Thursday, July 23, 2009

The Hit and Miss of Last Night’s Public “Information” Meeting on Atlantic Yards

(FCR's Gilmartin)

Comparing notes after last night’s information meeting on Atlantic Yards, the consensus seemed to be that there wasn’t that much about it that was that surprising. Forest City Ratner in the person of Executive VP MaryAnne Gilmartin and representatives of the Empire State Development Corporation essentially answered the questions they wanted to answer they way they wanted to answer them and evaded the questions they didn’t want to answer. Nonetheless, as Atlantic Yards Report notes in an excellent, detailed account still being updated the session did surface answers/non-answers that were “telling.” (See: Thursday, July 23, 2009, ESDC, FCR face, answer, evade tough questions (subsidies, cost-benefit analysis, etc.); meeting marred by heckling and chaos.)

Surprise at Questions Ending?

There was, however, one thing that did initially seem surprising to us: The written questions submitted by those in attendance ran out about ten minutes before the meeting was officially scheduled to conclude. That was surprising to us until we thought more about the fact that some of our own Noticing New York questions that were submitted were not, in fact, presented. Other questions we submitted that were asked flashed by time-wise because they were not answered at all. In theory, questions we submitted might have been passed over if they duplicated other answered or evaded questions that were asked, but that was not the case. At least we will get to note them here.

(The procedure was that the audience was to submit questions in writing. The questions were then pre-read and sorted by the community board and questions to be presented were handed up to read aloud by moderator Craig Hammerman, the CB 6 District Manager. Additional questions could be submitted at any point until the very end of the meeting. There was, in fact, encouragement to submit more questions rather than object aloud or heckle when FCR or ESDC dodged or evaded answering.)

Generating Questions About an Undesigned Project Sill Sight-Unseen after “Half a Decade”

For the week preceding the hearing we found ourselves unenthusiastic about generating questions to submit at the meeting. It seems like shadow boxing since we are not being told exactly what the project now is. The timing on the release of information is all from the standpoint of accommodating the developer at the expense of the public. Although Ms. Gilmartin made a point that “It is approaching half a decade since Forest City embarked on the Atlantic Yards project” the crowd was being told that because Forest City Ratner is in the middle of designing the arena (the only fraction of the megadevelopment it currently plans to build, or maybe even design, near term) that the public won’t even be able to see images or know what is proposed until after next week’s public hearing on the project. Such images an information will not even be released until after the ESDC board approves the project on this sight-unseen basis.

Atlantic Yards Report Tells of Some of Our Questions

We managed to rev up our enthusiasm and did show up with questions. Then we generated more before the evening was out.

The latest version of the updating Atlantic Yards Report account of the meeting includes two of the questions we asked. Here is one that received a non-response, except to the extent that it hints at an acknowledgment that the state’s override of local laws will cause the megadevelopment to exceed the density New York City zoning would legally permit:

What’s the FAR?

Subtracting out the streets and the area devoted to green space, what’s the calculated Floor Area Ratio (FAR) and how does that compare to what would normally be legal for residential development?

ESDC said they couldn’t provide a specific number. Shatz said, “As was mentioned before, this project did benefit from a zoning override. Although we did create design guidelines with input from City Planning, people have to understand that this project was not subject to New York City zoning.”
Here is the final question of the evening, also ours, that got an answer we do not believe is correct:

Final question

Will the project go back to the Public Authorities Control Board (PACB), the three-men-in-a-room who must review state capital projects?

Matlin said no further approval is needed, given that the PACB approved the project, and the financing, in 2006."
We do not believe that the answer is correct because the mega-project and its financing have changed dramatically from what received PACB approval in 2006, tilting ever more strongly towards a very substantial likelihood that the financing will fail and an increasing need for it to be propped up with more subsidy just as it in fact was by the most recent actions of ESDC and the MTA. To say that the PACB does not need to approve substantial revisions of projects careening off toward failure is to deny the PACB its purpose and veer away from past precedent. To suggest that there is an effort underway to have the PACB not approve the substantial rewrite of the project’s financing that has occurred since 2006 says something about the fear that politicians have of taking responsibility for this project. Politicians would rather set precedent in giving up this control and gate-keeping function than take responsibility for the project? Really now!

