Friday, May 6, 2011

Xanadu- Governor Christie’s Ode-ious “Yes We Khan” Moment

(Above: “Xanadu” from “Citizen Kane” - “cost: no man can say”- and “Xanadu” the mega-project in New Jersey, - more costs now being assumed by the New Jersey taxpayers- both from wikipedia.)

Suppose the New York Times proposed a contest for readers to write a poetic ode about a huge, over scale, garishly designed and questionably subsidized mixed-use project critically integrated with a sports complex: Do you think the readers might respond with lacerating lyricism questioning the judgement, priorities and profligacy of public officials?

Well, the New York Times did, and its readers did, only the contest was not held with respect to the Brooklyn Atlantic Yards meg-monopoly handed out to Bruce Ratner (the Times business partner in building the new Times building). The contest was held with respect to New Jersey’s stalled Xanadu project recently rescued from financial insolvency by Governor Chris Christi. (For background on the basic story see: Developers and Christie Detail a Plan for Xanadu, by Richard Pérez-peña, May 3, 2011 and For Xanadu Mall, Stalled and Scorned, Deal May Offer New Life, by Charles V. Bagli and Richard Pérez-peña, April 28, 2011.)

Is It Even Debatable?

The justice of poetic criticism alone not being sufficient, the Times also set up “a debate” with five chosen debaters to take up the subject of whether the mega-project should be saved: May 1, 2011, Is a Failed Megamall Worth Saving?

It is a something of a misnomer to call the result of unleashing the five chosen commentators “a debate” since what each of the five had to say was, on balance, extremely negative about saving the mega-project, providing prosaic parallels to the scathing wit of the poetry contest submissions. Even if one reviewed and included the readers' comments responding to the five chosen pundits it would be reaching to say that a debate had been opened up as the Times readers were also almost all similarly uniformly negative. Perhaps the project being in New Jersey, and the Times being a New York City based newspaper, the New Jersey construction unions hadn’t gotten the memo that some positive supporting statements for the project need to be typed.

Here is a taste of the views offered by the professional commentators (with full commentary and multitudinous readers' comments available at the Times site):
Judith Martin: (a professor in the department of geography and director of the urban studies program at the University of Minnesota.)
Too big to fail* one more time? How about too ugly or redundant to succeed?
(* This picks up from what was reported in the first Times article by Charles Bagli about how the Christ administration rationalized his governmental intervention: “The administration has argued that the project is too big and too far along to let it lie fallow.”)

David Smiley: (teaches architecture and urban studies at Barnard College.)
People have a right to their pleasures but not with our tax dollars, please.
Brigid C. Harrison: (a professor of political science and law at Montclair State University.)
This would placate the building trades unions which were temporarily riled up by his decision to cancel the ARC tunnel project.

But the problem with Governor Christie's decision is also economic: it puts the state at risk for financing a historic boondoggle while in the midst of a slow economic recovery. The state would relinquish some of the potential gain of tax revenue generated by Xanadu, which is almost certain to snatch business away from other local merchants, given its enormous size.
Bob Ingle: (a senior political columnist for Gannett New Jersey Newspapers, a daily blogger at Politics Patrol)
How appropriate that it shares a name with a stinker of a movie, “Xanadu.”*
(* The IMDB link to the Olivia Newton-John movie “about a girl who makes dreams come true” is supplied by NNY. In movie fame terms “Xanadu” was also, in the movie “Citizen Kane”, the name of Charles Foster Kane’s “world’s largest” palatial estate “cost: no man can say” the film’s stand-in for William Randoph Hearst’s San Simeon castle. Kane was, of course, modeled after Hearst, who was boss to my grandfather, Thomas Justin White, the General Manager and one-time President of the Hearst publishing organization, who consequently spent a lot of time at San Simeon.)

Terry Golway: (a former member of The New York Times editorial board, teaches United States history at Kean University in Union, N.J.)
Nearly $2 billion already has been sunk into this modern Swamp Castle, so it’s highly unlikely that it simply will be demolished. Too bad. The building’s hideous appearance can be fixed, but only a wrecking ball could change its status as a symbol of bad public policy and private sector overreach.
Out of the Swamps Some Editorializing About Preserving Ecosystems

Mr. Golway’s views expressed in his “Swamp Castle” piece (making a wonderful analogy to the satire of an episode embedded in“Monty Python and the Holy Grail”) were especially interesting: One reason is that he is noted to be a former member of the Times editorial board which has not excoriated the Atlantic Yards project (the way years before it did the early proposed developer-centric designs for the Time Warner Center) and the board has also been supportive of the similar wholesale decimating takeover of West Harlem by Columbia. Mr. Golway speaks in terms of respecting, preserving and working with the existing authentic ecosystem of the area, instead of importing just “cookie-cutter attractions” and unimaginatively replicated “food courts, chain stores.”

