On Charlie Rose NYPL Trustee Stephen Schwarzman Confirms Suspicions: His $100 Million To The Library Was Linked To NYPL’s Real Estate Plans

NYPL trustee Stephen A.Schwarzman appearing on Charlie Rose to discuss, among other things, the NYPL's Central Library Plan.  Is that pinch to illustrate how the libraries get smaller as he sells off their real estate?  Keep reading.

(Correction appended 07/02/2013)

One of the great mysteries about the New York Central Library plan is why on earth would the NYPL’s trustees want to approve the NYPL’s giving up substantial library system assets and vastly shrinking the library system’s space, spending hundreds of millions of public dollars, perhaps in the end as much as a half billion dollars, to do so?  Is it true that the only possible explanation is that the there are library trustees interested in seeing the real estate plans go forward, no matter the cost to implement the plans or the lack of benefit to the public?

Wednesday night NYPL trustee Stephen Schwarzman, head of Blackstone Capital, a major investment and real estate firm, confirmed on Charlie Rose the interest he had, going back to 2008, in seeing the Central Library real estate deals go forward at that time when they were launched.  See: See: Charlie Rose: With Stephen Schwarzman, Wednesday, June 19, 2013.

NYPL Real Estate Deals

In March 2008 Schwarzman committed $100 million to the NYPL.  When Rose on Wednesday night’s show asked Schwarzman about his standards for that money going to the NYPL and the negotiations that might have taken place, Schwarzman said that when “the head of the library came over to visit me [about the $100 million] as these things tend to work” (Schwarzman referred to “numerous meetings” on the plan) and that he, Schwarzman , therefore “knew how they were going to spend it . . .to reconfigure the library system.”

The Rose interview doesn’t provide greater specificity than that with respect to exactly when all these discussions took place, but, indeed, at the end of 2007 and the beginning of 2008 a lot was happening at the NYPL in terms of its real estate plans.  November 7th is when it was abruptly disclosed to the public that, after a secretive process, the beloved Donnell Library had been sold.  That five-story, 97,000 square foot library on Manhattan’s 53rd Street between Fifth and Sixth Avenues across from MoMA was sold for an absurdly low figure, netting the NYPL only $39 million.  The 7,381 square foot penthouse apartment in the 50-story building now going up at that site is being marketed for far more, $60 million.  There will be a “replacement” Donnell of only 28,000 square feet that will be mostly underground and largely bookless.  It might finally be built by 2015.  See: Monday, May 27, 2013, More Thoughts On Valuation And What The NYPL Should Have Received As Recompense For The Public When It Sold The Donnell Library and Friday, May 24, 2013, Previews Of The Proposed New Donnell Library: The NYPL Unveils Its Version Of The “Silk Purse” Libraries It Envisions For Our Future.

Extent of Blackstone's Real Estate and Other Investment Interests

Why should we note with interest Schwarzman's admission of the linkage of that $100 million to the real estate plans?  (He describes the plans as “terrific” and designed to put the NYPL in “better financial shape.”)

Because Schwarzman’s Blackstone Capital is involved in real estate and investments creating all sorts of possibilities of conflicts of interest.  And because Blackstone is so huge those possible conflicts are huge.

Albeit there was a lot of boasting and associated PR during the Rose show intended to make Schwarzman look good, some of which may need to be discounted, but at the top of the show, by way of introduction Charlie Rose began with the following information about Blackstone: 

Rose: . . .  it is now the world's largest alternative investment firm with over $200 billion under management.

Further into the show there was this exchange:

Rose: I think you're the largest real estate investor in the world, aren't you?

Schwarzman: That's true.  (Nodding)

During the show, working from a list in front of him where he was crossing things off, Rose clarified with Schwarzman that through Blackstone Schwarzman was involved in the following seven lines of business:

    •    private equity,

    •    hedge fund,

    •    real estate

    •    a large credit business that does highly leveraged credit,

    •    a mergers and acquisition group

    •    a troubled company restructuring business,

    •    Raising money for other people in the alternative asset classes from institutional investors.

Not only is Blackstone the “largest real estate investor in the world,” Schwarzman says during the program that Blackstone is similarly preeminent in hedge funds:

Schwarzman: We are the largest investors in the world in hedge funds.

Are hedge funds notorious these days for making a lot of money?  Schwarzman says his private equity business is bigger:

Schwarzman:     … Private equity is a bigger business… The rates on return on private equity tend to be much higher.

And when Schwarzman speaks of the $100 million to the NYPL as being connected to the 1007/2008 real estate plans it is worth thinking about what he next told Rose about making those private equity profits:

Schwarzman:     . .  And the reason is that you have control of businesses or control of real estate. You can change the management. You can change the business strategy, and it's not passive. 

How Readily Conflicts of Interest Can Crop Up

It would therefore be easy for Schwarzman and his Blacktsone Group to have conflicts of interest.  Actually, it would be perhaps be hard to avoid them.

One example of how easily conflicts of interest potentially crop up is that in the spring of 2007, the same year that Donnell was sold by the NYPL Peter Slatin wrote speculatively in The Street envisioning that Schwarzman would be one of the buyers of Orient-Express Hotels, the company to whom it was announced the library would be sold.  And Slatin envisioned that Schwarzman would buy it partnering with Sternlicht of Starwood Hotels, the company that wound up actually buying Donnell when the dust settled.  He imagined a celebratory scene respecting the purchase: “Steve Schwarzman and Barry Sternlicht are sitting down for burgers” at the 21 Club with Andrew Davis of Von Essen Hotels celebrating their purchase of Orient-Express Hotels.  Interestingly, the 21 Club, adjacent to Donnell, factored in prominently with its purchase.  See: Getting All Aboard the Orient-Express, 03/26/07.

Who knows if there was something particular that stimulated Slatin’s speculative imagination coming up with so many odd prescient details, but the idea that what he imagined or any variation of it could actually easily have happened emphasizes the concern about where conflict of interest might lead.

Another example of relationships that point to the ease with which conflict could crop up is that the Chief Operating Officer of the NYPL, David Offensend, came from Wall Street and is a cofounder of Evercore Partners, a firm that might be described as sort of a boutique spin-off of Schwarzman’s Blackstone (two key partners, Roger Altman and Austin M. Beutner, are Blackstone alumni).  Offensend is the most important employee of the NYPL in terms of implementing its real estate plans and he describes the NYPL’s plan as originating back in 2006, perhaps as far back as 2005.  Offensend began working for the the NYPL in 2004.

Not that Schwarzman and Offensend are the only significant individuals with respect to the making of real estate plans at the NYPL.  According to Vartan Gregorian, who became the NYPL’s president in 1981, he put NYPL trustee and real estate developer Marshall Rose in charge of the supervision of the entire real estate holdings of the NYPL.  Mr. Rose has continued to handle the NYPL’s real estate ever since, even during a period of time that he was chairman of the NYPL’s trustees.

It is harder to ignore these concerns when real estate deals Mr. Schwarzman says are intended to put the NYPL in “better financial shape” seem to impoverish it instead:  Things like the sale of Donnell or the Science, Industry and Business Library (SIBL).  That library, in the old B. Altman department store building  was completed in1996 as one of the projects under Mr. Rose’s guidance at a cost of $100 million.  Last year the NYPL, calling virtually no attention to the fact, sold off 87% of its space for $60.8 million.  Was the publicly paid for library that recently cost so much worth now worth that little?  See: Saturday, June 15, 2013, SIBL, NYPL's Science, Industry and Business Library Sold At An Unreported Loss To The Public (And an Elucidating Sideways Look At The BAM South Library Real Estate Games).

Schwarzman's Purpose on Wednesday Night?

