Sovereign Immunity, Reconfiguration of Brooklyn’s Traffic And The Peculiar Verisimilitude of Government Functions When Forest City Ratner Takes Over

(Above, a screen that was part of Sam Schwartz's presentation on Tuesday about reconfiguring Brooklyn's traffic patterns.)

When I attended the forum the Empire State Development Corporation and Forest City Ratner held Tuesday night on reorganizing the Borough of Brooklyn’s traffic flow, a reconfiguration necessitated by the plunking down of the Ratner/Prokhorov (“Barclays”) Nets basketball arena atop a major congested confluence of intersections (with attendant permanent street, avenue and sidewalk closings to boot), something that was said got me musing: When asked about how all the changes would impact the emergency response time for the local police and fire department stations, Sam Schwartz, the traffic engineering consultant working for Forest City Ratner, was unable to provide an answer.

No Answer Available From the Answer Man

Mr. Schwartz was responsible for much of that evening’s Borough Hall presentation. The basic bottom line of Schwartz’s response was that “We're developing a plan with the police department.” This was after some semi-obfuscatory treading of water that was essentially to the same effect of having no answer: “We're working closely with all emergency services in this area” . . . “The emergency services have a plan for every type of emergency. We've done this with Madison Square Garden. We've done this with CitiField,” . . . “It's standard work that is done to deal with any kind of emergency that would occur in the area, both at the arena, and both going through the arena area.” This state of not knowing is where Mr. Schwartz is in June of 2011, more than eight years after the December press conference where Mr. Schwartz’s boss, Forest City Ratner, announced its massive mega-project as a purported fait accompli.

Mr. Schwartz’s inability to provide an answer about the effect on emergency response times was reported by Atlantic Yards Report, see: Wednesday, June 15, 2011, At forum on traffic, new concerns about unintended consequences of traffic mitigations: spillover onto and around Third Avenue. (There were other questions to which Mr. Schwartz was also unable to provide answers.)

Translation: Lives In the Balance

Thinking about it, everyone realizes that increased emergency response times equal lost lives, physical injuries and property damage. This is the point that community representatives strive to emphasize whenever a mayor closes fire stations and or police precinct stations, typically in response to budget shortfalls. It may seem strange that planning decisions with all the associated abstractions of statistics and projections actually translate into life and death decisions, but they do. Normally, making the argument that lives hang in the balance (sometimes shrilly) is all that all people can do when public officials make decisions. That’s because, recognizing that public officials have to make decisions and their job is to make decisions, public officials are protected by something called “sovereign immunity.”

Introducing Sovereign Immunity

“Sovereign immunity” is the reason the police can’t be sued for exercising their powers in good faith even when they may be causing terrific harm or are negligently making significant mistakes. Sovereign immunity is also the reason you normally can’t sue the government for not providing you with police protection or other services. Sovereign immunity is something the government, state, local or federal, possesses though it can be waived. The idea is that when the government is performing its functions it can’t be sued without its consent. The idea is an old one, hearkening back to the idea that the King could not be sued.

Governments frequently waive sovereign immunity as a matter of public policy in many specific areas (although sometimes uniquely subjecting such waiver to specific abbreviated statute of limitations-style conditions for suit): For instance, it doesn’t make public policy sense that nearly all drivers on our roads should be liable and carrying insurance when they have car accidents but that a small segment of drivers who are public employees (who could be similarly insured) would be exempt from the consequences of their similar carelessness.

Arguments for Sovereign Immunity

Nevertheless, there are good arguments to have sovereign immunity apply in certain situations where it is not waived. I mentioned the process of putting together a city budget. Would it really make sense if all the policy decisions that need to be balanced in that process were subject to attack and second guessing through law suits asserting liability on the part of the decision makers for bad decisions? Isn’t the political liability for bad decisions sufficient? It may be argued that Mayor Michael Bloomberg is now laying off teachers and closing fire houses because he made bad decisions such as diverting city resources into Atlantic Yards and Yankee Stadium while at the same time giving tax breaks and special benefits to the new Goldman Sachs building, but isn’t the political realm still the best place to argue about those budgetary priorities? As bad or good as the decisions may be, the fact that there is a political process check on bad decisions with public officials ultimately, theoretically, accountable to the public is one reason the continuation of sovereign immunity can be defended in America.

Sovereign Immunity Applies to Government Not the Private Sector

All that being said, here is something that may sound self-evident: Sovereign immunity only applies to governments. It does not apply to those in the private sector who look like they are performing government functions and it does not apply to private sector entities that assume what would normally be a government function. This is why a private security guard in a mall is not protected by sovereign immunity even though the job such a guard is doing may look a lot like the job of a policemen on a beat who would, in fact, be covered by sovereign immunity.

If you See Something Strange, Say Something

Sometimes you see something and because you see it before you, you somehow suppose it must be normal. Maybe you’ve never seen it before and so when you see it for the first time you dismiss any sense of oddness attributing it to your own unfamiliarity with what you are seeing. Perhaps what your are seeing has a resemblance to something else you have actually seen before, mimicking its forms. - -

- - After I thought about seeing Sam Schwartz’s presentation at Borough Hall the other night it struck me that I had seen something very odd. Yes, the presentation was in the stately courtroom of Borough Hall, the carved woodwork, towering pillars and ornate ceiling conveyed the sense of governmental formality, but here was a man, a consultant hired by and working for a private developer, describing how, as a result of that developer’s project, traffic, was going to be rerouted by him all around the busiest most populous areas of the borough.

While flash animated videos showed the multitudinous streets involved (or at least those to which Mr. Schwartz was extending his formal consideration), Mr. Schwartz casually explained about the little blue stand-ins for real vehicles scooting around in the videos “did not represent the real volume of traffic flow” (which would in real life be considerably heavier) and were there only to demonstrate the sets of theoretical turn off choices drivers would have at specific streets and avenues. Perhaps, by the same token, it should be pointed out that, appearances aside, Mr. Schwartz, standing in Borough Hall showing how so much of the borough’s traffic would be reconfigured (without actually simulating the real volume of traffic flow), did not represent a real public official.

The Private Sector Without Sovereign Immunity

So this is what I am wondering: Although Forest City Ratner and Sam Schwartz as its engineering consultant may seem a lot like the government performing a government function, that is not what they are. Forest City Ratner and Sam Schwartz are private sector entities and however much they have intruded themselves into an assumption of what we would expect would be a government process they are no more actual government officials than a privately hired mall security guard.

So the question is: Can they be liable for their negligence if they do damage in this vastly extensive and impactful reorganization of the borough affecting so many neighbors? As sovereign immunity should not apparently apply to their actions, can these private entities be sued in court if the effect that the new arena and traffic patterns have is to slow response times for the police and fire departments resulting in deaths, physical injuries and property loss when their arrival is consequently delayed?

By No Means a Normal Project With Normal Government Involvement

Normally, developers don’t have these concerns. But normally projects are developed in a very different fashion from the privatized fashion with which Atlantic Yards has been developed.

Normally, government makes up a set of rules universally applicable to all, and developers act within the envelope of those rules. Not so with Atlantic Yards, where the rule book, zoning and all the statutory and regulatory standards for good urban design and land use, including mechanisms for proper review, were thrown out the window and the developer was allowed to write his own set of rules.

Is the Schwartz plan for which so many answers are unavailable in any way negligent or unduly preferential to the developer who hired him? Might that generate liability? Even if the Schwartz plan actually does the best possible job in dealing with the impact of the arena, can’t traffic harm be traced straight back to the developer because of the developer’s private choice/ private action decisions to override zoning and planning norms? What then?

A Hallmark of Privatized Government Functions: Solving the Private Entity’s Problems At The Expense of Others?

Functions resembling those that are typically governmental not only become qualitatively different when performed on a privatized basis, they need to be regarded as so. If there is any doubt about this consider the points that were raised Tuesday night by Jonathan Glazer, a resident of State Street (just west of Third Avenue) when he talked with the press after the meeting. Mr. Glazer pointed out how (although not addressed in the state's Final Environmental Impact Statement or what was being selectively presented during the course of the evening) the new configurations were sending substantially increased traffic flows over to Third Avenue. According to Mr. Glazer, in what is probably a pretty accurate summing up: “They came up with a convenient plan that solves someone else's problem and creates problems for us.”

This problem creation, by the way, is all in the name of “mitigation” for the traffic pattern damage created by siting the arena by overriding all the normal rules that ought to have applied.

Traffic flow is actually being pushed over from the arena even farther than Third Avenue. Traffic volume is up substantially as far as Hicks Street, so that because of Hicks and Clinton Brooklyn Heights has been affected. Will this eventually diminish or stay the same or eventually get worse? (Traffic in areas surrounding Brooklyn Heights is already substantially complicated by the closing off of streets in connection with Ratner's 17 plus acre Metrotech Center.) The point is that whatever happens a private developer and his consultant are apparently calling the shots.

Correcting the Files for Coverage?

Who knows? Perhaps based on what I am now pointing out about liability will cause the Forest City Ratner/Sam Schwartz/ESDC folks to scurry back to their files to add something to their contracts that says that Sam Schwartz shall be considered to be working for ESDC as a governmental agency and hence, they might hope to be cloaked with the privileges, exemptions and immunities of ESDC. But that, like so much of the Atlantic Yards fiasco, is merely form over substance and does not change the fact that when ESDC put Forest City Ratner in the driver's seat for all the mega-project decisions they ensured that the public interest would never be given due weight in the decision-making process.

