Monday, November 30, 2009

Promising Predictions as Bloomberg’s Political Plaything

Knowing the “No”s of November, the Election Month

Back in September we commented skeptically on predictions that the Brooklyn Bridge Park would be opening by the end of the year. Some of what we said:
The public is being further titillated by the projection that spurs having been kicked so that the first phase of the long-delayed Brooklyn Bridge Park will be open by December, just two months after the mayoralty election. Really?

* * * *

Notably, much like the Times advises public officials to do in the case of Moynihan Station, the city is now suddenly moving Brooklyn Bridge Park forward (we’ll gauge how fast when December finally rolls in after the election) because it is setting the extraneous focus on development aside.
This was part of piece we did wherein we noticed a rash of new Bloomberg pre-election promises about development while commenting that by falling over himself to put developers ahead of the public interest Bloomberg had been particularly inept at actually producing development. (See: Wednesday, September 23, 2009, Getting Bloomberg Out of The Way to Honor Moynihan.)

It turns out that we didn’t actually have to wait for December to find out about the Brooklyn Bridge Park opening. We didn’t even have to let the election month of November conclude to find out. The mayoral election was November 3rd. On November 24th, a mere 21 days later, the Brooklyn Eagle ran a brief story that the opening of Brooklyn Bridge Park’s Pier 6 is being postponed. Now we are told that “It won’t be ready until spring.” (See: B’klyn Bridge Park Pier 6 Opening Postponed, by Brooklyn Eagle, 11-24-2009.) The story said only that Pier 6 won’t be open in December but since the story said that the reason that the opening is being delayed is “because they say a harsh winter could damage the facilities” it is entirely possible that we shall soon find out that the reasoning applies equally and that the opening of Pier 1, the other pier that was promised to be opened in December is also being postponed.

(Below is a picture, appearing with its original caption, of Pier 1 that we included in our September story followed by an up-to-date photo of the progress.)

(With about nine more weeks to go before its announced completion date, this is what Brooklyn Bridge Park’s Phase I looks like today.)

Predictably True: Election After-Math On NYC Budget

What a difference a matter of weeks can make if it takes you from pre- to post-election. We found out more quickly, only a week after the election, that Bloomberg was cutting the city budget almost 12%, the steepest cut since the cuts in response to the 9/11 crisis. (See: Bloomberg budget ax will cut to the bone, by Sally Goldenberg and David Seifman, November 11, 2009 and Mike's budget chopping spree, by Sally Goldenberg, November 17, 2009.) The cuts applicable to nearly all agencies were announced to take place in two phases (does that make either of them seem smaller?): 4% in fiscal year 2010, and 8% in FY 2011. But this was the announcement that was immediately post-election. Does anyone want to bet that the announcements of how much is actually being cut will also occur in two phases with additional cuts being announced in January when more serious budget deliberations are underway? When the Bloomberg administration announces the additional cuts, can they then get away with saying that they are just a percentage adjustment of the figures previously released or will the press add it all up together and announce that the cuts are 15%+ (or whatever it is) in cuts to the budget announced since Bloomberg won the election in November?

More Election After-Math

Some other numbers have received their post-election release as well. The current tally is that Bloomberg spent at least $102 million in direct campaign expenditures to get elected to his extended third term. (See: November 27, 2009, Bloomberg Spent $102 Million to Win 3rd Term, by Michael Barbaro.) Since this figure is post-election (as of Nov. 26) it will be close to the final figure although the Times points put hat it does not yet include Bloomberg’s “storied bonuses to campaign workers, which can top $100,000 a person.” Some of his storied bonuses are much higher: In 2005 he gave his campaign manager, Kevin Sheekey, a $400,000 bonus and Patricia (“Patti”) Harris, his top aide currently First Deputy Mayor got $350,000 for less than three month’s work. (See: Bonuses Uncertain for Bloomberg Election Aides, by Michael Barbaro, November 6, 2009.) Accordingly, our last Noticing New York estimate that he would spend $105 million looks like it was pretty dead on target, though near the end of the election we passed on word that the Times was estimating the incumbent mayor was “on pace to spend between $110 million and $140 million.” (See: Sunday, November 1, 2009, Bloomberg vs. Thomson (54% to 29%?): It’s Not What You Think. (For Instance the “P” is Missing and What Might “P” Stand For?).)

No matter that the Times’ last projected estimate was on the high side, it is still became a case of “never before in history” in many ways quite a while ago: Never has anyone in the United State of America spent so much of their personal money to hold political office, never was NYC’s mayor the wealthiest man in the city let alone become such with a multi-fold increase in wealth while serving in the office, never has a mayor had so many mind-boggling conflicts of interest with a personally-owned company that does business with so many of the same companies that the city itself has transactions with. No matter as well, because while our best estimate was that Bloomberg may have spent $102-105 million on direct campaign expenditures, these direct expenditures were dwarfed by his indirect campaign expenditures such as political contributions to buy endorsements ad charitable donations for political purposes. Counting those, we have noted, the total expenditures could be more on the order of $1 billion for Bloomberg’s third term.

Dueling Predictions

As our prediction on Bloomberg’s campaign spending was fairly dead-on accurate, let us try a few more predictions to duel with the guile of the prettifying before-the-fact promises that have been offered by the mayor. Try this one on for size: Columbia University will announce that it is deferring its plan to develop the swath of West Harlem for at least five years and at the same time is likely to announce that it is having problems technologically effecting the Jules Vernian giant underground bathtub basement that it used as a rationale to seize property through eminent domain. When will Columbia announce this? Not during the pendency of the litigation they are currently trying to win in order to uphold their abuse of eminent domain. They will hold back on the announcement as long as they can, perhaps hoping that by struggling longer with the bathtub technology and maybe shifting to a new architectural team they can conquer the problem before they have to acknowledge failure.

The reason that Columbia won’t announce anything like this during the pendency of the litigation is because litigations involving state agencies these days are more than a little like elections: Up-front government officials and the real estate development entities they go out of their way to assist are willing to say anything to win a lawsuit in the belief that once they have won it makes little difference that what they represented and promised wasn’t really true at all, irrespective of subsequent events disclosing the truth.