Why was Schwarzman on Charlie Rose Wednesday night?  He was on Rose once before, but it was years ago, in 2006.  It could be that the Central Library Plan is running into difficulty, encountering opposition, and he was there to give it a PR boost.  This could be particularly important at this moment because this coming week the selling off and shrinkage of New York City libraries will be the subject of a hearing by the New York State Assembly Committee on Libraries and Education Technology on Thursday June 27, 2013 (10:30 a.m. Assembly Hearing Room 1923, 19th Floor, 250 Broadway, Manhattan).  See:  Subject: The Sale of Public Library Buildings in New York City/Purpose: To examine the practice of selling public library buildings to private developers and the impact that sale has on the library and the services it provides.

Relying on Charlie Rose? 

Charlie Rose is a notoriously soft interviewer who compliantly works with his interviewees to support them in putting out their PR in exactly the way they want to put it out.  This can involve being sycophantically servile to those with power and sometimes that means that misinformation is promulgated uncorrected.   I’ve previously written in Noticing New York about how Rose put himself in harness to promote real estate developer Bruce Ratner’s Atlantic Yards ambitions.  See:  Monday, April 2, 2012, Charlie Rose Does Infomercial For Forest City Ratner.

Bruce Ratner partnered with Russian oligarch Mikhail Prokhorov on Atlantic Yards and in that earlier Noticing New York Article I observed:

Rose's cavalier, jokey exchange with Ratner about Prokhorov may some day come back to haunt him. Ratner joked that Prokhorov almost became president of Russia. Prokhorov has long been one of the insiders who get along with Putin. Most interpret his feint at a run for president as an effort to deflect real opposition to Putin, but Rose wasn't doing a serious international affairs interview so he simply played along.

It turned out that one Charlie Rose show promoting Bruce Ratner’s Atlantic Yards was apparently not enough and a few months later Rose did another, this time hosting not only Ratner but also the Russian oligarch, and as a softening measure Prokhorov brought along his sister Irina.  (See: Monday, October 08, 2012, On Charlie Rose, uninformed sycophancy redux; host lets Ratner spin, claim arena was gift to Brooklyn, admit working the levers of government "in the traditional way").  This show, promoting the so-called “Barclays” center as an entertainment venue, did find Rose obsequiously joking with the oligarch about Russian politics.
      
Rose’s show can be informative (misinformative too) and, obviously, much of what I am writing here is drawing upon worthwhile information from the Rose Schwarzman interview.

Schwarzman The Compassionate Romneyite 

Later in the interview we learn from one of Rose’s inquiries that Schwarzman is a “a Republican” who has been  “a strong supporter of Republican candidates including Governor Romney” and, Rose implies, one who has problems with President Obama and the way Obama is handling the American economy.  We also find out that Schwarzman believes the current United States tax system should be replaced with a “flat tax” (like Russia! he points out) although he allows that in the engineering of such a massive overhaul others could advocate for progressivity of the tax rates.  Schwarzman says he thinks that it would be more equitable and that the tax code should be made simple.  These are familiar talking points from an admitted Republican but I for one, while I would favor simplifying the tax code, don’t believe that it can ever be made “simple.”

Schwarzman may have been a Romney supporter but throughout the show Schwarzman is depicted in `compassionate conservative’ guise.  Rose starts the show by having Schwarzman talk about a scholarship program with his name that involves sending students to China and it then moves on to his affirmative charitable (“eleemosynary”) efforts to hire combat veterans.

In talking about the scholarship program orientated around creating relationships with China (“Schwarzman Scholars”) its is not immediately clear at this early point in the program that there is connection between the program and, controversial at the time, the investment by the Chinese government in Blackstone, buying 9.9% of its stock (“nonvoting” stock) when Blackstone went public in 2007.  The timing to buy into Blackstone, shortly before the financial crisis, was bad and Schwarzman admits the Chinese suffered a loss due to the downturn, but, as described by Mr. Schwarzman, the Chinese, with dividends, are almost back to even, which he describes as “not a bad outcome.”

Getting to Library Issues

The discussion of the library starts about ten minutes into Rose’s thirty minute interview of Schwarzman, a positioning that is a pretty good indicator that this was considered a highlight or prime purpose of the interview.

It begins rights after Schwarzman, talking about his military employment efforts, uses the word “eleemosynary” (i.e. `charitable') as if to cue Rose:

Rose: You gave $100 million to the library; I may have the wrong number, but it was about that.

Schwarzman: That's true.

Rose: How do you decide your philanthropic commitments?

Schwarzman: That's a great question and I am still developing the answer. I make major commitments where I see a major need.  Ah, and there are many different areas where people find need and satisfy it. I happen to like things in the educational area.  I believe that a great education is a passport to a different type of life, and particularly in the world we're living in now, it's really essential.  And if I can help in various situations how people have that boost and have that advantage, I tend to respond to that.  So, at the library we have a huge number of people- New York City, as you know, has people living here I think it's from around 140 countries, 170 countries, somewhere in that area, that the library serves, people who don't have the advantages, necessarily. Some do, but it's a place where, you know, you can take out books, you have the advantage of librarians, you have computers.  So just the opposite of what you might think, attendance at libraries is going way up.

There is a disconnect between what Schwarzman says and much of what is actually going on at the library.  While he says “you can take out books” he doesn’t mention that the NYPL has been implementing a book reduction program administered by such people as Anne L. Coristan, Vice President for Public Service, who is one of those involved in implementing the Central Library Plan: Books are not supposed to exceed 50% of shelf space, no duplicate books are supposed to appear on the shelves (even Hamlet) and “shabby” books are supposed to be thrown out even though many classics and out-of-print books don't look new.

Schwarzman talks about having “the advantage of librarians” but he doesn’t talk about NYPL’s  huge layoffs of librarians, the way they have been intimidated and de-escalated in importance even while those engaged in real estate deals at the NYPL are made more important, and an increasingly large proportion of revenues is diverted to their salaries.

He mentions that “attendance at libraries is going way up,” which it is, but does not mention the perplexing concurrent shrinkage of the libraries under the NYPL’s plans.

Deflection on Democracy Issues?

Perhaps most important, Schwarzman in his mention of “passport to a different type of life,” his conjuring up diversity with his description about people from 170 countries, his talk of `boosting’ people and giving them `advantages’ is on message to deflect the obvious criticism that selling, shrinking and defunding libraries is anti-democratic and discriminatory.   I’ve previously pointed out that deflection of such criticism is probably the reason that Schwarzman and the rest of the NYPL trustees hired Anthony Marx as the new president of the NYPL to implement these plans.  See:  Tuesday, May 14, 2013, A Consideration of Race, Equality, Opportunity and Democracy As NYC Libraries Are Sold And The Library System Shrunk And Deliberately Underfunded.

Schwarzman, the former Romney supporter, sounds studiously aware of getting across the same  talking points Marx routinely works into his speeches in this regard when he goes on to talk about “reaching all kinds of middle-income and lower-income people” (“So I really like that” he says) and serving the “ethnic mix, ah, and economic mix of lower income people.”

While libraries are truly a “vehicle for changing people's lives” there is a hint in Schwarzman’s discussions of `passports to a different type of life’ of the Republican fiction that anyone, through hard work, can elevate themselves to the ranks of the wealthy and privileged.

Name Attuned?

