Affordable Housing Institute : US

[Continued from Part 1 and Part 2.]

Why should the public have a voice?

In political terms, scale. That many affected neighbors means that many voters, and for political survival, voters must be heard.

 

 

Imagine if we all voted!

 

What’s the antidote to anti-development voters? Pro-development voters. Developer Ratner has found them in an unexpected place:

 

[State Assemblyman Roger Green] had helped launch a group called BUILD, Brooklyn United for Innovative Local Development, which became one of the most enthusiastic signers of a Community Benefits Agreement in which Ratner promises to create public services and distribute jobs to local residents.

 

 

They’re happy they signed it.

Whether you regard it as shrewd politics or genuine policy commitment, the CBA is a good move for the developer, since it makes manifest some benefits that are often questioned in other urban redevelopment schemes.

 

 

The eight community groups that signed the document have a predominantly black membership, which set the stage for the racial subtext in the battle over Atlantic Yards. “If this thing doesn’t come out in favor of Ratner,” BUILD’s president, James Caldwell, said last year, “it would be a conspiracy against blacks.”

 

Pretty incendiary stuff, considering that we are discussing a mixed-use property.

 

 

Add racial taunts, and pull.

8. Did government cut a good deal? Government brought essential value to this transaction. Indeed, by contributing the land, it enabled the development, which would normally entitle one to a founder’s equity-type share. Beyond this, government provided subsidies. What did government provide, and what has it secured?

Atlantic Yards’ 2,250 subsidized apartments are among its strongest selling points, a seemingly ­apple-pie benefit trotted out in every press conference and direct-mail flyer. Stuckey, doggedly on-message, manages to use the phrase “affordable housing” five times in two minutes. Not once does he mention the 4,610 market-rate (unaffordable?) apartments and condos to be built.

 

 

Affordable being one-third of total residential (2,250 / 6,860, or possibly fewer) is very reasonable — but then there is all that commercial and office space. And the funding

The city and state are kicking in $100 million each in cash to help Ratner; tax breaks could push the public bill to anywhere from $500 million to $1.5 billion.

Assessing whether the public got value for money can be a very complex exercise — so shouldn’t we trust the local elected officials? They all seem satisfied. But transparency has its beneficial side-effects, for it enables the dedicated amateur to have something to say:

 

 

The opposition’s greatest resource hasn’t been Goldstein or the Hollywood stars but one unknown man working late at night in his Park Slope apartment. Norman Oder, 45, has a full-time day job as an editor for Library Journal, but for most of the past year, he has spent at least 25 hours a week dissecting the details of the Atlantic Yards plans and posting his analysis at atlanticyardsreport.blogspot.com.

 

 

Anyone interested in delving deeper in Atlantic Yards should head over to Mr. Oder’s blog, which is a veritable trove of digging, posting, analyzing, and commenting.

Oder is a skeptic in the tradition of I. F. Stone, proving how much can be accomplished with a URL and an obsession.

 

 

Stone loved exposing the soft underbelly of government

8. Who out-traded whom? When government and the private sector negotiate, the results should not be zero-sum (I win, you lose) but positive-sum (we can both win). However, even in a positive-sum game, someone usually comes out better, gaining a larger proportion of the value created. Has the New York government been out-traded here?

The government, naturally enough, is confident:

[Deputy Mayor Daniel] Doctoroff says he drove a hard bargain: “They wanted a lot more money.”

 

 

And she’s not for sale

You gave them less than they demanded? Well, that’s dispositive.

 

Still, this is a major point of contention for Ratner’s critics, who want to know exactly how much Ratner will profit in his quest to help Brooklyn. Despite the Ratner team’s claims of transparency — “I don’t know, other than to have people sitting in my office, how you could make it any more transparent!” Stuckey says — FCR refuses to discuss how much it expects to clear, saying it’s a public company and can’t risk accusations it’s manipulating the stock price.

 

The only public documentation of profit appears to be a nearly illegible one-page form filed with the MTA labeled pro-forma cash-flow statement. It seems to show Ratner with a profit of $1 billion. Real-estate expert Jeffrey Jackson ran all the available Atlantic Yards numbers and came to the same rough conclusion. “It’s difficult to quantify the profitability of the arena,” Jackson says, “and the return will be impacted by the final mix of financing. But Ratner should make around $700 million to $1 billion—about a 25 percent return. That’s pretty good.”

 

 

“A billion? That’s pretty good!”

Blogger Norman Oder has spent hundreds of hours banging his head against the data opacity:

Struck by what he considered the weakness of the Atlantic Yards coverage in the Times (which is partnering with Forest City Ratner to build its new headquarters in midtown Manhattan), Oder set out to write one piece of media criticism. But as that essay grew into 160 pages, Oder kept finding more Atlantic Yards issues that sparked his curiosity.

 

 

His blog breaks down every arcane detail related to Atlantic Yards; he delights in reality-checking some of Mr. Ratner’s eye-catching claims. For instance, Mr. Ratner’s promise of 15,000 Atlantic Yards construction jobs turn out to be 1,500 people a year, working for ten years.

Even with all his work, Mr. Oder has been unable to plumb the depth of ESDC’s transparency, for instance in $1.4 billion boon:

The Empire State Development Corporation (ESDC) claims that the Atlantic Yards project would provide a huge fiscal boost, $1.4 billion in new city and state revenues in excess of “the public contribution” over the next 30 years.

 

 

The problem: there’s no way to see how the ESDC, in the General Project Plan (GPP), arrives at that calculation.

