Tuesday, October 20, 2009

Bloomberg’s Increasing Annual Wealth: 1996 to 2009

(Mayor Bloomberg above listening to public testimony about the term limits extension bill he signed immediately afterward.)

Here, as an updated quick reference for the campaign season, are figures on Mayor Michael Bloomberg’s increasing estimated annual net worth consolidated from Forbes for our article The Good News IS the Bad News: Thanks A lot for Mayor Bloomberg’s “Charity” (Monday, February 2, 2009). For more on what those numbers mean in context click to read the article.

The most reliably constant gauge of his wealth over the years are the annual figures published by Forbes in September of each year:
1996 - $1 billion
1997 - $1.3 billion
1998 - $2 billion
1999- $2.5 billion
2000- $4 billion
2001- $4 billion
2002- $4.8 billion
2003- $4.9 Billion
2004- $5 Billion
2005- $5.1 Billion
2006- $5.3 Billion
2007- $11.5 billion
2008- $20 billion
2009- $16 billion (interim March figure)*
2009- $17.5 billion
* For more on how Bloomberg's wealth went down (because he didn't see the financial crisis coming?- And how the press missed it) see: Bloomberg Update: Fire and Ice (Sunday, April 12, 2009)

For an update on how the media is not keeping up with the story of Bloomberg's wealth, the conflicts of interests involved in where it comes from and his so-called "charitable" giving see: No Real Debate About It: Press Remains Way Off Track in Presupposing Bloomberg’s “Charity” (Friday, October 2, 2009)

For our recent remarks on Bloomberg's term limits extension see: Challenging Bloomberg Unlimited (Sunday, October 18, 2009)

PS: (NOTE, Updated coverage on this subject is provided here: Sunday, October 16, 2011, Bloomberg’s Increasing Annual Wealth: 1996 to 2011. Added October 18, 2011.)

Monday, October 19, 2009

Oral Arguments On the Atlantic Yards Eminent Domain Case Before the Court of Appeals: ESDC Knows Blight and Economic Development are Pretextual

(Develop Don't Destroy Brooklyn supporters outside the courthouse this afternoon in Albany. Photo, by Tracy Collins, featured at No Land Grab via flickr Atlantic Yards Photo Pool.)

Off to Albany

We went to the oral argument before the Court of Appeals on the Atlantic Yards eminent domain lawsuit last Wednesday. You can read a report of our comments made outside Freddy’s Bar & Backroom, before we got on the bus to Albany. We said:
that Atlantic Yards should be broken up into multiple projects to create more jobs more quickly.
and
that New York’s eminent domain abuse standards are too lax.
(See: Brooklynites Bus to Albany to Fight Ratner, 14 October 2009, by Meredith Kennedy.)

The Morning after the Mayoral Debate

Our trip to Albany Wednesday morning, the day after the mayoral debate. Fred Siegel was saying in his column in the Post that morning that Atlantic Yards should have been a feature of the debate (a copy of the Post was on the bus).

Breaking Up Is Good To Do

Little did we know when we said “that Atlantic Yards should be broken up into multiple projects to create more jobs more quickly” that Bill Thompson would be making the same point about Bloomberg’s megadevelopments at a Crain’s breakfast the very next morning. Here is the New York Observer Story about Thompson’s remarks at that breakfast: Thompson on Mega-Development: Look to Battery Park City, by Eliot Brown, October 15, 2009. There is also video available. You probably also will want to read our thoughts on why (in addition to creating more present-day jobs more quickly) breaking up the megadevelopment project into multiple parcel will bring in higher developer bids for the MTA for its property. (See: Monday, October 19, 2009, Thompson’s Advocated Multiple Parcels (a la Battery Park City) vs. Single-Developer Mega-monopolies Should Boost Developers’ Bids.)

Illegitimate Origin in the Bed of Albany Politics

If you want an entertaining account of what it probably would have felt like for most people to be attending the afternoon Court of Appeals arguments (plus view some pictures if you click through), see Eliot Brown’s account in the Observer: Atlantic Yards at New York's High Court. Mr. Brown has one of the best lines in all the coverage offered:
A bit of background: The Atlantic Yards project is no stranger to Albany.
Which is to say that when you give an account of the project’s origins you have to explain that it was born, not so strangely, illegitimately, in the bed of politics.

Best Coverage

If you want to read what is actually far and away the best coverage of the hearing, go straight to the thorough, careful and balanced account by (of course) Atlantic Yards Report: At eminent domain oral argument, judges skeptical of both sides; court spends more time on process, low-rent housing issue than AY as sweetheart deal (Thursday, October 15, 2009). It includes some excellent embedded video, including video of Matt Brinkerhoff, the counsel for the plaintiffs explaining how he thought the arguments were received.