Redundant, or undeserved acknowledgment?  Schwarzman's name on a potential demolition project

When Rose continues, getting to the subject of the Central Library Plan (and, at the same time, Schwarzman getting his name affixed to the NYPL’s 1910 42nd Street building at Fifth Avenue that was built to house the Central Reference Library that Schwarzman’s CLP would now destroy) Rose broaches a typical concern of charitable donors: That money they give to charitable organizations may not be used for the purposes intended.  At City Council hearings at the beginning of this month NYPL president Anthony Marx and BPL president Linda Johnson addressed this concern directly with Marx saying that the NYPL cannot now make a `credible' case to NYPL donors that money given to the NYPL will not be subtracted out again in Bloomberg administration cuts.
Another concern for donors should be that what they give (for example to build the $100 million SIBL) might be squandered in real estate deals.  Lastly, there is the way evanescence of substantial gifts under the new NYPL regime that pays so little attention to history or that which was intended for posterity.  The 42nd Street Central Reference library was paid for (in addition to money from NYC taxpayers) by the Tildens and the Astors.  In inflation-adjusted terms the money Schwarzman has provided to the NYPL is a pittance compared to those who have gone before him.  The library used to have a policy against naming its buildings for living individuals.  Yet Mr. Schwarzman's name has been plastered on that library (which he would like to see destroyed) in five conspicuous locations, obliterating memory of the truer and more substantial patrons of the library that precede him.

The exchange between Rose and Schwarzman allows Schwarzman to appear modest about this naming:

Rose: So when you make that kind of commitment, what is your standard of accountability?  I mean in this case, I assume you didn't do this because you wanted your name on the building … you wanted to do this because you wanted to make a difference, and you want to make sure if you're giving that level of gift that they… the money is spent wisely.

Schwarzman: Well, the advantage here is that I knew how they were going to spend it.  And, the reason I responded to this…

Rose: That was because of negotiation that takes place?

Schwarzman: No, this is because I was on the board of the library, and they hired one of the major consulting firms to figure out how to reconfigure the library system, create a modern lending library in the main branch of the library and be able to deliver better services and put themselves in better financial shape. This is a terrific plan! And so what happened is that the head of the library came over to visit me as these things tend to work, and suggested that I give them $100 million.  They can then have a lead gift to implement their plan, so you get a multiplier of close to $1 billion.  Ah, and ah, you know, they said, by the way we'd put your name on the building. And I said sure sounds like a great thing because there'd been numerous meetings on how this program would kick off a whole reinvigoration of the library system, reaching all kinds of middle-income and lower-income people. So I really like that. I also do major support for the parochial school system in New York. Why do that?: That's an easy one. They have the same basic ethnic mix, ah, and economic mix of lower income people.  And they graduated about 99% of their kids, whereas the public schools are somewhere around 50%. So my wife and I are supporting that because it's just changes the lives of these people because they have 96% that go on to college.  And it's transformational and I've done other things around the world that haven't been disclosed that tap into that and I like education as a vehicle for changing people's lives.

Rose: And giving them opportunity?

Schwarzman: Exactly.

One note: Schwarzman frequently, haltingly interjects “ah”s into his discourse, some of which seem somewhat telling.  You can watch the video to listen for them but as a courtesy and to make it more readable I left most of them out of the transcription.

Adding Consult To Injury

Mr. Schwarzman above refers to the NYPL’s hiring of “one of the major consulting firms to figure out how to reconfigure the library system.”  One reason the major consulting firm is unidentified may be because it is Booz Allen Hamilton, hired by the NYPL to produce a 2006 report recommending consolidation and downsizing of the NYPL.  Mentioning the firm’s name on Rose could have been awkward as the firm is presently getting a level of spectacular attention that a Charlie Rose audience might find hard to overlook: It employed Edward Snowden, now in the news as an intelligence leaker or whistle-blower, to gather intelligence on Americans for the NSA.  The firm currently has a huge public relations problem on their hands.

Booz Allen Hamilton is not the only consulting firm the NYPL has hired to work on the Central Library Plan.  When doing something controversial it is good to hide behind the work of a lot of “consultants” you hire.  According to COO David Offensend the NYPL also hired the Gensler architectural firm to bless its calculations of how much it could reduce its library space and also hired McKinsey & Company in connection with its planned reductions of space and personnel.

More recently, at a May 29, 2013 Historic Districts Council panel discussion of “The Changing Face of New York City’s Public Library Systems,” Scott Sherman, contributing writer and editor of The Nation, who has been covering the changes at the NYPL, noted that journalists calling the BPL for information can no longer get through to the BPL’s own public relations staff; now they are referred out to the firm of BerlinRosen, which Mr. Sherman pointed out, says on its web site that is specializes in “crisis management.”  (Correction 07/02/'13: This article originally stated that the BPL and the NYPL had both  engaged Berlin Rosen to provide statements about library sell-offs to the public.  Mr. Sherman only said that the BPL had engaged the firm and the NYPL says that BerlinRosen is not doing work for it.)

One For All?

Berlin Rosen is issuing statements on behalf of both the BPL and the real estate developer it is dealing with on one of the library schemes the BPL is pursuing, the sale of the historic neighborhood Pacific Branch  to partially pay for the outfitting of a new library originally described as being an expansion of the Brooklyn Academy of Music.  This appeared in the Brooklyn Eagle:

Jeremy Soffin of BerlinRosen Public Affairs, representing both Two Trees Management and Brooklyn Public Library, said on Tuesday that Two Trees read a statement into the record "talking about its commitment to good jobs. It did not commit to union wages on this project."

(See: 32-Story ‘BAM South’ wins NYC Council approval, by Mary Frost, June 17, 2013.)

The way in which BerlinRosen is representing both the BPL and Walenatas developer’s Two Trees Management is reminiscent of how an earlier Brooklyn Community Board 5 committee meeting on the same "BAM South" project held in March was attended by Jamie Van Bramer (no apparent relation to City Councilman Jimmy Van Bramer on the library committee) of the Yoswein New York, Inc., a firm hired to lobby for both the BPL and the developer.  Mr. Van Bramer told the assemblage that although his firm also lobbies for the developer he was not there that day to represent the developer on that particular project.  Van Bramer has been at many subsequent meetings where both the BPL’s and the developer’s interests were similarly at stake.

Schwarzman Dreams Of A Hydro-Fracked World

Is Mr. Schwarzman sincere or merely unabashed when it comes to talking points?

Schwarzman environmental finger!: Schwarzman raising his finger to emphasize the point that fracking is `environmental'

After the library discussion Rose gave Schwarzman a chance to expound on his theory of where things were in the world economically, which Schwarzman used as an opportunity to swing the discussion around so he could do some cheerleading for hydrofracking.  (Blackstone invests in fracking.)  The discussion, sanitized to the point that it never mentions the term “hydrofracking,” is scary in the way it invokes “dreaming” as an invitation for Americans to sleep through, and not notice, Schwarzman’s deceptive depiction of fracking as environmentally beneficial.  An indication of the coordination between Rose and Schwarzman is the way that Rose, jumping in, knows that Schwarzman is talking about fracking for natural gas and its supposed “benefits” before there is any concrete clue of the topic in Schwarzman’s own words.

Schwarzman: The US in particular is quite interesting because we have a revolution going on in the energy business in the United States which is presenting…

Rose: What impact is it going to have on the United States in terms of making it, certainly, energy independent and not dependent on energy from the Middle East?

Schwarzman: Well, it does a lot of really neat things.  right? Well, what happens is our price of natural gas is going to be way below world levels. And that's going to enable us, theoretically, to do all kinds of things.  First, it's a clean fuel, which (pointing with a raised finger) is a very important environmental thing.  Second, because it's cheap we are going to be able to attract companies from around the world to locate in the United States, in the petrochemical area and all kinds of allied types of businesses.  Third, we are going to convert over time to gas powering utilities, which is pretty cheap.  We could convert cars to natural gas. The amount of money that we would save would be equivalent to a "peace dividend" plus we'd have clean fuel. We already use natural gas in a lot of cities for buses.