Future Litigation and Its Outcome?

It is possible that Forest City Ratner and/or its consultant Sam Schwartz may eventually be sued for injuries resulting from their actions, including any and all the various sorts of detriment resulting from the reworked traffic flow possibly extending, among other things, to increased response times resulting in deaths. If they are, it is probable that they would claim that, despite evidence to the contrary, they actually took no actions, that all the actions were taken by exclusively public agencies immune through sovereign immunity.

Possibly they would escape liability on such a basis. The question is whether justice would be served if they escaped responsibility for their private actions utilizing such an argument when, with Atlantic Yards, we have seen an unprecedented swap-out of government responsibilities with private actions? Atlantic Yards likely provides the courts with a case of first impression. Doubtless we have never seen the likes of this before. Has a developer ever before been so totally in control of what should be government functions?

The Miscalculations Encouraged By the Fuzzy Math of Subsidies: Yankee Stadium Bonds on Verge of Default- A Case Study

Noticing New York is not a fan of subsidies for sports venues like stadia and arenas. Even when the schemes behind those subsidies work out as the public officials dispensing them intended they tend to amount to crony-capitalism style transfers of more wealth to the already wealthy and connected. As in the case of the new Yankee Stadium they can replace taxpaying businesses with freeloading businesses exempt from the tax rolls. As in the case of the Atlantic Yards Prokhorov/Ratner basketball arena they wind up being significant net losses for the public. Add to all of this is the fact that these schemes may not even work out as public officials intended. They may work out a lot worse. To consider the implications of that point more thoroughly let’s direct our attention to a new Transportation Nation story about bonds issued to subsidize Yankee Stadium that are on the verge of defaulting: After Hundreds of Millions of Dollars of Public Subsidies, Barely Used Yankees Parking Garages Face Financial Collapse, May 19, 2011, by Jim O'Grady.

(The WNYC Transportation Nation story has also been substantially reprised in this WNYC story: Yankees Parking Garages Driven to Brink of Financial Collapse, Thursday, May 19, 2011, WNYC, by Jim O'Grady.)

Defaulting Bonds

The bonds issued in connection with Yankee Stadium that are in jeopardy of possible default are $237 million in tax-exempt bonds that were issued to finance a 21-acre parking garage complex for the new stadium. The stadium was subsidized by the public in multiple ways, not just by these parking garage bonds; other subsidized bonds were issued for the stadium itself. At the moment it's just these parking garage bonds that are in danger of default and not the other bonds financing the stadium directly. Those stadium bonds are presumably OK for now (unlike the bonds issued around the same time to finance the stadium for the financially flailing Mets) but the financial difficulties associated with the garage bonds highlight how the city’s public officials made a number of fundamental miscalculations when handing out these subsidies.

No Problem, Says Bloomberg

The Transportation Nation story includes information about Mayor Bloomberg cavalierly dismissing the screw-up:

Mayor Bloomberg says private bondholders, not taxpayers, will be on the hook if the Bronx Parking Development Company defaults on the bonds. On his weekly radio show, he shrugged off the Bronx Parking Development Company’s possible collapse.

“The city has no downside,” he said. “If they were to go bankrupt, it doesn’t hurt us. It wouldn’t be good for the project.”

Notwithstanding Bloomberg’s blithe dismissal, defaults on municipal bonds that are issued and promoted by the city administration are bad. Bad for the city, not just for the bond holders who also get shafted when things go wrong after the city convinces them to buy their product. When bond holders get shafted by a New York issuance, how do you think they will feel about buying bonds the next time a New York issuance comes out? Especially when you have a top city official like the mayor dismissing their interests, sounding like the mistake was all on the part of the investors who bought what the city was selling.

And, by the way, as we will be discussing, there is a long list of additional downsides for the city.

Who’s Watching?

This default was on the Forbes radar screen as of last fall: Yankee Stadium Parking Garage Bonds Are Among Shaky Muni Bonds, Sep. 21 2010 as well as that of the Bond Buyer, Yankee Stadium Parking Garages on Track for Default on $238M of Debt, Tuesday, September 14, 2010, By Ted Phillips and Crain’s, Yankee Stadium parking strikes out: Bronx outfit faces default on bonds as fans park elsewhere and residents fume, by Hilary Potkewitz, March 13, 2011.

The WNYC public radio stories note that the garages were also defended in 2006 by City Council Speaker Christine Quinn, Bloomberg’s regular comrade in crime when it comes to promoting developer-promoted over-development.

