“Welcome To Brooklyn” Where the Game Is Frivolous Spending On Boondoggle Basketball Arenas- Getting the Image Right

Just the other day we were out crossing the Pulaski Bridge that connects North Brooklyn to Queens when lo and behold what did we espy but a “Welcome to Brooklyn” sign set up to flog the Forest City Ratner/Mikhail Prokhorov Nets basketball arena to the traffic going to and fro!

The sign was doubled-sided so it presented the same “Welcome to Brooklyn” message whether you were coming to or leaving Brooklyn (the shot above is the “Welcome to Brooklyn” you see when leaving Brooklyn- the shot below is what you see when arriving), but we found ourselves transfixed more by a second anomaly of this image that wasn’t gotten right: The picture is the really preposterous old rendering of the arena which by now ought to be discredited in the minds of most people. I am surprised it hasn’t been discarded. . . .

. . . For one thing, the preposterous old rendering used in the billboard still has, in the background, the notorious ghostly “vaportechture” that stands in for the buildings that aren’t being built, while blotting out both the real neighborhood being destroyed and the developer-created parking lots that are likely to be around for decades. The rendering also substituted a whoosh of orange glow for the inevitable slow-moving traffic jams that will surround the arena.

The fact is, after that old rendering came out quite a few of us spent a fair amount of time working on a corrected version of what things are apt to really look like.

With collaborative corrective efforts, the rendering thus went from this fantasy:

To this likely reality:

And thereupon it seemed like the image really needed to be overlaid with some visual reminders about how the arena New York taxpayers are subsidizing for the subsidy-collecting Bruce Ratner and his Russian oligarch financial pal will be a significant financial net loss* for the public.

(* It is true that an updated calculation of the extent of the net loss needs to be prepared and in this regard it is telling that the public officials responsible have not disseminated and probably not bothered to calculate such an update.)

For more on this see:

Friday, October 30, 2009
Getting The Image Right: Forest City Ratner’s Proposed Atlantic Yards Nets Basketball Arena

Saturday, September 12, 2009
Really Now! The subject of Rendering the Atlantic Yards Arena Realistically Revisited

All that remains now is to get this image up on a billboard so that all those entering or leaving the borough of Brooklyn will get the message (click to enlarge).

This Saturday May 7, 2011, In Brooklyn Heights: Folk Music With We’re About 9, Barnaby Bright and the Brooklyn Heights Association Landmark House Tour

Here is a suggestion for making a great day of it in Brooklyn Heights this coming Saturday, May 7th. It caps off with catching the folk music performance of We’re About 9 in a return engagement in the First Acoustics series at the Unitarian Church on Monroe and Pierrepont Streets. Folk music duo Barnaby Bright, a married couple, is their opening act. The performances start at 8:00 PM.

But here is how you can make a real day of it. Start out with the annual Brooklyn Heights Association Landmark House Tour. You should be done just in time to have a perfectly timed pre-performance dinner at one of the good local restaurants. The window of time for doing the "go-at-your-own-pace" five town house tour tour is 1:00 PM to 5:00 PM, with tickets available in advance on-line or by phone, or on Saturday at the event from 12:30 to 3:30 PM. The brownstone/townhouse and garden-oriented house tour is fun and raises money for the oldest and one of the strongest community neighborhood associations in the city. (The BHA is part of the Brooklyn Speaks, which is currently litigating against the Atlantic Yards Ratner mega-monopoly.) With luck this will be another year when homes on the Promenade with views of the harbor will be on view. And if you haven't done it before you should take the tour's opportunity to do the docent-led tour of historic Plymouth Church.

What does notice of a local music event and the Brooklyn Heights Association annual House Tour have to do with Noticing New York’s more typical focus on development in New York City and associated politics? - - It’s a long story (some of which is still being written). Some of it can be found via the segments linked to below:

Wednesday, March 16, 2011
Another Insert into the Music- Hands Joining Across Eras: Brooklyn Heights Unitarians and How a Historical Landmark Saved the Past For the Future

Wednesday, March 9, 2011
An Insert Preview - Music Superstar Ethics: How Completely You Can Sell “You can say what you say, but you are what you are.” Jay-Zzzzus!

Tuesday, October 19, 2010
Adding A few More Off Topic Notes (Or Are They Really?)

Here again is the information about Saturday night’s performances. Tickets are available on-line. Enjoy.

Saturday evening at 8:00 PM
We're About 9
with special guest
Barnaby Bright
First Acoustics
May 7, 2011
All seats $25.00 advance, $30.00 at the door
For More Info

More on the details of getting tickets for the BHA house tour are here. The tour tickets are $30.00 for BHA members and $40.00 for non-members, with an additional significant discount for those who become members and reserve in advance, which is still possible.

A List of Reasons Lovers of New York Should See “Bill Cunningham New York,” A Documentary About Photographing New York Fashion

(Poster for Bill Cunningham New York, click to enlarge.)

Noticing New York readers are in luck. Here I was thinking this post would be too late, but it’s not: You can still catch the documentary “Bill Cunningham New York” in New York area theaters. The sweetly charming Cunningham, a man of extraordinary magnanimity of spirit, is a beautiful nerd, a man who, by giving himself over entirely to his obsession with fashion, achieves a singular greatness few of us can ever hope to achieve. With his two contrasting photographic features appearing weekly in the New York Times, Cunningham meticulously and with relentless energy chronicles the upper echelon fashion at New York’s exclusive charitable soirees and, also, more important, street fashion.

I’ve met Cunningham a couple of times and found him to be exactly as charming as depicted in the film. As he is also something of a ubiquitously present street character, famously relying on his bicycle (his 29th) to traverse the city, you may realize upon seeing the film that you too have seen him busy at work without it ever registering who you were seeing. Concentrating on his work, Cunningham has a genial way of blending into the background as he happily snaps photos of woman’s footwear or other accouterments (or men's) whereas some other similarly preoccupied fellow might be have everyone around on edge with suspicions that he was some sort of fetishist.