Rose: Right.

Schwarzman: And it's… It will be the natural logical fuel for the United States.

Rose: A better source for propulsion for cars than electric?

Schwarzman: You've got to make electricity. So you could look at it, I guess, you know, either way you'd have to build new electric plants and so forth. I look at this just in terms of dreaming as to what the United States could become as a result of this type of thing.

Rose: So when you dream, the United States could become what?

Schwarzman: Oh, oh, could significantly increase its growth rate, we could be attracting companies and investment from all over the world because we have such cheap energy and we have rule of law here. We have safety and not all the places where you produce energy have rule of law or are safe or don't have threatening neighbors very close by or instability in their populations.  So this can be a kickstart for a new economic age in America if you were to dream.

(To start reading more about what fracking and climate change really mean for the country see: Tuesday, December 6, 2011, Testimony at Department of Environmental Conservation’s 11/30 Hearings on High-Volume Hydraulic Fracturing (“Fracking”): The LONG and the SHORT of It.)

Creatively Cheerful Destruction?

The Schwarzman-Rose tag team are ready to make anything sound good.  But sometimes Schwarzman slips up.  The greedy calculations involved in how to make money in real estate can sometimes involve a certain grim grislyness.  In an exchange with Rose, Schwarzman tells Rose about how he has recently been involved in making money from foreclosed American homes.  Rose quickly identifies what can be described as cheerful about this:

Schwarzman: We started actually buying individual houses from Foreclosure about a year and a quarter ago. We're now the largest owner of houses in the United States.

Rose: Can you say we're the largest investor in houses in the United states, which therefore says that we have confidence in the future of the housing market in the United States?

Schwarzman: Absolutely and in fact it's turned out to be so even faster than we wanted it to.

Schwarzman’s slip-up?: “it's turned out to be so even faster than we wanted it to.”   He was happy to be improving his financial position as others were foundering!  This is one of the trustees pushing through the real estate deals that sell and shrink our libraries?

Schwarzman’s Central Library Plan shrinks 380,000 square feet of library space down to fit into just 80,000 square feet.  It sells off the Mid-Manhattan and SIBL libraries and involves demolishing and getting rid of the research stacks that make the important Central Reverence Library it was meant to be.  All this shrinkage, its full cost not having yet been determined, is likely to cost the public something in the neighborhood of perhaps a half billion dollars, the current estimate being at least $350 million with $150 million being the direct expenditure of taxpayer dollars dictated largely by Mayor Bloomberg.

You can find out more about this from the Committee To Save The New York Public Library.  There is also a petition to be signed from Citizens Defending Libraries (of which I am a co-founder) which is leading a campaign against the sale, shrinkage and deliberate underfunding of all New York City’s libraries in order to create real estate deals for the benefit of developers, not the public.

So did Schwarzman, going on Charlie Rose this week, do a good job in promoting the NYPL’s plans to sell and shrink libraries?  Not for those listening carefully.

NOTE Correction 07/02/'13: This article originally stated that the BPL and the NYPL had both  engaged Berlin Rosen to provide statements about library sell-offs to the public.  Scott Sherman of the Nation only said that the BPL had engaged the firm and the NYPL says that BerlinRosen is not doing work for it.

SIBL, NYPL's Science, Industry and Business Library Sold At An Unreported Loss To The Public (And an Elucidating Sideways Look At The BAM South Library Real Estate Games)

Science, Industry and Business Library (SIBL) in the former Altman building

Things don’t always go as planned.  Not even the mega-million dollar deals that the public expects are carefully considered as public resources, taxpayer dollars and public contributions are poured into major public improvements like libraries.

Did you know it ultimately cost the New York Public Library (NYPL) 25% more that it expected to build its new Science, Industry and Business Library (SIBL) when it bought part of the old B. Altman department store on Fifth Avenue?   When it had mostly raised funds for the project in late 1991 it expected it to cost $80 million not the $100 million it ultimately cost.

SIBL Space Now Sold Off Cheaply

Was the Science, Industry and Business Library building worth the $100 million it cost the public when it was finished in 1996?  At the time, the public and donors paying for the library were led to believe it was a spectacular achievement.  But there is some startlingly underreported news, again about how things don’t always play out according to described plans, and it casts doubt on the proposition that it was worth what it cost: Last summer, sixteen years after the completion of this $100 million investment that (at least five years in the works!), the NYPL sold off most of the SIBL library space at a very substantial loss.  See The Real Deal: Five floors of Madison Avenue offices nets $60.8M for the New York Public Library, June 22, 2012.)

The NYPL sold off five of SIBL’s six floors, 140,000 square feet or 87% of the library if you consider that square footage for SIBL is stated as an overall 160,000 square feet, for just $60.8 million.  That means that something on the order of at least $25.2 million of what was spent on SIBL went down the drain.  More went down the drain if you think in terms of inflation or what $100 million could have brought simply by being conservatively invested.  The Real Deal’s Reported:

The New York Public Library has sold five floors of a Madison Avenue building for $60.8 million, according to the New York Post. The third through seventh floors of the Science, Industry and Business Library at 188 Madison Avenue near East 34th Street was purchased by the Church Pension Group, which will use the space as its headquarters. The space comprises 140,000 square feet and only the fifth floor is currently occupied.

What might the library want to say to all its donors and the taxpayers whose huge $100 million investment has just been swept into the dustbin?

Should we simply ascribe the huge loss to the passage of time, thus being able to write it off?  To me, 1996 doesn’t seem that long ago: 1997, only a year later "The Lion King" premiered on Broadway, an event that seems fresh in my memory that led to Julie Taymor’s recent involvement with “Spider-Man: Turn Off the Dark.”

Besides, if you own real estate and, particularly if you are willing to wait a little while isn’t its value supposed to go up?  At the end of this article we will come back to the question of whether fair value is being received for the SIBL space being sold and at the same address a few mysteries.  They may be an explanation as to why SIBL would be sold off at less than its true value.

Larger Plans Afoot

SIBL was underway in 1991 when the real estate market was in a trough.  By contrast, 2012 was supposed to have been a pretty good year for NYC real estate and particularly commercial real estate in the Midtown South neighborhood where SIBL is located.  Why is the library being sold off at such a substantial loss?

The Real Deal article tells us:

The sale is part of the library’s four-year-old initiative to sell real estate and raise money for its $1 billion master renovation plan.

“$1 billion master renovation plan?”   Most people have only heard that getting rid of SIBL is part of NYPL’s Central Library Plan, a plan to take 380,000 square feet of library space and reduce it down to 80,000 square feet of library space by selling off the 160,000 square foot SIBL, together with the 139,000 square foot Mid-Manhattan Library and demolishing the 80,000 square feet of research stacks under the Central Reference Library at 42nd Street and Fifth Avenue and then putting squeezing what’s left of those two sold libraries in where the research stacks were removed.

The Central Library Plan has not been priced yet. . . It isn’t even fully designed yet and NYPL executives haven’t even decided what they might want in the way of having books in the new library but so far they have estimated, subject to increase, the cost of reducing this library space down from 380,000 to 80,000 square feet will be at least $350 million.  Largely because of Mayor Bloomberg’s specifications, New York City taxpayers will be paying at least $150 million of that cost.  But the $350 million plus figure does not include the losses that the NYPL is incurring by selling off SIBL at so low a price.  It should.

The New York Post “exclusive” from which The Real Deal story derived referred to the “master renovation plan” slightly differently and as going back to 2008: “The library announced in 2008 plans to sell some real-estate as part of a $1 billion master renovation plan.”   Does the Post think that NYPL plans to sell real estate unveiled in 2008 will involve that much NYPL real estate being sold off?