Witness the spectacle of that portion of the Atlantic Yards litigations that the Court of Appeals, the state’s highest court, just embarrassed itself with. The court managed to uphold a terrific abuse of eminent domain by deferring to a fairy tale version of the facts cooked up by state officials in service to the monopoly-seeking subsidy collector involved (Forest City Ratner). A key mechanism they used to do this provides an amazing example what we are talking about: The court based their decision on a “record” of non-facts that was officially closed as of late 2006, while they ignored conspicuous subsequent events that have continually demonstrated how false the facts of that “record” are in almost every respect.
The Amazing Carnage

Right now there are many litigations going on in efforts to stop Bloombergian real estate development: the aforementioned challenge to the Columbia University expansion, Atlantic Yards (a good several law suits), Willets Point, the Rudin/St. Vincent’s sell-off of the Greenwich Village Historic District, and the documented lying of finagling public officials on Dock Street. Many of these lawsuits involve the same conundrum of who are the courts going to believe, public officials creating a record of fictitious predictions or the contradicting realities that emerge. We won’t try to predict the outcome of all these litigations, but we will predict something else. While Bloomberg (if not stopped by lawsuits) may succeed in creating mega-project holes in the ground around New York, he will not in his third term as mayor succeed in creating successful developments to fill those holes.

Why do we confidently predict such carnage at sites like Coney Island, West Harlem where Columbia is taking over, Willets Point and Atlantic Yards? Because during the eight years that Bloomberg has been mayor (good economic years with a robust real estate market) Bloomberg has not been able to capitalize successfully on the simpler development opportunities that were already his to take advantage of: Ground Zero, Queens West, Moynihan Station (the new Penn Station) and, where we started. . . Brooklyn Bridge Park. Which brings us back to the words with which we concluded that article where we looked skeptically at the idea of the December Brooklyn Bridge Park openings together with many other promising predictions that administration officials furnished to the public intending that they be believed only for a limited period of time, only just long enough for Bloomberg to get a grant of power from the electorate in the election. This is what we wrote:
Some of Bloomberg’s developments may have been held up by litigation, but mostly they have been held up by his own misplaced focus, and if some have been litigated against, that too is largely the result of his own misfocus which has resulted in projects, often mega-projects, that are on top of everything else incredibly poorly designed.
It does not seem to us that Bloomberg (nor either his cohorts in development malfeasance) is a man to whom the electorate should be giving grants of power based on prettifying prognostications of what his destructions will lead to, whether those prettifying predictions come pre-election, pre-City Planning Commission, pre-City Council approvals, or pre-court litigations.

Friday, November 27, 2009

Schumer's Multi-Monopoly Positions Unhealthily Muddy Debate on an Issue With Left, Right and Center Appeal

Global warming, health care reform, complex scams to transfer wealth to already rich politically connected subsidy seekers: It can all get quite complex and the vested interests that oppose the public good know that they can tranquilize the public into soporific political inaction if they confuse the debate sufficiently. Health care reform is a case in poignant point: What should have been a relatively clear dialogue about what was good economics and best for the people has bogged down in confusion, with polls showing a shift. Initial strong support for health care reform has ebbed as Americans are increasingly misled and bewildered by manufactured non-issue, like “death panels.” Democrats like New York Senator Charles Schumer are attempting to interject clarity into the discussion, but politicians who are compromised by their inconsistencies have trouble delivering a clear message. Remember the amount of money spent to create public confusion is immense.

Monopolies: A Chance to Find Evil Left, Right and Center

We bring this up because this week we found Senator Schumer talking about an issue that is near and dear to our economics-loving heart: The evil of monopolies. No dummy, Senator Schumer is apparently quite aware that the issue should appeal “left, right and center” across the entire political spectrum. Problem is that Senator Schumer has a monopoly-supporting skeleton in his closet, one we have been speaking out against strenuously: Forest City Ratner’s proposed mega-monopoly in Schumer’s hometown of Brooklyn, New York. Jeepers, not only is Atlantic Yards in Schumer’s own borough, he might even be able to see it from where he lives in nearby Park Slope. Schumer can’t dodge knowledge of the ugly details of this scam.
(For more on image of proposed Forest City Ratner mega-monoploy above, see: Saturday, November 21, 2009, Mapping Out Forest City Ratner’s Monopolistic Strategy of Subsidy Collection.)

WNYC and Face the Nation on Sunday

Sunday afternoon WNYC’s radio news introduced other significant coverage (on All Things Considered) of the health care reform debate now at a critical juncture in Washington with a report on how Senator Schumer was emphasizing that the public option is an important part of having competition necessary for a functional health care system. We heard this introductory commentary from WNYC (emphasis supplied):
New York Senator Charles Schumer says health care reform that includes a public option can pass the Senate. He stresses a public option is crucial to guarantee competition:
WNYC then inserted a clip from CBS’s Face the Nation where Schumer had made his point earlier in the day. This is what the Senator said on Face the Nation (emphasis supplied):
Here’s the reason we need a public option. And we do, we very much do. The insurance industry is about the most highly concentrated industry in the country. In many states eighty-one percent of the insurance is by one company. In forty states two companies dominate. When there is no competition or very little competition, every economist left, right and center will tell you, the costs go way up. And that’s what’s happened here. So you need to inject some competition into the insurance industry. The best way to do that is a public option. And the program that we’ve put together is set up by the government, but then it’s on its own. There is no intent for it to compete unfairly against private insurance. . . . But I came up with the idea and the HELP Committee adopted it as well of a level playing field public option.
(Transcript available in addition to the video.)

Noting the quote was from the CBS program, WNYC wrapped up commenting:
Schumer says he is assuring his more conservative Democratic colleagues that the public option included in the Senate bill is "modest" and not the first step in a government takeover of the insurance industry.

Schumer is also reminding fellow Democratic senators that the bill would allow states to opt out of the public option.

He asks that they not prevent his constituents in New York from getting the public option they desire.
Schumer: Does He or Doesn’t He?

So does Senator Schumer believe in the evils of monopolies, like almost everyone in their heart of hearts does? Does he believe "his constituents in New York" deserve the protection of competition? If so, why does he support that the Atlantic Yards mega-monopoly? In our last post we made the point that “Once upon a time the U.S. Supreme Court went out of its way to say that one of the rare purposes for which eminent domain could be used was to break up land that was overwhelmingly concentrated in the hands of a few private landowners” yet public agencies supported by Senator Schumer are “doing the opposite: Using eminent domain to artificially concentrate monopoly ownership in the hands of Forest City Ratner.” (See: Wednesday, November 25, 2009, Picturing What Could Have Been Said If Public Officials Accepted Public Comment at the Atlantic Yards Bond Approval Meeting.)