Impressively, the film by Richard Press is apparently one of the first things Press has done. According to the narrative of the film, it took many years for him to persuade Cunningham, now in his early 80's, to consent to the project. Cunningham is still plying his trade and the bike riding seems to have kept him admirably spry.

Cunningham isn’t like your typical fashionista. Totally brilliant about style and what superb craftsmanship may be essential to the mechanics of achieving a look (Cunningham once designed hats), Cunningham isn’t a snob; he is totally egalitarian which is really the story behind his coverage of street fashion, something he is probably more responsible for than any other individual.

What Cunningham seems to value more than anything else is fashion courage as individuals find ways to express themselves. When he goes to the high society social soirees, the rich and powerful who go there to be seen and hob nob importantly don’t get photographed by Cunningham unless they are wearing something interesting. As one of our party on the trip to see the movie observed: “Cunningham is more of an anthropologist of fashion than anything else.” (This particular viewer from our party was back to see the film for the third time in one week. The rest of us were newbies.) Cunningham is quite aware of all the ways that fashion is used to signal the nuances of social strata; it is just that he doesn’t participate in those value judgments while observing them.

The only thing Cunningham might be a snob about could be an illegitimate pretenses of originality. Blessed with a remarkable memory of the fashion past Cunningham can readily exhume archived material to show when a design has been done before, sometimes, as the film shows, with devastating effect.

Intensely moral and scrupulous about his standards, Cunningham is unusual in the way he will not compromise his integrity. He refuses to be seduced into supporting any of the prevalent stratifying cruelties of the fashion world. It is interesting to learn that Cunningham (and therefore, to a significant extent, the New York Times) selects the multitudinous weekly charity events he attends based on what he thinks is the value of the work the charity is doing. Cunningham, will also, when attending society events, never accept food or drinks, not even so much as a glass of water.

A List of New York Reasons to See This Film

Here is a list of the particular reasons Noticing New York readers will want to catch this film, the trailer for which is below or you can find it here.



It will give you a prism through which to see the city and think about ALL the following subjects (and then some):

• The contrast between the elite high-cost fashion of the power brokers (making, for instance, decisions about rezonings and mega-projects using eminent domain) and the fashion that generates up from the street level is emblematic of many of New York’s most important contrasts. One doesn’t have to scrutinize it very hard to find in it the Robert Moses/Jane Jacobs dichotomy of city life. A Cunningham quote from the trailer: “The best fashion show is always on the street; always has been and always will be.” And here is a quote from the New York Times review that sounds like an admonition lifted from Jane Jacobs herself: “I let the street speak to me, and in order for the street to speak to you, you’ve got to stay out there and see what it is.” The Times review also comments: “Mr. Cunningham has molded himself into the designated noticer and interpreter of the city. . .” - Humm, a “noticer”. . .

• Biking as an alternative form of transportation, biking in all weather, where to keep a regularly used bike if you own one, the possibility of accidents, where to lock up bicycles on the street and the frustrating rate of bicycle theft. Also, the concern of finding bike-friendly apartments and workplaces.

• The difficulty of finding an apartment. The film was made when Cunningham, on the presumably restricted salary of a journalist, needed to find a center-city replacement for his extremely modest apartment which apartment he gives over, almost entirely, to his work, with file cabinets occupying almost all the space.

• Whether charities to whom the city dispenses special privileges such as tax exemptions are serving the purposes once envisioned or are just submerging indistinguishably into the dull grey corporate mesh of things. The reason Cunningham had to look for a new apartment was his eviction from his studio apartment in Carnegie Hall Towers, a saga in itself. The movie looks in on its waning days. For more than a hundred years the Carnegie Hall Towers studio apartments, once numbering 170 in all, had been occupied by an intermingling collective of musicians, dancers and artists who lived and spent time there, including Mark Twain, Marlon Brando, Leonard Bernstein, Norman Mailer, Agnes de Mille, Martha Graham, John Barrymore, Garson Kanin, and Isadora Duncan. When built by Andrew Carnegie, the spaces were specifically designed as workable living space with artists in mind, with high ceilings and north-facing skylights. The Carnegie Hall Corporation began evictions to clear the building of artists with steep rent increases in 1981 and the protracted struggle to clear the building of artists didn’t end until the final eviction in 2010.

• The way that charity event life meshes with money and power (and therefore, the astute will extrapolate, politics and political agenda.)

• Whither the New York Times? The future of the city, at least for the time being, is probably inextricably linked with the New York Times. As Cunningham’s work now and over the years has mostly been for the Times the film provides a valuable window into the culture of the paper, including a scene with Times publisher Pinch Sulzberger (called "Pinch" because his father was nicknamed "Punch"). A lot of the film is shot inside or just outside of the New Times building that the Times, employing eminent domain, built in a business partnership with Bruce Ratner, the notorious politically-connected subsidy collector reviled for Atlantic Yards, (a mega-project the Times refrains from criticizing or scrutinizing). The Times review of the film describing Cunningham as “legendary” gets a lot of its assessments right. See: Bill Cunningham New York (2010), By Carina Chocano, March 15, 2011. See also this Times coverage: March 23, 2010, Capturing the Elusive Bill Cunningham, by David W. Dunlap.

• The mores of journalism: If the future of the city is inextricably linked to the Times, it is also inextricably linked to the mores of professional journalists. It’s doubtful that Cunningham’s standards are representative of the ethical standards of journalism in the city in general, but the film supplies ample meditation on the subject, including the temptations involved. Among other things Cunningham consciously avoids taking money for much of the work that he does in order to maintain his journalistic freedom. A Cunningham quote from the trailer: “You see, if you don’t take money then thay can’t tell you what to do. That’s the key to the whole thing.”