A Lot More Coverage and a Lack

There is a huge amount of coverage of the case available. We are fascinated that it was covered by Tokyo television while essentially being skipped over by the print edition of the Times. The Times used to cover eminent domain issues (one might even say somewhat critically). Did that coverage stop when it acquired its new headquarters through eminent domain or when it became business partners with Forest City Ratner, the company now abusing eminent domain for Atlantic Yards? Silly question! Those two events were actually one in the same, Forest City Ratner developed and co-owned the Times headquarters with the Times. (The Times has since sold out its interest.)

The Big Picture

Most of the coverage of the hearing, other than Atlantic Yards Report’s, is not that elucidating because it is confusing and tends to lose its bearing. The court’s reaction to the case is hard to gauge. As we have commented before, there is a lot of hypertechnical stuff floating around in these court environments. We think that however important it is to pay attention to technicalities when dealing with the law, it’s everybody’s job to keep their eye on the big picture. The big picture as we’ve said is that:
Eminent domain is being used pretextually and at sad cost, with no actual benefits to the public, causing blight not addressing it, for the purpose of benefitting Forest City Ratner with a self-prescribed monopoly that eliminates free market competition.
See: Tuesday, October 13, 2009, Not Accepting Pretexts To Lose Sight of What Justice Requires (AYR’s Post About the Court of Appeals Wednesday Hearing on Eminent Domain Case)

ESDC Helps Us See the Big Picture!

Read Atlantic Yards Report if you want to sort out the hypertechnicalities for yourself. If you don’t want to spend the time perhaps we can give you a quick takeaway of what the Wednesday court arguments were about. In fact, we think that one way we can do it is with ESDC’s assistance. ESDC, (the State Urban Development Corporation doing business as the “Empire State Development Corporation”) is the defendant state agency that the mega-project’s opponents are suing. ESDC knows what the big picture is and that can help us to understand what it is all about too. We shall proceed in that vein.

ESDC obviously knows what the big picture is and that’s why:
1.) immediately after the oral arguments they issued a PR statement that states simply and falsely that the project delivers “benefit”:
“We expect that the Court of Appeals will recognize the many substantial public benefits of the Atlantic Yards project, and that the court will affirm . . .”
2.) ESDC wants only as small a picture as possible to be seen. Therefore, not surprisingly, ESDC’s case is being supported by the friend of the court brief from New York City (is partner in crime) that says the NYC’s Independent Budget Office’s report calculating that the Nets arena will be a $220 million net loss for the public should not be ignored, even though that report is the only government documentation that exists of cost vs. benefit for the mega-project.

3.) ESDC brought up the question of its pretextual actions as the first question on the merits it wanted to address in its oral argument.

4.) ESDC is fighting to be legally able to use eminent domain without considering the benefits delivered to Forest City Ratner vs. harm and absence of benefit befalling the public, without the “comparison of public and private benefits” that it didn’t perform.

5.) ESDC placed an exceedingly high priority in its argument (its very first priority beginning even BEFORE defending its pretextual conduct) on convincing the court NOT to consider the case based on the merits.
Will ESDC please make up its mind: Is this case about looking at the project benefits or not? The points above should be pretty convincing about what is going on in this case. The stated reasons for using eminent domain are pretextual. There is no question that the mega-project’s “public benefits” both in terms of “economic development” and “blight removal” are indeed “incidental” [or negative]’” AND “pretextual in comparison with benefits to particular, favored private entities.”

Gerrymandering in Albany? Really Now!

Just consider the extended exchange between Judge Smith and ESDC’s counsel (Mr. Philip Karmel) during which Mr. Oder of Atlantic Yards Reports writes he was having to `stifle’ his “spit-take,” the bottom line question of which was Smith’s “Have you gerrymandered this area to fit what the developer wanted to build on rather than take an area of real blight?”* Karmel told Smith during the exchange that property desired by a developer that couldn’t be described as “blighted,” AND which (two years after the developer’s plan was hatched) could only objectively be described as having “indica of” or “one or more blight characteristics”of blight could be condemned whenever the developer included it in a larger site even though half of the larger site wasn’t actually blighted. Later on Karmel went further to say that, irrespective of any such pretextual blight, such a developer could get any “perfectly nice” “clean” piece of property with which there was “nothing particularly wrong” if a government agency (acting politically?) were to say (pretextually) that the developer wanting to take it could make that property “more vibrant” or perhaps “more dynamic.” (Or turn it into parking lots for 25 years?)

(* We should note that Smith’s “Have you gerrymandered this area to fit what the developer wanted to build on rather than take an area of real blight?” question was appropriately covered in nearly every one of the many accounts of the hearing. If you want to see what “gerrymandered” looks like written out in Japanese cuneiform characters watch the video mentioned above.)

How Lax Can NYS Go?