Consider Who Is Telling You to Believe in Monopolies

Why would anyone believe that Atlantic Yards is good? Not because of the highly suspect studies funded at the instigation of and paid for by the developer. On Face the Nation Senator Schumer pointed out that “studies” bought and paid for by the industry involved ought to be rejected. Here is what he said about the health care reform study that Senator Jon Kyl was trying to promote as persuasive in the same Face the Nation debate:
Let me answer that. First the Lewin study, which Jon cites is widely discredited for one good reason--they’re fully funded by United Health, a health insurer.
Schumer went on to counter that the appropriate study figures to reference should be those of the Congressional Budget Office because “they’re not funded by anybody. They’re impartial and we both go by their readings.” Promoting the study of the CBO because they are impartial (which is definitely a good thing) is like, in the case of Atlantic Yards, promoting the figures of the NYC Independent Budget Office for the same reason: that they are impartial. These findings of the IBO which Bloomberg and the state agencies in service to the developer Forest City Ratner have summarily rejected says that the basketball arena those agencies are about to finance for the developer will be a $220 million net loss to the public.

Objections to the ACORN Endorsement, Left, Right and Self-Centered

That doesn’t leave Schumer with much reason to be supporting Atlantic Yards. It sort of forces one to go back to our story about how when the Senator was cornered about the subject of Atlantic Yards in a neighborhood barbershop he fled, saying that he had just accepted what ACORN told him about the project. (See: Monday, January 12, 2009, The Prospect of Caroline Kennedy as a New York Senator.) We previously discredited the way that ACORN sold out the community on Atlantic Yards but these days reliance on ACORN is not what politicians appealing to the left, right or center should want to be doing, given all the more recent events that have conspicuously brought to fore ACORN’s perpetually self-serving nature.

A Sad Forking Result

“Speaking with a forked tongue” was once frequently used as a term to describe lying. Whether or not it is strictly lying, speaking of the evils of monopoly as you follow a forking path, where sometimes you support monopolies while sometimes you don’t confuses the public dialogue. When the dialogue is allowed to be confused with such inexplicable compromises of integrity the wrong side wins far too often in this world.

Wednesday, November 25, 2009

Picturing What Could Have Been Said If Public Officials Accepted Public Comment at the Atlantic Yards Bond Approval Meeting

We were at Tuesday’s Brooklyn Arena Local Development Corporation (“BALDC”) meeting where that authority approved the issuance of bonds to finance the proposed Atlantic Yards Nets basketball arena. What is that agency in relation to the Empire State Development Corporation and its co-located sister agency, the New York State Job Development Authority? What makes it distinct? Or is it? Don’t ask unless you want to get into some needlessly byzantine distinctions that don’t exactly help the public understand or hold its government authorities accountable. If you do want to get into these distinctions and get an explanation for why this agency was trying to run off the radar without taking public comment or making information available ahead of time, read Atlantic Yards Report with all the gory details: Arena bonds authorization coming Tuesday: questions about transparency, PILOTs, and infrastructure spending remain (Monday, November 23, 2009).

Picturing Imperfect

We went to the meeting and were perfectly prepared to say something about the bonds being authorized for issuance but since the public officials there were not interested in public comment we brought images telling what we had to say, which we held aloft in succession as the meeting proceeded, right through to the bitter end. Below are those images, followed by the words that would accompany them if given the opportunity. Atlantic Yards Report covered the board meeting and our “brandishing” of our “mini-poster” messages in a post that also includes videos. The last of that post’s imbedded videos includes an interview we did with NY1 covering many of our concerns. (See: Wednesday, November 25, 2009, Arena bonds authorized, underwriter Goldman confident, but questions remain about rating, insurance, market.)

A Precedent Not to Be Proud Of

One thing to note first. Shortly before the 10:00 AM meeting began, word came down that the state’s highest court, the Court of Appeals, had decided against the plaintiffs in one of the many cases brought to oppose the use of eminent domain for Atlantic Yards. It was an important case and a significant loss in many ways. As a post in the The Volokh Conspiracy says:
The case is also significant because it is the first major state supreme court defeat for property rights on a public use issue since Kelo. Over the last 10 years, the tide had been going the other way, with more and more state high courts applying restrictive definitions of “public use” and forbidding economic development takings of the kind upheld in Kelo, including important decisions in Ohio, Oklahoma, and Michigan, among others. Hopefully, Goldstein will not be the start of a counterrevolution.
The people in the Empire State Development Corporation offices where the “BALDC” meeting was held were not gloating obscenely about the court decision. Why should they? They have nothing to be proud about. There is no reason to be proud of what they are trying to do at Atlantic Yards. They have no reason to be proud of the legal arguments offered to try to sustain their proposed abuse of eminent domain there and they have no reason to be proud of how they “won” the court decision which, because it consigns to the trash heap the protection of fundamental constitutional rights, has many people wondering if the decision in the state’s highest court was simply politically rigged like so much of what happens with Atlantic Yards. We will come back to spend some time on the “logic” (or lack of it) of the opinion offered by the court when it determined that the public should not be protected against politically connected developers. That will be in a later post.

Our Visuals and Putting Words to the Pictures

Here then are the visuals we held aloft at the meeting followed by the message we would have delivered if our comment had been allowed in words.

1. Why? Why are you financing something that will be $220 million net loss to the public?
2. And what kind of net loss will the rest of the Atlantic Yards site be to the public? You don’t know because you haven’t done the analysis and you have set public up for a big net loss by giving the developer a monopoly on site development options, freely renouncing your negotiating power.3. And why are you using the power of the government to consolidate Forest City Ratner’s monopoly on developing Brooklyn? Once upon a time the U.S. Supreme Court went out of its way to say that one of the rare purposes for which eminent domain could be used was to break up land that was overwhelmingly concentrated in the hands of a few private landowners. You are doing the opposite: Using eminent domain to artificially concentrate monopoly ownership in the hands of Forest City Ratner.4. There are of course many questions to be asked about why you are issuing bonds with so many tell-tale loose ends. We could ask you why, for instance you aren’t reviewing and approving the involvement of Mikhail Prokhorov as a proposed principal in this transaction?