The ecosystem that Golway speaks about preserving is the natural ecosystem of the swamp but with only a little imagination it easily stands in as a ready metaphor for the kind of natural and intricately evolved and valuable ecosystem of neighborhoods that Jane Jacobs wrote about, neighborhoods like Prospect Heights, West Harlem, Willets Point and Coney Island. The development community and developers like Forest City Ratner and Columbia University are so eager to raze these communities rather than work within their context when they build huge, subsidized mega-projects.

As one Times reader (Comment #3, Cram from Brooklyn, NY) points out about the Meadowlands ecosystem: “Navigable wetlands within the New York region, you can't create and you don't need to subsidize.” The same could easily be said about the neighborhoods (and their associated economies) in Prospect Heights, West Harlem, Willets Point and Coney that are being wiped out in favor of subsidized replacements that won't even be created for a while.

Here is more of what Mr. Golway has to say. Just see out how easy it is to substitute in your mind the concept of neighborhood ecology (in the case of NYC many mega-projects) for the nature's ecology in the Meadowlands that Mr. Golway is talking about (in the case of the Xanadu mega-project):
Before they spend another few billion in an attempt to right this environmental wrong, the site’s new owners should spend a couple of days reading Robert Sullivan’s brilliant 1997 book, “The Meadowlands: Wilderness Adventures at the Edge of a City.” [Substitute Jane Jacobs "Death and Life of the Great American City"?] Mr. Sullivan [Jane Jacobs] showed how this fragile ecosystem has managed to survive repeated assaults -- and he [she] wrote long before anybody thought that the swamp was a good place for another new shopping mall [retro-urban renewal-style extravaganza]

If the owners truly are intent on correcting the mistakes of the past, they will consider offering New Jersey something more than food courts, chain stores and, yes, an indoor ski area. How about incorporating the site’s setting, so beautifully described in Mr. Sullivan’s [Ms. Jacob’s] book?

In fact, why not include a conservation center [parts of Prospect Heights such as the Ward Bakery Building] as part of the “entertainment” component? Instead of designing cookie-cutter attractions, the new owners should remember that they built their castle in a swamp. If they read Robert Sullivan’s [Jane Jacobs] book, they’ll understand why that’s so important.
Putting Taxpayers Out of Business

With all their criticism (as well as that added in by Times readers) there is one thing I am not sure the commentators made clear enough. Brigid C. Harrison got closest to expressing it: “The state would relinquish some of the potential gain of tax revenue generated by Xanadu, which is almost certain to snatch business away from other local merchants, given its enormous size.” If David Smiley is correct in his sentiment (seemingly shared by Ms. Martin as well) that the region is “what retail analysts call ‘over-stored’” then it can be expected that directing enormous subsidies to create an additional huge mall will result in other existing businesses, perhaps other competing malls, going out of existence. Entire malls do go out of business through competition.

Our Old Chum the "Churn"

When government actions and subsidies simply promote the substitution of one set of businesses for another the end result is essentially a “churn.” The way the government thereby assists in putting competing private enterprises out of business is only one or two steps conceptually removed from New York-style abuse of eminent domain to replace one set of private property owners with another set who will be using the land for the same purpose. All this may make the subsidy-seeking real estate industry happy, but it is not good for the public. In fact, it is bad for the public to the extent that the substituted tax-excused businesses are paying less in taxes than those they replace and perhaps not any at all. This, for example, is what is going on up at Yankee Stadium.

Mr. Smiley makes the point that the new massively subsidized mega-project is not just competing with other large malls that may themselves be subsidized; it is also competing with the “small stores and the older main streets of New Jersey” and he suggests that therefore, to even things out, single store and local store owners should be the target of “proportionate loan deals and subsidies.”

What Should Really Be Subsidized Anyway?