ESDC’s Pattern of Relieving Forest City Ratner of Obligations

Questions were asked about what remedies would be available to ESDC if Forest City Ratner didn’t complete the megadevelopment. The answers ought to have generated surreal malaise given that significant remedies can’t be pursued in the near term and, most important, ESDC’s right to do anything about noncompletion of the project doesn’t kick in until twenty-five years down the line. Our follow-up written question, one we thought was important, did not get asked:

What assurance is there that ESDC will enforce its remedies against Forest City Ratner to complete the project and comply with the project plan given that whenever Forest City Ratner has requested ESDC has acquiesced and been willing been willing to eliminate and/or reduce those Forest City Ratner obligations from which Forest City Ratner has wished to be relieved?
In this regard, having remedies that can only be enforced starting twenty-five years from now is representative of ESDC’s reluctance to saddle FCR with actual responsibilities. It is similar to the MTA saying that it will not immediately collect from Forest City Ratner the $80 million which FCR will theoretically, one day pay the MTA for its property. With the MTA at each opportunity rejiggering to give FCR a better deal (with less exacting obligations), why should anyone believe that the MTA when next asked won’t effectively excuse entirely payment of the $80 million it has deferred?

These questions of what FCR will ultimately be held to over time, in twenty-five years or whatever, are crucially important. One thing that was acknowledged by ESDC last night is that the Atlantic Yards project is not being built on a we-get-benefit-as-we-go basis. When asked about the New York City Independent Budget Office report that says the arena would be a net money-loser for the city, ESDC Senior Counsel, Steve Matlin said:

“We do our own analysis. We basically do an analysis of the entire project. We don’t do a separate analysis just of the arena component. What we bargained for was the entire project. We bargained for the benefits generated from the entire project.”
In other words, the city won’t get benefit from what is built first so later on, without the kind of adequate enforcement from ESDC (which is definitely not assured), the city in not likely ever to get benefit, even by ESDC’s calculations. As No Land Grab snipes, ESDC only does a benefits-only analysis with no analysis of costs.

“Impermissible Favoritism” for Forest City Ratner

Another question we submitted more than once was not asked. Our later submissions updated our original version of the question so that it would serve as appropriate follow-up to the extent that some components of our question were either asked or by happenstance answered. Our question concerned the apparent “impermissible favoritism” of exclusively awarding Forest City Ratner the whole megadevelopment without a competitive bid. We tried to structure our question with its own embedded follow-ups:

What can you tell us about why Forest City Ratner as opposed to some other developer (for instance, a more credit worthy one or one that would pay the MTA more) should be the developer for the entire site? - In light of what you are willing to tell us in this respect to what extent are you willing to preclude the possibility or offer assurance that FRC will never assign any or all of the site to another developer at another time? - Given your answer to the forgoing why does it make sense that FCR is getting a long-term, low-cost option to develop the entire site with no corresponding obligation to go forward with that development?
It should be noted that MTA’s and ESDC’s recent restructuring of the Forest City Ratner deal breaking the project into separate chucks or parcels, which FRC more clearly has freedom to proceed with or not, negates the idea that the megadevelopment must somehow be considered a one-developer deal.

We restructured and resubmitted our question when ESDC Senior Counsel, Steve Matlin effectively answered part of our question after someone else asked, “Why Forest City Ratner and not another developer?” Mr. Matlin said there were two answers: 1.) Forest City Ratner had a contract with the Nets (pertinent to only a small portion of the project), and 2.) Forest City Ratner already had control over much of the site when it proposed the project.

Mr. Matlin’s response about FCR’s ostensible control over the site generated outcry in the audience (we clearly heard the voice of Candace Carponter, legal chair for Develop Don’t Destroy Brooklyn) that it was inaccurate. We therefore resubmitted the question modified to ask for the challenged accuracy of the site control statements to be addressed. When the meeting was over we had a chat with Henry Weinstein, an Atlantic Yards footprint developer Forest City Ratner wants to displace. As he talked about the lawsuits he’s he has won against Forest City Ratner we were reminded us about of some of the games that ESDC and FRC have played along to the way to misrepresent Ratner’s control of the site. For Mr. Weinstein things began with illegal actions Forest City Ratner took 3/31/05, long after the December 2003 announcement of Ratner would be developer. (See: May 14, 2009, Weinstein Legal Victory Shows Ratner and Boymelgreen Acted in Bad Faith and Friday, May 08, 2009, Snag in AY? Appeals court upholds decision that said Boymelgreen improperly assigned lease of footprint building to Ratner.)

