Comment On What Is Going on With Assemblyman Hakeem Jeffries: Two Things We Hope He Remembers

We want to comment on what is going on with respect to Assemblyman Hakeem Jeffries and Atlantic Yards to say that we hope he remembers two things. (See: Wednesday, October 21, 2009, An update from Jeffries: "I remain highly critical" of Atlantic Yards.)

There are a lot of bad things to remember about Atlantic Yards, enough to make a very long list. In the comment the assemblyman has issued available on Atlantic Yards Report Mr. Jeffries has already indicated he has not forgotten Atlantic Yards’ abuse of eminent domain.

Two other things we hope Jeffries knows should be remembered:

1.) The housing portion of the community benefit agreement provides substantially no benefit and should be considered a fraud upon the community. One thing that makes this absolutely clear is the missing income band of low-income families for whom no affordable housing will be provided. For more on this see #11 in the list at: Ratner: The Little Boy Trying To Get Too Many Cookies Out of The Cookie Jar and Getting None (Friday, July 31, 2009)

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

2.) The mega-monopoly needs to be broken up into parcels that will be distributed by bid to multiple developers replacing Forest City Ratner. In other words, we should be doing something consistent with what mayoral candidate Bill Thomson has said should be done with megadevelopments. (See: Monday, October 19, 2009, Thompson’s Advocated Multiple Parcels (a la Battery Park City) vs. Single-Developer Mega-monopolies Should Boost Developers’ Bids.)

With luck, Mr. Jeffries will have a chance to remember these things at tomorrow's PHNDC meeting.

A New Year’s Revolution List (Starting 2009 Off Clean: Pull the Plug On Atlantic Yards)

It is time to pull the plug on Atlantic Yards, go back to the drawing board and get going with a better designed, fairer, clean-slate project that can proceed faster at less public expense and greater benefit. We’d soon be most of the way there by bidding out a version of the UNITY plan proposal to multiple developers. The proposed Atlantic Yards developer, Forest City Ratner, is clinging to a strangely formulated circumlocution that it is using to string along its investors: That FRC has an “entitlement” to decades of undefined development in the proposed Atlantic Yards footprint. Forest City Ratner’s “entitlement” is a just a made-up term. It stands for nothing legal and, at best, is a claim upon politicians not the public. (Honestly, what more does anyone thinks it means than, "We gave campaign contributions?")

Forest City Ratner never bid to become the developer of Atlantic Yards. Giving a decades-long monopoly on acre upon acres of Brooklyn development to a bankrupt developer with bankrupt ideas who is forever looking for opportunities to raid the public till for additional subsidy is hardly the model we should be following. Forest City Ratner is the same developer who has the twisted notion that its ravaging of Prospect Heights and its environs with blight will strengthen its tenuous chances of being permitted to develop the area. Obviously, Forest City Ratner will be generating more blight until it is extracted out of the picture.

Governor Paterson, Mayor Bloomberg or even the City Council each have the independent ability to initiate the action of extracting Forest City Ratner from the picture. Let’s consider how they are going to do it.

Consider this a wiki-piece. We are throwing out ideas in the list below that consists of various thoughts about ways to terminate Ratner’s “entitlements.” We invite anyone to contribute additional ideas to the list. How good an idea does one need to send Ratner and his “entitlements” packing? It probably won’t take much to bid adieu to Forest City Ratner. Remember that even were Ratner to protest, the courts are going to be sympathetic to the government seeking to follow a good government course of action.

1. Entitlements? Where would they come from? There was no contract to begin with. There is no such thing as a legally enforceable "agreement to agree." A contract has to be reasonably specific from both ends about what is going to be done in order to be enforceable.

2. Next, the project is no longer what was approved. For instance, there should be no obligation to do a $950 million arena when what was approved was a $637.2 million arena.

3. It is easy to simply note that more approvals are needed and that they won't be forthcoming. An example: the Public Authorities Control Board approval taking the arena up to $950 million.

4. Housing subsidies should not be given unless there is a competitive bid for the parcels of project being financed. That knocks Ratner totally out of the box. The housing agencies have not contracted to give (non-bidding) Ratner subsidy and they shouldn’t.

5. Then there are the various breaches on Ratner's part.

6. It is also possible to throw Ratner out based on misrepresentations.

7. If all else fails, terminate and give Ratner damages. The courts will never allow him substantial damages. (Among other things, think back to the misrepresentations and no-bid aspects of his project.)

8. To get out of financing the arena, bond counsel can observe that they don't consider that proper legal opinions can be issued on the bonds. (It could be the current bond counsel or there might even be a reason to switch to bond counsel as a first step, given everything that has gone on with Yankee Stadium and a history of odd real estate assessments on these deals.)

9. Ratner’s so-called “entitlements” can be voided for public policy reasons.

10. Eminent domain could be used to wipe out whatever “rights” Ratner thinks he has.

11. Then there is the simple expedient of just settling the law suits- Why? Because the state knows that there is plenty in its files which would cause the litigation to be lost if it is divulged.

12. Because of various bait and switches, what was contracted for was never properly approved. There are therefore no valid “contracts” because they would all be ultra virus. An ultra vires defense can also be asserted to the extent that authorizing legislation has been exceeded.

13. Recind city and state appropriations. Take advantage of the fact that this project is being done over the course of so many years that appropriations for it can always be recaptured because the City Council and/or the state legislature this year doesn’t have to spend what once upon a time a prior City Council and/or the state legislature decided it wanted to spend.

14. Have the city rezone the entire area for something more appropriate. Override ESDC’s zoning override. (And don’t re-override it back again.)

The above is not intended to be inclusive. Nor have we ordered ideas, putting the best first. Pretty much any one idea would suffice in itself though there is always the option of using ideas in combination. As we said, consider this a wiki-endeavor, so we are soliciting additions.

One place the ideas should be coming from is Empire State Development Corporation (ESDC). As has been reported, there was a meeting the beginning of this week where gathered legislators were presented with the status of the dreadful mess that ESDC and Forest City Ratner have made of things. (See: Wednesday, December 24, 2008, Details on AY housing point to 80/20 rentals, not condos, in a smaller Phase and Developer of Atlantic Yards project delays condo plan, by Jotham Sederstrom, Tuesday, December 23rd 2008.)

The way the meeting should have concluded is that ESDC Chairwoman Marisa Lago should have asked the Forest City Ratner people to leave the room and she should have thereupon addressed the assembled legislators to say, “Here are our favored options for terminating our relationship with Forest City Ratner.” If this did not happen, upon Marisa Lago’s initiative, the request for the Forest City Ratner representatives to leave the room should then have come from the legislators present. Our legislators should have then asked Ms. Lago to present the termination options.

If neither of the above happened, each of the legislators involved in the meeting should be contacting Ms. Lago in follow-up, asking for a detailing of the preferred termination options. All it takes to get moving is for people to decide that pulling the plug on Atlantic Yards is what we are going to do and for the government lawyers to get creative because this is the time we are going to do it.

We are happy to add additions from the government lawyers to our wiki-list.

We understand that the legislators who were involved with Monday’s meeting and should be equipped with the identified option to terminate Forest City Ratner are as follows: City Council member (and candidate for City Comptroller) David Yassky, City Council member (and candidate for Public Advocate) Bill deBlasio who sent a represntative, City Council member Tish James, Congresswoman Yvette D. Clarke, New York State Senator Velmanette Montgomery, New York State Assembly members James (Jim) F. Brennan, Joan L. Millman, and Hakeem Jeffries.

Let’s see what they can send in to add to our wiki-list.

MAS Prescience on Subject of One Developer: Could Prescience Have Been Greater?

Atlantic Yards Report today has a pickup from our recent Willets Point series, noting the prescience of the Municipal Art Society in advocating the superiority of the multiple-developer model used at Battery Park City and Queens West over the ineffective one-developer model envisioned for the Willets Point megadevelopment. The one-developer model is the same approach that is now failing at Atlantic Yards megadevelopment (Sunday, December 07, 2008, The prescient MAS: "The One-Developer Model has not proven effective").

Abandonment of Public Sector Responsibility and Materializing Risk

The MAS advocacy was in its August 13 comments before the City Planning Commission on the Draft Environmental Impact Statement for Willets Point. MAS advocates in its comments that megadevelopment should properly be overseen by the public in part because:

By eschewing the public sector’s responsibility to prepare the site and provide the public infrastructure necessary for redevelopment, the City is running the risk that the development at Willets Point, as at Atlantic Yards, will stall indefinitely.

Atlantic Yards Report points out that MAS’s comments were written:

before the suspension of infrastructure work at the MTA's Vanderbilt Yard further stalled the AY project.

Important Question on MAS Prescience

MAS’s indisputable prescience is laudable, but we need to ask one important question. Could MAS have improved upon its prescience? We think the answer is yes.