Underwriting Immediately Proved Wrong

The bonds were issued by the city’s Industrial Development Agency in 2007. That means that there was hardly the blink of an eye between the underwriting of the bonds and the proof, through failure, that the underwriting was terrifically wrong. The New Yankee Stadium opened in April of 2009, so the bonds took only the first two seasons to go bust, given that before that, during construction, interest on the bonds would have been paid out of capitalized interest (i.e. funds borrowed from the bond holders up front.) WNYC reports that the garage facility is $17 million behind in back rent and other payments owed to the city.

When the Fuzzy Wuzzies Come to Bear

The default is illustrative of a danger everyone should be on guard against when it comes to development through subsidies: Beware of miscalculation because those involved in development are likely to have put away their sharp pencils. Subsidies, generate fuzzy math, fuzzy thinking and they take peoples' eyes off reality and real costs. Those who are expert at working City Hall to finagle subsidies do not necessarily have the same skill sets as those who know how to shave a profit out of the real world, and frequently there is also the danger that their thinking is that if and when they are off on their numbers they will be patching things together at the back end with additional subsidy flows, perhaps with a “too big to fail” argument. That seems to be the case with Atlantic Yards. (The latest about Atlantic Yards fuzzy math was reported upon by Atlantic Yards Report yesterday.)

In the case of Atlantic Yards, say for example with the mega-project’s implausible initial job-projection numbers, fuzzy math is cultivated as a habit to get a foot in the door for what would otherwise have been an unacceptable project. Atlantic Yards' false projection of a ten-year build-out rather than a multi-decade build-out is another example.

Listing, We Sink With Miscalculations

So what were some of the miscalculations made with respect to the issuance of these now defaulting bonds for the new Yankee Stadium complex? Here is a list:

1. That there was no need for 9,000 parking spaces* in the eleven garages in the onsite complex directly serving the stadium. (With the stadium’s reduced 50,287 seat capacity- the reduction was between 4,561 and 7,459 seats while 2,000 parking spaces were simultaneously added- that’s one parking space with the new configuration for every 5.587 seats for a baseball game. And games are not selling out.) WNYC reports that on game days the garages are two-thirds empty and Crains reports they have never been more than 60% full. This is an odd miscalculation for officials serving the public to make in a city where the policy should be to encourage mass transit and discourage the onslaught of vehicular surges through stadium neighborhoods. (Atlantic Yards planning is similarly biased toward providing parking spaces.)

(* It should be noted that of the 9,000 parking spaces there were 250 additional parking spaces, previously intended for “public use” that were given to the Yankees “for the private use of Yankees officials, players and others” so that the Bloomberg administration “intent on obtaining a free luxury suite for its own use” could get a suite with twelve seats. Because the city and state codes governing public official ethics are different, this was not technically an ethics code violation although Governor Paterson’s obtaining a set of free tickets to a Yankee game was and consequently earned him a $62,125 fine. The overriding caveat, however, is to beware of public officials obsessed with using the office they hold to attend sports games for free.)

2. That the new, more expensive stadium parking would be attractive enough at the new, more expensive prices to attract sufficient utilization to support the bonds. Was that a good bet when they underwrote the bonds in 2007? In spring of 2009, concurrent with the first season’s opening, Noticing New York reported on the skepticism of two old-timers, both baseball scouts. They thought $29 was too much to charge for parking (Sunday, March 15, 2009, Inside Baseball.) The price of parking has recently been hiked to $35, probably worsening the situation. Will we now see a vicious cycle of price hikes intended to compensate for low utilization?

3. That other existing cheaper local private sector garage and parking facilities wouldn’t out-compete the subsidized Yankee garage facilities. (WNYC reports competitors are charging as little as $15.)

4. That high prices wouldn’t cause those who do drive to the stadium to roam the streets looking to usurp the street parking that was previously available to those who live in the neighborhood. This part of the miscalculation nullifies some of the environmental assessments made when the new stadium was first considered and winds up being contrary to assurances that Yankees president Randy Levine offered the City Council during at least one public hearing.

5. That the alternative transportation options provided by the new Metro-North stop added next to the stadium as part of the reconfiguration wasn’t essentially a duplicative and conflicting public investment.

6. That having all of this unutilized new parking infrastructure was more desirable as a public investment than the alternatives that were available. Some of the alternatives:

a. New York State didn’t need to spend $70 million in taxpayer dollars to build Parking Garage B, the private VIP garage with direct access into the stadium. Using the way-back (time machine) capabilities of the Internet (and their inventory of previous posts) to hold everyone accountable to the facts and a consistent story, No Land Grab pointed out that in 2006 “discredited” “sports economist” Andrew Zimbalist Jr., wrote in a New York Times Op-Ed that “all parking revenue would go back to the state and more than pay off the investment.” - One more fuzzy math miscalculation.
b. The neighborhood public parks and trees sacrificed to create the parking could have been kept instead. 377 mature oak trees might have been kept or at least some of them. 25.3 acres was taken. The "replacement" parkland for the community includes space on top of one of the stadium's parking garages, some already mapped parkland, and a patchwork of other plots ranging up from less than a half acre in size.
c. The city wouldn’t then have to be paying all of the $195 million it is supposed to be paying to replace parkland it gave to the Yankees.
d. The local community needn’t now be dealing with the fact that the “replacement” parkland has been slow to materialize and inferior.