During the hearing, some of the judges indicated via their questioning that they didn’t know where the restriction was or should be on taking property for “public use” if economic development was the stated (pretextual) goal. If this is the lack of restriction that would be possible in New York State when a developer initiates and without restriction draws lines around property on which he wants to get a monopoly via eminent domain, then New York protections against abuse will surely be far more lax than envisioned even by the Kelo court’s opinion.

We hope that helps you with the big picture. (We thank ESDC for their help in making our case.)

It’s Not 16 to 1, Not Even 12 to 1, But It Is 8.5 to 1- At Least This Campaign Finance Ratio Favors Thompson (David and Goliath Campaign Spending)

When it come to direct campaign finance expenditures we have noted that Bloomberg is on track to spend more than $100 million. (Based on his rate of spending and what he spent last campaign we could project $105 million, but until we find out for sure, which will be after the fact, we won’t know.)

When last calculated, Bloomberg was outspending Thompson 16 to 1. Thompson spent $4 million had raised $8 million and was having problems raising more from big donors. Looks like, in the end, Bloomberg will be outspending Thompson in direct campaign expenditures by about 12 to 1. At this point most of Thompson’s money is coming in from small contributors.

Critical Deadline With Ratio in Thompson’s Favor

Here is a new ratio that has been brought to our attention that is in Thompson’s favor. Midnight tonight is a truly crucial filing deadline. If you donate before the deadline, the City will match your contribution by 8.5 to 1. That means a contribution of $80 is worth $760 to Thompson’s campaign. Even a small contribution will go a long way. To donate go to thompson2009.com/donate.

The Thompson Bargain When Buying Points in the Polls

Even though Thompson is being outspent by Bloomberg by a tremendously huge ratio, the polls don’t reflect that kind of ratio. Support among voters projected to vote for Bloomberg is still hovering at about 52%. In other words Bloomberg is spending (in direct campaign spending) about $2,020,000 for each percentage point he gets in the polls. Meanwhile, Thompson is claiming each percent of his poll rankings at a fraction of that. He gets each percentage point at about 10% of the price: only $222,000. (Does this mean that, with matching funds each $23,400 the public contributes shifts the polls 1 whole percentage point in Thompson’s favor? Maybe.)

Real David and Goliath

It’s really much more of a David and Goliath story than that. Thompson is truly spending about $8 million dollars on his campaign, but Bloomberg is really spending much more than the $105 million he is spending on his direct campaign. When you tally it all together his campaign total expenditures may be verging on something like $1 billion. To see how what Bloomberg is spending should be calculated see: No Real Debate About It: Press Remains Way Off Track in Presupposing Bloomberg’s “Charity” (Friday, October 2, 2009).

Thompson’s Advocated Multiple Parcels (a la Battery Park City) vs. Single-Developer Mega-monopolies Should Boost Developers’ Bids

As reported in the Observer in a story by Eliot Brown (Thompson on Mega-Development: Look to Battery Park City, by Eliot Brown, October 15, 2009), Comptroller and mayoral candidate Bill Thompson at a Crain’s breakfast Thursday has begun to clarify his message about what is wrong with Bloomberg’s megadevelopments, calling for the Bloomberg administration’s single-developer mega-projects to be divided into multiple smaller parcels per the successful and proven Battery Park City model. This is quite consistent with what Noticing New York advocates and as Atlantic Yards Report points out it is essentially the UNITY Plan for the rail yards where Bruce Ratner wants to put his Atlantic Yards arena while seizing adjacent neighborhood blocks. (See: Saturday, October 17, 2009, Would you believe it? Thompson likes Battery Park City (but has ignored the UNITY plan).)

This post reprises comment we have offered on the Observer article.

Multiple Parcels Enable and Speed Development

We agree that the Battery Park City model of dividing up large development into separate parcels is the best way to go. Yes, it allows for staged development which can be good and is sometimes appropriate, but it also allows for multiple parcels to go forward simultaneously whereas a single developer would not have the wherewithal to proceed on multiple fronts at the same time. (For instance, the city was getting strong advice not to try to advance the new phases of Queens West as a single-developer site given this kind of incapacity.- Queens West had already wound up delayed under the Bloomberg administration due to the Bloomberg/Doctoroff preoccupation with the Olympics bid.)

Our “Wholesale” Disagreement With Observer: “Retailing” Parcels Increases Developer Bids Increasing Funds the Public Will Collect

There is one thing in the Observer Article that we think is misleading:
“Giving a big site to a single developer all at once—such as the 22-acre, $4.9 billion Atlantic Yards project—could bring a higher bid given, among other reasons, that the developer would benefit from economies of scale and increased values as it fills out the site.”- -
- - We think that it needs to be understood that `giving a big site to a single developer all at once—such as the 22-acre, $4.9 billion Atlantic Yards project’—could bring a MUCH LOWER bid.