• The fight to save the city’s garment district beset by globalization together with Bloomberg administration upzonings. The Bloomberg administration may or may not be interested in earnestly taking steps to preserve area rather than have it be displaced by financial institutions. In the film Cunningham talks with people he knows from the industry attending a demonstration to save it. Cunningham discusses with these insiders the way firms in this once key business have been driven out of the city.

• Parks. On the weekends Cunningham is photographing the fashion action in Central Park.

• Enthusiasm and energy. The film is all about the kind of enthusiasm and energy that makes the city so identifiably New York.

You will probably come away from the film feeling inspired and uplifted, finding Cunningham an endearing marvel of a man, even as you still are still agog at the improbable and eccentric gift to New York Cunningham has chosen to make of himself.

Numbers up: The New York Times Is Counting Wealthy Chinese, In A Too-Short Story

“585." “585?”

This week is was impossible not to notice that the New York Times was prominently featuring the number “585" for a short little blurb of a story featured in its "News of the Week in Review" section. Turns out they were counting wealthy Chinese. (See: Prime Number, Published: April 23, 2011.) The Times was taking note that 585 is the estimated number, in the thousands, of people in China who this year will have investable assets of $1.5 million or more. This was according to a study by Bain & Company, a Mitt Romney connected consulting firm.

The number, the subject and the calculation couldn’t help but remind us all of another number, “498" which is the number of Chinese that Forest City Ratner is soliciting to “invest” $538,000 in order get American government issued green cards that Forest City Ratner is being allowed to sell more or less exclusively for its own private benefit. After some time (five years), the Chinese are supposed to get back less money ($500,000) which, other than their green cards, constitutes the return on their investment provided the deal Forest City Ratner has structured for them doesn’t tank. This all has to do with something known as the federal EB5 program, a program Congress created supposedly to produce jobs in the U.S. but which Forest City Ratner is taking advantage of in a non-job producing way. Essentially, the Ratner firm is abusing the EB-5 program in a way that Congress is now letting it be abused: Ratner is selling United States green cards to rake in cheap capital without producing jobs.

In other words, if, as reported in the Times, there are 585,000 Chinese who have $1.5 million or more to invest, 489 of them, or one out of every 1,197 of this them are expected to pony up $538,000 of that available $1.5 million to pay Forest City Ratner for green cards.

The Times article seems rather too short in that it simply doesn’t bring the numbers home. If the Times is interested in how many millionaires there are in China mightn’t it then be interested in what portion of that elite cohort is sending their money to the United States particularly if such a substantial portion of all that money is coming into this country in a federal program that is being abused?

Fact is though, the Times has been passing up (virtually ignoring) the EB-5 abuse story and all its ramifications that among other things would necessarily lead them to reporting some unflattering things about Forest City Ratner, their business partner when it came to building the New York Times headquarters for which, like Ratner’s Atlantic Yards mega-monopoly, eminent domain was used.

As pointed out in an earlier Noticing New York post, the Times mangled its last report about the non-job-creating EB-5 programs use in connection with Atlantic Yards:

Perhaps what mightily facilitates the ease with which the EB-5 program is abused is that it is not known by any formal title, like the American Jobs Creation Act, leaving the New York Times to struggle as it refers to Ratner’s `enrollment’ of “498 Asian investors” in “an obscure federal program that grants [“sells” is a better word] green cards in exchange for a $500,000 investment in a job-producing American project,” thereby stumbling compliantly into having referred to `job-production’ which is, as discussed, actually nonexistent.

In other words, this Times story made it sound as if Ratner is using the program to create American jobs, which isn't a fair report of what is actually happening.

(BTW: Neither 585 nor 489 is a "prime number"-- That's aside from the fact that the 489 Chinese investors won't prime the American economy.)

To catch up with more stories about the EB-5 program here are some links:

• Atlantic Yards Report is the only media source that has been providing complete and thorough coverage of the program with a great deal of original investigative work involving procuring and examining original documents (which often involves translating them from the Chinese). To work backward from Atlantic Yards Report's latest post start here: Monday, April 25, 2011, Kunpeng, consultancy promoting AY to immigrant investors in China, among firms willing to deceive regulators, according to newspaper investigation

• A complete list of Atlantic Yards Report’s coverage on EB-5 is available by clicking here.

• And here is Noticing New York Coverage:

• Friday, October 8, 2010, Putting It Together: Who Should Be Selling Green Cards?

• Wednesday, October 6, 2010, Translation: Bruce Ratner Wants To Swindle 498 Chinese Millionaires?

• Saturday, March 26, 2011, The American Jobs Creation Act, Job Creation That Wasn’t: What Happens When Government Doesn’t Manage Its Programs

• Sunday, October 10, 2010, Noting One Oddity, The Times, in Another, Neglects Obvious Explanations: Ratner’s EB-5 Green Cards Sale; A Reason For the Nets To Go To China, And. .

A Post-Earth Day Post: Bloomberg, His PlaNYC 2030, His Environmental Creds (Credentials and Credibility) and Population Projections

(Image above is from Bloomberg’s PlaNYC website.- The graph shown is not up-to-date. If corrected the second green triangle approximately over 2010 should be down more or less level with the blue square over the year 2000, because the city hasn’t actually grown much under Bloomberg.)

Yesterday was Earth Day and Mayor Michael Bloomberg has recently been busy getting himself into the news to claim credit as an environmentalist. On Wednesday of last week (the 13th) he and former President Bill Clinton announced that they were merging the global climate groups that they head (Bloomberg and Clinton to Merge Climate Groups, by Michael Barbaro, April 13, 2011) and yesterday on Earth Day itself, Bloomberg announced an update to his PlaNYC 2030, considered to represent his current environmental agenda (City Issues Rule to Ban Dirtiest Oils at Buildings, by Mireya Navarro, April 21, 2011.)

The announcement with Clinton got Bloomberg this adulatory lead in from the Times:

Mayor Michael R. Bloomberg and former President Bill Clinton, two of the most influential spokesmen for environmental sustainability, will merge their global climate groups under a plan announced on Wednesday.

The Earth Day announcement respecting what is supposed to be a significant update on to the PlaNYC 2030 sustainability initiative Bloomberg launched on Earth Day in 2007 was treated more mundanely by the Times, which focused on a new ban on the burning of dirtier fuel oils that the Rent Stabilization Association has announced it will fight:

The new rule, announced on Thursday by Mayor Michael R. Bloomberg as part of an update to his environmental agenda, known as PlaNYC, affects about 10,000 buildings that burn the dirtiest types of heating oil: No. 6, the cheapest oil pumped into aging boilers; and No. 4, another heavy oil that is only slightly less noxious.

Atlantic Yards Report has already posted a review of the plan’s updates which notes how awkwardly the non-environmentally advised Atlantic Yards Ratner mega-monopoly fits in with attempts to openly, and transparently plan coherently for a sustainable environmentally sound future. Saturday, April 23, 2011, PlaNYC update: an Atlantic Yards mention (for water mains!) and potential reconsideration of parking requirements. The post focuses mainly on how parking should not be a prominent feature of high-density projects near mass transit facilities. The other connection with Atlantic Yards is that, from its inception, PlaNYC has called for building platforms over railyards and highways to create new areas for housing.

But for the best reference on whether Bloomberg has truly believable environmental credentials, the following Noticing New York post, beginning with a quiz on environmental political facts, is recommended: Monday, November 2, 2009, On Your Way Vote, We Quizzically Ask: How “Green” Is Our Bloomberg?

Here is one thing that, with the recently released update on PlaNYC, deserves notice for its non-updated status. The just updated PlaNYC still incorporates what are probably grossly erroneous population projections.

Noticing New York recently covered how wrong Bloomberg and his administration have almost certainly been in estimating that the population in a mere two decades (or less) will grow by another 1.2 million. (See: Wednesday, April 20, 2011, Fighting His Third Term Curse Bloomberg Now Uses His Own Money To Promote Mega-Projects That Aren’t Happening.) In fact, the city is apparently currently growing at so slow a rate that the city won’t actually grow to 9.4 million until almost 70 years from now.

What makes the continued misestimation of these figures all the more startling is that these highly dubious population projections are credited with sparking Bloomberg’s environmentalism and more or less the plan itself. Below is an extract from the Times also extracted in the original Noticing New York environmental quiz article, beginning with a quote from James F. Gennaro, chairman of the City Council’s Committee on Environmental Protection, about how Bloomberg had an environmental change of heart (after Al Gore’s “Inconvenient Truth”) :

“Clearly, in the fall of 2006 Mayor Bloomberg had an environmental apocalypse,” Mr. Gennaro said. “Something inspired him.”

It was not an epiphany, but federal census data that prompted the mayor to act, aides said. The numbers suggested that the city would grow by a million residents by 2030, which would lead to heavier traffic and more use of electricity at the same time that the city would be grappling with floods and other effects of climate change.

(See again: Mayor’s Environmental Record: Grand Plans and Small Steps Forward, by Mireya Navarro, October 22, 2009.)

So what was the core seed for the gestation of the plan, Bloomberg's near epiphany with respect to projected population growth, has not been changed in his plan even though it has now been found to be almost certainly incorrect.

Not only have the population projections not been changed in the plan (see the chart at the start of this post that also remains unchanged on the website), the old numbers remain firmly anchored in the plan.

For instance, we see this amongst the “Frequently Asked Questions”:

POPULATION

How do you know our population will grow by almost one million more people?

The Population Division of the Department of City Planning has done a detailed projection of the City's population. This analysis, done on the level of each borough, has taken into account the current age and sex breakdown of the population; birthrates by borough; immigration patterns (not based on origin); life-spans; and patterns of people moving out of the City. With this information, we strongly believe that the City's population will grow, primarily due to three factors: continued immigration; New Yorkers are choosing to stay in their city longer, rather than moving out to the suburbs or to another city; and finally, we are living longer. For these reasons, our population of school-age children will not increase dramatically, but we will have many more seniors.

That in turns links to:

• The mayor’s quite antiquated December 13, 2006 Press Release about how the city was going to grow to 9.1 million people by year 2030

• The mayor’s December 12, 2006 speech regarding planning for a sustainable future, saying that by 2030, the city population will reach more than 9 million.

• a "Full Report" (33 pages) – a detailed analysis of the total population projected to 2030, as well as the projected school-age and elderly populations (includes an in-depth description of the projection methodology).

• a "Briefing Booklet" (26 pages) – on the population projection methodology and the major findings.

• PlaNYC

The new pfd update has this language:

New York City’s population is still growing. By 2030 we project that our population will increase to more than 9 million

Why is this important? One reason is that the projections for enormous population growth have been used as a backdrop to help justify the Bloomberg-style mega-development that begins with tearing things down while not having terrific success at replacing what gets demolished. It is also interesting to note that in 2007 Bloomberg's Director or the Budget, Mark Page, was factoring in this assumed population growth when calculating his balancing of the budget.

We don't want to discourage city officials to work had and in earnest to make the possibilities of each Earth Day more promising. Certainly many of them are working very seriously in this regard. The reminders here are so that when Bloomberg sallies forth each Earth Day people shouldn't focus on automatically giving him personal credit that isn't due. In fact, this is not the kind of reaction Bloomberg can always count on. Earth Day is not always a good pres day for him.