Aside from the prospect that this newly created retail space will be putting other retail out of business, there the question of whether retail is a good thing to subsidize. One reader (# 3 David Weinstein of Bethpage, New York) offers the critique that there are other smarter investments for job creation because: “Retail has a very low multiplier-effect: It produces very few jobs secondary to the jobs it immediately creates.” Similarly, there are questions in New York as to whether we should be subsidizing, for instance, housing near a transit hub (or hubs) like those being commandeered by the Atlantic Yards project, where that housing was busily under development anyway, or whether the city should be investing its resources in the sort of transit infrastructure that was stimulating that development without such subsidies. It is likely that investment in infrastructure will have a greater job-creating effect.

In much the same vein Nicole Gelinas meditates in a short piece (May 4, 2011, Like, OMG, NJ, a mall is not public infrastructure!!!!!!!!!!!) whether any jobs this mall may be said to be creating is simply taking away better jobs, by killing competing private enterprise and stealing money from the creation of valuable infrastructure.

Well Versed To Win

Having hopefully whetted your appetite at the beginning of this post we should not delay too long before proceeding to the lyric conclusion of this post.

On April 29, 2011, the Times challenged readers to do their poetical best with the offer that the winner would receive a prize (Odes to a Pleasure Dome Deferred?): “Your assignment: Rewrite a stanza or two of the Samuel Taylor Coleridge poem that gave Xanadu its name, in light of current events.”

May 3, 2011, the Times declared a winner: Prevailing Poet Is Decreed in Meadowlands Ode Contest.

Here for reference is the opening stanza of the original Samuel Taylor Coleridge poem:
In Xanadu did Kubla Khan
A stately pleasure-dome decree:
Where Alph, the sacred river, ran
Through caverns measureless to man
Down to a sunless sea.
The declared winner was Steve Schoenwiesner of Montclair, N.J., for his two-stanza entry, one stanza of which is reproduced below:
For Xanadu did Christie-Khan
A stately subsidy decree.
While tracks below a river, planned,
Were scuttled, fundless, by this man
A blight revives tax-free.
(The hyperlinks in the above are Noticing New York supplied.)

For the second stanza and all the other admirable entries visit the Times site.

Touching on Christie's Tunnel Vision

Mr. Schoenwiesner was chosen as winner for “smartly touching on both the tunnel and the wildlife.” The wildlife reference is in Mr. Schoenwiesner’s second stanza. Reference to the tunnel is something many commenters in the “debate” mentioned: Not long before Governor Christie decided to rescue Xanadu, which its new developer, the Triple Five Group, is re-christening “American Dream” (no kidding) Christie axed the much more essential ARC tunnel link between New York and New Jersey which stood to be a much bigger job creator and stimulus to the New Jersey economy. The Triple Five Group is the owner of another subsidized mall, the Twin Cities’ Mall of America in Bloomington, Minnesota.

It is true that, in the overall scheme of things, the Xanadu project will require less subsidy from the state than the ARC tunnel (even as the state adds $200 million to the $1 billion or so it has already spent on Xanadu) and, if all goes well, it will be completed sooner, but New Jersey’s ARC tunnel subsidies were being highly leveraged by contributing subsidies from the federal government and the Port Authority: Christie gave up $6 billion that was coming from the federal government and $3 billion committed from the Port Authority (coming from its tolls). Christie expressed concerns that New Jersey was going to be responsible for cost overruns on the project originally priced at $8.7 billion. Those estimated overruns might have been as low as $2.5 billion or, Christie was alleging, as high as $5 billion. (With luck, a substitute for the ARC tunnel will one day be built.)

What’s interesting, as Brigid Harrison points out, is that it is Christie’s killing the ARC (theoretically on the vaunted Republican Party principle of small government) that may have backed him into subsidizing Xanadu because as a politician bowing to practicalities at the expense of principle he then needed to “placate the building trades unions.” The problem being, as Harrison points out, that the Xanadu deal “antithetical to” and “flies in the face of” the conservative vision Christie has repeatedly expressed that “government should be smaller, leaner, and not in the business of providing services best left to the private sector.”

Unidentified Cost of Abandoning Principle

Christie ducked out of the ARC tunnel deal, assertedly because he did not know how much it would cost the state. But New Jersey’s Xanadu may also be a bottomless money pit with an unknown cost. Like Charles Foster Kane’s Xanadu it may well have a “cost: no man can say.” Whatever the cost of the state subsidies to Xanadu itself may be, that will not be the end of all the associated costs, especially when the line of principle has been crossed and the government gets repeatedly involved in the incalculable losses associated with the endless churns that the subsidized real estate industry will continue to pursue.

No comments: