Oops! NYPL Documents The Blank Check Mentality of Certain Reliable Supporters of Library Sales and Shrinkage

NYPL's "Voices of Support" page for the nonexistent Central Library Plan starting off with praise from the Daily News editorial page

Gotcha!  Smile!  Say Cheese!  You’re on Candid Camera!   Caught in the act!

The NYPL (New York Public Library) has just documented the blank check mentality it expects from a cast of supporters it believes can be trotted out to reliably  . .  

. . . To reliably what? We’ll get to that in a moment.                   

The other day the New York Times ran a story letting us know that the NYPL is in bigger trouble than most probably suspected.  It won't be releasing the “new” version of the Central Library Plan (now AKAing as the “42nd Street Library Renovation Plan”) this fall as planned.  The plan’s obvious flaws are too difficult to paper over in the time frame they expected!  (See: New York Public Library Postpones Release of Revised Renovation Plan, by Robin Pogrebin, October 23, 2013.)

Just so everybody knows (pardon any repetition): The Central Library Plan (CLP) is the consolidating shrinkage of more than 380,000 square feet of library space down to just 80,000 square feet of space.  Two significant pieces of Manhattan library real estate would be sold, going the way of the 53rd Street five-story Donnell Library before them: the Mid-Manhattan and SIBL (Science, Industry and Business Library).  As part of the big squeeze, the research stacks of the 42nd Street Central Reference Library would be ripped out, the books banished.

Don’t expect the “new” version of the CLP to be anything more than the old version with a new veneer, its real estate sale and shrinkage goals still intact, still preeminent and still driving all the decisions being made.

What do you do in the interim if you are the NYPL and you are beset by such difficulties?  You dig your grave deeper by putting up a "Voices of Support" page for the nonexistent plan, thus having your “supporters” on record as supporting virtually anything and virtually nothing.

Here is my comment on the Times article:

Putting up a "Voices of Support" page for a nonexistent plan? All that exists of the plan that can be supported is a plan to sell off library real estate, shrink library space way down (from more than 380,000 squarer feet to 80,000) and exile books. Statements of support from a group like Urban Librarians Unite? Research the group and see what that means. A healthy antidote to these "Voices of Support" with lots of specifics can be found in the testimony that Citizens Defending Libraries delivered at the recent City Council hearings on the sell-off of public libraries around the city, available here:

Report on Monday, September 30th City Council Hearing On Sell-off of NYC Libraries Plus Testimony of Citizens Defending Libraries

    Michael D. D. White
    Citizens Defending Libraries

The Times article doesn’t mention that furtherance of the half-baked plan may have been impeded somewhat by the two lawsuits that have been brought against the plan, including the one in which Citizens Defending Libraries (I am a cofounder) is a plaintiff.  (The article doesn’t mention the lawsuits, but comments can.)  The timing of the article was somewhat luscious in that the NYPL’s announcement came just one day after Citizens Defending Libraries delivered its 16,000 plus signature petition (most of those signatures are online) to Mayor Bloomberg at City Hall.

Who are some of these supporters the NYPL feels can be depended upon to support, sight unseen, a plan for sale of library real estate, shrinkage of libraries and banishment of books?  Urban Librarians Unite, Kathy Wylde of the New York City Partnership and the Building and Constructions Trades Council of New York.

Kathy Wylde testifying for the Atlantic Yards megadevelopment at the MTA on Monday, June 22, 2009 after it had markedly degenerated

We’ve seen Ms. Kathy Wylde in this blank-check approval mode, before when she supported the Atlantic Yards mega-development.   At an MTA hearing Monday, June 22, 2009, after the proposal for the Atlantic Yards mega-development had been vastly changed to the detriment of the public Ms. Wylde testified to support the project, speaking in terms of the Partnership’s long-term support for it, virtually oblivious to the fact that the project was so much worse and less defensible than ever.  (See: Tuesday, June 30, 2009, The Partnership for New York City's evolving (and misleading) support for Atlantic Yards.)

In the case of the NYPL’s Central Library Plan, Ms. Wylde’s blank check support will be the inverse of Atlantic Yards: In the case of Atlantic Yards, supporting the megaproject from the beginning, Ms. Wylde continued her unswerving support as the megaproject degenerated profoundly; in the case of the CLP, she is now documented as supporting from day-one a plan so bad that its authors had to withdraw it out of embarrassment.  In either case, the minimum standard for her fixed support as things shift is a discernibly low bar.

Unfortunately, what we get from power-elite representatives like Ms. Wylde is the bottom line of wealth speaking to wealth, resulting in what many of us see as rigged deals, where the vagaries of any public benefit are relegated to afterthoughts to be primped up for public consumption afterwards. . 

Support from Urban Librarians Unite for a plan about which nothing is known except that libraries will be sold and shrunk and books banished may seem strange, until you closely consider that it is almost seems as if Urban Librarians Unite was created with such support being their primary purpose.  See: Saturday, June 8, 2013, Irony Of Ironies: Urban Librarians Unite, Holding A “We Will Not Be Shushed Read In June 8 & 9th! Sign Up Now!” Event, Wanted To “Shush” Citizens Defending Libraries About It.

Support by the Building and Constructions Trades Council of New York?  I have previously observed construction unions’ Pavlovian support for what creates construction jobs irrespective of public harm:

Construction unions are interested in the churn. They are not interested in what is in the public interest (hence their partnering with Ratner). Frank Lloyd Wright once facetiously proposed that all of Manhattan be leveled and replaced by just two phenomenally enormous tall towers. I often think that if such a plan were proposed today the construction unions would be out in droves to support it, not because it was in the public interest but because it would mean a huge amount of union jobs, both demolition and construction.

(See: Friday, March 18, 2011, The Real Question to Ask About the Ratner Bait-and-Switch Approach on Atlantic Yards.)

When it comes to libraries, this reflex on the part of construction unions hurts not only the public, but also other union workers as well.  As was mentioned at a forum at Barnard College this past week (For the Public Good: Public Accountability in NYC, A panel with Elizabeth Blackmar, Aaron Pallas, and J. Phillip Thompson, Thursday, November 7, 2013) the selling off and privatization of public assets like schools and parks is often intertwined with motivations of disenfranchising union workers.

The NYPL’s false step of bringing in the construction unions and creating this documenting gallery of automatic supporters, the likes of those above, arrayed together with others such as the soundly-defeated candidate for mayor City Council Speaker Christine Quinn is probably the first work of the Parkside Group, the NYPL’s expensive new lobbyist.  News of the hiring of the Parkside Group surfaced in the New York Times the day after it was announced that the NYPL wouldn’t be releasing its plans to the public this fall. (See: New York Public Library Hires Firm to Promote Renovation Plan, by Robin Pogrebin, October 24, 2013.) 

The hiring of the Parkside Group means that, in these maneuvers of arraying all these automatic supporters and others, library administration officials are prepared to divert huge amounts of public money and charitable donations into arguing for the sell-off of these public assets for the ultimate benefit of the real estate community.  (See: Wednesday, October 30, 2013, Conundrum For Those Wanting To Donate To Libraries: People Who Would Use Our Donations To Shrink and Sell Off Libraries.)

When will the NYPL be releasing the new edition of its plans?  According to the Times the NYPL said in a statement:

We now expect to unveil the new design sometime after the New Year.

Sometime after January 1st?  What’s important about that January 1st date?  That’s the date when Mayor-elect Bill de Blasio will take office at the city helm.  It would have been impossible for the NYPL to have released more bad plans during the mayoral race as de Blasio would have had to reject them, for the sake of his campaign’s consistency and to keep himself appropriately distinguished from his opposition.  (Candidate de Blasio had already stood on the steps of the 42nd Street Central Reference Library calling for a halt to the sale of New York City’s public libraries.)  (See: Sunday, November 3, 2013, Candidate Lhota's Flub!: He thinks library lovers don't read the Wall Street Journal!!- Checking In On Mayoral Candidates’ Library Positions, de Blasio vs Lhota.)