5. Of all the multiple loose ends that make this so transaction dangerous, perhaps the most important to ask you about is this: Why are you financing an arena that is different from the one that the ESDC board and the PACB actually approved and which will be so much more risk for the bondholders? You are financing an arena which, among other things is so much smaller that it won’t be able to host a second team playing hockey.
6. Of course, you should be worrying that these bonds will default and consequently don’t deserve a good rating. A default will negatively affect the market for all New York issuers. But that is not all you should be worrying about. Moody’s has warned that the entire state is weeks away from a substantial downgrade of its credit rating if it doesn’t close its budget gap. Governor Paterson is asking the legislature to take steps to close that gap but who can take the governor seriously when on his behalf you are still pursuing this supremely wasteful financing that is driving the state into a deeper financial hole. You are responsible for the misapplication of billions of public money to Atlantic Yards.
7. The consequence of your misconduct doesn’t end here. Sometimes the question comes up whether the most productive use of our time is to address the kind of misconduct and waste by public officials we see here or to turn instead to issues such as global warming that threaten the entire planet. There is really no distinction: The selfish pursuit of things that don’t make economic sense, that harm the larger community so that one company with too much political power can destructively get more than their fair share of the pie is all part the same bigger picture.

8. Sometimes sports stadiums and arenas are worth a lot less than the public pays for them. Above the Silverdome stadium that just sold at auction for less than the price of a one-bedroom apartment.
9. Your Ratner-comes-first infliction of harm on the greater community should be a warning sign to anyone who might consider buying these bonds. What kind of transaction will you foist on them? What kind of song and dance will you use to misrepresent things to them? We know the fictions you’ve been selling us:
Ostensible, pretextual, is what you gave to us
Aweful vice, a Ratner heist, is what we’re loath to see

You made our lives preposterous, you can't blame us for feeling clamorous
Ostensible, pretextual, is what you gave to us
Obviously the conclusion above provides an appropriate musical accompaniment to our slide show.- So now you have, pictures, words and a tune to hum.

Going Weirdly From “Tutti Frutti” to “Rocky Road”

Before the meeting we were talking with one of the Goldman Sachs bankers involved in issuing the bonds, commenting that this must be the weirdest transaction on which they had ever worked. We were told that they had worked on some pretty weird transactions. We challenged them to name one as strange or involving so many oddities. Various other transactions were named. . . and discarded as candidates. We never came up with a transaction that even marginally approached being comparably strange. We commented that this transaction probably had within it every element of every weird deal that had been done anywhere else that strange things were going on in New York. Our banker mentioned that he sometimes tells people he does “Tutti Frutti” deals. Then he sighed, and perhaps realizing what was more apropos to this deal, he said, “Or I sometimes tell them I do `Rocky Road.’” “This,” we said certainly involves more than one scoop of “Rocky Road.” And god knows how many scoops of something else.

Press Conference on Bonds for More Expensive, Different Arena Than Approved, With Lower Capacity to Generate Income

After the board meeting was over there was a press conference where the Goldman Bankers and ESDC (“BALDC”) officials answered questions about the proposed issuance and marketing of the “Rocky Road” bonds. As Atlantic Yards Report reported, we asked about the fact that the bonds proposed to be issued are much riskier and are different from the financing approved by the ESDC board and the Public Authorities Control Board (“PACB”). The arena is significantly smaller, less functional and less capable of producing revenue, and much more revenue is going to be needed to pay for it because it is going to cost far more than the PACB was told. We thought it was interesting that Goldman bankers has said at the meeting that they were going to take the bonds out on “road show,” an atypical move that indicates to us that they view these bonds as an extreme version of “story bonds,” bonds that bondholders won’t feel comfortable buying based on what is in the offering statement unless it is supplemented with a lot of explanation, hand-holding and soothing about the transaction’s many ugly warts.

Question Dodging?

Initially one of the Goldman Bankers, Marvin Marcus (as seen in one of the videos), tried to block our risk question put to another Goldman banker, Goldman Sachs Managing Director Gregory Carey, saying that Goldman only wanted to take questions from “the press.” The tactic seemed particular unfair given that Mr. Marcus had told us only a half-hour before that he had actually been reading our work. We had only left it undetermined where he had been reading what we write, in Noticing New York, the Huffington Post, the New York Sun, the Brooklyn Paper, or a consolidation with a pick-up of a Reuters story or somewhere else.

What Would Jane Jacobs Do?

Atlantic Yards Report commented that with our sometimes multiple hats, which involve not only writing commentary but also asking questions and asking for accountability by via activist tactics we may sometimes make it more difficult to get answers to our legitimate and tough questions. Acknowledged. We do give consideration about how to structure our role. Noticing New York is a truth-seeking, truth-exposing endeavor. The model for what we do is probably closest to Jane Jacobs, who wrote extensive commentary on urban events and at the same time used devices to illustrate and contrast her point of view with the point of view (and sometimes false facts) that stage-managed events attempt to promulgate. We don’t think there are easy answers to how to report on events about which one may have a point of view except to be honest in reporting one’s point of view. We will continue to think about this. Meanwhile we think our visuals present questions that need to be asked and answered.

Dealing With Greater Risk?

Goldman’s Carey responded to our question about the extra risk as you can see from the detailed Atlantic Yards Report account saying, among other things, that there was “less leverage on this transaction” than with respect to the old transaction. “Less leverage” is often a way to reduce risk in a transaction when it is being acknowledged to be riskier, so in a way that could be viewed as an indirect acknowledgment that the deal, as should be obvious, is riskier than the one that was approved by the PACB and the ESDC board, but Carey gave a bottom-line, on-script answer that “we actually view this as a much more secure transaction.” In our view, the PACB didn’t approve such “less leverage” fix-ups of a risky transaction. Mr. Carey did not himself offer a point of view on the PACB approval saying he wasn't familiar with what the PACB approved.

State of Risk?

Relating to this question of approved risk, WNYC’s Matt Schuerman asked ESDC attorney Jonathan Beyer, ESDC Chief Financial Officer Frances Walton (“BALDC President) ESDC Senior Counsel Steve Matlin if the state would be willing to let BALDC’s Ratner bonds default when financial difficulties materialized. Here, reported in AYR, is the response he got, which though technically accurate bears some explanation:
"I don't know if I'd characterize it as willing," Beyer responded, "it's just that the documents do not require us to make any payments."

"This is a bondholder risk," added ESDC Senior Counsel Steve Matlin. "That's what the bondholders are looking at when they're purchasing bonds."

"That's not saying the exact same thing," Scheurman followed up. "You might actually decide, though you're not obligated, to bail out these bonds."

