. Chairman Hemmerdinger subsequently returned for the rest of the Wednesday meeting as well.

Atlantic Yards Report noted that how when one board member spoke against the deal in the meeting “the mustachioed Gary Dellaverson, the MTA’s Chief Financial Officer, looks tense” in the YouTube video supplied on the AYR site. Chairman Hemmerdinger began the meeting directing the MTA members as follows: “Look Comfortable. Cameras are on.”

Def Jam

When Candace Carponter, Counsel for DDDB, addressed the MTA members today (before the DDB offer or the vote) she offered them this definition of fiduciary duty:

"Fiduciary relationships have often been described as 'special relationships,' for good reason. Generally, '[a] fiduciary relationship is a situation where one person reposes special trust in another or where a special duty exists on the part of one person to protect the interests of another.'"
One non-voting member of the MTA (Norman Brown) said that he found it patronizing to have to be told exactly how fiduciary duty is defined though this is something that even attorneys will look up when they intend to carefully advise a client.

Hemmerdinger Goes Off Track To Suggest Approving The Ratner Giveaways for the Wrong Reason (One Inconsistent With MTA’s Fiduciary Duty)

Atlantic Yards Report’s account makes an interesting point on how Hemmerdinger, apparently at a loss for good reasons to recommend approval of the giveaways wound up suggesting that they be approved for reason inconsistent with the ground upon which the MTA needed to base its actions and for reasons which were probably not even supported anywhere in the record:

“ . . . . no deal is ever perfect,” Hemmerdinger said. “You get what you can when you can. And I think, in this economy, jobs and an arena in Brooklyn is a public good.”

In essence, his argument had gone off the rails, the MTA was supposed to vote only in its own interests.

(MTA Chairman H. Dale Hemmerdinger)

Hemmerdinger’s Closet: A Tie

We wrote yesterday about how we do not believe the politically colored events of today can be separated from other things personal and professional. What does Chairman Hemmerdinger have in his closet? Chairman Hemmerdinger is a human being much like ourselves. It so happens that he owns one of our favorite neckties (see the image above). On Monday, when were we were at the MTA waiting to make our statement to the MTA’s finance committee, Chairman Hemmerdinger approached us to comment appreciatively on our necktie and inform us he had the same one at home . . . presumably in his closet. We think of it as an urban design tie (it has on it a print of a New York map) and we think it ought to be worn by people who care about the city.

Spirit of Civitas

Ironically, the tie is by “Civitas.” (It is available through Josh Bach, also in hues of blue.) What does “Civitas” mean? There is a group in New York named Civitas that attends to urban design issues (within the boundaries of Community Boards 8 and 11 on the East Side of upper Manhattan). This is what they provide in terms of what “Civitas” means (emphasis supplied):

In 1981, when CIVITAS was founded, August Heckscher, its first chair, hearkened back to the Roman Republic to find a name that would express the spirit of the new community organization. The name chosen, "CIVITAS," referred to that quality of a citizen that made him deeply involved in the life and fate of his city. Such has been the guiding spirit for CIVITAS ever since.
Scale and Community Participation

Ironically, Civitas has concerned itself with things similar to what generates so much concern with respect to Atlantic Yards, though only in its own area of the city: for instance, the scale of new unwanted towers. Civitas has also complained about the way communities attempting to participate in planning their own neighborhoods are ignored. Here from Atlantic Yards Report:

Genie Rice of Civitas said that there has been community planning, but 197-A plans produced by Community Boards are “totally ignored.”
Perhaps Civitas will be concerned with what is happening at Atlantic Yards since Atlantic Yards is now draining the coffers of the MTA even further. After all, every citizen cares about funds for mass transit.


“Civitas” derives originally from the term used to describe Roman citizenship. We will think of it in terms of the qualities of civility and duty to your fellow citizens required for civilized communities to work. We do not believe that the actions of the MTA board today can be considered consistent with those qualities or civil obligations.

Sacrificial Pattern

Here is another irony: The thing that makes our Civitas necktie wonderful is the street grid pattern it displays. The street grid is something we revere and something also celebrated by Jane Jacobs, who called for short blocks and frequent streets. She was opposed to superblocks and their resulting elimination of streets from the grid, exactly what is being proposed for Atlantic Yards. (Elimination of the grid is being proposed so that developer can go even further in squeezing buildings of unprecedented density into the brownstone neighborhood.)