In addition, any bedraggled release of plans at the tail end of the Bloomberg administration would just associate a design rehash more firmly with the increasingly unpopular departing Bloomberg administration.  No doubt, what the NYPL will want to do is seek a willing collaborator in the de Blasio administration to make it somehow seem that they have a plan that can be considered as “new” and different and probably that the plan is even, in part, a response to Mr. de Blasio’s own high standards and insistence on improvement.  At that point they will trot out again the supporters now on record as supporting the old, discredited plan and hope that nobody will be keeping track.

Chiara de Blasio, candidate de Blasio's daughter vouching for her father about the the sell-offs of public assets we won't see if her father is elected.

Will de Blasio fall for it, or, acting in collaboration, expect that others will?  During the campaign his daughter, Chiara, gave us assurance about where her father stood respecting the sale of public assets.  In the end, the sale of NYC public libraries will remain at bottom what it is: real estate deals for the benefit of developers, not the public.  I don’t think de Blasio will fall for such an NYPL ruse and I certainly hope that when it comes to these matters he will steer his own unveering course.

Candidate News: Tomorrow’s Primary Election - Silly Season? Some Consider It So, But. . .

Here’s some news, a bit of a round-up of stories concerning who you might vote for in tomorrow’s primary election.

When I was in government, for all the months leading up to an election we kept our heads down, referring to the election season as the “silly season” trying to ignore, particularly the hyperbole and shrill rhetoric,  what was going on.  It was axiomatic that much of what was being said wasn’t sincerely meant and that in many respects whatever politicians were elected to office they would wind up doing very similar things.  You know, `politics is the art of promising what is popular to the public and governance is what actually gets done in terms of running things after the election.’

Nevertheless, as a member of the electorate there is no better or more important time than now in terms of having candidates clarify their positions and locking them firmly into promises tat will cause embarrassing damage to their careers if they don’t honor.

With that as background. . .

Candidate Recommendations From Citizens Defending Libraries

Citizens Defending Libraries (of which I am a co-founder), formed in February of this year in response (with a petition) to the breaking headlines about the selling off, shrinking and underfunding of New York City libraries to create real estate deals that benefit real estate developers, not the public, has issued recommendations on candidates running for office in new York City.
 
Citizens Defending Libraries first issued its recommendation NOT to vote for Christine Quinn.  (See: Citizens Defending Libraries First Election Recommendation: NO to Christine Quinn, Who Favors Selling & Shrinking Libraries.)

Citizens Defending Libraries then issued its recommendations, pro and con, respecting other candidates in the election.  (See: Citizens Defending Libraries Recommendations On Other Candidates: Vote For Liu or de Blasio (Depending), Tish James For Public Advocate, NO to Squadron, and . . . More .)

Citizens Defending Libraries recommends voting for John Liu or Bill de Blasio (depending- detailed explanation at its site) for the Democratic nomination for Mayor and recommends voting for Tish James for Public Advocate.  Citizens Defending Libraries strongly recommends against voting for Daniel Squadron for that position.  In addition, Citizens Defending Libraries has other recommendations on other candidates.  That includes City Council and Borough President races in addition to a recommendation to vote for George McDonald for the Republican nomination for Mayor.

Candidates that Citizens Defending Libraries recommends include the following candidates for City Council seats: Steve Levin, Yetta Kurland, Micah Kellner and Ede Fox.

As for who I will be voting for, for Mayor (and who I think most Noticing New York readers will be voting for). . . .  I will get to that in a minute.

Citizens Defending Libraries recommendations are based on the Mayoral forum on libraries it held for Mayoral candidates on August 30th (link provided below), the Public Advocates and Comptroller Candidates forum on libraries held September 4, (link provided below), responses to its candidates questionnaire and its other interactions with, and information about, the candidates.  The full whys, wherefores and analysis are provided at Citizens Defending Libraries web pages links provided above.

    •    Mayoral Forum on Libraries Held August 30, 2013
   
    •    Public Advocates and Comptroller Candidates Forum on Libraries Held September 4, 2013 
   
If you check in with what was said at these forums you'll notice that the politics of the real estate industry and its influence in this city was talked about a lot.

Other Candidate News: WNYC Reports on de Blasio’s Atlantic Yards History

A few days ago WNYC ran one of its best stories to date on the Atlantic Yards mega-project:  De Blasio’s Atlantic Yards Support Helped Old Ally ACORN played pivotal role in 2001 City Council race, Thursday, September 05, 2013, by Matthew Schuerman.

Click to listen to the audio below.



Norman Oder of Atlantic Yards Report is quoted (using a sound bite) in the WNYC story.  Here is his largely complimentary Atlantic Yards Report take on WNYC’s reporting: Thursday, September 05, 2013, WNYC on de Blasio: "his handling of Atlantic Yards raises questions about whether he has been able to push developers to keep their promises".
       
Mr. Oder says:

I'd encourage people to listen to the audio, rather than rely on the text version, since there are some key differences and shadings.

Notably, in the audio version, the last word goes to the skeptical Letitia James, rather than the self-serving Bill de Blasio. And she deserves it.

By the way, not by coincidence, Tish James, running and recommended for the Public Advocate office by Citizens Defending Libraries, has been in the forefront of the opposition to the selling off, shrinking and underfunding of libraries for real estate deals.  See the follwoing Tish James OpEd that appeared in both the Brooklyn Eagle and the Huffington Post: OPINION: Shrinking the library system is a loss for New Yorkers, August 29, 2013.

The best financed opponent of Tish James, Daniel Squadron, recommended for office by Noticing New York for his senatorial office in 2008 because of expressed opposition to Atlantic Yards (though never ultimately acted on), has refused to oppose New York City’s library sales, including not representing his constituents to oppose the proposed sale of the Brooklyn Heights Library.  Squadron is also regarded as having sold out the supporters who got him into office when he relinquished, without a fight, substantial leverage he had to oppose a huge amount of development that might have been parts of Brooklyn Bridge Park.

For more on Squadron and libraries Citizens Defending Libraries has a tasty YouTube Video up with moderator Roy Paul asking some hard questions: Squadron Surrogate Mark Green Grilled On Offensend Donation.

Back to WNYC’s story about de Blasio on Atlantic Yards. .

Here is my Noticing New York comment posted at WNYC’s site:

This story is one of the best that WNYC has done on Atlantic Yards giving to it the kind of time the subject deserves.

Nevertheless, here is what is absent from the narrative reported. The story is all about failure to enforce the "public benefit" aspects of Atlantic Yards (de Blasio's failures in particular), not about the fact that those public benefit terms were, in the first instance, written by the developer for the developer's benefit, not the public.

Atlantic Yards as originally conceived was not right and de Blasio should have opposed it (He once feinted at doing so) from the beginning demanding a different project divided up and competitively bid amongst multiple developers, one that did not involve tearing down much of the neighborhood with eminent domain. The project should only be building over the rail yards, not on the rubble of what Ratner was allowed to tear down.

Instead, one of the main features of Atlantic Yards that is bad is also now central to the problems of negotiating with the developer and enforcing public benefit: That Forest City Ratner has been granted a government-supported mega-monopoly. You can't negotiate with a monopoly. You can't negotiate with a mega-monopoly. Mr. de Blasio and others should insist that the Atlantic Yards mega-monopoly be taken away from Forest City Ratner, Mr. de Blasio's campaign donor.

Here is more Noticing New York analysis on that subject: Tuesday, April 30, 2013, Relevance of Mayoral Debate Discussion About Forest City Ratner Atlantic Yards Misconduct To The Sale and Underfunding of NYC Libraries.

Relevant Background Report: The Vicious Cycle Of Subsidies And Elections

In early August Atlantic Yards Report ran a story extremely relevant to elections, echoing a concern repeatedly raised here in Noticing New York: How government subsidies pick and flow money to economic winners, including the very politically connected Forest City Ratner, and then companies like the Ratner firm, awash in such benefit, flow that money back to get their favorite politicians elected.  (That’s why de Blasio taking money and campaign support from Ratner is such a concern.)  The story was about a new Cause of Action report specifically about Forest City Ratner.  According to the New York Post:

Forest City Enterprises, the real-estate behemoth whose subsidiary built the Barclays Center, has taken pay-to-play to new levels, an explosive new report charges.  The company has gotten indirect government subsidies totaling $2.6 billion over the last decade — or 23 percent of its $11.4 billion in revenues over the period, according to the report.