"That's speculation," Walton said, shaking her head.
What all this means is that although the bonds are issued by an authority that is a form of state agency, the bonds are non-recourse against the state itself, which means that the bondholders are at risk if these riskier bonds default. Because the state is not required to rescue defaulting bonds, it can technically walk away from them and it might. But if the state does walk away and lets the bondholders suffer when the bonds default, it will hurt the market for all New York State bond issuers, so the state may want to step in to prevent that from happening. Either way, the state takes a loss. That’s why the PACB was created to give prior review and approval to or prevent the kind of extra risky transactions that can provoke such problems from going out to market. Nevertheless, ESDC and BALDC want to avoid taking the inherently riskier transaction back to the PACB. In fact, they don’t even want to answer questions about the risk they are exposing the state and te bondholders to.

Questions About Transaction’s Greater Risk Left Unanswered

We asked the three PACB officials about the inherently more risky nature of this transaction involving a smaller, less functional arena than approved though it needs to somehow generate income to pay back a much higher construction cost. As Atlantic Yards Report details in its account, first they ignored me. Then they tried to avoid the question as not being from “accredited media.” Finally they walked away as we commented that we took this to mean that they had no response to our question about the greater and unapproved risk of the bond transaction the “BALDC” board had just authorized.

On old saying goes: “If you can’t stand the heat, get out of the kitchen.” Here we would adapt it as follows: “If you can’t answer questions about the risk, don’t issue the bonds.”

If you want to see in video form much of what we would have said in presenting our images to the state officials uninteresting in taking comment go to this video from Atlantic Yards Report (the quality of the video is better if you click on the first version of the video below which is from the AYR post- original videography by Jonathan Barkey).

Monday, November 23, 2009

Sometimes Sports Stadiums and Arenas Are Worth A Lot Less Than the Public Pays For Them: No Silverdome Lining to Gathering Economic Clouds

(Photo of Silverdome above from auction site.)

If a city spends money on sports stadiums and arenas and doesn’t look after its economy it might just wind up so broke that it has to sell off the sports complexes it built. . . for a minuscule fraction of what it spent to build them. That appears to the lesson of the Pontiac Silverdome stadium, former home of the Detroit Lions, which was just auctioned off for an embarrassingly low price.

The city of Pontiac spent $55.7 million to build its Silverdome in 1975 and it just auctioned the thing off for $583,000. That’s about 1% of what it cost to build it. Even allowing for a little wear and tear over the 34 years since the year One Flew Over the Cuckoo's Nest won five Oscars, that is a steep discount: You also have to think in terms of the worth of the $220.52 million that $55.7 million would be would be in today’s 2008/2009 dollars (2008 is the last year you can presently calculate for). Or think in terms of what simply investing the cash would have brought: $711.36 million (That’s $55.7 million x 7.5% compounded annually for 34 years- Interest rates were actually very high for many of those years.)

If nothing else just look at all those parking spaces in the photo above and wonder what they are worth? Or what the parking spaces would be worth if they surrounded something valuable?

For more on the story see the following, the last of which are, respectively, links to a Field of Schemes post and to a Jon Stewart Daily Show clip, each of which point out that the stadium has been sold for less than the price of a one-bedroom apartment:
Winner of Pontiac Silverdome auction revealed: Andreas Apostolopoulos of Triple Properties Inc.
By Jonathan Oosting |
November 19, 2009

November 17. 2009 2:52PM
Silverdome sale price disappoints, Pontiac officials wanted more than $583K for stadium
Mike Martindale / The Detroit News

November 17, 2009
Silverdome sold for less than a studio apartment in Manhattan

November 19, 2009
Things Not to Be Thankful For - Silverdome, Goldman Sachs & Congressional Recess (Detroit sells its Silverdome for less than a one-bedroom apartment, Goldman Sachs reports huge profits, and three congressmen warn New Yorkers of terrorism.)
According to the Detroit News story above, the arena was “once called the most desirable property in Oakland County” and a quoted realty firm says the land itself “should have gone for more than that.” Apparently the arena was not considered worth its upkeep and the city of Pontiac was desperate to get the property “back on the tax rolls.” Sports stadiums and arenas on the tax rolls? There’s a novel concept that spendthrift New York City seems is absolutely unfamiliar with!

(At the time of the Silverdome’s sale, city officials didn’t even know who bought it. It turns out it was a Canadian Company based in Toronto run by Greek-born Andreas Apostolopoulos. Does that sound like way the Nets arena is being palmed off to Prokhorov?)

Considering the Silverdome fiasco, we here in New York we can’t help but think of our own wasteful stadiums and arenas that are taking property off the tax rolls and giving less than nothing in return. We wrote already about how the new Yankee Stadium is not just itself off the tax rolls but is also removing from the tax rolls a substantial amount of neighborhood economic activity that used to be taxpaying. (See: Saturday, November 14, 2009, The Yankee’s Hoggish New Stadium Monopoly Taxes The Rest of Us.) And tomorrow a subsidiary of the Empire State Development Corporation is scheduled to vote to issue bonds for a new off-the-tax-rolls Nets basketball arena that is already calculated by the NYC Independent Budget Office to be a $220 net loss to the public. (See: Monday, November 23, 2009, Arena bonds authorization coming Tuesday: questions about transparency, PILOTs, and infrastructure spending remain.)

(Above: Proposed new Nets basketball arena. For more, see: Friday, October 30, 2009, Getting The Image Right: Forest City Ratner’s Proposed Atlantic Yards Nets Basketball Arena)

What must the Michigan city have been thinking when it built its worthless Silverdome stadium? Was this just another case of public officials taking their eye off the economic ball due to sports euphoria. This is a very clear warning: The mysterious value of team spirit sports euphoria that cannot, and generally is not, economically quantified is in all likelihood economic value that just doesn’t exist at all. The overall lesson to be learned is how these sports stadium and arena deals terrifically shortchange the public with stadiums and arenas that have very low true economic value.

There is one thing that will be different in New York when the city hits bottom with a mismanaged Bloombergian economy that has squandered its other economic opportunities: The city is setting it up so that it won’t have any sports stadiums and arenas to sell at a pittance when the economic day of reckoning comes; those stadiums and arenas will all still be in private ownership and they will all still be off the tax rolls.

Saturday, November 21, 2009

Mapping Out Forest City Ratner’s Monopolistic Strategy of Subsidy Collection

(Click on any image in this post to enlarge.)

(Above: Highlighted in yellow, the monopolistic Brooklyn real estate empire Forest City Ratner is pursuing. The large block in the lower right is FCR’s proposed Atlantic Yards adjacent to FCR’s two malls, Atlantic Terminal and Atlantic Center, one of which includes an office building. The large block in the in the upper left is FCR’s still-growing MetroTech. Almost right next to it is an office building in Brooklyn Heights and to the southwest is the Court Street Cinema/Barnes and Noble block. Equi-distant between MetroTech and the proposed Atlantic Yards chunk of ownership is Ratner’s “10 MetroTech” and the adjacent new
80 DeKalb residential building.)