The Times apparently never reported the sale of SIBL or the substantial loss being incurred but approximately one month before the news of the sale appeared in the Post and the Real Deal, the Times, paving the way for it, published an editorial praising the Central Library Plan of which this sale would be a part: A Library for the Future, May 8, 2012.  (These Times articles from around the same time were more critical of the plan but not in terms of how library space was being wastefully sold off: Shh! Scholars Fight Over Library Plan, by Ginia Bellafante, June 8, 2012 and Public Library Head Faces Critics of Renovation Plan, by Robin Pogrebin, May 22, 2012 )

How We Paid For SIBL

Of the $100 million cost of the Science, Industry and Business Library, about half ($50 million) was paid for by charitable (tax-deductible) contributions made for the public's benefit and the rest was publicly financed by the city, the state, the federal government and even New Jersey indirectly had a hand in financing the library (the New York State contribution was delivered through the Port Authority of New York and New Jersey).  The exact contributions of the taxpayers through these respective governments changed somewhat as the project maneuvered through to completion under the guidance of New York State real estate developer and NYPL trustee Marshall Rose.  Mr. Rose was put in charge of the supervision of the entire real estate holdings of the NYPL by Vartan Gregorian, who became the NYPL’s president in 1981.  Mr. Rose has continued to handle the NYPL’s real estate ever since, even during a period of time that he was chairman of the NYPL’s trustees.

The Times reported the following breakdown with respect to the funding April 6, 1993:

    •    New York City has pledged $10 million
    •    The state $7.5 million
    •    Project officials are trying to raise $7 million from the federal government, although only $1.9 million has so far been secured.
    •    $25.5 million in long-term debt will be financed by bonds issued by the State Dormitory Authority.
    •    The largest single private contribution, $7.5 million, was made by Lewis and Dorothy Cullman.  (The 80,000-volume circulating library on the ground floor was to be named for them.)

The above is in line with previously reported figures (and figures reported afterward) except that in 1991 it was reported that there would be $55 million in tax-exempt bonds, probably issued by the Dormitory Authority.  Brooke Astor was another donor in the news.

Favorable Times Coverage For SIBL

Click to enlarge

From its announcement in 1991 all the way through at least 1997 the Times was full of nothing but praise for the new SIBL (see image above).  In late 1997 the NYPL Trustees announced that they “would rename the library's Electronic Information Center as the Elizabeth and Felix Rohatyn Science, Industry and Business Library.”  Elizabeth was departing after a short stint as Chairman of the Board of Trustees.  Did the trustees or the Rohatyns (off to France so that Felix could serve as ambassador) know how fast the sand was flowing out of the hour glass for SIBL making this honor ephemeral almost as soon as it was conferred?

Probably not.

The Times was reporting things like the following:

The most spectacular example of public-private enterprise is SIBL, the $100 million Science, Industry and Business Library that opened to great fanfare recently in Manhattan.

(See: Adopting Branch Libraries, July 15, 1996.)

The new $100 million library, which occupies roughly 160,000 square feet in the former B. Altman building, is the largest single project the library has undertaken since the construction of its landmark main building was completed in 1911. It unites all of the library's various collections of scientific, technological, mathematical and business material, which had been divided between 42d Street and the library's West Side annex, and places them in a new environment that is itself a showpiece of technology.

(See: Grandeur and Modernity in New Library, by Paul Goldberger, April 24, 1996.)

It was considered big.  In an editorial whose title alludes to SIBL’s proximity to Macy’s the New York Times praised the new library as follows:

The new outlet is the library's biggest single undertaking since the main Research Library, at Fifth Avenue and 42d Street, was built. The New York Public Library's president, Paul LeClerc, calls it the largest public-private collaboration of its kind -- not just in New York but anywhere.

(See: Miracle on Madison Avenue, May 11, 1996- The real estate industry has also sought to move Macy’s out of its building to turn it too into a real estate project.)

Interestingly, the Altman department store was built in 1906, just five years before the main research library.  The Mid-Manhattan Library was similarly created making use of a former department store, the building that housed Arnold Constable.

Mid-Manhattan Library, before there was scaffolding, the former Arnold Constable Department store

When Did We Suddenly Start Shrinking Libraries?

Was there an unforeseen turnaround, a sudden change in the concept of what libraries should be, the advent of digitalization such that abruptly, after only sixteen years, large libraries were no longer desirable and very small libraries are instead preferred?   Looking ahead in 1996 the prediction was against this:

"There is so much hype about electronic resources that if you allow yourself not to think about the future carefully, it's easy to believe it will be one without books," said William D. Walker, who is Andrew D. Mellon director of New York Public's five research libraries. "We're making an enormous investment in new space to hold future print collections. The book is an invention that will be difficult to bump by any technology."

(See: Moving Bits, Bytes and Books To the Library of the Future;A New Branch Offers Data in Old Forms and New, by Bruce Weber, April 5, 1996.)

In point of fact, public demand for physical books at the New York City libraries is up.

An Elucidating Digression Into Library Building and Real Estate Games In Brooklyn

The idea that significantly smaller libraries were suddenly to become the fashion would take some time to get around.  Until recently the real estate industry and developers saw libraries in a somewhat different light.

In 2002 the Brooklyn Public Library selected Enrique Norten of TEN Arquitectos in Mexico City to build a 150,000 square foot library across from the Brooklyn Academy of Music.  The library was seen in terms of bigger real estate ambitions, the “sleek, all-glass, Enrique Norten-designed building is a main feature of the city’s plan to surround the Brooklyn Academy of Music with a Lincoln-Center-style campus that includes new housing and cultural institutions.”   (See: Bruce to the rescue? Library courts Ratner for big cash infusion, by Ariella Cohen, September 2, 2006, The Brooklyn Paper)

Library New York Times, August 15, 2006

2005: Proposed theater shown next to library.

The price of the big Enrique Norten library went up over time (from $120 million to $135 million) and the envisioned date it would be built kept getting pushed back (ground wasn’t broken in 2005 and the building didn’t open in 2007).  But even though the proposed size of the big library was scaled back by about 40,000 square feet in 2004 (Library Project In Brooklyn Scaled Back, April 18, 2004) fund-raising for the library continued and the idea of a big library continued until 2007. (See: No Norten for BAM? 04/25/2007and Arts Library Planned in Brooklyn Hits a Snag, by Robin Pogrebin, May 3, 2007.)
    
2007, the year that this “big” Brooklyn Public Library project was abandoned was the same year that the Donnell Library sale-for-shrinkage deal was announced. That’s when the fashion swung from building big libraries to selling city libraries and shrinking them.

The idea of having an Enrique Norten-designed library across from BAM persisted, however.  It became  (or maybe remained a chess peice) in a game of real estate development manipulation.

The Times article announcing the demise of the plans for the big Enrique Norten-designed library contained this:

Plans now call for a new headquarters for Danspace Project, which commissions and presents contemporary choreography, to be built at Ashland Place and Fulton Street, with a 20-story residential tower on top. A formal request for proposals went out to developers in February, and responses are due on May 18. David Walentas, the developer behind much of the Dumbo area of Brooklyn, said he would submit a proposal.

Mr. Walentas said he would consider being part of a revised library project that would also include private uses. He declined to elaborate.

The above, with its reference to a request for proposals (“RFP”- a form of bid that is often used to get around the bids having to actually and truly be honestly competitive) totally obscures from the public what happened.  What happened should be a red flag for the public about what kind of improper real estate transactions are now being tolerated, nay intentionally structured, by library and city officials. . .