See: Wednesday, August 07, 2013, A national spotlight: libertarian watchdog group targets Forest City Enterprises for "political profiteering"; while report goes over the top, Forest City's defense is too pat.

More from the Post:

“For far too long, Forest City Enterprises has operated on the model of political profiteering, essentially rigging the marketplace by paying off government officials with lavish campaign contributions and gambling with taxpayer funds for its private profit,” Cause of Action's Epstein told the Post.

Responds Forest City Ratner (Oder says “a wee bit” defensive and self-righteously):

Forest City spokesman Jeff Linton said, “It should come as no surprise that we support candidates whose policies promote economic development and job creation. However, to suggest or imply a direct connection between this support and our opportunities as a company is baseless and defamatory.”

He said without government development incentives, most of the company’s development projects “would not be economically viable.”

To me that sounds nearly like, `yes, you’re right.’

Apparently the report doesn’t get all its subsidy calculations correct (I think it may underestimate them), a hard thing to do, which is one reason firms like the Ratner firm walk away pocketing so much more taxpayer money than the electorate is likely to actually know.

I’ll leave the quibbles about the report and its calculations to Mr. Oder, who says: 

It's also simplistic to suggest that Forest City's considerable spending on campaign contributions and lobbying directly delivers subsidies and government assistance.

Instead, I will pose the following as a standing question which I think that any reporter interviewing Forest City Ratner and its executives should always be primed and ready to ask:

What was the last project, if any, that Forest City Ratner did that did not receive significant public subsidy from some level of government and was subject to a true competitive bid?   

The question has never been asked.  The answer is that there aren’t any.

The New York Times Weighs In On What Developers Think Of The Silly Season

With all that money flowing in, developers likely believe that, in the end, they have the upper hand, according to a New York Times article that describes what developers think of the silly season:

In the Democratic primary for New York City mayor, a new set of political dirty words has surpassed the usual favorites, like “lobbyist” and “flip-flop,” that are traditionally used to spritz opponents and adversaries with a film of slime.

These new dirty words are “real estate,” “developers” and “condos” — printable, and yet filthy with disdain. But, conveniently, they have not stopped any of the major campaigns from accepting hundreds of thousands of dollars from the real estate industry. 

    * * * *

Some members of the real estate industry may grumble to find themselves on the raw end of a stump speech, said Kathryn S. Wylde, president of the Partnership for New York City, a business group, but most just shrug it off.

 “It’s political pandering to a public sentiment that the middle class and low-income people have been left out of the prosperity of the past decade,” Ms. Wylde said. “I think, for the most part, they would govern with very different interests than their political rhetoric suggests.”

And so the money rolls in.

(See: The Appraisal: In Mayoral Race, Attacking Real Estate Industry but Taking Its Cash, by Elisabeth A. Harris and Jo Craven McGinty, September 2, 2013.)

That “shrug” above comes from the same Kathryn S. Wylde with whom I used to do a considerable amount of work and who favors the use of eminent domain to take property away from individuals and hand it over to politically-connected developers.  (I don’t yet know her position on handing over public libraries, but I fear to guess.)

Kathy Wylde

 And The Winner Is. . . . ?

Who will I personally vote for, for Mayor?: I will vote for John Liu!

That's because in this season of rhetoric I think it is most important to go back and look at the record of what a candidate has actually done and John Liu has a record of standing up to the real estate industry.  He also one of the candidates not funded by that industry.  I suspect that most regular Noticing New York readers, remembering the record of the candidates, will be voting for Liu.

Voting for Liu may get us into a run-off in which Liu will participate.  Whether or not it does, I think that voting for Liu sends the best message, one that desperately needs to be sent.

Visiting Occupy Wall Street We Hear “Eliminate the Fed!”: OR Maybe Just Federal Reserve Directors Backing Mega-Monopolies For the Super-Connected?

(Photo above from this link.)

There are provocative ideas circulating among the Occupy Wall Street protestors. Maybe with respect to one idea, a very powerful one, we can take heed, but start small by considering a basic essential: Is the Federal Reserve on the public’s side?

Visiting Occupy Wall Street you will probably see, as I did, the placards calling for elimination of the Fed, (aka the “Federal Reserve” or “Federal Reserve System”). That’s also something that Ron Paul, more frequently thought of as closer to the Tea Party side of things, is calling for. Indeed, hostility toward the Fed is a theme that is also circulating amongst the Tea Party activists and activists invoking the Tea Party label (how does one differentiate and how critical is it to do so?).

See:

From Tea Party Advocates, Anger at the Federal Reserve, by Sewell Chan, October 10, 2010

Tea Party Rallying Cry: Abolish the Federal Reserve! By Liz Peek, The Fiscal Times, November 10, 2010

End the federal reserve - American Tea Party Constitutional Coalition
The Federal Reserve - A Scam!

The Tea Party vs. the Federal Reserve, by Michael Tennant, Wednesday, 13 October 2010

AUDIT THE FEDERAL RESERVE (New Hampshire Tea Party Coalition)

That's not to say that all those out to earn Tea Party credentials and endorsement are opposed to the Fed. Herman Cain was chairman of the Kansas City Federal Reserve Bank in the mid-1990s. (See: Herman Cain: Federal Reserve Chairman, Tea Party Champion, by Joshua Green, May 27 2011.)

Eliminate the Fed? GULP! That would be a big step. It’s really hard to get one’s mind around what it would mean in terms of the economy. And the belief of some that eliminating the Fed would be good because it would be better to regulate the money supply by a return to the gold standard is scary: How much gold you have isn’t a measure of true societal wealth. Among other things you can’t eat it.

(Below an interfaith protest arrives Sunday with their version of Wall Street's "bull" being the bible's Golden Calf idol.)

We understand concerns that the Fed has a lot of power, that while it functions as if it is one of the most powerful organs of government it is not readily accountable as other branches of government are supposed to be, that it is in technical terms essentially a private entity.

Although it is embedded in the nation’s political history the Fed is a entire branch of government you can’t find in the Constitution.

The origin’s of the Fed go back to the creation of federal central banking via the famous Hamilton, Jefferson Dinner Table Bargain of June 1790 whereby the other side of the agreement was to locate the U.S. Capitol in Washington D.C. (The Constitution also doesn’t say where the capitol of the U.S. should be. Before D.C. it was located in Philadelphia and New York City.) Though the compromise may have traded away New York City’s then status as the official political capital of the U.S. via the compromise, Hamilton, then the Treasury Secretary (Jefferson was Secretary of State) secured for New York the de facto status as the nation’s financial capitol from then on.

Take the big step of eliminating the Fed? Maybe we could start with the smaller step of looking at who are the Federal Reserve Directors and whether they can be counted upon to serve the public interest. As mentioned above: Herman Cain?

(Above Federal Reserve Directors Kathy Wylde and Lee Bollinger both of whom are key backers of neighborhood-seizing eminent domain abuse to benefit government assisted monopolies.)

More important, I have previously pointed out with some anguish that the Federal Reserve Bank of New York has on its board two directors, Kathy Wylde and Lee Bollinger, both with one thing conspicuously in common: They have both been key in backing the neighborhood-destroying seizure of land through eminent domain abuse. At the expense of community interests they have endorsed those seizures for the sake of governmentally assisting politically-connected private mega-monopolies. This is some of what I previously wrote:

Regarding Director Wylde:

Kathy Wylde, whose most high-profile recent actions have been to go out of her way to promote Atlantic Yards, the megadevelopment on track to be one of New York’s most conspicuous money-losing failures. (See the July 27, 2009 story in Crain’s.)

* * * *

Ms. Wilde has been president and chief executive of the Partnership for New York City for some time and was prominently in the news in the (pre-fiscal crisis) summer of 2008 as a supporter amongst the inner business circle strategizing for Mayor Michael Bloomberg’s overturn of term limits to get a surprise third term. Wylde effused that the business world was “primed” to help him. (See: Bigs Back Law Change to Keep Mike, By Angela Montefinise, July 27, 2008.) . . .

