We seek out new posts and new inspiration

1.1 Atlantic Yards Report

Ever since I first encountered the Atlantic Yard report blog, I’ve considered it essential reading for understanding Atlantic yards, an enormous and seemingly endless current eminent-domain-like redevelopment in Brooklyn.

Single-handedly putting the New York media to shame:

Norman Oder

Single-handedly researched, written, and posted by the indefatigable and Pulitzer-prize-deserving Norman Oder, it is a sole-source reference, using the Web to publish documents obtained via Freedom of Information Act requests, chronicling public hearings, and mercilessly comparing what officials said once with what they say now.

Putting elected officials on the record:

One of the hundreds of documents posted by Norman Oder

I’ve been agog at two things:

* The extraordinary diligence that Mr. Oder has poured into his blog, even quoting people like me.

* The significance of Atlantic Yards on discussions (for or against) of eminent domain for economic development (ED4ED), which often bears on affordable housing.

Over and over, Mr. Oder had exploded public pronouncements with evidence, leaving the developer’s credibility (and that of many of its supporters, such as ACORN) in tatters.

Nonsense, everything’s fine

Most recently, his quest for transparency and truth has led him, to discover that leak-tolerant architect Frank Gehry’s original design was impossible, and that, as shown in the following excerpt, virtually nothing about Atlantic Yards will be what it was sold as:

This got the approval; who knows what will be built?

What we learned

But we did learn some important things:

* The Independent Budget Office (IBO), recalculating its 2005 cost-benefit analysis, concluded the arena would be a money-loser.

* The Metropolitan Transportation Authority (MTA) is willing to compromise with Forest City Ratner on the timetable (and perhaps the total) for the $100 million owed, as well as the quality of the new Vanderbilt Yard.

* Neither the state nor the city have updated their analysis of new revenue–already deeply flawed, because it excludes costs–to acknowledge current conditions

* The New York City Housing Development Corporation is waiting for Forest City Ratner and ACORN (which is in hock to the developer) renegotiate the configuration of the affordable housing.

* The Empire State Development Corporation (ESDC) likely will produce a revision of the Modified General Project Plan (GPP) in the next month or two, which will trigger a new public hearing.

There are many known unknowns, and we don’t know when we won’t know them

What we didn’t learn

Some other important things we didn’t learn:

* How long the project might take

* When construction might begin

* When affordable housing might begin

* Whether there are enough bonds for affordable housing

* How the per-unit cost of affordable housing compares to other projects

* Whether architect Frank Gehry is on the project

* Whether officials realized FCR decided to seek more subsidies well before the economic downturn.

* Why the ESDC lets private companies benefit from naming rights to public buildings.

Though I generally support eminent domain for economic development, Mr. Oder’s investigative reporting – all of it, I might add, from public-domain sources and out of his own pocket – reveals a seamy side to glitzy projections and hollow promises. Long may he prosper.

1.2 India Development Blog

Because we are doing some modest work in India – Slum Dwellers International in Mumbai, and SEWA Bank in Ahmedabad, almost anything to do with Indian affordable housing is interesting to us, and because India is the world’s fastest-growing democracy, and quite probably its fastest growing middle class, anything to do with Indian affordable housing is important for the wider world. Over at the India development blog [Hat tip: Yousuf Marvi], we came across this post is the next challenge scale or flexibility?

Indian MFIs typically offer very general and standardized products.  The 1st loan is often in the range of Rs 6,000-10,000 (USD $120-200), and is paid back weekly over one year.  The 2nd loan is typically about Rs 12,000 (USD $240) and the 3rd loan is about Rs 15,000 (USD $300), and repayment is done the same way with both of these cycles as was done with the 1st loan.

Microfinance remains among the last quarter-century’s greatest financial innovations, yet its very success has led to a tyranny of sameness. The more financial products, the more robust the financial ecosystem, and the greater the consumer choice.

One size does not fit all.

You might want to rethink that …

Even the most successful entrepreneurs would fall under this rigid structure, and would only be able to receive about Rs. 15,000 (USD $300) in their 3rd year of successful repayment.  If they need more capital, they will need to go to a moneylender or another MFI, regardless of their track record.

I think MFIs in India should better tailor their microcredit products to their clients.  Some clients need larger loan amounts, a monthly infusion of cash, or daily loans (e.g., auto-drivers that rent their autos at a daily rate).

Just as birds can fly only if they are smaller than a certain size, classical microfinance has upper-bound limitations.

Nothing bigger can fly: the Andean condor

When the scale reaches above a particular size, new engineering is involved.

For that load, you need new technology: the gossamer condor

In our view, microfinance will never scale to housing; instead we must introduce new products, such as what we at AHI are calling Home Asset Finance.