. .  The proposed library is now supposed to be included in the Walentas Two Trees Development BAM South project, but as became clear at City Council Land Use Committee hearings June 4th, Walentas got the right to build this property by bidding for city-owned property against nobody on an RFP for the right to build a “parking garage”: A “parking garage” (!!!), not the 300 units of housing now proposed to be built there together with the library and a great deal of other cultural space in a building that will be almost as tall as the Williamsburg Savings Bank building.

Presenting the BAM South Porject at June 4th City Council Hearing.  Image of BAM South alongside Williamsburg Savings Bank on screen, developer Jed Walentas on right

You can find an early report on the evolving status of this matter a year later in Brownstoner: Norten Design for BAM is Resurrected by Two Trees, by Gabby, 06/16/2008.  As of that time in 2008 the proposal was a “371,000-square-foot building with 180 units of housing and 187,000 square feet of commercial space.”  Later on, the project would grow to 300 residential units while promulgating the notion that the public should allow this still greater density in exchange for getting the library built.                 

Walentas project at 180 residential unit size- At the June 4th hearing the developer said the city directed him to use the architect

In 2008 it was not known that BPL also intended to sell the historic Pacific Branch library, the first Carnegie library opened in Brooklyn, as part of its plans in order to partially pay for the outfitting of the library in the huge new Walentas BAM South building.  The public would not find that out until January of 2013. 

The Walantas Two Trees development fully grown to 300 unit size from the "parking garage" RFP

The problem with not having a proper bid for city property is pointed out in one of the comments to the Brownstoner article from Shahn Andersen:

Am I the only person who has noticed that for a measly $26.5 million dollars, Two Trees is getting land that should be worth a around $65 million dollars? For the $20 million they are paying the city plus the lot worth $6.5 million they are transferring to BAM, they will be getting land with 371,000 buildable square feet. At an average market value of $150-$175 a square foot for a lot like this it would be worth $65 million dollars on the open market. Two Trees will be paying the equivalent of only $71 a buildable square foot for space that is predominantly valuable residential and commercial space.

Why doesn't the city ask for RFPs for this space, or open up it up to competitive bidding? The people getting short changed on this deal are us, the taxpayers. As mayor, Michael Bloomberg has sure pushed through a lot of projects that seem to benefit private developers more than the taxpayers.

I haven’t checked Shahn Andersen's calculations but the calculations were for when the project involved 180 residential units.  Increased to the 300 residential units now proposed the discrepancy between the benefit the developer is getting and what the developer is paying for it is far more extreme.

This is why City Council Member Tish James was entirely on target when, at that June 4th city council public hearing, she zeroed in with questions about the lack of public benefit the developer was delivering in building the project.  Among other things, the value being discarded by the city could surely fund city libraries instead of being being handed out as gifts to real estate developers.  Instead we find things are to the contrary, with the mind set library officials now have of selling off libraries to generate real estate deals; approving the BAM South projects stands to put the continued existence of the historic Pacific Branch Library in significant jeopardy.

Back to SIBL’s Sale

When all these real estate games are being played with library property it is important to ask whether proper value was obtained when the SIBL space was sold off.  Maybe not.  There are already significant and clear questions whether appropriate and full value was obtained when the Donnell Library was sold in 2007.  See: Monday, May 27, 2013, More Thoughts On Valuation And What The NYPL Should Have Received As Recompense For The Public When It Sold The Donnell Library.  It almost certainly wasn't.

Sale of the five-story 97,000 square foot Donnell netted the NYPL only $39 million while the 7,381 square foot penthouse in the 50-story building going up on its former site is being offered for $60 million.

It is hard to find comparables for and to judge what a vacant commercial condominium space like the SIBL space should sell for.  The price of commercial space is generally affected by leases.  If the property is affected by low-rent paying leases its value will be brought down.  High rent paying leases will bring the value up.  Low interest rates like we’ve had in recent years bring prices up, but for commercial space generally prevailing cap rates can also help keep prices down.  If the purchaser of vacant space is buying space to occupy the space themselves as was the case when SIBL’s space was sold to the  Episcopal Church’s Church Pension Group, prevailing high rents for leases in the city will tend to also drive up the price that will be paid for the commercial condominium property.

That being said as background, the sale of 140,000 square feet for $60.8 million comes to $434.29 per square foot.  Information available from one brokerage firm says that for 2011 the average sale price, per square foot for commercial space in an office building was $701 while “the first three months of 2013 average price per square foot for the purchase of an office building was $703.”

If you go back and watch a contemporaneous pertinent Stoler Report episode: The Stoler Report: “The Office Market in New York” June 8, 2012 (taped May 10, 2012) you will hear the real estate experts on that show describing the market back then as strong but taking a pause in its growth.  They also mention that the market was showing particular strength in Midtown South, the real estate area from the 30s to the teens between Fifth and Lexington where SIBL is located.  The Empire State building on the block next to SIBL’s gets cited.       

SIBL and Empire State Building in background

Then, as I mentioned before, there is the question of whether, with the escalation of real estate prices in general between 1991 and 2012, it makes sense that a loss was suffered.

What induced the Episcopal Church’s Church Pension Group to take the space?  The Real Deal article says that the Pension Group:

    . . . plans to sublease its existing offices at 437 and 445 Fifth Avenue upon moving into the Madison Avenue property.

That means that their existing lease was not up and that the deal they were offered on SIBL was good enough to induce them to incur the extra transaction costs of moving and subleasing.  Did they have a sublease clause allowing them to sublease?  At a higher rent?

The addresses the Episcopalian pension fund is vacating might point to an answer.  The addresses are right next to each other, but one of them, the 445 Fifth Avenue is next to, on the same block as, the Mid-Manhattan library that the NYPL is maneuvering to sell. Is this part of an endeavor to clear a larger real estate site for a truly massive building project?  And, if it is, can the New York Public Library legitimately be selling off a library like SIBL at a below-market price, at a loss to the NYPL, in order to promote that real estate deal?

That might be the an excellent place to end this article, but I won’t.

Let’s progress to one more mystery.  The State Dormitory Authority issued tax-exempt bonds to finance SIBL.  Why is it that when information about SIBL seems to have been furnished to the news media by the Dormitory Authority that SIBL’s space is reportedly cited as being larger?  More like 200,000 feet rather than the generally recited 160,000 square feet?

Rebuilding buildings doesn’t always make them safer.  Soon after SIBL opened there was a fire in the building that started in what were the fur vaults of the old Altman department store.  Reporting on that fire the Times reported:

The Science, Industry and Business Library of the New York Public Library occupies nearly 200,000 square feet on the eastern end of the building. Opened with great fanfare in early May and hailed as something of a technological marvel, the library serves 3,000 visitors a day.

(See: Fire on 34th Street Snarls Traffic and Shuts Library, by Janny Scott, August 24, 1996)

Similarly, this Times article reporting about Dormitory Authority financing uses a higher square foot figure:

The Dormitory Authority is also helping finance a $125 million project creating the Science, Industry and Business Library in 213,000 square feet on the lower eight floors of the Madison wing, scheduled to open later this year. CUNY's move, also authorized by state legislation and financed by public funds, will fill 375,000 square feet of Altman's remaining space, making CUNY the building's major occupant.

(See: Neighborhood Report: Midtown; Domino Real-Estate Deal Cleared, by Bruce Lambert, August 6, 1995.)

The answer may be hidden in this Times article about real estate lawyers.  It says that Gordon Davis, lawyer and former City Parks Commissioner (from 1978 to 1983) was working for the NYPL “which is looking for tenants to occupy expansion space in the new Science, Industry and Business Library at Madison Avenue and 34th Street.”  (See: Lawyers Who Mold The Shape of a City, by David  W. Dunlap, February 25, 1996.)