Wylde Support of Economic Mega-Losses for NYC

A spectacularly flawed project in almost all respects, New York City’s Independent Budget Office has concluded that the Atlantic Yards arena, the only part of the Atlantic Yards project currently designed or for which any kind of enforceable, documented deal exists will be a net money loser for the city to the tune of $220 million($39.5 million in direct losses and $180.5 million in opportunity losses). The megadevelopment’s guaranteed inadequacies flow principally from the fact that it was set up and concocted by the developer, Forest City Ratner, as a subsidy-infusion system intended to deliver maximum benefit to the developer at the expense of the public. The IBO has conservatively calculated that on the arena alone the city will be giving the developer$726 million in no-bid giveaways.

Regarding Director Bollinger:

Lee C. Bollinger, President of Columbia University. One of the three highest paid presidents at a private university ($1.4 million annual compensation package), Mr. Bollinger has spearheaded Columbia’s usurpation of West Harlem using eminent domain to gain a multi-decade monopoly shut-out on the real estate there, very much like Atlantic Yards.

(For more of what I said then- and I had a lot of points to make- See: Saturday, September 19, 2009, Really Wylde? New NY Federal Reserve Bank Director Supported Major NYC Net Loss ($220 Million) Megadevelopment.)

The Tea Party tends to focus its anger at government. Occupy Wall Street is focusing anger more directly at Wall Street. Both groups ought to be properly directing their anger at the double-whammy you get whenever government steps in to support Wall Street and/or to specially benefit politically connected monopolies and elites. We see it far too often. Indeed, the shared objections to the Fed is that it is a private entity usurping government prerogatives and functions to favor private interest over public interests.

So, if the Fed is going to be kept around do we want it to have directors like Wylde and Bollinger who readily endorse the kind of abuse favoring the 1% over the 99%?

Compensating Justly? What Is the Property Being Condemned at the Atlantic Yards Site Really Worth?

Atlantic Yards Report has an extremely fascinating article that compares the prices Forest City Ratner seeks to pay for property, when abusing eminent domain, against various measures of what that property is actually worth in the market. (See: Friday, October 30, 2009, What's a Prospect Heights condo worth? ESDC low-balls Goldstein (who once walked away from $500K profit) and overpromises the public.)

Needless to say, the prices that Forest City Ratner wants to pay by virtue of using the eminent domain club are a lot lower than fair market.

Wyldely Off For Starters

Needless to say? Maybe not. What provided background for AYR’s analysis was a recent Brian Lehrer discussion of eminent domain (part of its election issues series- 30 Issues Day 6: Eminent Domain, Monday, September 28, 2009) where Dana Berliner, senior attorney at the Institute for Justice, and Kathryn Wylde, president & CEO of the Partnership for New York City, debated eminent domain. Ms. Wylde, a dependable apologist for eminent abuse, routinely maintains that fair compensation is always scrupulously paid, something we have taken issue with her about in previous posts. (She also maintains, incorrectly, as she did on the program, that eminent domain is never used unless a careful cost benefit analysis has determined that the ensuing project will be a net benefit to the community. Ms. Wylde takes this position while supporting use of eminent domain for the proposed Atlantic Yards basketball arena, documented as a $220 million net loss to the public. The arena was a subject of the Lehrer program’s discussion.)
(Click on the above image to enlarge it. For more about it click here.)

Paying Less (Per Square Foot) Than Ratner Would Seel Property For (Per Square Foot)

The Atlantic Yards Report post is fascinating because it does such a good job of elucidating a subject that certainly needs it.

First, the AYR post makes clear that Forest City Ratner wants to pay less for property than it cost before the market escalated in the last real estate boom and less, on a square foot basis, than they would themselves expect to sell similar property for. But, as we will explain, that difference is just a fraction of profit total spread they hope to collect by paying less than market.

Atlantic Yards Report noted that Forest City Ratner wanted to pay Daniel Goldstein an `estimated’ $450 per square foot for his condo in the Atlantic Yards footprint while at the same time FRC is getting state agency blessing to proceed with its (no-bid) mega-monopoly based on a (suspect- we’ll get to that) KPMG market survey that says that the current condo market in Prospect Heights is $470-$1225 p/s/f. Further, as AYR notes, FCR estimated in 2006 it would get $850 p/s/f for its proposed Atlantic Yards condos.

Paying Less For Property Than It Was Bought For Before the Market Escalated

Atlantic Yards Report “estimated” the $450 p/s/f offer to Goldstein based on the fact that during the Lehrer program Mr. Goldstein phoned in to speak about the absence of “just compensation,” saying that Forest City Ratner was offering below the $466 p/s/f Goldstein paid in 2003 explaining, "It is even below what I paid for the place... over six years ago, and everybody knows the market is not lower.”

Even More Greedy Than It Sounds

Expecting to pay half or less for property, when looked at on a square foot basis (the $450 vs. the $850 to $1225 p/s/f), may already sound really greedy. That’s at first blush. In a moment we’ll explain why it is substantially even more greedy than simply comparing these per square footage numbers might indicate. But before we explain why its substantially more greedy let us be meticulous and explain why the above gap in figures is probably slightly less greedy than it sounds.- Yes, that sounds as if we are geekishly taking you on something of a mathematical roller coaster, but at least no one should say that we aren’t going out of our way to be fair and to say something potentially nice about Ratner.

When Trying to Say Something Nice about Ratner Maybe You Can’t Anything at All!

The reason why what we have described already is only slightly less greedy than it sounds is that the high number in the range given for those “surveyed” market values, the “$1225 p/s/f” figure, doesn’t represent reality. It is virtually certain that the number was deliberately inflated to support a legal fiction that the development monopoly government officials want to confer upon Forest City Ratner isn’t really destined to result in Ratner’s keeping most of the megadevelopment acreage as undeveloped parking lots for several decades. Oops: That doesn’t sound very nice! Just goes to show you: Even when one goes out of one’s way to say something nice about Ratner one discovers more greed under another rock.

Taking Greed to a Previously Unknown Zone

Now, back to why referring simply to “square foot” prices for condominium apartments doesn’t convey the full measure of Ratner’s greed. Daniel Goldstein’s apartment is in a nine-story building. As Atlantic Yards Report references in its article, the Ratner megadevelopment involves an override of local zoning and procedures whereby Ratner is proposing to ultimately create the densest area in North America. Goldstein’s nine-story building is supposed to be replaced by a forest of 50- and 60-story buildings. Assuming, conservatively, that Goldstein’s apartment will be replaced by development that is four times the current density, and assuming conservatively that we should use the $850 p/s/f condo figure, this increase in density transmutes the square foot value of Goldstein’s apartments in development terms to $3,400 p/s/f ($850 p/s/f times 4). Then the gap between what Ratner is offering Goldstein and what the unit is really worth is $450 vs. $3,400 p/s/f.

How a Condominiums Price Would be Negotiated in a Fair Market Transaction

Assume that Ratner had to approach the owners of the Goldstein’s condominium building in a fair market transaction without using the threat of eminent domain. Under the by-laws of the condominium all the unit owners would have to get together and consider the offer. The by-laws almost certainly provide that an offer would be accepted only if a supermajority of the unit owners agreed. (Unit owners in the minority might have additional protections.) Before they agreed to a sale the unit owners would want to be getting a fair market price. They would factor in the development value of the building in determining that price. They would be looking for Ratner to pay a substantial portion of the above $3,400 p/s/f development potential of the site. That, by the way, would be market value.

Magically Minting Money to Pay For Condemnation Awards (Not Out of Ratner’s Pocket)

As Atlantic Yards Report describes, Ratner, using the threat of eminent domain, paid other individual condominium unit owners in Daniel Goldstein’s building more than the $450 p/s/f Ratner is estimating to be offering Goldstein. With the threat of eminent domain behind him Ratner paid substantially less than $3,400 p/s/f and using “gag order, non-disclosure, and tout-for-the-project” agreements kept secret what was actually paid to individuals accepting the deals. AYR notes, referencing court records, that in 2005 there was an offer of $850 p/s/f. FCR’s offer of a higher prices was facilitated not only by the upzoning but also by using taxpayer money to make the payments.