It could be difficult to train loan officers on how these different loan products work, and which type of client may benefit from these differentiated products, but it’s crucial that Indian microcredit becomes more flexible.  In my mind, more flexibility would benefit clients more than the growth in scale of the microcredit available today.

Yes, and we’re working on it.

Seeking the elements of a new form of housing finance

1.3 Bldg blog

On a lighter note, we [Hat tip: Janaki Blum] found the Bldg blog, which presented a great post on urban X-rays:

See the blog post’s structure?

At one point Beard refers to the “theaters and porticoes” built in ancient Rome using wealth taken during Pompey’s “eastern campaigns” in Armenia and elsewhere. However, she writes:

The term “theaters and porticoes” hardly does justice to this vast building complex, which stretched from the present day Piazza Campo del Fiori to the Largo Argentina, covering an area of some 45,000 square meters. A daring – and, for Rome, unprecedented – combination of temple, pleasure park, theater, and museum, it wrote Pompey’s name permanently into the Roman cityscape. Even now, though no trace remains visible on the ground, its buried foundations (and particularly the distinct curve of the theater) determine the street plan and housing patterns of the city above; it remains a ghostly template which accounts for the surprising twists and turns of today’s back-streets, alleyways, and mansions.

The not entirely surprising realization that the present-day street grid of Rome is actually an articulation of other, previously buried cities – cities not lost to history, then, but accessible in outline through the indirect archaeology of contemporary urban planning – reminds me of something that came up back at Postopolis! LA.

[Image: Fallen Fruit's map of the lost orchards of Silver Lake].

During their presentation, the ingenious duo Fallen Fruit mentioned that, when they were mapping fruit trees in today’s Los Angeles, they stumbled upon the borders of much older, abandoned fruit orchards. In other words, what appeared simply to be a random fig tree growing in someone’s front yard was, when seen on a map together with other such trees, actually the remnant presence of a now-forgotten farm. Those trees, to use Beard’s term, are the “ghostly template” from an earlier phase of land use.

As I’ve written elsewhere, streets and other lines of transportation are a city’s nervous system, so even today main tunnels come into New York at the Battery, because that is where the trains started, because that is where the ferries docked.

A tunnel to connect to railroad lines that have since vanished …

There is a different grid inside the grid, you might say – where each tree becomes something like a legal document, marking the outer boundaries of a lost landholding.

I love this evocation of the past still around us, forgotten. The front yard of our old house on Avon Hill Street, had two bearing pear trees, one a Bosc, the other a seckel. Every fall, Nancy used to gather both kinds, which made good eating.

Who planted the tree whose fruit I ate?

After we bought the house, I learned that our neighborhood had indeed been an orchard, and I allowed myself romantically to think that these trees were in fact survivors of that bygone age.

Perhaps I wasn’t being so romantic after all.

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Last year, intrigued by an article in New York magazine, I wrote a three-part blog post about Atlantic Yards, the multi-billion-dollar Brooklyn mixed-use property being developed by Forest City Ratner that, if completed as now contemplated, will house an arena, retail and office, condos, market apartments, and some affordable.

Mr. Ratner wants to bring Brooklyn the Nets … and much more

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.  

The centerpiece is an enormous Frank Gehry design dubbed’ Miss Brooklyn’

Back then, I was highly impressed by what Mr. Oder was doing, and commented:

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

I sent Mr. Oder a link to my post; in mere minutes I received a reply, noting some inaccuracies in the New York article and asking if I were amenable to correcting imprecisions in my post (which, of course, I was and am).  Since then Mr. Oder has regarded me as a source, quoting me on several occasions:

Lots of volatility

Smith emailed me: Even a cursory review of the financing plan materials released so far reveals that this is an extraordinarily complex undertaking, with many moving parts. The moving parts — the financing plan, with multiple phases, multiple property uses, and multiple potential sources including subsidy and concessionary government capital — mean volatility.

It could be a great financial and economic result, or a terrible one. With this much volatility, sequencing is key: what happens in what order, and who decides what changes are made to the development plan? If the developer has all the optionality — that is, control over the responsive actions taken after unexpected favorable or unfavorable outside events — and the city has none of the optionality, then it’s very likely that the developer can navigate through all the complexity to a successful deal, and achieve this result by adjusting the affordable housing to be fewer apartments, to happen later in the development sequence, and to be redefined upwards. (Anyone who does business with any government agency as a counterparty knows that managing expectations over time is a critical developer skill.)

I have to manage what the government expects

The question isn’t, “Could the developer make a lot of money?” nor even “What is the public getting and what is the public paying?” but rather, “As things change in the future, who decides how the gains and losses are shared between developer profit and housing affordability?”