Ratner’s Monopoly-Seeking

We have said many times before that Forest City Ratner’s strategy at Atlantic Yards is to pursue a monopoly. (See: Saturday, November 14, 2009, The Yankee’s Hoggish New Stadium Monopoly Taxes The Rest of Us.) And we pointed out that a strong motivating factor for Forest City Ratner to launch its Atlantic Yards quest was to wipe out competition for other developers in its back yard. (See: Tuesday, October 13, 2009, Forest City Ratner’s “Not In My Back Yard” Attitude.) We have also pointed out that, taking into account subway system linkages, the monopoly Ratner is pursuing at Atlantic Yards should be considered an extension of the control Ratner has over other key Brooklyn real estate (emphasis added below):
Atlantic Yards and its use of eminent domain is first and foremost about monopoly. It’s about precluding competition and the options of others. The Atlantic Yards site is adjacent to other property of Forest City Ratner, thereby giving the developer unchallenged control over 30 acres of some of Brooklyn’s most valuable real estate. (In fact, jumping over to the nearby subway stops just up the line you find that Forest City Ratner’s monopolistic ownership of Brooklyn real estate continues.)

Atlantic Yards was birthed through the preclusion of allowing other developers to bid against Forest City Ratner for the site. Without that first step it never could have proceeded. The abuse of eminent domain was just a next step that was similarly about removing competition to complete the FCR monopoly. And, . . . . . the public cannot walk away.
(See: Tuesday, October 6, 2009, First Monday in October: An Open Letter to Sonia Sotomayor about Noticing an Eminent Reality.)

Mapping It Out

To assist in showing what we mean we thought we would supply some maps as visuals to demonstrate more about the exclusive control Ratner is seeking to establish involving strategic consolidations of much of Brooklyn’s most important real estate. The first of these visuals appears at the beginning of this post with a caption that explains which properties are which.

Beginning With MetroTech, He Wants to Make It Bigger

MetroTech is where Forest City Ratner’s foothold on monopolistic control of key Brooklyn real estate began. Anyone who doubts what Forest City Ratner is all about in regard to this kind of control should take a look at a January 1999 article that appeared, contemporaneously with some of the public relations hoopla of MetroTech coming on line. It appeared in the now defunct “Brooklyn Bridge” magazine. Atlantic Yards Report has written about the article, “King of the Deal” twice: Stadtmauer Bailkin, Bruce Ratner, and the web of subsidies (Friday, August 17, 2007) and Flashback, 1999: Developers, said FCR, must be "more creative" in finding sites (Thursday, August 23, 2007). Unfortunately, going back to 1999 there is no weblink to the article. The image supplied here (of the first two pages- Click to enlarge) is from Atlantic Yards Report.
MetroTech began with a plan to redevelop the Polytechnic University campus, focusing on making it a “high-tech research center” to tap into some Silicon Valley 1980's style growth. The “King of the Hill” tells us that when Forest City Ratner, Bruce Ratner’s family real estate development firm, entered the picture their focus was to grow the plan into a larger one:
“When Forest City came in, they said the plan had to be substantially larger,” said [attorney Michael] Bailkin, who went on to work for Forest City for eight years, helping to negotiate the incentive packages from the city that would lure companies to Brooklyn.
That should sound familiar to those who have been paying attention to the Forest City Ratner exploits at Atlantic Yards. There has clearly been an operative strategy to make Atlantic Yards bigger than it needs to be both in terms of the site’s footprint and in terms of consolidating bulk onto that site through a zoning override. Among other things the Atlantic Yards plan involves the proposed condemnation and destruction of a block of buildings that there is no reason to destroy except that the site is being gerrymandered to please the developer’s desire to have more cheap land and a larger monopoly.

The Ratner Tradition of Avoiding Competition

The fact that developers tend to always be attracted to size may obscure something that makes size especially important to Forest City Ratner. It is a way to eliminate competition. Here is what the 1999 article says about competition and the traditions of Forest City Ratner development:
An institutional rather than a speculative developer, the firm specialized in projects where it would not face competition and where public subsidies were available. One indicator of its unusual niche is that Forest City was the largest single recipient of federal Urban Action Development Grants (UDAGs) in the entire country.
Elimination of Competition and Chasing Subsidies: “Rent Seeking”?

The firm specializes in collection of subsidies in environments where it does not have competition? This sounds essentially like what we have been saying when we describing Forest City Ratner as being not really a developer but a “subsidy collector.” It also sounds like the classic definition of “rent seeking.”

“Rent seeking” is a concept closely related to the concept of monopolies and originated out of discussions about them. Atlantic Yards Report summarizes “rent seeking” as “the pursuit of special advantage via public policy” and links to a definition in the Glossary of Political Terms. We find Wikipedia’s discussion of the subject more useful. That speaks of capturing special benefit or income “through manipulation or exploitation of the economic environment, rather than by earning profits through economic transactions and the production of added wealth,” for instance through “special monopoly privileges, such as government regulation of free enterprise competition.” It points out that the term is “derived from the far older and more established practice of appropriating a portion of production by gaining ownership or control of land.”

Engineering Losses to Society

The Wikipedia discussion goes on to point out that “Rent seeking generally implies the extraction of uncompensated value from others without making any contribution to productivity, such as by gaining control of land and other pre-existing natural resources” and that it “can impose substantial losses on society.” Reiterating how closely linked the concept is with monopoly, it elaborates that “Studies of rent seeking focus on efforts to capture special monopoly privileges such as government regulation of free enterprise competition” and “The term "monopoly privilege rent seeking" is an often-used label for the former type of rent seeking.”

Applying it to the way Forest City Ratner operates, monopoly and subsidy collection synergistically reinforce each other. Government-created monopolies are a starter form of subsidy that eliminates competition. The absence of competition, in turn, allows Ratner to capture subsidies more easily without comparison benchmarks easily being available to shine light on what it might be fair to actually give them. This makes it easier for politicians to dole out excessive amounts to the Ratner firm. The “King of the Deal” article specifically attributes the Forest City Ratner success in Brooklyn to these “generous subsidies” referring to Bruce Ratner’s “uncanny knack for identifying projects that dovetail with the city’s economic development plans and therefore benefit from generous public subsidies.”