Nor has Mr. Oder gotten to the bottom of the fiscal impact, the public cost, or the affordability, commenting via personal email that:

Note that these posts do not attempt to analyze the cost of the affordable housing, which for now is a bit of a black box to me and most people.

Almost enough to make me want to tackle the affordability calculations myself!

 

 

I’ll bet you can’t figure out the affordability bargain!

9. Has there been a good process? At the heart of Mr. Oder’s extensive blogging, and Chris Smith’s article, is the sneaking suspicion that the elected officials, dazzled by the prospect of revitalization, ribbon-cutting, new construction spending and new taxes, have let themselves be hypnotized by an all-too-smooth operator.

 

 

“Now, my darling, why would you be suspicious of me?”

Mr. Ratner and company have certainly worked hard to round up their support:

For their efforts on Ratner’s behalf, Green and other community representatives received terrific and creative commitments in the Community Benefits Agreement, minority job training and below-market housing chief among them.

 

 

As I noted, the Community Benefits Agreement is good politics and good policy.

 

 

Other benefits are more troubling. BUILD, the organization Green helped found, was tapped to help recruit minority construction trainees for Atlantic Yards, even though it has no experience in the field. At first Ratner and BUILD denied a financial relationship. Then the Daily News discovered an IRS filing in which BUILD said it expected to receive $5 million from Ratner.

Not only is money changing hands, but the recipient’s reflexive initial denial encourages suspicion.

 

 

But it was plausible, wasn’t it?

At least four organizations that signed the CBA have received some form of payment from Ratner, totaling more than half a million dollars. The tactics, say critics, mean that Ratner purchased the “community” with which he negotiated.

 

Mr. Ratner has also used a novel form of argument:

 

 

While he wasn’t able to win over Millman—or Tish James, who represents the City Council district where Atlantic Yards would be built—Ratner has still been deft at portraying the “real” community as being on his side. He’s flipped the debate upside down, depicting the old-timers as open to progress and casting as the enemy the white, gentrifying, brownstone-owning, white-collar, semi-recent arrivals to the neighborhood. In other words, me.

In part that’s come through the obvious public-relations tactic of recruiting celebrity spokesmen—from Heath Ledger, of Brokeback Mountain and Boerum Hill, to Rosie Perez, lifelong Brooklynite and member of the Spike Lee ensemble—which has given the anti-Ratner campaign a not-always-helpful tinge of radical chic.

Meanwhile, Brooklynite and science fiction author Jonathan Lethem has found himself drawn into the issue as well:

 

 

“I started to feel the resentment of having been tricked,” Lethem says. “This wasn’t about a basketball arena and a Gehry building. And the opposition is not about a given building being torn down or fetishizing some particular half-ruined part of the city. I want to be the first to say that there ought to be development on the rail yards.”

 

 

Mr. Lethem fears the false dichotomy: any development means this development. Writer Smith also feels crowded into a political corner:

In looking at Atlantic Yards up close, it’s outrageous to see the absolute absence of democratic process. There’s been no point in the past four years at which the public has been given a meaningful chance to decide whether something this big and transformative should be built on public property. Instead, race, basketball, and Frank Gehry have been tossed out as distractions to steer attention away from the real issue, money.

The fundamentals of the project — an arena plus massive residential and commercial buildings — have never been up for discussion.

 

 

We’ve kept a close eye on it throughout.

If true, then that is a fundamental breakdown of normal civic processes. Stuy Town across the river has shown us just how hot New York real estate is. If the Atlantic Yards development is so important, if the parcel is so valuable, why was it not bid, via an RFQ or RFP process?

 

 

10. What is one to think? I don’t live in Brooklyn, so as to developmental information, I’m limited to the views of those who do. Smith is conflicted:

Why—living where I do, looking at ten years’ worth of construction trucks chugging down my block, followed by increases in traffic, noise, school crowding, and buildings that will blot out the sun, not to mention 15,000 new neighbors—should I like Atlantic Yards?

 

Stuckey is brief. “If you define your existence just based on what’s good for you today,” he says, “I can’t help you.’”

I care plenty about tomorrow, for myself and for the city. And no matter how I look at it, in the end I can only conclude that Atlantic Yards is a bad deal.

 

In the end, for Atlantic Yards as it is moving forward, there are only two sides.

 

 

 

Pick one or the other

Smith finishes with a wry oxymoron:

Brooklyn is changing every day, all the time; I wouldn’t want to live here if it didn’t. I don’t kid myself that all the changes are “organic” or even desirable. But it’s an evolution instead of a cataclysm imposed from above. The opposition to Ratnerville is sometimes vitriolic, unsympathetic, irrational. Sign me up.

The transaction is scheduled to receive final ESDC approval in the next month or so (after which, if successful, it will go to the Public Authorities Control Board). Will it? Mr. Oder chronicles the latest twist:

 

 

Not another lawsuit?!?

It was just a status conference, the first skirmish in a legal war, but two lines of argument emerged yesterday as lawyers in the case known as Goldstein v. Pataki, which challenges the use of eminent domain for the Atlantic Yards project, met in federal court in Downtown Brooklyn.

On the one hand, the plaintiffs (property owner Daniel Goldstein and nine others, owners and tenants, threatened with eminent domain) will be pressed to argue that the Atlantic Yards project would provide too little public use to meet the legal standard.

On the other, the defendants (Empire State Development Corporation, developer Forest City Ratner, and city and state officials including Governor George Pataki) must stretch to contend that the project was in fact considered by a legislative body, as evolving eminent domain law seems to require.

Here we are, back at ED4ED.

 

Send post as PDF to