Mr. Oder’s first foray into the arena was in September, 2005, when he wrote:

The New York Times Company and Forest City Ratner (FCR), which has proposed a massive set of 17 towers plus a basketball arena for the Brooklyn site (spanning at least 22 acres), are partners in building the Times Company’s new headquarters on Eighth Avenue, in Manhattan.

A thorough assessment of the Times’s coverage, from FCR’s announcement of the Atlantic Yards development in December 2003 to the present, reveals numerous stories missed, legitimate critics ignored, issues downplayed, and mistakes uncorrected.

The blog is mightier than the press release?

While the report does not accuse the Times of bias, the paper has an obligation–given its business relationship with Forest City Ratner–to report exactingly, to remove any specter of bias. For some two years, the Times has not done this.

Mr. Oder took it upon himself to do what the Times was not.  As he wrote six months later:

The report has not yet spurred the Public Editor of the New York Times to assess the newspaper’s coverage of the Atlantic Yards project. However, I do think my criticisms have contributed to a somewhat better performance by the media, including the Times.

I will continue my analysis of the New York Times’s coverage, and of media coverage in general.  But I also will continue to take a broader view of the biggest development project in the history of Brooklyn.

Ever since then I’ve had Mr. Oder’s blog, atlanticyardsreport.blogspot.com, on my blogroll, and I’ve checked in more or less every day to see what new finds he has unearthed. 

Keep digging in the dirt

The stream of information has been unending, and factual, and bit by bit, Mr. Oder has:

·         Unearthed $1.4 billion in projected tax-exempt volume cap bonds, worth (by my calculations) about $600 million of grant funds, as compared with previous statements that Atlantic Yards would be financed with purely private funding.

·         Explored Atlantic Yard’s remarkable (and very valuable!) carveout from the 421-a affordability requirements.

·         Discussed the Kelo-based eminent domain hearings that matter because the developer has assembled a parcel of this size in part using a friendly agency to take private property as eminent domain for economic development (ED4ED). 

·         Tenaciously, one might even say obsessively, compared FCR’s present statements with its past ones.

·         Observed an apparent inconsistency in elected officials’ postures toward using public funds.

Part of the [Starrett City] negotiations involves increased subsidies that would help keep the complex within the state’s Mitchell-Lama program, though the owners have already fulfilled their obligations. The Times reported:

Yesterday, Senator Charles E. Schumer sent a letter to Mr. Deane asking him to lower his sights from $1.3 billion. He said he did not object to the owners making a profit. But, Mr. Schumer wrote, “it cannot be done at the expense of middle class New Yorkers,” nor should the seller’s profit from the sale be reaped from a new infusion of government money.”
[missing quotation mark in the original]

Without opining on the fate of Starrett City, I think it’s worth noting that Schumer has not extended his concern about the appropriate balance between private profit and public subsidy to the Atlantic Yards project that he supports.

In all this, Mr. Oder has run absolute circles around the New York Times, even to the point of highlighting, and returning frequently to, the Times‘ conflict of interest in covering the story, since FCR has been developing the Times new headquarters.

Mr. Oder has done this, as far as I can tell, out of nothing more than intellectual orneriness, a sense that the full story has not been told. 

He’s also used the bandwidth freedom of a blog to post graphics, source documents, pictures, maps, anything and everything that can display information.  It’s been an astonishing, virtuoso performance.

Making the blogosphere sing

[Just in case there are paranoiacs among my readers -- hey, what's wrong with paranoia? Ed. -- I have no interest whatever in Atlantic Yards nor, as far as I know, any of the players involved, including Mr. Oder, whom I've never met nor done business with.  I'm Simply Curious.]

Just because I’m paranoid …

Aside from the storytelling, Mr. Oder’s work is bringing into the public view a fascinating case study of how a developer pursues a highly complex, interdependent project, and the interplay between public and private sector.  However Atlantic Yards comes out, Mr. Oder’s blog will serve as the definitive contemporary reference; several doctoral theses could be written just using his material as the basis for examination of public-private partnership as a financing and development vehicle.

A one-man word factory

Pulitzer prizes are awarded for ‘distinguished’ journalism in areas including investigative reporting.  Joseph Pulitzer himself was a ‘champion for the common man’ who:

“worked at his desk from early morning until midnight or later, interesting himself in every detail of the paper.” Appealing to the public to accept that his paper was their champion, Pulitzer splashed investigative articles and editorials assailing government corruption, wealthy tax-dodgers, and gamblers.

Whatever you think of Atlantic Yards — and I still haven’t made up my mind, because so many things are in flux and shifting — what Mr. Oder has done represents investigative journalism of the highest order.  He’s done the cause of public-private governance a huge service, all on a shoestring, fired (as far as I can tell) by nothing but altruistic motives.

What does it say right on the Pulitzer medal?

“For the most disinterested and meritorious public service.”

Give this man a Pulitzer.

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