Last Earth Day when Bloomberg was getting an Earth Day award presented to him for being "America's greenest mayor." Bloomberg was using the associated press conference as an opportunity to attack Obama on the subject of financial reform. This opened the door for WNYC’s Bob Hennelly to quiz the mayor about his off-shore investments and to post the mayor’s tax returns in his coverage. (See: The Mayor's Money: Bloomberg Pressed on Offshore Investments, Saturday- April 24, 2010.) For a lot more of Noticing New York on that topic see: Monday, May 24, 2010, Looking a Gift Horse in the Mouth? An Examination of Brooklyn Bridge Park in Terms of the Politics of Development, Part I

Applying the Principles of Legal Ethics to New York Development: Lawyers Are Not Supposed to Represent Deceiving Clients

(above, "nationally renowned ethicist" and NYU law professor Stephen Gillers)

This turns out to be the second in what will now be a series of articles inspired by recent courses I’ve been taking to bank additional CLE (Continuing Legal Education) hours required in connection with continuing my state registration as an attorney. The first such post I put up concerned reverse morals clauses in celebrity contracts of interest to me particularly because of Jay-Z’s involvement promoting the Atlantic Yards mega-monopoly in Brooklyn and also because of Jay-Z’s wife Beyoncé’s morally questionable performance for the Gaddafi clan. (See: Friday, April 8, 2011, “Reverse Morality” Clauses for Celebrity Endorsers: What Are They? Something Celebrities, Including Jay-Z, Should Try Enforcing.) (Beyoncé has also been of assistance in promoting the destructive Atlantic Yards megadevelopment.)

Legal Ethics of Working For the Unethical

For this go-round the subject is again ethics, and again the ethics of working for someone who is behaving unethically. For lawyers it will hit a little closer to home. This time the subject is when lawyers have an ethical duty to withdraw from representing a client who is behaving dishonestly.

On April 14th I attended “Legal Ethics: Real World Issues and Considerations,” a truly excellent two-hour morning course presented by the law firm of Paul Weiss (aka Paul, Weiss, Rifkind, Wharton & Garrison LLP) at the Pierre Hotel. The firm has regularly hosted sessions like this focusing on the real world ethical conundrums lawyers face.

An important contribution to the morning’s success was NYU School of Law Professor Stephen Gillers moderating the discussion. Also present and participating in the discussion were the Paul Weiss attorneys: Claudia L. Hammerman, Jeffrey D. Marell and the wonderfully gruff Gerald E. Harper. (Gruff frankness goes a long way when discussing legal ethics.)

(panel above: Gillers, Marell, Hammerman and Harper)

As Professor Gillers’ official NYU biography makes clear he is a specialist in legal ethics. For those of you who missed the Paul Weiss program, Professor Gillers will soon be giving another CLE legal ethics course for the City Bar of New York on Wednesday, April 27, 2011 from 6:00 p.m. to 9:00 p.m.: Current Legal Ethical Issues. The City Bar is advertising Professor Gillers as a “nationally renowned ethicist and well-regarded speaker.”

Lawyerly Noise About Selling Misrepresentations

While all the topics covered during the morning were interesting (and I will write about another of them in a later post) the topic that I will deal with here concerns a lawyer’s ethical responsibility if, when representing a client-seller in the course of a sales transaction, the lawyer becomes aware that the client is submitting false information about what is being sold to the buyer.

What is the lawyer obligated to do? We were told during the discussion that the lawyer can’t be an aider and abettor to the perpetration of a fraud, that the lawyer likely has to withdraw from the matter but that even withdrawal from the matter may not alone be enough to satisfy ethical concerns. Especially if the lawyer was involved in transmitting false information, it may be incumbent upon the lawyer to make what is referred to as a “noisy withdrawal” from the transaction. While a lawyer can’t actually say that his client has lied, a “noisy withdrawal” where for example the lawyer “retrieves or takes back” the false information the lawyer was involved in delivering sends a definite “signal” to the other side that will allow them to investigate to discover for themselves what is amiss. That the lawyer responds, when asked why he is taking back documents by saying, “I can’t tell you” only “exacerbates the noisiness of the withdrawal.”

Rules, Rules

Rule 1.6 (b) (3) of the New York Rules of Professional Conduct (the ethics rules New York attorneys are supposed to follow) is specifically written to permit such noisy withdrawals, “where the lawyer has discovered that the opinion or representation was based on materially inaccurate information or is being used to further a crime or fraud.” The American Bar Association model rules, adopted in some form in 46 jurisdictions, actually go further in possibly mandating the disclosure of otherwise confidential information to rectify or prevent a fraud whether or not the lawyer transmitted something he can retract.

Dealing With the Root of the Problem

Of course, things may not get so dramatic as a withdrawal. The lawyer’s first step probably will and should be to go to the client and tell the client that they need to correct the record because at this point the lawyer can no longer allow the transaction to move forward. Professor Gillers quoted Elihu Root, lawyer, statesman (including U.S, Secretary of State), and Nobel Laureate who said:

About half the practice of a decent lawyer consists of telling would-be clients that they are damned fools and should stop.

A Dramatically Raised Ante

On the other hand things can get much more dramatic if the lawyer doesn’t withdraw from assisting the transaction when he/she should. Assisting the client who has engaged in fraudulent activity (as defined by the substantive law) in exploiting that fraud by going to closing can make the lawyer liable to the buyer for damages (as would also be the lawyer’s client, the seller). In fact, it was pointed out that clients like these often go bankrupt while law firms have malpractice insurance (a source to recover damages from), and therefore lawyers are increasing being sued in such situations. The rule is that once the lawyer knows that false information has been transmitted the lawyer cannot help the client exploit the falsity by helping the client accomplish the sale.