Support for MAS

We revere MAS. It is as a superb organization and we recommend that people become members and contribute financially to MAS. The organization is indispensable in an era when the Bloomberg administration continually steers the city into indefensible and destructive real estate megadeals. Among other things MAS has provided invaluable forums for discussion about the direction the city is taking in which deep misgivings about all aspects of Atlantic Yards repeatedly become important topics. MAS’s Jane Jacobs and the Future of New York exhibition, series of panels and walking tours are an example the resources they provide. They were part of the inspiration for our Jane Jacobs’ Report Card. (See: Tuesday, November 11, 2008, Jane Jacobs Report Card for Atlantic Yards . . .Megadevelopment Gets an “f”.)

Improving Upon MAS’s Prescience

Here is where MAS’s clear sightedness falls short. We have been urging a mutideveloper model for Atlantic Yards as far back as we can remember and we were very glad to see it is an important part of the proposed alternative Unity Plan. In contradistinction to the UNITY plan, MAS and Brooklyn Speaks, of which it is a part, have been described as having a "mend it don't end it" stance regarding Atlantic Yards. (See: Monday, December 03, 2007, Pragmatism vs. principle: a look at the MAS & Atlantic Yards) What does this mean? The devil is in the details.

"Mend it don't end it"is actually a continuum and a plan like the UNITY plan is not an “end it” plan since it envisions that a project will be built. Perhaps the key difference between the UNITY plan and the Brooklyn Speaks version of "mend it don't end it” is that the UNITY plan has called for a multiple-developer model whereas the “prescient” MAS and Brooklyn Speaks have yet to do so.

March 2008: Multiple Developers; What We Called for

Back in March of this year we said that it was well past time for Brooklyn Speaks to update its negotiating posture in dealing with Atlantic Yards. We said:

Brooklyn Speaks has been ineffectively looking for the compromise of a reduced, better designed project. This goal is somewhat vague and makes the mistake of presuming that Ratner is to be left in place.

* * * *

There cannot be effective negotiation with Ratner if the alternatives are between Ratner Alternative A, Ratner Alternative B, Ratner Alternative C and Ratner Alternative D.

* * * *

Brooklyn Speaks needs to go beyond stating principles. It needs to be setting forth specific definite bottom line requirements that it should pursue in a hard and fast way.

(See: Effective Action Needed From Brooklyn Speaks, BHA, etc. Picked up and posted by No Land Grab, March 19, 2008.)

We set forth enumerated positions that we said Brooklyn Speaks should insist upon as a bottom line in the negotiations, seven in all. Included among them was avoidance of all unnecessary street closings and the creation of additional streets. This would create, as the UNITY plan does, separate parcels that could easily be bid out to multiple developers. Most important, we said that this should be taken advantage of by not continuing to treat the project as a megadevelopment that Forest City Ratner has the right to develop on a no-bid basis. We said:

Do Not Permit Ratner to Use the Megadevelopment as an Excuse or Mechanism to Receive No-bid Subsidy. - - Housing subsidies are scarce and need to be appropriately distributed. Ratner’s project with its super density has been designed with the idea that Ratner will soak up, without having to bid or compete for it, a great deal or all of the subsidies that would normally be available to others. That should not be permitted. Ratner should not be permitted to get any housing subsides on a no-bid basis. Accordingly, the prerequisite should be that Ratner will get no housing subsidies at all unless the various blocks and building sites upon which housing will be built are individually put out to bid. There should simply be no no-bid housing subsidies. That will also eliminate much of the below-market land price subsidy which the MTA is proposed to give Ratner and which would be inappropriate. Any bid that Ratner wins in a fairly conducted process will result in housing subsidy being able to flow to Ratner for that block, if available.

Other Problems With the “One-Developer Model”

“Materialization of the risk that the development at Willets Point, as at Atlantic Yards, will stall indefinitely” is just one reason that the public sector should not eschew its responsibilities by turning all control over to a single developer. Others are:

1. It makes any bid process ineffective which means
a. Higher cost, and
b. Unfair benefits and windfalls to the developer
2. It slows the project down (to the speed of one developer with a guaranteed hold on the project)
3. It creates a developer-driven dynamic where the developer has free rein in designing a project to meet its own goals instead of the public’s. It is not then surprising when the most recognizable characteristics of Atlantic Yards is that its design is intended to be a subsidy-absorbing supersponge with inappropriate eminent-domain-abusing superdensity.