Did (or does) the NYPL own “expansion space” in SIBL, perhaps 40,000 to 53,000 square feet making up the difference between generally reported 160,000 square foot size of SIBL and these larger figures?  It raises many intriguing thoughts.  It also provides another place to end this article. . . .

. . . .  If the Central Library Plan goes through and what is left of the SIBL and Mid-Manhattan libraries are crammed, after demolition, into small space occupied by the research stacks of the Central Reference Library, there will be no `expansion space’ for the resulting much smaller library.

That should remind everyone of what is true of all the libraries around the city: Once they are sold off for these real estate deals it will be virtually impossible for the public to get them back.  (Even harder if they are sold off at below market prices.)

Irony Of Ironies: Urban Librarians Unite, Holding A “We Will Not Be Shushed Read In June 8 & 9th! Sign Up Now!” Event, Wanted To “Shush” Citizens Defending Libraries About It.

Urban Librarian Unite is having a read-in event (publicized above) to protest the underfunding of libraries but they don't want you to come to it if you are opposed to the real estate deals selling off and shrinking the New York City library system

Urban Librarians Unite is having a “We Will Not Be Shushed Read-In June 8 & 9th! Sign Up Now!” event inviting people to “take a stand against the outrageous proposed cuts to our beloved New York City public libraries.”

Citizens Defending Libraries has a petition that demands that “Mayor Bloomberg stop defunding New York libraries at a time of increasing public use, population growth and increased city wealth.”  The petition has well over 11,000 signatures, most of them online.  Citizens Defending Libraries (of which I am a co-founder) put the Urban Librarians Unite “We Will Not Be Shushed” event in the online calendar where it makes available all New York City library related events likely to be of interest to its petition signers and others.

And then Urban Librarians Unite wanted to “shush” Citizens Defending Libraries about its “We Will Not Be Shushed” event.  Why?  Because the Citizens Defending Libraries petition statement continues with the observation that “Shrinking our library system to create real estate deals for the wealthy at a time of cutbacks in education and escalating disparities in opportunity is not only unjust, it is a shortsighted plan that will ultimately hurt New York City’s economy and competitiveness.”
 
Notwithstanding that Urban Librarians Unite posted on the web that it was inviting “readers, library lovers, librarians, families, and even unsuspecting people just wandering by in front of the library” to participate and join “together to take a stand” against cuts that both organizations were formed to oppose Urban Librarians Unite demanded that Citizens Defending Libraries remove information about the public event about library funding from the calendar because Citizens Defending Libraries was opposing the real estate deals.

Urban Librarians Unite expressed dissatisfaction with the Citizens Defending Libraries testimony at Wednesday’s June 5th City Council Budget hearing where Citizens Defending Libraries called those real estate deals into question.  See: Testimony By Citizens Defending Libraries At June 5, 2013 City Council Committee Hearing On Library Budget Issues.

Here are some excepts from that CDL testimony:

City Council members will say that this underfunding is unjust and must be reversed.  Citizens Defending Libraries wholeheartedly concurs in calling for an end to such underfunding at a time of substantially increasing library use and city growth.

* * * *

On Monday, at the first portion of ths City Council committee hearing concerning budgeting for New York City Library budgets and library funding Anthony W. Marx and Linda Johnson, the respective heads of the New York Public Library and the Brooklyn Public Library, testified that they had a problem approaching donors asking that they give monies to fund the libraries because they cannot make a `credible’ case that any money given to the libraries by such donors will not be immediately subtracted out by the mayor of New York in budget cuts.  Indeed, supporting the observation that there are games being played that we must guard against and that are damaging to the public, Committee Chair James G. Van Bramer concluded with an acknowledgment that the annual budget dance around libraries is a `game.’

The testimony called for the City Council to intervene and investigate how city funds being supplied to the libraries were being plundered in these real estate deals.  As the city is providing the “lion’s share of all the funding for the libraries” Citizens Defending Libraries called for the City Council to seek the same assurance that big charitable donors insist upon to assure that their donated funds will not be “squandered or otherwise made meaningless.”  This made Urban Librarians Unite unhappy.

As much as Urban Librarians Unite sought to kerfuffle with Citizens Defending Libraries over the issue Citizens Defending Libraries did not agree to have Urban Librarians Unite dictate what should be included in its calendar items.  Instead, after much back and forth Citizens Defending Libraries accommodated Urban Librarians Unite by inserting notice of the following wish from Urban Librarians Unite, essentially a dis-invitation to the Urban Librarians Unite event directed to an important segment of the population:

•   Important Note Respecting One Of The Events In The Calendar Above-  The Jun 8 – 9, 2013 24-Hour Library Read-In by New Yorkers Standing Up for Libraries- Hosted by Urban Librarians Unite.  This is one of the events on the calendar not organized by Citizens Defending Libraries (most are not).   Urban Librarians Unite (created circa 2008) contacted Citizens Defending Libraries to express their wish that Citizens Defending Libraries communicate Urban Liberians Unite's wish that people not come to attend their 24-Hour Library Read-In event if they believe:

    •    We shouldn’t be selling off our NYC libraries the way we are.
    •    We shouldn’t be shrinking our library system assets
    •    It is a matter of public concern that we are getting less than appropriate value when these assets are sold, and/or
    •    Public representatives should assert themselves to protect these public assets.

Urban Librarians Unite also informed CDL that they considered inclusion of this publicly advertised (previously come-one-come-all event) public event in the calender “unacceptable.”  In other words they wanted to Shush us about their "We Will Not Be Shushed Read-In June 8 & 9th! Sign Up Now!" event.  Urban Librarians Unite objected to the testimony CDL delivered at the City Council budget hearing on June 5, 2013 and apparently there was concern on their part that people with negative feelings about library sales and shrinkage might participate in the event to express their opposition to underfunding of libraries, or that such people might communicate with attendees of the event about this related subject. CDL doe not allow those holding public events to dictate exclusion (or inclusions) of information in the calendar about relevant library-related events (mayoral forums, library trustee events, etc.), but agreed, in this instance, to express the above about ULU's conscientious efforts to exclude public opposition to the library sales and shrinkage from their message. 

The first communication coming from Urban Librarians Unite making the totalitarian demand that Citizens Defending Libraries remove from its calendar the event designed to capture "unsuspecting people" (library patrons) " just wandering by in front of the library” came in a phone call from an upset Lauren Comito, listed as on the board of Urban Librarians Unite. (We knew Ms. Comito from before because she had come to one of the first Citizens Defending Libraries organizational meetings.  Back then Ms. Comito expressed a desire to avoid the politics library underfunding, and subsequently our communications with Urban Librarians Unite dropped off.)

Ms. Comito expressed a concern that Citizens Defending Libraries was not calling for restoration of library funding.  Since her concern seemed to be expressed in earnest, even if it was a peculiar perception, (and evne though she hung up on us when talking) her concern seemed to deserve a response and I provided the one below:    

Lauren,

This was our testimony yesterday:

Citizens Defending Libraries wholeheartedly concurs in calling for an end to such underfunding at a time of substantially increasing library use and city growth.

See attached for the full letter.

So no, we are not in disagreement with Urban Librarians Unite that funding should be restored.  In fact, another point we make is that the given that the current funding crisis coincides exactly with the ginning up of these real estate deals to shrink the library system (including, as a result, staffing) we see the real estate deals and shrinkage as actually being a cause of the deliberate "unjust" underfunding, therefore another reason to fight them.  (One reason we are fighting for baseline funding.)

I don't know what you mean when you say you know what happened in the Donnell deal but I don't think it is was a good thing for the public.  [Ms. Comito had said on the phone that she was not naive and knew what happened at Donnell but did not elaborate about what she meant by this.]