Hypothetically Framed

The discussion was framed with the aid of an orally summarized hypothetical that focused in on the fact that some of the numbers given to the buyer were wrong. There was also a written version of that hypothetical furnished under the heading of “Lawyer Liability to Third Parties”:

You represent a company selling one of its subsidiaries to a buyer. You have transmitted various financial documents from your client to the buyer’s counsel based on which the buyer formulates its bid, which is accepted. Prior to closing, you learn that your client changed some of the numbers to make the subsidiary appear more profitable than it is. What do you do? Does it matter what you said about the documents in your transmittal to opposing counsel?

Does the answer change if you learn about the alterations after the closing but the buyer still remains ignorant of them?

Closing In On the Answer

Despite that phrasing of the hypothetical it was made clear that for the most part, it probably doesn’t make a difference whether the lawyer transmitted the false information or the client did. As for the question of whether the transaction had already closed makes a difference (because the reduced possibility the buyer would alter their conduct or be able to mitigate damages), Paul Weiss partner Gerald Harper had this view:

The ability to withdraw the statement persists and the fact the transaction has closed doesn’t strip you of your right to take back any statement that you sponsored as a lawyer to the counterparty. I don’t think it matters whether the transaction is closed or not. You are free to withdraw any fraudulent statement that you, as a lawyer sponsored, and I think I would do that.

Mr. Harper qualified this by saying that in the real world the lawyer is going to go back to his client first, explaining that if they don’t correct the matter they will be sued for fraud.

Noticing New York Question: Does the Rule Apply To. . .

At this point most Noticing New York readers have probably guessed where we are heading. When the session commenced Professor Gillers had stated that each of the four hypotheticals that would be discussed during the day “brings up an issue that could arise in any practice any time.” I was chomping at the bit to ask the first question. The following is my exchange with Professor Gillers:

MDDW: This will test the notion that these hypotheticals transpose to all practice areas: Say you are representing the developer of a publicly financed real estate project, so, in essence, the public is the buyer- Do you think this principle applies there as well if the developer has misrepresented the project?

PROF. GILLERS (being careful to precisely define the situation): To whom has the developer misrepresented the project?

MDDW: You could consider either that it has been misrepresented to the public or that its been misrepresented to the public officials who are responsible for handling the project.

PROF. GILLERS: My answer is yes, it applies there as well. I suppose federal securities laws can apply there as well, but here we are talking about the state common law of fraud, but yes, it applies there as well. It doesn’t have to be an A to B sale of private parties. I don’t see why it couldn’t apply.

As you see from the above, I did not mention any particular publicly financed real estate project but certainly some come readily to mind, foremost among them probably being Atlantic Yards. Before applying what Professor Gillers said above to a project such as Atlantic Yards it should be remembered that exchanges at a legal conference are never intended to constitute actual legal advice and Professor Gillers had not been asked to consider a specific set of real world facts.

Non-Facts

Further, after the questions (one involving lawyer suspicion rather than knowledge of client misconduct), Professor Gillers had more to say on the subject that would be relevant to any evaluation of the ethical conduct of the lawyers working for Forest City Ratner on Atlantic Yards. Specifically, the rules of misrepresentation are different for what are considered “non-facts,” which extend to “predictions,” the idea of “puffing and exaggeration” and “prospective events” we might even be talking about dubious assumptions and insufficiently backed up assertions.

While it can clearly be said that the Atlantic Yards has regularly and routinely been grossly misrepresented to the public, those who would defend the ethics of the lawyers working to further Ratner’s project-promoting goals would certainly argue that all these misrepresentations are in this “non-fact” category, amounting to no more than “puffing and exaggeration” with respect to the prediction of prospective events and that no matter how misrepresentative of the project it is, Forest City Ratner is no more than the permissible purveyor of dubious assumptions and insufficiently backed up assertions.

The Politics of Actually Non-Factual

One question that comes to mind is whether lawyers consider that a different standard does apply to Forest City Ratner and perhaps any developer that does publicly financed projects, the thinking being that when you are talking about projects financed by the public one has entered the realm of politics, a realm where truth is no longer important and “factual statements” take on entirely new definitions. A recent example of the extreme we have gone to in this regard was when an aide to Senate Minority Whip Jon Kyl (R-Ariz.), condoned Kyl’s senate floor whopper that abortions are, “well over 90% of what Planned Parenthood does” (only 3% of what Planned Parenthood does relates to terminating pregnancies) by saying the senator’s declaration of the percentage “was not intended to be a factual statement.” The political humorists are rightly having a field day with this “not intended to be a factual statement” ploy, Stephen Colbert and Wait Wait...Don't Tell Me! included.

Maybe in the political realm one can get away with virtually any misrepresentation of the truth no matter how “factual” sounding the statements appear to be. But would the perpetual Forest City Ratner promotions be acceptable if Ratner were foisting the transaction on a private party instead of the New York taxpaying public? The idea that a distinction might exist is an intriguing theory worthy of consideration but not necessarily the law.

Real World Misrepresentations

Only two days ago Noticing New York circled back to look again at how bonds for the arena were marketed with a crafty non-statement of fact conveying the misimpression that the arena could just possibly one day earn additional revenue by hosting a professional hockey team (See: Thursday, April 21, 2011, Question Revisited: How Craftily Close Did Forest City Ratner Skate On Thin Ice of Securities Law Violation With Non-Promise of a Hockey Arena?) That was selling participation in a financing to bond purchasers, private parties, so the standards for truthfulness perhaps should be high. (Not to mention Professor Gillers' reminder about federal securities laws.)

The following Noticing New York article provides more than a baker’s dozen bullet listed items cataloging other misrepresentations involved in selling Atlantic Yards to the public: Tuesday, December 1, 2009, Unfair Substitution of Fiction For Fact in the Atlantic Yards Dialogue. One can go through them analyzing which of the misrepresentations might be sufficiently “factual” to invoke the question of legal fraud but certainly huge deceptions have been perpetrated. Adding to the list, Ratner's vastly exaggerated claims about `creating jobs' has recently been a focus of recent news.