A Jane Jacobs Digression

In her The Economy of Cities, urbanologist Jane Jacobs at one point digresses as she is discussing how new kinds of work evolve out of previously existing tasks and occupations. One of Jacobs' themes in this book is her endorsement of cities for their ability to foster these new, generally productive, ingenuities but she cautions that while it is ordinarily a good thing that new trades can evolve from old ones, the particular evolutions that result are not always to be desired. As she declares (page 54) not all the results are necessarily “useful, legal or innocuous.” In a long list she catalogs examples of things that are not “useful, legal or innocuous” and includes police that take bribes (or burglarize) and government officials who stuff ballot boxes and to this list she adds:

some city-planning departments take to scouting out and processing profitable deals for favored real-estate operators and also to organizing and running fraudulent “citizens’ organizations” to help overcome public opposition.

This observation can be readily adapted to say that while the work of government officials administering subsides may, when they start out, be doing the job of serving the public (a useful and desirable vocation), when they become captives of the development industry they have embarked upon a qualitatively different kind of pursuit (one that isn’t useful or innocuous and may not even be legal). When the miscalculations associated with administering subsidies become profuse as with the list above perhaps it is time to believe that the administering public officials have transitioned into the captive class. (Consider the concept of “Agency Capture.”)

In the End the Community Pays the Price

The WNYC Transportation Nation story begins and ends with an anecdote about a local community high school varsity baseball team that can no longer play its games in the community because the Yankees built one of their parking lots on the field where the varsity team used to practice and the team is still waiting for promised replacement fields. Jim Dwyer of the Times also wrote about how the varsity team now buses out of the community to its games. (About New York, Yankees Claimed a Park; Children Got Bus Rides, October 23, 2009. Putting the miscalculations in terms of the losses to the community and public is really the only way to put appreciate what the miscalculations actually mean.

Here is a cruel irony about how badly the local community has been shortchanged that may be added to the list of miscalculations- - it doesn’t seem to have been noted in any of the coverage to date: Since some of the “replacement” parkland for the community includes space on top of one of the stadium's parking garages, the community might now stand to lose that parkland (as inferior to the original replaced park as it might be). As Crain’s notes, “A default could set up a seizure by bondholders and would leave the garages' future in question.” Presumably the future of that parkland as well.

This Saturday May 21, 2011, The First Acoustics Season Finale, Bob Cunningham Jazz Ensemble

(Above, February 15, 2009, Bob Cunningham at a previous First Acoustics performance with First Acoustics' producer Coco Wilde and singer Wendy Russell who opened for Cunningham that evening.)

This Saturday (if the world is not ending) you can catch the Bob Cunningham Jazz Ensemble in a return engagement performance that will constitute The First Acoustics Season Finale. Next season's performance line up will also be announced.

What does notice of a local music event 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's information about Saturday night’s performance. Tickets are available on-line. Enjoy.

Saturday evening at 8:00 PM
Bob Cunningham Ensemble
First Acoustics
May 21, 2011
All seats $25.00 advance, $30.00 at the door
For More Info

Notice About “National Notice”

Noticing New York readers may be interested to know that it isn’t just all about “Noticing New York” any more. I have started another site, “National Notice” (banner logo subject to change). Sometimes, when I have things to say they just aren’t appropriate items to bend the ears of Noticing New York readers with. In other words, the central theme of what I want to say is not about development in New York and the associated (frequently dirty) politics.

Mostly, the other issues I find myself attracted to involve national politics and, in that regard, what likely makes good economic sense as national policy always intrigues me. If you go to “National Notice” you may find that the issues discussed, even if they do not directly discuss New York City development issues (and hence have been invited to this new territory), nevertheless echo the themes frequently presented in Noticing New York posts, that life could be better for the general population if the wealthy and privileged held a little less sway over policy, decision making and distribution of resources.

Perhaps this will be a salve, if on a slow day you are hungry for a new Noticing New York post you don’t find and are willing to settle for something similar but a little bit different. And, inevitably I expect, the two discussions (with some meaty recommended links) will converge when many topics get discussed.

For an initial introduction you may be interested in this review of economic issues affecting the national real estate market (it does not go into why New York City, benefitting from the direct federal support received by Wall Street since the 2008 economic downturn, is currently in a somewhat different boat from the rest of the country):

Friday, May 13, 2011
Inflation That's Causing Deflation: Some Not So Very Good News For the Real Estate

Right now, the just started National Notice doesn’t Google very high, something I hope to address in time. (It’s already going up.) If you would like to help in this regard and there are articles you see that you like, please feel free to assist by sending links to your friends.