No doubt everyone has heard the expressions “You didn’t pay retail for that, did you?” and “I can get it for you wholesale.” Suffice it to say, retailing sales RAISES the prices a seller can charge. Furthermore, dividing huge sites into multiple parcels increases the number of capable bidders in the game and that raises the price the government will receive. Another benefit is that it mitigates risk for the government, allowing for more flexible Plan Bs (and Cs). As Atlantic Yards Report notes (and suggests may have been understood when the Observer article was authored), the lack of alternative plans can lead to costly additional concessions later on. Or the lack of alternatives can be used as political excuses to wind with a “deal on terms more favorable to the developer.”

Doubtful “Economies of Scale” Argument

Finally, when it comes to sites as large as Atlantic Yards there aren’t actually any economies of scale for the developer because these megadevelopment sites are way past the point where any such economies max out and developers never gear up to that scale.

If there were, in fact, actual economies of scale you would see it in developers putting out the highest bid for multiple parcels all at once or on a running basis. That didn’t happen at Battery Park City although some developers did bid successfully to build more than one site.

The only thing slightly inconvenient about the multiple-parcel style of development that is that it pushes the government to the fore in terms of traditional government responsibilities like developing some of the common infrastructure such as parks and roads. But as Atlantic Yards Report has pointed out this probably means that those things that the public wants, like parks, will probably be delivered sooner.

And Properties Might Get Retailed Anyway, So. . .

Government also ought to feel chagrined if it wholesales megadevelopments to (no-bid or low-bid) developers like Forest City Ratner and those developers then retail out sub-parcels to other developers at a marked-up price. This is something we may see at the West Side’s Hudson Yards.

The Four “M”s

Not mentioned above is that single-developer development produces listless monoculture and monopoly. That way you wind up getting the four “M”s: Megadevelopment, (Mega-) Monopoly, Monoculture and Monotony.

Sunday, October 18, 2009

Challenging Bloomberg Unlimited

(Above: Bloomberg leaving City Hall just prior to Friday’s event recreating the City Hall hearing statements from a year ago that were delivered in opposition to his extension of term limits. One day Mr. Bloomberg will be departing City Hall for good. Will it be in four years at the end of a third term? In a year when he becomes governor? In three years were he to defeat Obama? Or in a just a few months if he is defeated by Thompson?)

Yesterday’s New York Times, giving us a substantial eight column inches of ink, reported how on Friday on the steps of City Hall we “gleefully recalled” our “appearance last year” at the event that recreated last year’s “raucous” City Hall term limits hearings “which paved the way for Mr. Bloomberg to rewrite the law and run for a third term.” The event, arranged by the Thompson for Mayor campaign, commemorated the anniversary of those hearings. The Times commented that the event where “New Yorkers who testified last year to return for a repeat performance” was the “most creative event” of the Thompson campaign.

Our statement, with those statements of other repeat performers, came shortly after a number of elected representatives who opposed Bloomberg’s extension of term limits spoke. Mr. Thompson was of course among them, also council members, Tish James, Bill de Blasio (now candidate for Public advocate), David Weprin (no longer running for Comptroller), and Rosie Mendez.
If you want to read the Times account of what we said which respectfully includes much of what we had to say, go to Michael Barbaro’s Term Limits Revisited. (Here as an update to this post is newly available video of the event.) Below, with helpful links is everything we said.

* * * *

Michael D. D. White’s Noticing New York Statement at the Anniversary of City Hall Term Limits Hearing

On Friday we said:

Some of you may remember the coverage of our testimony a year ago.

“Two minutes to testify?” we said. “We want five!”

Councilman Felder looked at us and said, “I’m sorry Mr. White, the two minute limit applies to you the same as everyone.”

“So, we said, you don’t like the rules about limits being changed in the middle of the game.” (The audience was in an uproar.)

And then we testified:

This is some of our testimony from 2008:
Noticing New York believes term limits' greatest value is with respect to certain city offices. First and foremost the office of the Mayor.- Parallel to our federal system.

While we tend to disfavor term limits, we are absolutely against their elimination in the middle of the ongoing 2009 election cycle.

Most objectionable is the Bloomberg/Lauder billionaires' pact designed to make the repeal of term limits a special event for wealthy Mr. Bloomberg.
Our testimony in 2008 went on to include a lot more. The rest of it is on the web. [See: Tuesday, October 21, 2008, Time to Report on the Best City Council Hearing Testimony.- The article also has links to the coverage our original statement got back then.]

Instead of reading the rest of we said, we’d like to provide this as an update.

Here is the 1997 book [holding it up] where Michael Bloomberg told the world that he would be a good mayor. (He actually tells us not only that he would be GREAT mayor and a GREAT governor . . . a GREAT president- That’s something he has, in fact, been pursuing.)