Eminent Domain Abuse Coupled With Upzonings Degrades Quality of Urban Design

Because the upzoning is effectively funding the real estate acquisitions, we are seeing a pattern with developer-initiated, developer-driven eminent domain where the eminent domain is routinely accompanied by abnormal boosts in density within boundaries coterminous with the developer’s monopoly ownership. That doesn’t make for the best urban design.

Monopoly’s Theft of Value From Neighboring Property

Even in the adverse setting of a condemnation proceeding, a condemned property owner is (and should be) entitled to legal (and constitutionally specified “just”) compensation which should include the portion of the prospective development value of their property that can be reasonably anticipated. That is “reasonably anticipated” under normal circumstances. . . That doesn’t mean that the unit owners in Daniel Goldstein’s building should be entitled to the full aforementioned $3,400 p/s/f associated with the huge upzoning because not all of that upzoning should have been anticipated. Entitling them to all that money would be unreasonable (irrespective of all the money from the zoning going into Ratner’s pocket) because no normal prior owner could reasonably envision or expect to benefit from the unreasonable way that density has been selectively piled onto the Ratner site or the politically connected zoning override used to do it.

Properly, while a portion of the upzoning of the Ratner site is attributable to the condemned properties being taken away from their legitimate owners through eminent domain abuse, there is another portion of the abnormal zoning increase that is instead attributable to neighboring properties that will no longer be eligible for their own future zoning increases because of the density that has been shifted over and piled exclusively on the Ratner mega-monopoly site. In effect, the abnormal density heaped on the Ratner monopoly steals property value from the surrounding neighborhood property.

Transaction Costs: Why The Value of Property Is NOT What Was Paid For It

As noted, the estimated $450 p/s/f being offered to Goldstein is less than the $466 p/s/f he paid for his property in 2003. But say that Goldstein had just bought his condominium for $466 p/s/f and imagine that he was being compensated a day later. Can it be argued that it would be fair to pay him exactly the $466 p/s/f he paid? There are those such as Kathy Wylde who act as if this would be absolutely fair. (Goldstein was unaware when he bought his apartment that he was about to be faced with an attempt to seize his property for development.) From the Lehrer program we gather that Ms. Wylde is apparently content to pay Goldstein less than he paid for his unit. But someone like Wylde would likely argue that to pay Goldstein exactly what he paid for his unit a day after he brought it would be fair: The fact that he bought it on Tuesday at $466 p/s/f is very good indicator of its market value so that paying him $466 p/s/f the day afterward ought to constitute full market compensation.

That, of course, ignores the fact that people don’t ordinarily buy property and sell it a day later at the same price. It ignores that fact that eminent domain condemnations create forced takings which compel transactions to occur on timelines that would never otherwise be applicable. People don’t buy and immediately thereafter sell property because there are all sorts of expensive transaction costs incurred each time they turn property over. They must pay a broker perhaps 6%, they must pay their lawyer. They will probably have to pay to take out a mortgage, perhaps paying down the interest rate with substantial up-front points. The same interest beneficial rate may not be any longer available. They will have moving costs, decorating and renovating costs and costs for new appliances. There is all the time they will have invested to look for the property. There will even be the cost of their time to notify all their contacts of their address changes. They may have other costs like applying to send their children to new schools or looking to find those new schools. If you start thinking about why exactly you don’t want to move next week you can probably readily think of many more of the costs that should be added to the list.

Taken to an extreme, one can recognize that most people if they were forced to sell and re-buy a new home every year or every six months would soon be bankrupted by the recurring transaction costs. The fact is that hidden in all real estate prices is the legitimate expectation that homeowners and other real property owners will manage the their ownership so as to amortize the transaction costs over an appropriately extended period of time. If people are knowingly going to occupy properties for shorter periods of time they make appropriate adjustments; they rent, they take smaller apartments. People also time the moves they make to comport with projected changes in life, having one or more children, retiring, taking a new job, starting a business. If you force a different schedule on them, then in the free market they are going to demand a price high enough to compensate them for the extra transaction costs plus all the extra inconvenience togther with their emotional attachment to their investment. That’s a price Ratner doesn’t want to pay and Kathy Wylde defends Ratner’s not having to pay it. As noted, she defends Ratner’s paying even less.

Are Eminent Domain Transaction Costs Exceptional? Indeed.

We could go on to explain that having your property taken by eminent domain actually has extra transaction costs associated with it beyond merely the forced timing of the transaction. Your ordinary lawyer is not going to be able to represent you. (It is an experience you will not have in common with most of friends as would be the case with a traditional real estate transaction. You are going to be lonely when trying to compare notes with your fellow citizens.) Eminent Domain introduces unknowns and costly uncertainty into one’s life. This can be enormously expensive for a business owner trying to maintain and work with clients and/or tenants. Eminent domain is also likely to depress the value of your property (and your business). Certainly, it will stop its escalation.

In law school we were taught to pay attention to the filings by government that foreshadowed the use of eminent domain. We were taught that the government would try to get something on record as soon as possible to freeze real estate values and that pending eminent domain needed to be researched and discovered because of the way that it would likely depress real estate values. Of course, in law school in the 1970's we were thinking conventionally in terms of eminent domain for publicly owned facilities, not in terms of establishing huge no-bid developer-initiated mega-monopolies under the pretextual rubric of “economic development” or faux findings of “blight”in prime neighborhoods.

Not to Be Overly Academic About It: What’s Really at Issue

Perhaps we have allowed ourselves to get overly academic in this post. We don’t believe that people like Kathy Wylde are actually concerned with the academics of determining what is a fair price for people having their property taken by condemnation. We don’t believe their concern is actually whether megadevelopments like Atlantic Yards that abuse eminent domain will be a net plus or a net loss for the community. We are not certain apologists like Ms. Wylde even have a real concern for what these amorphously-shifting projects will actually finally be. What we see is Ms. Wylde reflexively promoting eminent domain and reflexively promoting its abuse to create a no-bid mega-monopoly for the politically connected Ratner. We see this done with no apparent regard for the public costs and irrespective of the absence of perceptible public benefit.

First Day of ESDC Hearings on New Sight-Unseen Version of Atlantic Yards: Some Noticing New York’s Testimony and Questions Asked

(Press conference and rally protesting Atlantic Yards outside ESDC hearing. Obviously many elected officials, candidates and campaign signs in evidence.)

We were at the first day of the Empire State Development Corporation hearings today on the new version of Atlantic Yards which is proposed to be approved sight-unseen by the public and the ESDC board. We testified and took the opportunity to ask questions of those who were there. There were also press conferences that went on, the most important being the really big one protesting the project before the hearing which was well attended by elected officials and candidates.

In this post we will first provide you with our testimony and then we will tell you the about some of the questions we asked of other attendees. Answered or not, we got some interesting insights.

Noticing New York’s Testimony

Here is our Noticing New York testimony which we read almost entirely to the end of before our three minutes for oral testimony concluded. We handed in a written copy with attachments. It is probably best read on the web though to take advantage of the hyperlinks.

* * * * *

July 29, 2009

Empire State Development Corporation
Attention: Steve Matlin, Senior Counsel
633 Third Avenue, 37th Floor
New York, NY 10017

Re: Public Comment for Atlantic Yards MGPP- Today’s Public Hearing

Dear ESDC:

This comment is being offered in the name of Noticing New York, an independent entity dedicated to the proposition that developing New York and appreciating New York go hand in hand.

I offer this testimony as an attorney experienced in real estate, as an urban planner and as former senior government official who worked for more than a quarter of a century in the areas of public finance and development for the state finance authorities.

1. There is good development and there is bad development.

2. Good development begets and whets the appetite for more development. Bad development creates enemies and stagnation. Good development moves relatively fast, providing jobs in the here and now rather than in the hereafter (after many of those now looking for jobs will have moved on to other things). For instance, if the alternative UNITY plan had been adopted there would be a lot of people working right now and a lot of people housed and about to be housed.