For Noticing New York readers may this be the start of a long and beautiful expansion of our relationship. See you over at the other place from time to time.

Reminder: So Many Wonderful Things To Do On A Sunny Saturday, May 7, 2011- Combine Choices But You Still Have To Choose

Here is a brief reminder: There are some great things you can do today. Some of them can be combined with others to make a full day of it but you’ll still have to make choices because you can’t really do them all- Or you could somehow try?

See:

• Monday, May 2, 2011, 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


• Sunday, May 01, 2011, Coming Saturday, May 7: a Jane's Walk around the Atlantic Yards site and environs

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

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

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

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

Is It Even Debatable?

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

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

Here is a taste of the views offered by the professional commentators (with full commentary and multitudinous readers' comments available at the Times site):

Judith Martin: (a professor in the department of geography and director of the urban studies program at the University of Minnesota.)

Too big to fail* one more time? How about too ugly or redundant to succeed?

(* This picks up from what was reported in the first Times article by Charles Bagli about how the Christ administration rationalized his governmental intervention: “The administration has argued that the project is too big and too far along to let it lie fallow.”)

David Smiley: (teaches architecture and urban studies at Barnard College.)

People have a right to their pleasures but not with our tax dollars, please.

Brigid C. Harrison: (a professor of political science and law at Montclair State University.)

This would placate the building trades unions which were temporarily riled up by his decision to cancel the ARC tunnel project.

But the problem with Governor Christie's decision is also economic: it puts the state at risk for financing a historic boondoggle while in the midst of a slow economic recovery. The state would relinquish some of the potential gain of tax revenue generated by Xanadu, which is almost certain to snatch business away from other local merchants, given its enormous size.

Bob Ingle: (a senior political columnist for Gannett New Jersey Newspapers, a daily blogger at Politics Patrol)

How appropriate that it shares a name with a stinker of a movie, “Xanadu.”*

(* The IMDB link to the Olivia Newton-John movie “about a girl who makes dreams come true” is supplied by NNY. In movie fame terms “Xanadu” was also, in the movie “Citizen Kane”, the name of Charles Foster Kane’s “world’s largest” palatial estate “cost: no man can say” the film’s stand-in for William Randoph Hearst’s San Simeon castle. Kane was, of course, modeled after Hearst, who was boss to my grandfather, Thomas Justin White, the General Manager and one-time President of the Hearst publishing organization, who consequently spent a lot of time at San Simeon.)

Terry Golway: (a former member of The New York Times editorial board, teaches United States history at Kean University in Union, N.J.)

Nearly $2 billion already has been sunk into this modern Swamp Castle, so it’s highly unlikely that it simply will be demolished. Too bad. The building’s hideous appearance can be fixed, but only a wrecking ball could change its status as a symbol of bad public policy and private sector overreach.

Out of the Swamps Some Editorializing About Preserving Ecosystems

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

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

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

Here is more of what Mr. Golway has to say. Just see out how easy it is to substitute in your mind the concept of neighborhood ecology (in the case of NYC many mega-projects) for the nature's ecology in the Meadowlands that Mr. Golway is talking about (in the case of the Xanadu mega-project):

Before they spend another few billion in an attempt to right this environmental wrong, the site’s new owners should spend a couple of days reading Robert Sullivan’s brilliant 1997 book, “The Meadowlands: Wilderness Adventures at the Edge of a City.” [Substitute Jane Jacobs "Death and Life of the Great American City"?] Mr. Sullivan [Jane Jacobs] showed how this fragile ecosystem has managed to survive repeated assaults -- and he [she] wrote long before anybody thought that the swamp was a good place for another new shopping mall [retro-urban renewal-style extravaganza]

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

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

Putting Taxpayers Out of Business

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

Our Old Chum the "Churn"

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

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

What Should Really Be Subsidized Anyway?

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

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

Well Versed To Win

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

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

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

Here for reference is the opening stanza of the original Samuel Taylor Coleridge poem:

In Xanadu did Kubla Khan
A stately pleasure-dome decree:
Where Alph, the sacred river, ran
Through caverns measureless to man
Down to a sunless sea.

The declared winner was Steve Schoenwiesner of Montclair, N.J., for his two-stanza entry, one stanza of which is reproduced below:

For Xanadu did Christie-Khan
A stately subsidy decree.
While tracks below a river, planned,
Were scuttled, fundless, by this man
A blight revives tax-free.

(The hyperlinks in the above are Noticing New York supplied.)