With Donnell, the Central Library Plan and every library sell-off plan the details of which have actually seen the light of day, including the Brooklyn Heights library, there has been a consistent and substantial diminishment of the publicly owned assets (usually by 2/3rds to 3/4ths) with no benefit to the public while others are benefitting in nontransparent top-down concocted deals that, like Donnell, benefit connected players in the real estate industry.

    •    Donnell Library: Reduction of public library space by more than two-thirds (from 97,000 square feet to 28,000 square feet- NY Times figures, though by other calculation it is more extreme).  Library worth perhaps $120 million to the public in terms of continued ownership (based on recent transactions) is sold to net $39 million.

    •    Central Library Plan:  Reduction of public library space by more than two-thirds or about three-quarters (from 380,000 square feet down to 80,000 square feet- That’s the 139,000 sq/ft Mid-Manhattan plus the 160,000 sq/ft SIBL plus the 80,000 sq/ft of stacks being destroyed.  In the very recent past, before the real estate guys took over it was proposed to nearly double Mid-Manhattan’s space, increasing it by 117,000 square feet for more library services) The cost of this 380,000 square foot shrinkage is $350 million or more. It is not paid for by the real estate sales because they bring in less than that amount (Marx referred to bringing in $300 million at least a $50 million loss).  Instead, the shrinkage is justified because it is asserted by Marx and the NYPL that a smaller library (with fewer librarians) might cost $15 million a year less to run.  Most savings of this sort involve personnel cost reductions, not brick and mortar.  (I agree with you that libraries are more than something just physical.)
  
    •    Brooklyn Heights Library: Reduction of public library space by more than two-thirds (from 62,000 square feet to 15,000 or maybe now 20,000 square feet).  Cost benefit to the public this time?  Not out yet, but it’s supposed to be a “partnership” arrangement rather than a request for bids arrangement and likely with Forest City Ratner with a record of abusing those relationships.  (The no-bid arrangement for the BAM South library to "replace" the historic Pacific branch- hearings were Tuesday morning- started out as an RFP to build a "parking garage" which through partnership has become something extravagantly different and more generous for the developer.)

Do we really want the library officials currently running the system to take these transactions and use them, as proposed, as models for sales and shrinkage throughout the system?  You say you understand these things.   Our understanding of them is such that we have to oppose the shrinkage now and hold the line so that it doesn’t spread with things like the plan for northern Manhattan and the plan to similarly “leverage” all of the BPL’s real estate.  We also believe that it makes sense to do as we have and call for a moratorium on real estate deals until proper funding is restored: That is likely, faster than anything, to result in a quick restoration of funding.   Doing the opposite and letting underfunding be an excuse for real estate deals (the exact thing they want) is only likely to result in more underfunding (because it leads to more of what they want).

I hope you stand with us one day.  And if you think any particular library looks shabby at the moment that may have a lot to do with the lack of funds we are all protesting.  (When developers want to get rid of something they work at making it shabby first.)

We had other testimony delivered yesterday that I can also send you that said, that as a substantial giver of funds, the city should do what any other substantial givers of funds should normally do, exercise control to make sure the intended benefit of those funds is effected rather that stolen. How else would you turn this around?: The plundering and shrinkage of assets itself compounds the system’s deprivation of funds.

Others are asking similar questions about how the library officials are wastefully pouring money into creating these real estate deals, like the $350 million potential net loss into the Central library plan and then asking for more money as if there is no irresponsible management of assets to be noticed.  For instance, New York Times architectural critic Michael Kimmelman tweeted the following and you can see the responses it generated:   

Nervy:@NYPL email begging donations for endangered branch libraries, which NYers really need+want, while it pours $$ into CLP @ 42nd St.

Kimmelman tweet

Click to enlarge.  Go to Twitter to see full conversation full size.  Some of the Twitter conversation in response to  Kimmelman's tweet

Ultimately, Christian Zabriskie, the founder and principal spokesperson for Urban Librarians Unite at events, stepped into the fray to demand the event be removed from the CDL calender of library events "immediately."  (The underscoring was his.)

Above, event at City Hall protesting the underfunding of libraries in which Urban Librarian Unite participated.  CDL was confused about what to do since the even was organized by libary officials want to sell libraries and shrink the system.  Some CDL members participated, others just watched.  Most people there said they did not want libraries sold or  the system shrunk.

Christian Zabriskie enlarged from the larger tableaux above and below

 

The City Hall event organized with library resources was similar to the April 18th City Hall CDL and Committee to Save the Public Library event event organized without those resources

Citizens Defending Libraries and the Committee to Save the New York Public Library had elected officials like NYC Comptroller John Liu and Assemblyman Micha Kellner

Citizens Defending Libraries and the Committee to Save the New York Public Library had representatives from a troop of girl scouts who came out to save the Pacific Branch Library they use.  Afterwards, the troop produced a wonderfully cute video making their plea (other videos available from CDL).  Following suit the NYPL City Halle event featured a mini-podium to feature children's pleas.

Mr. Zabriskie expressed concerns that he didn’t want Citizens Defending Libraries attempting to “co-opt” the Urban Librarians Unite event, given his strong disagreement with the Citizens Defending Libraries testimony, which he considered directly against his work, putting us at “diametrically opposite ends of this fight.”   Saying that he had “150 volunteers” to work the event he said he did not want fliers or petitions (information?) around that was not consistent with what he was working to achieve and that he didn’t want Urban Librarians Unite “members associated with” our testimony opposing the sale and shrinkage of library system assets.

Urban Librarians Unite was created in 2008, almost exactly the same time that the real estate deals selling off libraries were becoming public.  It was November 7, 2007, the very end of 2007, that the Donnell Library sale startled the public with its secrecy when it was suddenly unveiled as a fait accompli.  As noted, 2008 was also around the time when the underfunding of libraries, now used as an excuse to sell them, began to greatly accelerate.  Researching, I find that in all the years since it was formed in 2008 Urban Librarians Unite has apparently never raised questions about the library sales or shrinkages, never been critical about any of the big players or politicians involved behind the scenes.  The most radical thing I find on the ULU site is a link to a Zabriskie-authored American Libraries article sympathetic to the Occupy Wall Street library.
 

August 6, 2012 Zabriskie published an ebook on Amazon ($32:00?- 86 pages, no reader reviews or ratings) by the name “Grassroots Library Advocacy.”  The Amazon description refers to “rounding up advocates from the wider community and conducting a grassroots effort” and, despite the fact that Lauren and Christian previously communicated an aversion to being “political” it says it details “lessons learned . . . including advice for dealing with political leaders and the media.”

This fall 2011 article “Grassroots Advocacy: Putting Yourself Out There- Find fresh ways to energize support for libraries” (By Lauren Comito, Aliqae Geraci, and Christian Zabriskie) may have been a forerunner to that book: 

Are you trying to put pressure on politicians directly? Show up at a budget hearing and see if you can give testimony. Line up your speaking points in advance and rehearse them, be polite but firm, and dress professionally. Ideally, you’ll bring along a bunch of your friends and supporters, who will do the same.

This is the “fourth year of [the Urban Librarians Unite] hosting our 24-hour Read-In on the steps of the Brooklyn Public Library.”  The idea is sign up and symbolically read any literature you want on “the steps of the Brooklyn Public Library.”  I had been thinking of reading George Orwell.  I communicated that to Christian and Lauren.

It is interesting to think that if Urban Librarians Unite had not been formed in 2008 back when the sell-offs shrinking the library system started, that an organization like Citizens Defending Libraries (created this past February in response to breaking headlines with new information about the sell off of libraries) might have sprung into existence far sooner to expose how real estate deals that Urban Librarians Unite does not oppose are dismantling New York City's library system.