3. Good development finds a quicker more ready acceptance by the community, works with its values and doesn’t needlessly destroy its landmarks and worthwhile buildings.

4. Good development doesn’t go out of its way to embrace monopolistic ownership and control of huge swaths of the city by a single developer abusing eminent domain.

5. Good development doesn’t clog the natural forces of the economy and displace better competing alternatives.

6. Atlantic Yards is NOT good development.

7. The Atlantic Yards plan and design (such as we have actually been allowed to know what it may now be) proclaims by its obvious inappropriateness that it is a sponge for subsidy and benefit for a single developer at the expense of the public: its overbearing density through zoning overrides, the seizure of public streets, sidewalks and avenues, the suspiciously irregular footprint taking extra land through eminent domain abuse.

8. Consider all the following that bespeak the “impermissible favoritism” of a blank check for a developer-initiated, developer-driven sight-unseen project

a. No identification at this time of the supposed benefit of the megadevelopment. Benefit will be determined on an “as-you-go” basis: The project will start with the arena which the city’s Independent Budget Office has determined to be a net loss for the public.

b. Approval of (and these public hearings for) a sight-unseen project where nothing is yet designed (after half a decade!), not even the arena, and where an architect has not even been selected for the rest of what is being approved. The only promise is that it will all be “value-engineered,” i.e. built cheaply so as to cost the developer as little as possible.

c. Refusal to identify the total amount of subsidy that the megadevelopment will be given. Since ESDC is withholding or says it doesn’t know the amount, we offer our own calculations that total public subsidy being diverted into the project will surely exceed $2 billion and may well approach $3 billion.

d. No credible enforcement of or holding the developer to specific terms. ESDC has fashioned contract remedies that don’t kick in for 25 years and this hearing is held specifically because ESDC has just recently rewritten the deal, tilting it hundreds of millions of extra dollars more in the developer’s favor without any quid pro quo.

e. A no-bid award of a megadevelopment to a single developer on what is essentially a long-term, low-cost option basis. The breaking up of the project into optional (and assignable) segments undermines the specious pretexts that have been given for favoring the blank check to this developer over the Battery Park City model of bidding out to multiple developers.

9. In the end, the lopsided unparametered monopoly that has been “negotiated” by ESDC (“negotiated” is hardly a credible verb in this context) affords the government no leverage to insist that Forest City Ratner provide any level of public benefit in exchange for all the public giveaways by virtue of the blank check it has been allowed to write for itself.

Sincerely,


Michael D. D. White

ATTACHMENTS

(A few Noticing New York articles on Atlantic Yards that also link to others.)

1. Tuesday, November 11, 2008, JANE JACOBS ATLANTIC YARDS REPORT CARD

2. Sunday, June 28, 2009, Naming a Problem: The MTA Gives Ratner the Right to Name Brooklyn Subway Stations “Barclays”

3. Thursday, July 23, 2009, The Hit and Miss of Last Night’s Public “Information” Meeting on Atlantic Yards

4. Monday, June 1, 2009, Negotiating With Your Contractor: The Atlantic Yards As Kitchen Renovation Metaphor

(Civil rights Attorney Norman Siegel at press conference explaining the absence of procedural due process protection against eminent domain abuse: You don't get a day in court to defend your property. Mr. Siegel, involved in opposing Atlantic Yards from the beginning, brought no campaign signs, suggesting that gathering in opposition ought to be nonpartisan. )

Attendance by Political Office Holders and Candidates

The hearing and the press conference and rally preceding it was well attended by political officer holders and candidates, including two candidates for mayor, Tony Avella and Billy T. (Billy Talen, better known as the Reverend Billy), the vast majority most of whom were speaking in opposition. The hearings are being held over two days but we didn’t see the other Billy T. candidate for mayor, Comptroller Bill Thompson, who has at least made some noise about changing the way City Hall puts the interest of connected real estate developers above the public. We’ll see how Thompson handles the opportunity of these hearings, including whether he shows up at the hearings tomorrow, which are likely to be less well attended.

Two others we will looking for tomorrow will be Bill deBlasio, City Councilman for the 39th, and a candidate for Public Advocate like long time opponent Norman Seigel who was there (see image above), and Steve Levin Vito Lopez’s chief of staff and a candidate in the 33rd Council District race to replace David Yassky. (Yassky recently spoke before the MTA opposing the same project revisions that the hearing was about.)

Bill de Blasio was in the news this week winning a fight to stay on the ballot despite a typo in the fillig of his petitions. We were looking for de Blasio, who called for "a moratorium on demolition until there is a written plan" that "confirms what will be built when and confirms affordability" and that he "can't support" an arena-only plan (before the project actually deteriorated to the extent that it now has) because it seems that we are going to have to count on the new public advocate as a critical line of defense against boondoggle mega-projects like Atlantic Yards. We are looking for candidates that will have their heart in the job.

We were looking for Steve Levin, first because he could be clearer about his position on Atlantic Yards and other development issues, though he expressed the following about his Atlantic Yards position (again, before the project actually deteriorated to the extent that it now has):

I have many serious concerns about the Ratner plan as it is currently proposed. I especially have concerns regarding the proposed density of the development and the resulting strain that this density will put on the area's infrastructure, e.g. traffic, public transportation, and public school capacity. In addition, I am against the use of eminent domain unless in the case of overriding public benefit resulting from that use*.

Second, when we ran into Mr. Levin Friday morning at Teresa’s on Montague Street (a favored location for “power breakfasts”) we asked him about his attending the hearing and he wasn’t clear that he would make it: He spoke about the number of doors he is needing to knock on these days. This notwithstanding, Mr. Levin spoke critically about the way the project had degenerated since his above statement, together with the new $100+ million package of giveaways with which the MTA recently sweetened the developer’s deal. (We are supposed to be following up with Mr. Levin to interview him more thoroughly on his positions, something he mentioned Friday morning that we might convert to an e-mail chore.) It looked as if nearly all of Mr. Levin's opposing candidates in the race for the 33rd were there for the press conference. We'll see if Mr. Levin shows up tomorrow.

Whapped Up Side of the Head: BAM!

One of the early testifiers in favor of the project was the heavily-hissed Alan H. Fishman, Chairman of the Brooklyn Academy of Music. The reasons he said that BAM was supporting the megadevelopment sounded to our urban planner’s ears rather like an urban planning analysis of why Atlantic Yards might constitute a constructive overhaul of the Fort Greene and Prospect Heights neighborhoods in which Atlantic Yards is to be plopped. Frankly it didn’t sound like a good analysis to us and it reminded us of how the Brooklyn Museum went off track and betrayed the Brooklyn Community by “honoring” Bruce Ratner while he was trying to sell the city and sate on the idea of giving him more subsidies. It also seemed a dicey PR move for BAM to be taking a position that is likely to sincerely bother many of its informed and educated patrons. Isn’t this the kind of thing that people cancel subscriptions over?

We caught up with Mr. Fishman just outside of the door noting that it was the second time we had heard BAM giving public comment in support of the megadevelopment. Mr. Fishman said that it was the first time we had heard him deliver these comments (it was somebody else before). We noted what had been yelled out in the room as Mr. Fishman departed the lectern, that developer Bruce Ratner was on the board of BAM. Yes, said Mr. Fishman, Bruce even used to be chairman of the board some time ago.

We then asked Mr. Fishman how his attendance to present BAM’s position in favor of the project had been handled, who he had consulted with beforehand. It turned out that Mr. Fishman had discussions with Bruce Ratner about the development issues he had talked about in his testimony on behalf of BAM but that he had not discussed the position that BAM would be taking about redevelopment of the BAM neighborhoods with the BAM board. Mr. Fishman pointed out that he was also the Chairman of the Downtown Brooklyn Partnership and chairman of the Brooklyn Navy Yard (Directors of the Yard are appointed by Mayor Bloomberg) and he said “also chairman of a lot of other things in Downtown Brooklyn.” In his testimony Mr. Fishman had mentioned his position as chairman of the Downtown Brooklyn Partnership but said specifically that he was speaking to represent BAM in his remarks and to discuss BAM’s “relationship” with the project. In his remarks he said that BAM was calling upon all parties to endorse “this highly promising development plan.”