There Ought to Be a Law or a Public Policy

There probably ought to be a law that no subsides should be handed out unless those subsidies can be competed for. There is no such law, but it is a desirable policy. Further, as the administration of Battery Park City demonstrates with its bidding out of individual development parcels to multiple developers, it is possible to have competition when large sites are developed. Also, the much higher proposed per dwelling unit amount of the housing subsidies proposed for Atlantic Yards demonstrates the inevitable result when there isn’t competition.

Saying Aloha to Destructive Monopolies?

It should be viewed as a significant irony that one of the most precedent-setting and conceptually challenging cases in which the U.S. Supreme Court dealt with eminent domain was Hawaii Housing Authority v. Midkiff, 467 U.S. 229 (1984) which held that Hawaii could use eminent domain to break up and redistribute to a wider population land that was overwhelmingly concentrated in the hands of a few private landowners. Now, in situations like Atlantic Yards and the Columbia University takeover of West Harlem eminent domain is being used for exactly the opposite, to artificially concentrate monopoly ownership of property in the hands of giant land owners such as Forest City Ratner and Columbia University, respectively.

An Origin Story: A Stint With the City and a Subsidy-Seeking Law Firm

At the time MetroTech began, Bruce Ratner was a partner at the law firm of Stadtmauer Bailkin LLP. One of the two Atlantic Yards Report articles that wrote about the “King of the Deal” story focused specifically on how the law firm of Stadtmauer Bailkin LLP, specializes in the large-scale extraction of special subsidies from New York and using the firm’s website Atlantic Yards Report itemizes many of the subsidies the firm was involved in procuring for MetroTech.

While “King of the Deal” describes Bruce Ratner as having an “uncanny knack” for focusing in on and extracting “generous public subsidies” we would attribute this to a skill that was developed through careful preparation and study going way back. It can hardly be considered an accident that Ratner went to work for a law firm that specializes in the extraction of subsidy. Similarly, coming from a family development firm that specialized in the collection of uncompeted-for subsidies it should not be viewed as an accident that Bruce Ratner’s first significant career move was to serve as consumer affairs commissioner in Mayor Koch’s administration. “King of the Deal”explains how these two career steps got Ratner’s family firm involved with MetroTech as owner and developer of a major subsidy-collecting chunk of Brooklyn real estate:
“Bruce was at the firm [Stadtmauer Bailkin LLP.] to look for development deals when MetroTech came along,” says Bailkin. And it was Ratner’s [Koch administration] connections that got the ball rolling.
Converging Traffic, the Story on the Surface

The “King of the Deal” article begins with a description of how, when MetroTech was nearing completion, Ratner assigned one of his real estate development directors the job of flying over Brooklyn in a helicopter “videotaping traffic patterns and housing concentrations” searching for a location to build new shopping complexes that eventually became the Atlantic Center mall in 1996 followed by then the adjoining Atlantic Terminal mall. Atlantic Yards is envisioned as an another immediately adjoining extension to those properties.

The fact that Ratner was looking at street traffic patterns and likely located the malls at the significant convergence of traffic he found at the intersection of Atlantic Avenue and Fulton Street may be viewed as dismaying news to neighborhood residents who are looking at the fact that Ratner now wants to put a traffic-surge generating basketball arena at the very same site together with many blocks of traffic-attracting parking.

Converging Traffic, A Deeper Story

While Ratner, a boy from Cleveland, apparently had a real estate director looking at Brooklyn’s vehicular surface traffic way back then, in New York, what is much more important is where the subway lines are. We generated another map showing subway lines because the influence of subways is one several things that effectively make more pronounced the real estate monopolies that Ratner is pursuing.

To look at how effectively troubling a real estate monopoly is, one should not look at just at site acreage. One should also look at the density and size of the buildings in question, not only in terms of what exists and has been built but also in terms of what can be built. When looked at next to their neighboring structures the Ratner buildings dominate in size. Secondly, one should look at the relative value of that land and its practical proximity when traveling to other real estate. In those terms we find that the Ratner sites are dominating the subways lines too. See the map with city subway lines overlaid below. (Below that, as second reference on this is a DOT bicycle map that shows subway lines.) In other words the Ratner monopoly is more significant than might immediately be apparent.
(Above: Red lines show the 2 & 3. Dark Green the 4 & 5. Blue the A & C. Light Green the G. Yellow the R & M. Orange the B, D, Q & F.)

It’s Not As Simple as Just Tracking Ownership
To be fair, it is not easy to provide a map of Forest City Ratner’s dominance of Brooklyn real estate that provides all the information one might want to see to assess the situation. For instance. although Forest City Ratner’s website provides an image of MetroTech (above) that thrusts forward with relative prominence the two Chase Bank buildings (MetroTech addresses 3 and 4), those two buildings are not actually owned by Forest City Ratner. They are at least nominally owned by a city development agency, which ownership is probably tied in with the delivery of subsidies the two buildings receive. Accordingly, the Forest City Ratner website page (that allows visitors to zoom in and out on a map to view properties listed as owned by Forest City Ratner) omits these properties (see below). The website is not perfectly accurate: It puts One Pierrepont Plaza at the wrong end of Brooklyn Height’s Pierrepont Street rather than much closer to MetroTech on the side of Cadman Plaza (see below). With little overlapping pins, it also doesn’t give an idea of the expanse of the Forest City ownership.
(Above: One Pierrepont Plaza, with its pointed spire seen in the background behind 12 MetroTech also known as 330 Kay Street. Below: A picture of One Pierrepont Plaza on Cadman Plaza.)
Similarly, although our map highlights all of MetroTech, there are other buildings that Forest City Ratner does not own: for instance, it does not own a number of buildings that FCR developed for Polytechnic University. By the same token, though Forest City Rather is getting development control of all of the proposed Atlantic Yards site, to the extent that it develops luxury condominium buildings it will only have developed those buildings without ultimate ownership of them in later years. The many nuances of what constitutes control and influence could keep us busy writing an article of much greater length than this in which we would get into such subjects as ground leases and management contracts. For instance, we note that one way the FCR extends its influence in the MetroTech area is through the MetroTech BID (Business Improvement District) a form of local government over which it has substantial control (see map below- from the Downtown Brooklyn Partnership site). Comparably, Atlantic Yards proposes to have a Forest City Ratner-dominated “nonprofit” that will control “public space.”