Our necktie would be a lot less interesting if the New York streets on it were eliminated. Similarly, Brooklyn will become a much more desultory and less interesting place if Atlantic Yards is built. It would ruin the “fabric” of the city both figuratively and literally.

Keeping It In The Closet

We may have things in common with Mr. Hemmerdinger, but we think that in making his decisions today and leading the board through its mistakes Mr. Hemmerdinger was driven by ties other than what we have in common. We also think that what was done today was so egregious that we don’t expect this MTA debacle to be over. In other words, don’t expect that everything has been put away and will stay in the closet.

06/25/'09 UPDATE: This morning, Atlantic Yards Report today provided a report of yesterday’s board meeting that concluded with the following:

(A reader points out the Hemmerdinger was sued less than a month ago, according to Crain's, by "partners in one of his buildings [who] allege he illegally drained $2.2 million from funds set aside to run the property in order to create a crisis and buy them out.")
The Crain’s story says that the plaintiff’s in the lawsuit “against Mr. Hemmerdinger and his son, Damon” include “two half-brothers of Mr. Hemmerdinger.” Just for the record, that “reader” wasn’t us: We weren’t up on our reading of Crain’s and hadn’t come across its story. Any coincidence between what Crain’s reported and what we wrote on Tuesday, June 23rd must be ascribed either to coincidence or a healthy sixth sense. On Tuesday we wrote in relation to Mr. Hemmerdinger’s real estate and other activities:

As one can see, there are in these activities a great many situations where Mr. Hemmerdinger has significant fiduciary duties and other responsibilities wherein others need to put faith and trust in him. Inevitably, these are all connected just as even our honesty in dealing with our families also relates to such things.

Tuesday, June 23, 2009

Atlantic Yards, Metaphorically Speaking

Finding the right metaphor to describe Atlantic Yards can be edifying and, at the same time, a challenge. Recently, ESDC head Marisa Lago formulated the metaphor of Atlantic Yards as a kitchen renovation. We found that her metaphor adapted quite well for our purposes. (See: Monday, June 1, 2009, Negotiating With Your Contractor: The Atlantic Yards As Kitchen Renovation Metaphor.)

It is not so clear that Ms. Lago herself had success with the metaphor because exactly one week after she coined it she was let go from ESDC after having served barely nine months in her position. (See: (See: Friday, June 05, 2009, Observer: internal ESDC turmoil leads to resignation of CEO Lago; AYR: did testimony gnaw at her conscience?.)


We noticed that Develop Don’t Destroy was recently offering a new metaphor, describing Atlantic Yards as a “Zombie Project.” (See: Nets, Ratner, Yormark Desperately Trying to Market Zombie Project, posted: 6.04.09.) The idea behind that, of course, is that the strange political forces that keep re-animating Atlantic Yards don’t seem to recognize when a natural death and permanent grave rest under the lilies is appropriate.

We can offer a quibble on the zombiefication of the project. When it comes to zombies, we had previously declared the developer, Forest City Ratner, to be the “zombie,” not the project.

Our developer-as-Zombie pieces were as follows:

Thursday, March 19, 2009, Willets Point Lawsuit Points Out . . .

Tuesday, March 31, 2009, Looking at Things From Another Point of View: Do We See Distinctions That Make A Difference?

In them we talked about getting into the situation where government props up failing or financially weak developers on the theory that they can’t be allowed to fail. We referred to this as government’s getting into “a zombie subsidy bear-hug” with a developer. Instead, we suggested that the self-serving “contracts” with the zombie developer/subsidy collector Forest City Ratner ought simply to be repudiated. It turns out that with Atlantic Yards no “repudiation” was even necessary since the MTA has never even entered into a contract with Forest City Ratner for the project. (See: Tuesday, June 23, 2009, Thoughts on the MTA’s Finance Committee Meeting Wherein Atlantic Yards Was Considered as an “Information Item”.)