So the taking of this position by BAM was handled at the executive level without board authorization we asked? Yes, Mr. Fishman told us.

Mr. Fishman turned things around by asking us a question. He wanted to know, “setting process aside” whether we thought that the megadevelopment was a bad a project “from a community point of view, from a neighborhood point of view from an urban planning point of view”

It is an interesting impulse to want to set process aside, we told Mr. Fishman, precisely because it is the setting aside of process that has given Atlantic Yards its shape.- We hadn’t yet testified but this was one of the things we had already written into the testimony we had prepared.- Because Atlantic Yards is a developer-initiated, developer-driven project its whole design reflects the fact that it is designed and tailored to soak up subsidy and benefit for the developer by diverting public resources. Mr. Fishman suggested that was a separate issue. We said that to us the project clearly looks like something designed to benefit a developer and not the public. Mr. Fishman said that might be true. In other words, we told Mr. Fishman that the project is not only a very bad project but how bad it is cannot be separated from the way in which process was set aside. (One lesson that Atlantic Yards certainly raises starkly is that when one sets process and procedure aside, you had better get a good result rather than striking out on both counts. Obviously, Atlantic Yards is especially problematic because of its simultaneous failure.) Mr. Fishman said he disagreed with us that the project was a bad project.

We suggested to Mr. Fishman that in his BAM capacity he needed to be speaking from the standpoint of a 501(c)(3) community betterment point of view and that he should be expressing what wold be good for the community from the community’s standpoint and not from the developer’s standpoint.

We asked Mr. Fishman what kind of thinking was there on the part of the BAM board about the Atlantic Yards project. We asked whether there was disagreement or division and whether everyone was in agreement with him. He said he had “no idea.” We asked him if he thought it would have been appropriate to find out the thinking of the board before coming out to make his statement. We pointed out that a lot of people viewed the project as destructive to the community and to Brooklyn. When I asked Mr. Fishman if he would still have delivered his statement if most of the BAM board was opposed to the project. Mr. Fishman responded, “I’m done. We’re not talking anymore.”

A Few More Politicians

We were out of the main hall talking with Mr. Fishman when Borough President Marty Markowitz, who never met an Atlantic Yards developer-request or public-shortchanging he didn’t endorse, spoke to predictably mixed reactions. His spiel was standard Marty AY stuff: “Since the very first Atlantic Yards conversation took place my opinion has not changed. I still believe that this is a project that will benefit . . . etc.” Markowitz has not faltered no matter how much the project has changed and no matter how much more in giveaways have been piled on. No matter. Nothing has ever caused Mr. Markowitz to have even the slightest criticism of the project from whose developer he takes substantial money. The only possible slacking we might note is that Markowtiz did not send out a laudatory Atlantic Yards press release yesterday although Markowitz did send out a laudatory press release yesterday when the City Council voted to approve an incompetent or insincere rezoning plan that will terminate Coney Island’s history as an amusement area.

Besides Markowitz, Assemblyman Alan Maisel was the first (and only?) elected official to give testimony in favor of the project at the hearing. Maisel represents the 59th Assembly District in lower Brooklyn where Jamaica Bay almost becomes Queens. His district, bordering the Rockaways, contains New York’s first airfield, Floyd Bennett Field, Marine Park, Mill Basin, Mill Island, Paedergat Basin, Bergen Beach and Georgetown. It surprises us that any politician these days give such testimony. The project was bad and highly controversial before and now it is so much worse. We spoke to Mr. Maisel after his remarks to ask him if he could identify a project that he would consider a boondoggle. At this point we were interrupted by a project opponent telling Mr. Maisel that he was "fraud." Mr. Maisel responded by telling the opponent “You’re a fraud too” and then for some reason “And you know me very well.”

We returned to our question for the Assemblyman: “Just as a reference point, can you identify any single project, a single project that you would consider a boondoggle.” Mr. Maisel responded that he didn’t really want to talk to us. “One project, one project,” we said, “if this isn’t a boondoggle what is a boondoggle?” At this point Mr. Maisel asked that we reidentify ourselves. We did and when then Mr. Maisel said “I don’t really care.”

We left off, saying to Mr. Maisel, “So you are a public official and you can’t identify any boondoggles, any misspending of public money?” The assemblyman excused himself to exit the hall and then several minutes later quietly came back in the other door to sit at the back. We wonder, do Mr. Maisel’s constituents know how many billions in taxpayers dollars are being spent on a no-bid basis to enrich developer Bruce Ratner?

The Boondoggle Question Repeated

We were sitting with one of our former colleagues from the state finance agencies (who also testified against the project) when she pointed out that Kathy Wylde, the president of the Partnership for New York City, was present sitting near the front. Open-mindedly our colleague entertained the idea that Kathy might be testifying against the project as we both were. Everyone at my former agencies tended to be pretty aware of Kathy and we certainly all knew she was far and away bright enough to know what’s what and have good judgment. We explained to our colleague that Kathy had already testified in favor of the project at two other hearings we had attended. We mentioned the piece Norman Oder had written about Kathy’s testimony before the MTA Finance Committee and mine following, that dealt with the way the Partnership’s support for the project was “evolving” to support the project even as it degenerated. (See: Tuesday, June 30, 2009, The Partnership for New York City's evolving (and misleading) support for Atlantic Yards.) Mr. Oder's piece has video of the testimony we both gave. We also mentioned that Ms Wylde was in favor of eminent domain (“eminent domain abuse” we corrected ourselves- We all are in favor of eminent domain.) and the article we had written about this: Monday, July 6, 2009, Wylde Ideas, Making For a Wrong Partnership. We commented that we didn’t think that support for these bad ideas had been Rockefeller’s aspiration when the Partnership was set up.

Ms. Wylde got up heading to the back of the room and so did we so we could talk to her. Something was up. It turned out to be a press conference by the project supporters driven inside by the rain. Before the press conference Ms. Wylde needed to confer privately with Senator Marty Golden.

We asked Ms. Wylde whether she was there to testify or would be submitting something in writing. She said she wold be testifying personally. That did not come to pass. Later on we were there when Ms. Wylde’s name was called by the hearing officer but Ms. Wylde had departed.

Ms. Wylde had apparently read our last article about her testimony following up on Norman Oder’s about it. She said that she didn’t remember our working on the very much lower density project on the other side of Atlantic Avenue across from the Atlantic Yards site. It is true that we worked mostly in a supervisory capacity without calling attention to ourselves. (We had also worked on the site long before while at the NYC Housing Development Corporation.- A lot of people worked on the site over a lot of years.)

We asked Ms. Wylde about information that had not been made available by Forest City Ratner or ESDC at the informational meeting that previous week: “Do you know how much subsidy is going into the project?” She seemed to regard us askance. “I know as much about the project as you do,” she said. “No, seriously,” we said, “Do you know how much public subsidy is going into the project?” Ms. Wylde repeated herself, “I know as much about the project as you do."

We, in fact, knew that we would be addressing the amount of subsidy going into the project in our testimony. While it involves calculation of a somewhat shifting amount, because we had spent some time focusing on the numbers, we knew that it would be a minimum of between $2 and t$3 billion. We also knew that we had done some calculations how many additional hundreds of millions of dollars the new  most recent MTA giveaways tallied up to and that we had spent some time looking at what a proper value would be for the MTA’s sale of the right to name two of its subway stations and the MTA's giving up of it's ability to autonomously design the New York City subway map without interference from Forest City Ratner. (See: Sunday, June 28, 2009, Naming a Problem: The MTA Gives Ratner the Right to Name Brooklyn Subway Stations “Barclays”)

There were various people standing around as the press conference assembled. We got to meet and talk with Eric A.Ulrich, who is actually is the youngest serving Member of the City Council and is running for re-election as a Republican in his Queens 32nd Council District. Mr. Ulrich’s Queens City Council District is pretty much right next to Alan Maisel’s Brooklyn Assembly District, again being on Jamaica Bay and including such neighborhoods as Howard Beach (He has an “active membership in the Knights of Columbus, Kiwanis Club of Howard Beach.”)