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

Touching on Christie's Tunnel Vision

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

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

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

Unidentified Cost of Abandoning Principle

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

Good Grief! More Stories (Involving Computers and Schools) Deflating The Bloomberg Management Expertise Myth

(Above: Michael R. Bloomberg has created a plethora of self-laudatory faux websites, "Mike.com, "Mike.org," and "Mike.gov"- more about that here. It seemed fitting that one more be added to that Pantheon, happily supplied by NNY above, in light of recent news stories: "Mike.mismanage.gov". Click to enlarge.)

Come on, quit it. Enough already. I am not looking to do another Noticing New York story on this. But, here it is. It can’t be avoided. Noticing New York has some new links for you.

If Bloomberg is supposed to have brought any expertise with him from the private sector other than self-salesmanship it would theoretically be that he knows how to manage a computer information empire. And if Bloomberg were to push anything to the forefront for consideration and public admiration about the top priorities and goals focused on by his administration it would likely be improvement of the city public school system.

Computers, schools.

It seemed as if Noticing New York had adequately dispensed with the subject of how inadequately the Bloomberg administration was doing in these touchstone areas, computers and schools with several pieces in the wake of two scandals recently in the news: the early forced resignation of Schools Chancellor Cathie Black and the $80 million fraud in the CityTime payroll and time sheet computer automating scandal where some of the core of fraud ironically involved falsification of time sheets.

See all of the following:

Saturday, March 26, 2011
The Myth Of Bloomberg’s Management Expertise Reexamined: What Happens When Government Doesn’t Manage Its Programs

Saturday, April 9, 2011
Add To Bloomberg’s Other Mistakes: Mistakes In NOT Acknowledging Mistakes, Including A Certain Ratner Mega-Monopoly

Monday, March 28, 2011
Take TWO (AYR’s) On Times Coverage- Revisiting Light Shed by CityTime Outsourcing Scandal When Reexamining Bloomberg Management Myth

Another Story Computer Fraud (Affecting Schools) Undetected By Bloombergian Management

No sooner had these articles put to bed what ought to have been a convincing case that Bloomberg overrates his own expertise when we get yet another revelation in this vein. And what does it pertain to? You got it, computers and schools, specifically another fraud during the installation of a new computer system, this time one for the city school system. Again it involves work that was contracted out to the private sector. According to the New York Times whose headline for their coverage was a summing up of this point, the work being done seemed suspicious to those on the sidelines (IBM contractors) as far back as 2002, a date when Bloomberg was newly in office and reportedly giving great scrutiny to the city computer systems (January 2002) and schools (March 2002). Selections from the opening of the Times story:

Sometime in 2002, a manager at I.B.M., which was working on a large project to wire New York City schools for the Internet, noticed something unusual about payments the company was making for some workers.

The manager asked a colleague if this was proper . . . The colleague said others at I.B.M. were also concerned, with one saying he “did not trust Lanham.” But Mr. Lanham . . . assured I.B.M. that he had spoken with a supervisor at the Education Department, who “was O.K. with it,” and the matter was taken no further. . . .

It was the first of several warning signs about Mr. Lanham, whom investigators have accused of stealing $3.6 million from the city through marked-up billings using a complex scheme of contractors and subcontractors . . . .. But because of Mr. Lanham’s unchecked power over the project, which the city was paying him $200,000 a year to oversee, virtually all of the suspicions came to naught.

(See: Doubts About Schools Consultant Charged in $3.6 Million Fraud Dated to ’02, by Fernanda Santos, April 29, 2011.)

It seems appropriate that Noticing New York provide an update. But it is also helpful to hearken back to put it in context because, otherwise, the busy reader might just wind up thinking they were reading the same story over again- “Oh, yeah, yeah, I’ve read that one already.” But you haven’t read this one before and while it's similar and amounts to piling on of more of the same, it’s a different story, something you might not realize from glancing over the Times Story or its headline until you get to this language buried in the middle:

The case, which comes on the heels of an $80 million fraud prosecution involving consultants on another city project, the CityTime automated payroll system, illustrates again the vast amounts of money the city is spending on technology, and the trust it was putting in independent consultants.

The Times story neglected to mention that these scandals are both in the area of the mayor’s vaunted expertise, computer data system management.

Policing the Police With Computers

Meanwhile, the Bloomberg administration is reassuringly selling computerization as the cure for the Police Department ticket-fixing scandal in the news the last few weeks. (See: April 22, 2011, Bloomberg Says Computers Will Cut Ticket-Fixing, By Diego Ribadeneira.)

And One More Story of Waste and Inefficiency Involving Bloomberg Bringing Computers to the City Schools

The foregoing stories about Bloomberg’s failures with respect to computer data system management also have to be distinguished from this other new story from WNYC, again involving a computer data management system for the city’s schools: Bloomberg By the Numbers: $80 Million School Data System Still Evolving, Thursday, March 24, 2011. Although this account involving “ARIS” (the Achievement Reporting Innovation System) doesn’t involve allegations of fraud it does involve allegations of disappointing waste and inefficiency.