But before he tells us that he’d be a great mayor, he denigrates politicians in general, telling us what is wrong with them. He has quite a few bad things to say about politicians and then he says this.
Poll after poll shows that people rank elected and appointed officials at the bottom of the most respected list . . . I am certainly not above taking cheap shots at politicians. . . .
AND, What does he tell us you can take cheap shots at politicians for?

For their:
“hypocrisy” and their “`reelection at all costs’ mentality.”
"Reelection at all costs mentality!" "Hypocrisy!"

● This is the man who secretly strategized to ram term limits through at the last minute, using surprise and intentionally preventing the possibility of a referendum, even though he’d once said it would be a “disgrace” to overturn term limits.

● This is a man who together with Speaker Quinn used every trick in the book to twist arms to make council members vote against their consciences.

● This is the man who called up charities he sends money to tell them that they should show up to testify in favor of term limits. (He sends about a quarter of a billion dollars a year to charities.)

● This is the man who in the this week’s debate with Comptroller Thompson said that he ran because friends came to him during the recession and told him he needed to run when it has been well documented that he’d decided to run well BEFORE the financial crisis.

Term limits do not just represent a limit on the number of terms someone can be mayor. They are a check and balance on power. Such checks and balances were never so needed as with this mayor (who, BTW, says he now wants to do away with other checks on his power, the office of the Public Advocate, and he wants to strip community boards of their powers).

● During his term as mayor he became the richest New Yorker in the city.

● His companies do business with almost all the companies with which the city does business.

● His wealth went up from the time he entered politics approximately 10-fold. (It’s down just a little bit now because he didn’t see the financial crisis coming!)

● He has not honored the proscriptions of the Conflicts of Interest Board about keeping separate from his business to avoid conflicts.

● He has now appointed all of the current members of the Conflict of Interest Board who have their own tangled relationships with him.

● Not only is Bloomberg spending over a $100 million in direct campaign funds to run for mayor- During the season of the campaign he is spending a figure with charities and even City Hall controlled funds that conceivably verges around a billion total.

Checks and balances are needed with this man. They are needed so badly that when it came time for term limits to act as a check and balance on his power, he was already too powerful; he was able to simply override them.

The voters now need to provide the check and balance against this man by voting him out of office.

* * * *
The Times account of the Friday event ends with:
Mr. Bloomberg was nowhere in sight, just as he was during the Council hearings. But his presence was still felt.

At one point, a Bloomberg campaign aide stood a few feet from the press conference, smoking a cigarette. Occasionally, he turned to blow smoke in the direction of the podium.
Other Members of the Public Speaking (and Hugo Chávez as mentioned in the El Diario Endorsement of Thompson)

Of course, other members of the public spoke as well. One of them, (it may have been Martin N. Danenberg of GED for Individuals and Communities) referred to the El Diario editorial that just came out endorsing Thompson for mayor that compared Mr. Bloomberg to Hugo Chávez, “the Venezuelan president, for his all-out campaign to upend the term limits law so he could seek a third term.” (See: Bill Thompson for Mayor, 2009-10-15, and El Diario Endorses Thompson, Likening Bloomberg to Hugo Chávez, By Michael Barbaro, October 15, 2009) The comment was made that this comparison might be a little too insulting- - to Mr. Chávez- - because Mr. Chávez had at least had pursued that extension through a public referendum. The El Diario editorial speaks of how the actions of the Bloomberg administration go beyond “ simply slick scheming” and are “a gross abuse of power.”

Other speakers included recognizable community names like, Phil DiPaolo, Lucy Koteen, Jim Vogel (who sat next to us as we testified in 2008 after waiting more than eight hours to speak) and Patti Hagan who a year ago was quoted by the Times as assailing his “strong-armed knuckle-busting” tactics and by the Times and Atlantic Yards Report as thanking the City Council, sarcastically, for holding “a shotgun hearing on the just-announced shotgun marriage of Bloomberg and Quinn.”

For contemporaneous coverage and comment on the 2008 term limits hearings we particularly recommend now and we recommended then the series of pieces written by Times columnist Clyde Haberman.

Beneath the “Bloom” of Bloomberg’s Own Self-lauding Statistics

Saturday’s Times story reporting our Noticing New York remarks on the steps of City Hall appeared next to a cartoon and story about how Bloomberg rated himself in the debates (“A++”) observing that others felt Bloomberg and Thompson were both “underwhelming” that night. With the Bloombergian spending on the campaign verging on the aforementioned possible $1 billion, we have heard a lot of statistics about how Bloomberg rates himself. Significantly, the previous day’s Times had three major stories about how Bloomberg’s actual statistics on accomplishment are not as nearly as good as frequently self proclaimed. One was on the front page and two more appeared on the first page of the paper’s New York section.