We also modified our resubmitted question to acknowledge that ESDC had already said that evening that FCR can assign away the project to other developers.

No Affordable Housing for Those Who Most Obviously Need It?

There was a fair amount of discussion about what the rents for the so-called “affordable housing” in the project would be. Atlantic Yards Report has a comprehensive summary about FRC’s Gilmartin’s failure to respond to the question that includes the following:

She didn’t offer any monthly rents. A 950 sf three-bedroom apartment at $30/sf would be $2375 a month--and a rather small three-bedroom apartment at that. Keep in mind that a not insignificant slice of the affordable housing would appear to track or exceed the market.

Later, when the question came back up, she said that a rent of $12/sf on a thousand-foot apartment would be $12,000 a year, or $1000 a month. However, it's possible that no affordable units would be that large.

For more information on exactly how small affordable units would be, perhaps 575 square feet, not 1000, see: Saturday, July 15, 2006, AY snug or stingy? 575 sf for 1BR, 775 sf for 2BR.

We submitted a significant question in this regard which after several submissions was finally read but not answered:
Why did FCR and ACORN negotiate a Community Benefit Agreement/Memorandum of Understanding that has an income band right in the middle where families most significantly in need would not be provided with any affordable housing? That band (families with incomes from $38,407.00 or 50% of AMI to $46,087 or 60% of AMI) is right above the income bands that the federal tax code will require will be in the project and right below the units that will be provided to higher-income, less-needy families at the rents that appear to track the market.
Rather than say why this had been “negotiated” with ACORN, Ms. Gilmartin simply said that what was in the ACORN agreement would be adhered to. As Ms. Gilmartin did not answer the question we will provide the obvious answer. The concocted income bands minimize Forest City Ratner’s obligation to give any real public benefit. Since the bands below are required by the tax code anyway, they cost FCR nothing economically. To the extent that 575 square feet units at rents in the $1,535 to $2,880 monthly rent range track the market, there is also no economic concession to public benefit on Forest City Ratner’s part.

(Above chart shows the minor portion of units in Atlantic Yards referred to as "affordable." Click to enlarge.)

To see the chart and analysis we provided previously when writing about this see Friday, April 10, 2009 As AMI climbs, a significant slice of Atlantic Yards "affordable housing" seems to track market and Thursday, April 2, 2009 Jane Jacobs Atlantic Yards Report Card #14: Project Creates Population Diversity? NO

To read more about how ACORN essentially shilled for FCR by negotiating no real public benefit, see: July 24, 2008,
Falling Acorn! How Far from the Tree? and Saturday, June 28, 2008, Selling out the Community for Beans (A Giant Wrong).)

Our chart has rent figures in it.

Greene When It Comes To Numbers?

Another question we submitted more than once was never asked:

Why did Forest City Ratner hire Darryl E. Greene to be responsible for tracking minority hiring and minority business enterprise numbers, when a little bit of research or Googling shows that Greene’s trouble with mangling numbers led to criminal charges to which he eventually pled guilty?

(See: New York Times, “Lawyer Is Accused of Bilking City Agencies” Published: December 5, 1997 and City of New York Department of Investigation Press Release “Government Contract Attorney-consultant Pleads Guilty in $500,000 Theft of Public Monies”.)

This may be an unpleasant question to ask but one has to think about whose side Mr. Greene is on when it involves his taking home a check. Mr. Greene’s relationship to Ratner apparently goes back to at least 2004. Unpleasant or not, we think that Forest City Ratner should have been given an opportunity to address this.

Those then are questions we came up with. Once again, for a very full account of what happened go to the Atlantic Yards Report, being updated. While not all our question got asked or answered, we must note that the community board leaders had such a difficult job to do last night that it would be hard to fault any of them. One member in particular, Richard Bashner, chairman of CB 6, persisted with calm presence of mind to ask astute follow-up questions and bring far greater order to the proceedings than one would have anticipated given the willful disruptions (mostly by project supporters- click on video below) and the unfortunately provocative irritation of the perfunctorily rote evasions coming from Forest City Ratner ESDC.

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