Zombie Subsidy Bear-Hugs

The kind of “zombie subsidy bear-hug” we were referring to is the kind of thing the MTA and ESDC are now getting into with the financially ailing Forest City Ratner (the developer has a speculative credit rating of B1 and a stock value that has been at zero). Both agencies are looking to bail out the developer with a package of sweeteners on Atlantic Yards, the value of which is substantial. It starts with the $100 million in value with respect to the MTA railyard capacity that the zombie developer will be excused from providing, plus the $80 million the MTA won’t be collecting from Ratner for its land in the MTA’s time of financial need. There is a lot more sweetener with other benefits not being provided in the foreseeable future and timetables and deadlines being deferred. For starters see: Tuesday, June 23, 2009, Thoughts on the MTA’s Finance Committee Meeting Wherein Atlantic Yards Was Considered as an “Information Item”.

What we also refer to when we use the term “zombie subsidy bear-hug” is what Raul Rothblatt was talking about when he testified this morning at the ESDC board meeting. ESDC voted to approve the sweetening package for Ratner, worth however many hundred million dollars. Before they did, however, Mr. Rothblatt asked the ESDC board members what possible subsequent request from Ratner they would ever be able to refuse in the future if they approved this one. Probably none. That’s the nature of the hug.

Talking Serious Economics

The developer-zombie metaphor actually has a very respectable antecedent in economics. Essentially we derived it from the term “zombie bank” used by commentators such as Paul Krugman. The term refers to insolvent banks that should go out of business but are propped up by the government. First talked about in terms of the Japanese financial crisis that dragged on for years, zombie banks are generally thought to be a rather bad thing that prevents the economy from acting normally and with its usual vigor because economic incentives for proper performance get all bollixed up. The living dead parade around confusingly in what should be the land of the living. Welcome to the world Governor Paterson and Mayor Bloomberg are fashioning for us.

Political Possum

We thought that while zombie was the best metaphor for the developer, the project could be described with another metaphor: We said that the project had been playing “political possum.” The highly unpopular megadevelopment had been playing dead until recently (the dead thing again) so that politicians like Bloomberg and Paterson could avoid mentioning it or openly supporting it. The problem is that now that possum is getting ready to come back to life and scurry past the public as fast as possible. (For the possum metaphor see: Thursday, May 7, 2009, City Council Races (33rd and 39th CDs): Candidates’ Positions on Development and Effective Action They Would Take to Stop Atlantic Yards (Part III).)

Another Brand of the Undead

We also described the project as Dracula, a desicated corpse frying in the sunlight of public scrutiny that is still not truly dead until a stake has been put through its heart, its head has been cut off and its mouth stuffed with garlic. We called for responsible politicians to affirmatively kill the project. For this see: Wednesday, May 6, 2009, City Council Races (33rd and 39th CDs): Candidates’ Positions on Development and Effective Action They Would Take to Stop Atlantic Yards (Part II).

The vampire description has also been applied to developer Bruce Ratner himself. At the community protest when the Brooklyn Museum “honored” Bruce Ratner, there were signs and chants that “Ratner is a vampire” referring, no doubt, to his willingness to enervate the community by sucking on its blood for his own sustenance.

Monster or Its Creator?

Is Ratner the vampire, or his project? Is the developer the zombie, or the project? This gets into the classic conundrum of how the monster can often be confused with its creator. When we hear “Frankenstein” do with think of the monster or Dr. Victor Frankenstein who created it?

Bait and “Stitched?”

Frankenstein might, in fact, be a another good metaphor for the project since it is such a stitch-together pastiche of dead and improbable promises robbed from the musty tombs that hold so many past ill-conceived megadevelopment projects. We can imagine the laboratory where efforts are made to jolt the cobbled together monstrosity to life using Marty Markowitz’s silly boosterism as energy.


Maybe though the vampire metaphor is a good one to stick with in light of all the recent changes in the proposed monopoly-megaproject. We have seen the departure of Frank Gehry and Laurie Olin, replaced by an incredibly different low-rent design team. Vampires have the power of lycanthropy, the power to shape shift into other animals (yes, similar to werewolves). Perhaps that serves well because these days the moral with Atlantic Yards is that even though it is guaranteed to be something terrible, it is changing around a lot. It has no real defined shape so that if our public officials launch it there is no telling what we might one day actually get.