The front page story (U.S. Math Tests Find Scant Gains Across New York, by Jennifer Medina, October 14, 2009) challenges the notion that the Bloomberg’s much vaunted increase in New York School test scores represent anything else than “teaching to tests” that are, in fact, increasingly easier. The scores are also perhaps inaccurate as well. In the article Thompson calls Bloomberg the “Madoff of the American education system” while his campaign spokeswoman Anne Fenton says that “Bloomberg’s D.O.E. has systemically lied about test scores, graduation rates and dropout rates.”

On the front page of the New York section there is an article (As City Adds Housing for Poor, Market Subtracts It, by Manny Fernandez, October 14, 2009) about how Bloomberg’s programs to provide affordable housing have been pretty much overwhelmed by gentrification and rent deregulation. It is not necessarily exactly a hundred percent in accord with the analysis we might offer but it provides some important debunking. One thing it doesn’t note is how many of the new housing units Bloomberg has provided are actually already existing units whose affordability has been extended with additional expenditures and perhaps some changes in program terms.

The second article appearing on the New York section’s front page about how Bloomberg’s job numbers are not actually as good as may be portrayed (Bloomberg Has Added Jobs, and Lost Some, Too, by Christine Haughney, October 14, 2009) provides bad news about the jobs that haven’t been created under the Bloomberg administration and how those that have been created pay less than New York jobs used to pay. This sort of falls in line with what Fred Siegel wrote about in his Post column the day before when he was complaining about the missed opportunities to address the city’s economic problems in Tuesday’s mayoral debate. Siegel wrote:
An alert challenger less concerned with pandering would have asked, as Thompson did not, why, even in the recent boom years, the city's rate of job creation has been so far below the average of the last 30 years. And asked why so many of the jobs that have been created are either in low-end hospitality work or at city-subsidized health-care facilities.
Where in New York is there a future for the private-sector middle class?
(See: A wasted debate: B'berg, Thompson ignore economy, by Fred Siegel, October 14, 2009.)

All Roads of Economic Consideration Lead to the Atlantic Yards and Sports Stadium Boondoogles

As media monitoring Atlantic Yards were quick to point out, Mr. Siegel’s column mentioned Atlantic Yards and the other sports stadiums as something that ought to be asked about “if the next debate is not to be as hapless.” He suggested:
* Ask the mayor if his massive subsidies for the well-to-do owners of the Yankees, Mets and Nets for new stadiums can be economically justified when they're being paid for by a middle class bridling under what are already the highest taxes in the continental US.
(See: Wednesday, October 14, 2009, Post columnist Siegel: ask the mayoral candidates to justify "massive subsidies" for new sports facilities)

Thompson has strongly criticized Yankee Stadium and Bloomberg’s failing megadevelopements but has been less than clarionly consistent about opposing the money losing ($220 million net loss) Atlantic Yards Nets arena. (See: Sunday, October 11, 2009, Thompson’s Campaign: Lacking a Clarion Message, Plus Issues of Confused “Respect”.) To be fair, by the Thursday morning (the 15th) following the Tuesday night debate (and Mr. Siegel's column), Thompson at a Crain’s breakfast had begun to clarify his message about what is wrong with Bloomberg’s megadevelopments calling for the Bloomberg administration’s single-developer mega-projects to be divided into multiple smaller parcels per the successful and proven Battery Park City model. This is quite consistent with what Noticing New York advocates and is also essentially the UNITY Plan for the rail yards where Bruce Ratner wants to put his Atlantic Yards arena while seizing adjacent neighborhood blocks.

To read more about the Crain’s breakfast, see Thompson on Mega-Development: Look to Battery Park City, by Eliot Brown, October 15, 2009. Be warned however that, as we have commented, we think that Mr. Brown, who wrote that article, gets one thing wrong in an observation he provides as an aside. We think that breaking the megadevelopments into multiple parcels will increase the amount that government will get in bids from developers. Mr. Brown suggests, we think misleadingly, that might not be the case.

We can envision what will happen in the next mayoral debate if Thompson, building on his suggestion that megadevelopment mega-monopolies, particularly Atlantic Yards, be broken up into multiple parcels takes on Bloomberg as sponsor of and enthusiast for the Atlantic Yards boondoggle. We would suggest the Thompson also propose that the arena and its $220 million net loss for the public be replaced with housing. Imagine Thompson saying:
* You don’t believe in competitive bids Mike? Why not?

* You don’t believe in providing jobs here and now with multiple developers working on multiple sites? Rather than in distant decades?

* You just believe in a mega-monopoly for one big developer, one that is going bankrupt to boot? Shutting out everyone else? Shutting out all the better local developers?

* You don’t want a lot more money for the MTA and it’s riders? You don’t think the MTA should get a fair market price for its yards?

* Instead of more housing you want a humongous gift package arena for Mr. Ratner at a $220 million net loss to the city with a mega-project that will inefficiently commit more than $2 billion overall in subsidies to one developer?
At that point, we believe that Bloomberg might finally find himself reaching his limits- - Imposed by the voters.