One area where it seems that misrepresentations of fact did occur is with respect to the misrepresentations to Justice Marcy Friedman about the legitimately expected timetable for the development of the mega-project was: With lawyer assistance it was represented to the justice that Forest City Ratner and ESDC officials expected to complete the project within ten years while withholding from her (and the plaintiff parties representing the public in opposing the project) documents between them providing for and clearly envisioning a multi-decade build-out.

Similarly, sale of the EB-5 investments to prospective Chinese “investors” has been rife with misrepresentation. Technically, the misrepresentations being made to the Chinese are being made to them as private parties on the other side of a business transaction (rather than just an unwitting public being subjected to a spiel) so a high standard should apply respecting any misrepresentations. On the other hand is there thinking that as the Chinese are not American citizens they should not be expected to benefit from the full protection of U.S. law?

Addendum on Paul Weiss and Atlantic Yards

Although it may sound a little bit like biting the hand that legally educates you (and lets you munch a Pierre Hotel mini-bagel breakfast) I didn’t think I could conclude this article without researching whether the Paul Weiss firm had involvement with the Atlantic Yards project. It turns out they have. It was not surprising to discover this given that something that facilitates big development (and potentially helps mute criticism) is the way a lot of work can be spread around the professional community. The bigger your firm is- and Paul Weiss is a very big firm- the more likely you will be on the list.

Here is what I found involving partners in two departments at the firm:

Meredith J. Kane, a partner in the Real Estate Department and a member of the firm's Management Committee, who “regularly represents developers, equity investors, institutional and entrepreneurial owners and government agencies in all aspects of development, finance” and whose “experience includes all aspects of the finance and development of complex public/private joint venture projects” has, according to her page on the firm’s website worked on:

the development of MTA’s Atlantic Yards in Brooklyn as a proposed new development of up to 16 residential and commercial buildings

Astute readers will quickly note that the reference to the MTA’s “Atlantic Yards” rather than being to the MTA’s “Vanderbilt Yards” is reflective of a basic problem the MTA had in negotiating its transaction with Ratner and also when it handed the property over to Ratner at a below-market price with a less-than-real feint at a bid process: The MTA was treating its publicly-owned land (the Vanderbilt Yards) as constituting a project deemed to be already owned by the developer (Atlantic Yards.)

Here is more from the Paul Weiss website advertising this aspect of their involvement with some better language, but it nevertheless refers to “Atlantic Yards” as if it is the MTA’s development project which is arguably inaccurate:

MTA's Atlantic Yards Development Project Closes

We represented Metropolitan Transportation Authority in the sale to Forest City Ratner Companies of the air space development rights over MTA's Vanderbilt Railyards to be included in the multi-billion dollar Atlantic Yards development project. Under the State approved project plan, which covers 22 acres in the Brooklyn, New York neighborhoods of Prospect Heights and Park Slope, Forest City is to build a new arena for the Nets basketball team, as well as up to 16 residential and commercial buildings and a new railyard facility for MTA. Much of the residential and commercial construction is to occur on platforms to be constructed by the developer over the MTA Railyards.

Also, in November 2005, Ms. Kane was a featured speaker at a Pace University Real Estate Law Institute seminar on "Reinventing Redevelopment Law" which looked at the roles of the public and private sector in major urban redevelopment projects including Ratner’s MetroTech and Atlantic Yards.

A second partner of the firm, Daniel J. Leffell, in the litigation department, was also involved with Atlantic Yards. According to his page on the firm’s website Mr. Leffell’s “successful representations” include:

Montgomery v. Metropolitan Transp. Auth., 25 Misc. 3d 1241A (Sup. Ct. N.Y. Co. Dec. 15 2009) (successful defense of the New York Metropolitan Transportation Authority against a challenge to its sale of property for the Atlantic Yards development project)

The “Montgomery” in that case is State Senator Velmanette Montgomery (18th District) and “Montgomery” is an abbreviated stand-in for the entire list of plaintiffs who in that case were suing the MTA. Also suing the MTA were Assemblymember Jim Brennan (44th District), Assemblymember Joan Millman (52nd District), NY City Councilmember Letitia James (35th District), NYPIRG/Straphangers Campaign and Develop Don’t Destroy Brooklyn.

The plaintiffs were suing the MTA because it violated the still fresh-on-the-books Public Authorities Accountability Act of 2005, an effort by the state legislature to reform and rein in public authorities. The suit was brought because MTA failed to obtain an independent appraisal of the Vanderbilt Yards or seek out competitive offers for the Vanderbilt Yards property after a last minute rush was used for Forest City Ratner to get through a restructuring of the mega-deal into a plan far worse for the public than what original misrepresentations said would be provided. The case was lost when State Supreme Court Justice Michael Stallman found, among other things that the elected state legislative officials who enacted the public authorities reform law were not entitled to seek its enforcement to benefit the public (and under the theory that probably no on else is either, the law might thereby be nearly unenforceable).

In other words, Mr. Leffell’s page advertises that he was successful in preventing the plaintiff state legislators from doing anything more effectual than loudly crying foul when Forest City Ratner side-stepped honoring its dubiously intended exaggerations about what it would one day prospectively provide the public.

This article has concerned itself principally with the ethical obligation of attorneys directly representing Forest City Ratner in making misrepresentations. The question of attorneys representing the public officials dealing with Ratner who are supposed to, in turn be representing the public, is another more difficult one, complicated mightily by the terrific extent to which Ratner’s goals have seemingly, without question, been adopted by many public officials as their own.