Here’s how the WNYC report begins, together with a few excerpts from what ensues:

If there's one over-arching principle Mayor Michael Bloomberg has brought to city government, it's accountability through data. If you can measure something you can manage it better.

In 2007, the Bloomberg administration launched a new computer system for the city schools called ARIS, the Achievement Reporting Innovation System. The goal was to put information about test scores, attendance and student histories all in one place to help principals and teachers do a better job of reaching their students and improving performance. But the $80 million system hasn't yet achieved its full potential — even at schools that use it heavily.

* * * *

If ARIS is struggling to keep up with changing demands of teachers, that's partly because it had a difficult roll-out. IBM had to turn over most of the work when it fell behind schedule. The project was handed over to a subcontractor, the Brooklyn-based Wireless Generation (now owned by Rupert Murdoch's News Corp, which also hired former Chancellor Joel Klein as a vice president for educational technology).

Sources said this wasted time and money. Plans to make the system more user-friendly for teachers to share information with one another got put on the back burner and so were plans to allow more regular updates of school-by-school data. But Suransky said ARIS should be able to add some of those features in by the fall with a feature called ARIS Local.

Troublesome Focus on Management by Troublesome Statistics

If you spend time absorbing the whole report (which is not all negative) you can form your own impression of whether Bloomberg’s constant emphasis on “data” and computerization makes managerial sense. It is possible that all this technology can just be a wall between real people and that in education the answers are really more about how real people interact with each other.

Also, sometimes Bloomberg data is just wrong and self-serving even as it goes unquestioned. Consider his statistics about the presumed growth of the city, or this respecting the Bloomberg administration’s statistics on: 1.) school test score improvements, 2.) addition of affordable housing units (as many were being lost as created), 3.) the lack of job creation and quality job creation, and 4.) police statistics. (On the presumed growth of the city see also this excellent piece summarizing a Francis Moronne Historic Districts Council address from Atlantic Yards Report: Friday, April 29, 2011, PlaNYC 2030, the questionable estimate of 1M more people, Morrone's history of erroneous NYC predictions, and the preservation movement.)

Bloombergian "Start From Scratch" Grandiosity

When you are questioning the reliability Bloomberg’s management expertise and the extent to which his statistics reflect a real world versus Bloomberg’s desire for an exulting edifice-complex oriented headline, the statement the in the Times about Bloomberg’s “big push” for an applied sciences school (“envisioned as one of the largest development projects in the city’s history” - What? Bigger than the Atlantic Yards mega-monoploy handed to Bruce Ratner?) has more ominous resonance:

William A. Zajc, chairman of Columbia’s* physics department, said the idea for an applied sciences school was a “field of dreams venture.”

(* Is this gripe just because Columbia doesn’t want competition for its takeover of West Harlem?)

(See: Bloomberg’s Big Push for an Applied Sciences School, by Javier C. Hernnandez, April 26, 2011.)

Some more tidbits from that Times story:

Critics have deplored the city’s willingness to offer incentives at a time of economic distress.

* * * *

“In a period of economic crisis, when we are so tight with our budget, we should not be giving incentives to private institutions,” City Councilman Ydanis Rodriguez of Manhattan said.

* * * *

The idea is one of the more imaginative proposals to come out of Mr. Bloomberg’s City Hall, but it may also be among the riskiest.

* * * *

Some have faulted the city for not clearly articulating how it might recover some of its investments if the school does not turn out to be the economic engine that the mayor expects.

The Times story also includes criticism that the mayor should, instead, be thinking in terms of deploying the city capital (“the city has pledged to offer capital [$100 million or more] and public land”) to build upon and expand existing resources and programs rather than these grandiose plans to “start from scratch” which NYU’s proposal to the mayor dares to criticize:

“A ‘start from scratch’ approach that parachutes a new player into New York without the requisite ingredients that lead to success has the potential to be a waste of resources.”

Willlets Point, Atlantic Yards, Coney Island, even the Columbia expansion into West Harlem (potentially competing with the mayor's applied sciences school vision): Where else have we been hearing about the mayor’s intoxication with wiping the slate clean in order to “start from scratch” before building anything?

Yet, as the Times story notes, “Mr. Bloomberg has taken a strong personal interest in the project, embarking on a campaign-style effort to lobby university leaders and business executives” for his start from scratch approach.

Maybe Bloomberg is not serious about this new proposal. Maybe it is just that talking about parachuting “a new player into New York” just gives Bloomberg a better chance to roam around the country talking to power players on the national stage as he toys with the idea of replacing Donald Trump as the multi-billionaire Republican candidate to challenge Barack Obama in the next presidential election.

Net Net: When you read the Bloomberg stories in the news, they all have to be remembered and read together.