Tuesday, October 13, 2009

Forest City Ratner’s “Not In My Back Yard” Attitude

Here’s a quick thought. Watching Bill Maher the other night we heard an assessment that lobbyists (like, for instance, those in the health care reform debate) generally lobby for the status quo: They don’t want to see their client’s existing economic empires overturned. Those lobbying for health insurers don’t want to see the so-called “public option” for the provision of health care. Those representing the carbon fuels industries of oil, gas and coal don’t want to see any portion of the nation’s economy and efforts redirected from such exploits to something more modern even though carbon fuels contribute to global warming and even though the industries that exploit them are essentially the buggy whip manufacturers of tomorrow’s generation.

“Lobbyist” made us think of Forest City Ratner, a company that owes its entire existence to being chummy with politicians. We have commented before that Forest City Ratner isn’t really a “developer,” that it is really just a “subsidy-collector.”

Applying the thought that lobbyists lobby for industries that want protection against change, it occurred to us that Forest City Ratner is engaged in a colossal form of NIMBYism (“Not In My Back Yard”-ism) when it comes to its proposed Atlantic Yards megadevelopment. Forest City Ratner has two big government-subsidized malls adjacent to each other next to the proposed Atlantic Yards site. In other words they are the top-government-subsidized-dog in the area. It’s more than a bit monopolistic. That supremacy was going to be challenged when other real developers started developing condominiums in their back yard. (The competitors weren’t even subsidized!) “No!” said Forest City Ratner. They didn’t want this competition in their backyard. They wanted the status quo of being the only developer in the vicinity (and of continuing to rely on government subsidy and relationships.) That’s when Forest City Ratner went to government agencies to have them use eminent domain to wipe out the competition.

Yep, that seems to be the way it is: Forest City Ratner has denigrated opponents of its proposed megadevelopment as NIMBYists, yet what is motivating Forest City Ratner is that they are the biggest NIMBYists of all!

Thank goodness the MTA is now being sued by a group of legislators and community groups, challenged because it didn’t seek bids or accept bids from others (including not accepting a bid from the community coalition led by Develop Don’t Destroy Brooklyn looking to implement the UNITY plan) that would have paid the MTA more for rights to develop in Ratner’s own back yard than the Ratner firm is itself willing to pay! (See: MTA Sued To Annul Ratner's Sweetheart Atlantic Yards Land Deal, 10.13.09 and Tuesday, October 13, 2009, DDDB, Straphangers Campaign, four elected officials sue MTA, FCR to annul renegotiated Vanderbilt Yard deal.)

So, as the new lawsuit requests, let’s annul the MTA’s sweetheart contract with Ratner and put somebody else in Ratner’s back yard. They’ll even pay the MTA a higher price!

Not Accepting Pretexts To Lose Sight of What Justice Requires (AYR’s Post About the Court of Appeals Wednesday Hearing on Eminent Domain Case)

Tomorrow, Wednesday, the state’s highest court, the Court of Appeals in Albany, is hearing the case challenging eminent domain (Goldstein, et al. vs. New York State Urban Development Corporation d/b/a/ Empire State Development Corporation, or ESDC). Yesterday, Atlantic Yards Report had an excellent (necessarily long) summary of the issues the court will be hearing and considering. (See: Monday, October 12, 2009, The eminent domain battle Wednesday: an easy call for the Court of Appeals or a fresh look at blight, "public purpose," and relative benefits?) This Noticing New York post will serve as a reprise, for this site, of the comment we posted on the Atlantic Yards Report article.

The Hypertechnical and Keeping Justice In Sight

The Atlantic Yards Report is thorough, careful and intricate. One realizes when one reads the Atlantic Yards Report post the very hypertechnical level on which much of the legal discussion is occurring. As a lawyer we appreciate the importance of the technical but there is a danger that legal and government folk might just think that hypertechnical mazes could provide cover for losing sight of the big picture in order to deliver a result that would be peculiarly wrong and unjust.

Big Picture, Big Pretexts

It is worthwhile for everyone to be vigilant about not losing track of the big picture things that are going on in this case.

One of the biggest, with which the AYR post deals in a fair amount is the “pretextual” purpose for the eminent domain. The way in which public benefit which is actually “incidental,” entirely nonexistent, or negative, is also dealt with in the AYR post: The Independent Budget Office’s calculation that the arena will be $220 million net loss to the public and the lack of any cost-benefit analysis by the Atlantic Yards-promoting agencies.