The state legislators who sought to enforce the reform measures of the Public Authorities Accountability Act (and others of us as well), probably feel that the public was not well served when the MTA succumbed to Forest City Ratner. As such they are probably unhappy about the Paul Weiss firm’s representation of the MTA. But while that might be the case, most lawyers would agree that the Paul Weiss firm did not cross the kind of ethically lines discussed here when it represented the MTA. That is provided that the MTA was not making misrepresentations, say through its Chief Financial Officer Gary Dellaverson, about it could find how no other bidder for the project except for Ratner or how it needed to rush the project forward in 48 hours without one. But the ethically rules pertaining to litigation are also different from what we have been discussing.

The Paul Weiss firm’s “Legal Ethics: Real World Issues and Considerations” was a very good program and, like all good educational programs, thought provoking.

Question Revisited: How Craftily Close Did Forest City Ratner Skate On Thin Ice of Securities Law Violation With Non-Promise of a Hockey Arena?

With recent confirmatory revelations that the design of the Forest City Ratner/Mikhail Prokhorov arena was definitely not intended to accommodate a professional hockey team, it is worth circling back to examine again the language included in the official statement to sell the bonds that strongly conveyed the impression that it could do so.

Atlantic Yards Report wrote that Bob Sanna, Forest City Ratner Executive VP for Construction, just recently told a Pratt Institute School of Architecture audience that the arena was not intended for hockey team use. (See: Tuesday, April 19, 2011, Forest City executive says shrinking arena to preclude major league hockey was conscious choice, downplays modular construction as "research project".) Specifically, Mr. Sanna told the Pratt Institute School of Architecture audience that when the arena was shrunk, undergoing what he characterized as “a complete redesign” :

"we made some pretty deliberate decisions early on: we weren't going to have a [professional] hockey team."

That’s a confirmation of something that seemed pretty obvious looking at the schematics: the redesigned arena is far too small to accommodate a standard professional size hockey rink. (See images above and below showing the size of the rink that would have to be crammed into the planned arena and somehow work with seating, entrance and egress.

But what were the buyers of the bonds for the arena told in the information that was part of the official statement, the disclosure document used to sell bonds? They were told:

For purposes of this analysis, it has not been assumed that the New York Islanders would relocate to the Barclays Center.

For more on this see the Noticing New York analysis provided before the bonds were sold (Monday, December 7, 2009, The Craftily Negative Promise Offered For Bonds Being Sold For Nets Arena: It’s Not “Assumed” Islanders Hockey Team Is Coming to Basketball Arena) and also Atlantic Yards Report’s coverage at that time (See: Friday, December 04, 2009, Market analysis (commissioned by Ratner) suggests arena would have no trouble attracting events, might even host hockey).

OK, that language says that it has “NOT” been “assumed that the New York Islanders would relocate to the Barclays Center” but doesn’t it by any reasonable standard imply that, with luck, there is a legitimate possibility Islanders or another professional hockey team could decide to relocate to the arena? Let’s put it this way- Say a developer was trying to finance a building on the banks of the Gowanus Canal prior to the pending superfund cleanup of the toxins: Wouldn’t this be just like their saying in the prospectus that it has “NOT” been “assumed that the residents of the building will immediately appreciate the opportunity to swim luxuriously in the waters of the world-famous canal”?

As such, if the bonds for the arena one day default, as they could, will bond holders be able to sue on the basis that this statement misleadingly misrepresented the arena’s potential uses and revenue sources and therefore its value? If not, the non-positive statement at least says something negative about Forest City Ratner’s business ethics in its willingness to convey misimpressions with craftily constructed non-promises.

The recent Atlantic Yards Report story says that Mr. Sanna described the problem with introducing hockey into the smaller redesigned arena in terms of a lack of “good hockey sight lines” and that the arena seats can only be moved “in one direction,” but the impediments would seemingly be much more profound. Just look at the visuals. (More visuals and measurements here.) Perhaps, with a fair amount of jury-rigging, there would be a way to occasionally squeeze a truncated, less than professional-spec ice rink into the space, but even that looks like a challenge, let alone have a professional team play games there on a regular schedule. The problem was really sight lines?

Mr. Sanna may have been knowingly soft-pedaling the arena-as-hockey-venue problems. Mr. Oder of Atlantic Yards Report pointed out that Mr. Sanna was “incomplete, misleading, or erroneous” in at least one other statement to the audience: Although the entire Atlantic Yards mega-project, with its projected 16 towers beyond the arena, is likely to take at least the 25 years currently provided for in the documents, Mr. Sanna spoke about how it was “contemplated to be built out over the course of six years.” The very best that Forest City Ratner could be hoping for in six years would be the completion of only the very first phase of the project.

If the bonds do eventually default, the purchasers are going to want their attorneys to go looking for articles like Mr. Oder’s that reveal what the real thinking was when the misleading negative non-promise was inserted into the bonds' official statement. But they might not immediately realize that such evidence is available to be sought out. Other Atlantic Yards Report articles show that a gullible press (Fox Sports and the Daily News) is playing along with Forest City Ratner’s coy perpetuation of the notion that they still might think hockey is possible in this smaller arena:

On Fox: When an interviewer asked about hockey and a professional team like the Islanders playing there, Brett Yormark (Nets Sports and Entertainment CEO, and essentially a Ratner/Prokhorov employee) called it:

a "a multipurpose venue" and said they were open to many events. "We would love the Islanders to play a couple of games at the Barclays Center," he said, noting that the Long Island Rail Road could directly deliver Islanders fans.

(See: Friday, April 08, 2011, On Fox, Nets CEO Yormark calls Brooklyn "fourth-largest market," plays coy on team name.)

In the Daily News: As late as January the Daily News was irresponsibly writing about:

speculation about the Islanders moving to . . . the under-construction Barclays Center, where the Nets are set to play come 2012.

(See: Friday, January 07, 2011, Daily News piles on speculation in suggesting Islanders may move to Brooklyn.)