Below is a list of addresses the Forest City website lists as owned (it doesn’t get into the Atlantic Yards properties). Below that is a map of MetroTech with MetroTech addresses. It doesn’t show 10 MetroTech Center. If you ask about it, the security guard will be confused. Keep reading.
Below is a version of our original map that highlights in MetroTech only those properties that the Forest City Ratner website lists as owned by the firm. If anything, showing the Ratner ownership at the MetroTech site as a reduced amount only emphasizes the proportionately greater ownership of Brooklyn real estate to which Forest City Ratner wishes to surge through exclusive ownership of Atlantic Yards.
A Befuddling Extension of MetroTech

The colors on our original map don’t show the MetroTech BID as Ratner territory, but the BID interestingly extends far enough south and east (and the current official "MetroTech"? see below) of the above Metrotech map to pick up and include a distant Ratner-owned property to which Ratner gave the improbable vanity address of 10 MetroTech Center (corner of Fulton and Hudson Avenue) thereby throughly confusing pedestrians who will find that it is .8 miles from 12 MetroTech Center (aka 330 Jay Street). Those pedestrians are likely to be lost and have a long way to walk because both these addresses, 10 and 12 MetroTech Center, befuddle both Map Quest and Google Maps which, as a result, will get you nowhere close to where you want to go. (We have written before about the problem with vanity addresses when we were commenting about the MTA’s inappropriate giveaway of naming rights to Ratner for two subway stations. See: Sunday, June 28, 2009, Naming a Problem: The MTA Gives Ratner the Right to Name Brooklyn Subway Stations “Barclays”)

(Below is a "MetroTech" map according to the Metrotech BID.)
It is possible that the vanity address (that is the way Ratner himself referred to it) of 10 MetroTech Center (see building above) is a long-ago clue to Ratner’s ambitions for much more city-assisted ownership in this area. Perhaps he is looking forward to one continuous end-to-end swath. Ratner has since gone on to build adjacent 36-story 80 DeKalb residential building (see blow). Looking at the building’s size in relation to its neighbors is a reminder that, as we already made the point, it is important to consider relative size in evaluating dominance. Financing for 80 DeKalb was provided when scarce subsidizing tax-exempt housing bonds were provided to it by the New York State Housing Finance Agency. One would hope that the developer did not, as it typically does, use political influence to obtain preferential access to that subsidy.
Looking at a Handsome Building
MetroTech was originally spoken of as a 16-17 acre campus. It has, however, grown larger. The aforementioned 12 MetroTech on the other side of Jay Street expands it. We should point out that 12 MetroTech, Brooklyn’s second-tallest building after the Williamsburg Savings Bank Building when it was built, is an absolutely beautifully designed building, at least so far as we can tell from the street. It is probably the very best in design of anything Ratner has built in Brooklyn. (You see we can say nice things about Ratner when a compliment is due.) The building of 12 MetroTech was resisted by other occupants of the MetroTech Center, Chase Manhattan Bank and Polyprep, on a “Not In My Back Yard” basis: The building houses the Brooklyn Family Court and Kings County Family Court, the New York State Supreme Court (criminal division) and related city agencies. (The building has building will have three separate lobbies, one each for the Family Court, the Supreme Court and the commercial tenants.)

However beautiful 12 MetroTech (aka 330 Jay Street) may be, the question must be asked whether it was another situation where Forest City Ratner benefitted disproportionately as developer because of special access and lack of competition. This would probably take some sorting out. The property for the building was city property that housed the New York City Transit Authority and the deal involved the location of the courts in the building and was linked to Chase Bank locating at MetroTech. All that was opportunity for Ratner’s aforementioned speciality: “rent seeking.” As recently as June 2008, Brownstoner reported with a raised eyebrow how the city bought from Ratner the condominium portion of the building that the city already controlled, putting $499,401,179 in Ratner’s pocket for 830,879 square feet of space. (As you see from this piece of news Ratner does not any longer technically “own” 28 out of the 33 stories in the building even if the FCR website says it does.) Though the price the city paid did not seem such a bad deal after apportioning construction cost to the floors sold, Brownstoner commented: “Our question: Is this the most valuable high-rise in Brooklyn? Gotta at least be in the running.” (See: June 27, 2008, How Much For a Downtown 'Scraper? At Least Half a Bil.)

Controlling a High Proportion of Upcoming Development

If anything, the proposed Ratner monopolistic total control over the development of the Atlantic Yards site is a more disproportionate addition to Ratner’s Brooklyn holdings than one might expect because Forest City Ratner would own more of it and because it is all upcoming development. It is also disproportionately greater because of the extraordinary extra density being piled onto the site, significantly more than at MetroTech. The terms of the ludicrous so-called economic benefits agreement that ACORN signed with Ratner called for ACORN to support Ratner’s monopoly control of “7.799 million square zoning feet for the project.” (See: Saturday, June 28, 2008, Selling out the Community for Beans (A Giant Wrong).) On a square footage of land site control basis alone, this is a substantial portion of all the development that shows up on the Downtown Brooklyn Partnership’s map of “Current Development Projects” (see below). Only a small portion of the “handle” of Atlantic Yards’ wrench-shaped site peeks in onto that map but that “tip of the iceberg” portion looks huge compared to the rest of the development on the map. The map manages to show the rest of the Atlantic Yards site by shrinking the mega-project down to a minuscule fraction of its actual size, perhaps a ninth, where one block normal city length equals then three of the comparatively diminutive AY block lengths.
Square footage, however, does not take density into account. Taking the density "negotiated" by ACORN into account, the 22-acre Atlantic Yards megadevelopment, calculated on a per square mile basis, would be twice as dense as the densest census tract currently existing in the country. Eminent domain is being used as a tool to shoehorn in more density than would be possible under normal circumstances. (Though the 22 contiguous acres of the megadevelopment should certainly be considered as a whole, the 22 acres actually don’t constitute a single census tract since the span of acreage exists in four different districts. See: Ratner Will Bring Us Closer Together, by Matthew Schuerman in the Observer, October 5, 2006. As noted, the project land area unto itself is substantial: Though the project design involves discredited superblocking, its footprint could readily constitute 10 city blocks if it were better laid out.)

BIG Question

We conclude simply with this. If monopolies have always been recognized to be bad, such that we have national laws against them, and if monopolies facilitate “rent seeking” behavior that enables developers like Forest City Ratner to manipulate gains for itself at society’s loss, why is the government fostering these real estate monopolies for one real estate company’s unprecedented takeover of so much of Brooklyn? It doesn’t make sense to us but it’s a really BIG question. We hope that our mapping it out helps to visualize just how big.

(Below: MetroTech as seen from the southwest. A much smaller and lower density megadevelopment than Forest City Rather proposes to own at the proposed Atlantic Yards site.)