The AYR post has a section on pretext that highlights two especially choice paragraphs from friend of the court briefs submitted in the case:
Questions of pretext

The IJ [Institute of Justice] brief states:
The court below gave remarkably short shrift to the contention that the project at issue in this case is simply a pretext for conferring benefits on private developer Forest City Ratner, apparently holding that a taking cannot be pretextual as long as there is any purported public benefit associated with the taking…. This rule--that the only pretextual takings are those with literally no conceivable public benefit--seems at odds with the very notion of pretextual takings: there is always, in every pretext case, an asserted public purpose, which serves as a pretext for the would-be condemnor's true, illegitimate purpose. The lower court's rule is grossly out of step with the practice of other state courts (and even federal courts).

...It is especially important to look at questions of pretext where, as here, the purported public use dovetails with the preexisting commitments and plans of private parties.

The brief on behalf of the FAC, PACC, and PHNDC [that’s Fifth Avenue Committee (FAC), the Pratt Area Community Council (PACC), and the Prospect Heights Neighborhood Development Council (PHNDC)] argues similarly:
Here, the ESDC did not make a blight finding until at least two years after the AYRP was announced, and that determination is based on such compelling public health and safety issues as "graffiti," "weeds," and "underutilization." It is disingenuous for Respondent to now allege that blight clearance was its primary purpose all along. The arena for a private professional sports team owned by the developer was conceived of years prior to the completion of the blight study upon which the taking now relies. The record strongly indicates that blight removal (whatever that means)--not "slum clearance"--is nothing more than a convenient pretext for the otherwise invalid condemnation.
Picking Pretextual Poisons

One of the hypertechnical pretextual confusions the government agencies and Forest City Ratner are purposely fomenting involves whether Atlantic Yards is to be considered as an economic development project or alternately a blight removal project. In truth, it is absolutely neither, but the government would have it pretextually be whatever they can get away with.

If the mega-project is an economic development project (which government officials are probably most instinctively prone to promote it as- and often do in the press), it makes no sense that no cost-benefit analysis has been done to demonstrate its justification. If it is instead a blight removal project then it hardly makes sense for the public to be spending billions to remove “weeds” from a gentrifying neighborhood, virtually the same weeds you can find anywhere, including the borough’s best neighborhoods like Brooklyn Heights and Park Slope. If the pretextual goal is to remove blight that still implies that there should be a “weighing” in a sort of cost-benefit fashion that more blight will be removed than created. Not so! There has been no such weighing and instead it is the reverse. Ratner’s plan creates “more” blight (actual real blight) than the ostensible blight it pretextually removes.

Couldn’t Be Anything But Pretext!

The Empire State Development Corporation’s brief (as quoted in the AYR post) says: “In any event, on the record presented here, it cannot be said that the project's public benefits are `incidental or pretextual in comparison with benefits to particular, favored private entities.’”

Quite the contrary: It can, in fact, ONLY be said that the mega-project’s “public benefits” both in terms of “economic development” and “blight removal” are indeed `incidental [or negative]’” AND “`pretextual in comparison with benefits to particular, favored private entities.’”

Actual Purpose Monopoly Banishing Competition

The actual purpose of the use of eminent domain at the Atlantic Yards site, as signed onto by the public agencies involved, is to confer the benefits of a monopoly upon Forest City Ratner, eliminating all its economic competition. The plan quashes Ratner’s competition immediately while lacking any urgency or stringency about how, during the upcoming decades, Forest City Ratner will replace the economic activity being banished from the landscape by the public agencies.

The Forest City Ratner/New York-style abuse of eminent domain is not something that should be considered as something permitted under Kelo. It violates fundamental due process putting the taking process, entirely within the purview of politically biased agencies while insulating them from the checks and balances of fair challenge. The creation of the FCR monopoly and the quashing of competition that originates with Forest City Ratner moves ahead via the protective indulgence of a no-bid process and is self-servingly designed at every step of the way to benefit Ratner; even to the extent that it is Ratner who gets to pick, proclaim and self-certify the public benefits of the project. (See: Tuesday, October 6, 2009, First Monday in October: An Open Letter to Sonia Sotomayor about Noticing an Eminent Reality.)

How Lax Can Your Get?

In big picture terms there is a serious question here as to whether New York’s highest court will deliver state eminent domain abuse standards far more lax than ever envisioned in Kelo. Will New York’s standards be so low that in New York eminent domain’s paramount purpose can be pretextual ruses that create private monopolies benefitting a single developer running the show? (See: Friday, October 9, 2009, Will New York’s Highest Court Deliver State Eminent Domain Abuse Standards More Lax than Kelo? Can ED’s Paramount Purpose Be Private Monopolies?)

So that’s the big picture: Eminent domain is being used pretextually and at sad cost, with no actual benefits to the public, causing blight not addressing it, for the purpose of benefitting Forest City Ratner with a self-prescribed monopoly that eliminates free market competition. It would be tragic if New York’s highest court allowed itself to get lost in hypetechnicality, losing sight of the big picture and promoting the peculiar injustice of permitting such pretext to persist without practical check or balance.