June 2008: Atlantic Yards Governance Bill Emerges and We Again Call for Multiple Developers

In June, a proposed Atlantic Yards Governance Act emerged that was backed by MAS. The proposed legislation should probably be viewed as part of a "mend it don't end it" strategy. Proposed legislation can become anything, but the proposed legislation at the time did not call for a multiple-developer model. (See: Atlantic Yards Report: Friday, June 13, 2008, An AY governance bill emerges, aimed at 2009 and Tuesday, June 17, 2008, Push for AY Development Trust begins; how much power would it have?)

We were critical. In a comment on the first of the two above Atlantic Yards Report stories on the proposed legislation we reiterated among other of our points that Ratner should not “be permitted to use the Megadevelopment as an excuse or mechanism to receive no-bid subsidy, instead, the project” should “be bid out and awarded to multiple developers who could work concurrently to construct it faster and with greater leverage of any public funding provided.” We also wrote:

To be effective, the Atlantic Yards Governance Act (should it be called the Vanderbilt Yards Atlantic Avenue Area Governance Act?) is going to need to provide for a fair amount “back to the drawing board” work otherwise there won’t be principled development, community involvement, a good project, or effective negotiation when it comes to subsidies- The old axiom is that you don’t want to lock the barn door after the horse has been stolen- By the same token, we don’t want to appoint a posse whose job it is to sit around on the corral fence rails and admire horse-rustling-thief-Ratner riding off into the sunset.

We followed up in a comment when Atlantic Yards Report was reporting that the Empire State Development Corporation was lobbying for inappropriate stadium subsidy. (See: Monday, June 16, 2008, As IRS moves to close "loophole," ESDC fights for AY funding scheme) We wrote (in part):

I was at the press conference today for the Atlantic Yards Governance Act bill being supported by Assembly members Hakeem Jeffries and Jim Brennan, and City Council members Letitia James and David Yassky as well as the Municipal Art Society and Brooklyn Heights Association. “The Campaign to Reform the Governance of Atlantic Yards.” . . .

The bill could hold some promise.

The watchword phrase of the press conference was that the legislation is desperately needed so that there can be “accountability to the community.”

Accountability to the community cannot be achieved unless the public and its officials have real negotiating power when dealing with Forest City Ratner. . .

We thereupon continued with reasoning that we essentially restated in a comment the following day (in the second of above Atlantic Yards Report stories that ran June 17 the day after the press conference held for the legislation).

Treating Ratner as having a theoretical monopoly on development in the Atlantic yards area makes it virtually impossible to negotiate with him in more ways than one. It facilitates Ratner’s recent bullying threats to leave the public with a Ratner-created-wasteland unless the public antes up more subsidy in an amounts he has not yet even specified. Further, “fundamental” “power dynamics” are also affected by such a “monopoly” because a monopoly precludes other developers becoming part of the dynamics as an economic constituency with whom the public can ally in moving toward better plans and design.

It is of primary importance that Ratner’s theoretical monopoly on development in the area of Atlantic Yards be roundly disavowed. There is no reason to give the idea any credence or legitimacy. This is not an approved project. Subsidies, financing and a multitude of other arrangements for the Ratner vision of Atlantic Yards have never been approved and the Ratner vision also needs to go back to the PACB before it can ever move forward. The Ratner vision is also already a far different project than the Ratner vision that George Pataki tried to ram through in the final days of his administration. Plus, there are many more changes to come beyond Ms. Brooklyn’s recent conversion to the stack of discarded pizza boxes which Gehry now refers to as “Building 1.”

Clear Vision for the Future

Yes, MAS could have been more prescient. Sometimes clairvoyance (from the French meaning "clear" "visibility") is simply a matter of acknowledging to yourself, without censorship, what you already know, and being willing to honestly express it. MAS as part of Brooklyn Speaks could have been insisting from the beginning that Atlantic Yards should not proceed on the basis of a one-developer plan. Having not insisted upon it from the beginning, MAS and Brooklyn Speaks should certainly be empathically insisting upon it now.

Charitable Concluding Thoughts

We noted above that MAS is as a superb organization and we recommend that people become members and contribute financially to MAS. If this holiday season people want to make a gift in the spirit of giving to the general community of the city at large we would suggest they would do excellently by contributing to MAS. We might also suggest that, when they make their gift, they include a note suggesting that MAS, together with Brooklyn Speaks, increase their effectiveness with respect to Atlantic Yards by demanding that Atlantic Yards be bid out to multiple developers. We also suggest that people reserve a large amount of whatever they can give to make a sizable donation to Develop Don’t Destroy which has served the public well by taking very effective action against the project. Develop Don’t Destroy, which is in favor of development, is already opposed to the “one-developer model”so you will not need to include a similar note when you send them funds. (Here is a donation- tax deductible - link for DDDB.)