We asked Mr. Ulrich the same question we’d asked Assemblyman Alan Maisel: What did he think was the biggest boondoggle project in the city. He looked quizzical and asked about why were asking the question. We explained that it seemed to be an essential question to ask politicians because wasn’t it the job of politicians to recognize the misspending of public money? That seemed to make sense to him so we asked again. He thought for a moment, smiled and said “Certainly not this one.” “So you have a candidate for a project that is a bigger boondoggle?” we asked. “As a point of reference, what is it and what makes it a bigger boondoggle?” Mr. Ulrich didn’t have a project to name.

We asked Mr. Ulrich whether he knew how much subsidy was going into the Atlantic Yards project. Kathy Wylde was standing right beside us in the crowded room and uncomfortable with our asking the question we had just asked her, wincing a little. Though we asked more than once Mr. Ulrich had no answer and apparently did not know how much public money was being plowed into Atlantic Yards. Earlier we wondered whether Mr. Maisel’s constituents know how many billions in taxpayers dollars are being spent on a no-bid basis to enrich developer Bruce Ratner so to be fair we must also wonder whether Mr. Ulrich’s constituents happen to know this.

While we are in the process of such wondering, we should wonder about the constituents of Marty Golden. Golden’s Senate District overlaps a bit with Mr. Maisel’s, also including Marine Park on Jamaica Bay but it sweeps more east over to Bay Ridge, Dyker Heights and Bensonhurst.

Mostly we didn’t see elected representatives from around the project assembling for this press conference except for Delia Hunley-Adossa, the challenger to quintessential Atlantic Yards opponent council member Tish James from the 38th Council District. Delia Hunley-Adossa’s campaign is apparently funded by Forest City Ratner by way of not for profits set up to support Ratner. (See: Friday, March 27, 2009, Behind Hunley-Adossa's campaign, treasurer Nimmons heads another dubious nonprofit, with Ratner funding.) By contrast, at the rally and press conference in opposition to the megadevelopment the candidates and politicians from the area around the project, the 33rd, 39th and 38th Council Districts were copiously present.

Later on that afternoon we were able to ask Ms. Hunley-Adossa if she knew how much public subsidy was supposed to be spent on Atlantis Yards. We could evoke no response from her whatsoever nor from any of the people who were making themselves available for photo ops at the time. She was, however, very good at smiling for pictures at the same time she did not respond to the repeated asking of the question.

We did see John Heyer, candidate for the 39th Council District (de Blasio’s seat), floating around the room with the rest of the people who had come in out of the rain. Mr. Heyer previously described his qualms about the project to us in great detail. His qualms included objections to the public taxpayer funding of the arena, the project’s density and poor design, and the way in which the MTA was mismanaged and not serving the public in getting less than full value of the railyards from Ratner. This was before the project degenerated and the MTA piled on hundreds of millions more in Ratner giveaways. A week prior to this we chatted with Mr. Heyer at the informational meeting on Atlantic Yards where he expressed disgust at these new additional MTA giveaways.

Mr. Heyer has more than one capacity in which he attends events these days: He is not just a candidate. He is also an assistant to Brooklyn Borough President Marty Markowitz.

We didn’t find out exactly what Mr. Heyer might be doing next in the room. At that point, before the press conference began, we had to go back into the hearing room. We were told that our name had just been called for us to give testimony.

Chatting With Bertha Lewis About the Affordable Housing Which the Ratner/ACORN Agreement Doesn’t Provide

During the break between the two hearing sessions we had a chance to meet Bertha Lewis for the very first time and that meant we got to put a question to her we had been dying to ask.

We asked Ms. Lewis why the MOU (Memorandum of Understanding) that was then incorporated into the CAB (Community Benefits Agreement) she had agreed to with Forest City Ratner said that families who had a specified band of household incomes right in the middle would not be getting affordable housing. We had also asked this question at the previous week’s informational meeting where Forest City Ratner sidestepped providing an answer. (See: Thursday, July 23, 2009, The Hit and Miss of Last Night’s Public “Information” Meeting on Atlantic Yards.)

Ms. Lewis seemed surprised that she was being asked this question (though it seems extremely obvious why it should be asked) and she indicated that she somehow didn’t understand the question that was being asked. We can be extremely patient and explained it to her. You have an agreement with Forest City Ratner, an MOU incorporated into the CBA. (She understood this.) It provides and specifies what affordable housing will be provided. (Ms. Lewis understood this too.) And it does so by setting forth in stratified bands, the various incomes of the families to whom that affordable housing will be provided. (Yes to this too.) And right in the middle there is a specified band of incomes of people, families who will not be having any of that the affordable housing provided to them. (Right now that band is families with incomes from $38,407.00 or 50% of AMI to $46,087 or 60% of AMI.) Ms. Lewis acknowledged understanding this AMI stuff.

The missing (not provided for) band is right above the incomes for which the tax code would require that units be provided. We said this to Ms. Lewis.

(What we did not say to Ms. Lewis involves background the reader will want to take into account in assessing the rest of Ms. Lewis’s response. Right above the missing band are units that are close to at a level at which the market might provide units. Rents for those units would be $2,880, $2,304 or $1,536 per month and the units could be exceptionally small in size- See our previous post.)

Our exchange with Ms. Lewis then proceeded as follows:

BL: I think you are just wrong- Here’s the deal. I don’t know how many affordable housing units that you’ve built, I don’t know if you’ve had to do affordable housing but that’s what we do.* And here’s what we did: Everybody whether from low to moderate to middle, everybody across the board shares in this. So I don’t know what your point is, I really don’t.

(* Our MDDW resume actually tallies this experience in dollar, not unit count terms “Facilitated and participated in the issuance of over $36 billion dollars in bonds and over $390 million in State appropriated subsidy between 1993 and the end of 2006.” Though not all of that is affordable housing, the housing probably constitutes many multiples of what Ms. Lewis is conceiving of. In addition, we did many additional units from 1981 to 1993.)

NNY: “So there isn’t a missing. .”

BL: “I prevented a project from being totally luxury. So let me ask you, since you are looking at New York, I want you to tell me every other project that’s being built down here- you tell me about their bands, and then we can talk. OK?

NNY: . . “You negotiated units that were required by the tax code. . .”

BL: What did you negotiate? Don’t tell me what’s required by the tax code. I build. I am a developer.”

NNY: “I believe that if you look at the missing band of units, because I used to negotiate. . ”

BL: “Don’t tell me about a missing band of units. Here’s what I want you to do, how many missing bands are in Oro?* Do you know? Do you care? No!”

(* A 303 unit condominium at Gold and Johnson Streets, about three blocks away from where we were standing. The condominium units in Atlantic Yards are similarly not negotiated by ACORN to be affordable. It is very difficult to finance condominiums with the tax exempt bonds Ratner wants, which is why condominiums are usually market rate unless other subsidies are involved.)

NNY: “So are you denying that there is a strata that is not provided for?”

BL: No, I’m not. I’m providing for everyone, low, middle, and moderate.

Ms. Lewis did not convincingly acknowledge or refute that she knew that there was a missing band not provided for in her agreement with the developer. Instead, she first told us first that we did not know what we were talking about and she then accused us of having a point that we wanted to make and said that we did not care if we lied or obstructed or what we did.

But the deal that Ms. Lewis and ACORN negotiated is the deal they negotiated. (For more on what Ms. Lewis and ACORN negotiated see our previous post and the links therein.)

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

We would have continued our conversation with Ms. Lewis further and she seemed energized enough to want to do so, except handlers (looking out for her welfare?) stepped in, interposing their bodies and telling us that the conversation was not to continue. One of them even suggested that we were harassing Ms. Lewis.

An Emissary Lauding Ratner From the MetroTech BID (Business Improvement District)

Late in the evening a young man showed up to testify in favor of the project who might not have been there except for his connection to the Metrotech BID. . .

More coming. . .

(This article is being posted and updated in segments as written.- More to follow here.)