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EDA's Follies: Part Four
April 27, 2005: In Godzilla movies the money shot is when the big guy destroys Tokyo. With crowds of city dwellers rushing around screaming, trying to escape being crushed. But if developers Forest City Ratner, and New York State's quasi-public Empire State Development Corporation (ESDC), have their way, no one will be left to flee the mammoth footprint of the proposed Atlantic Yards Project in Brooklyn-- the neighborhood will have been destroyed long before Godzilla gets there.

The footprint of Atlantic Yards encompasses 22 acres and six square blocks. Most of the area lies within Prospect Heights, and is adjacent to one of the largest transportation hubs in New York City: the Atlantic Terminal. Where nine subway lines and the Long Island Railroad converge. Eight acres of the footprint is a Long Island Railroad train yard (Vanderbilt Yards) controlled by the Metropolitan Transportation Authority (MTA). The rest of the targeted area is a residential and commercial neighborhood. Until recently, it included 55 privately owned parcels put to residential, retail, office, and manufacturing purpose. Translating into 33 businesses, 235 employees, 125 homeowners, 209 tenants, and a 400 person homeless shelter. Structures in the low built neighborhood date largely from the early part of the last century; their conditions ranging from neglected to decidedly upscale. All in all, a fairly typical mix for NYC neighborhoods in boroughs other than solid gold Manhattan. Where independent retail ventures, small manufacturers and socially diverse neighborhoods are becoming a thing of the past.

Godzilla & Company

In December 2003, Forest City Ratner Companies, New York City's largest development firm, and its most active retail developer, announced their plan for the Atlantic Yards Project. The MTA rail yards and the neighborhood adjoining them, would be replaced by a 20,500 seat sports arena and 17 luxury residential towers. A platform would be constructed over the rail yards; part of the project would be built atop it. The sports arena would occupy about 10% of the overall area; the towers would take up the rest. A pinch of public space would be provided, as would a certain amount of government subsidized "affordable" housing. The sports arena would service the New Jersey Nets basketball team. Which is owned by a group headed by Bruce Ratner, of Forest City Ratner.

In order to come to fruition, the Atlantic Yards Project would require, by the developers' own estimate, public assistance to the tune of $1.1 billion. Studies done by economists not in the Ratner camp, place the number higher. Ratner & crew claim projected benefits, in terms of tax revenues, jobs, etc., will make Atlantic Yards a good investment for taxpayers and a revitalizing boost for Brooklyn. These projections are also subject to debate. Many believe the residential towers would financially carry the sports arena. Since urban sports arenas haven't panned out to be the gold mines of past projections.

If Atlantic Yards comes to fruition, a diverse and fluid mini- society of residential and commercial property owners, tenants, workers and small businesses, operating in a relatively free market manner, will be replaced by a behemoth luxury housing complex and sports arena jacked by public money, yet owned by one corporate entity. The arena will showcase their in-house team. Any low and middle income residents of Atlantic Yards will be carefully selected government pensioners, living in directly subsidized "affordable" housing. Administered by the New York arm of the Association of Community Organizations for Reform Now (ACORN). A national, not-for-profit, tax advantaged group with extensive involvement in taxpayer supported real estate.

ACORN's deal for their piece of Atlantic Yards requires them to pimp Forest Ratner's ride. In the "Memorandum of Understanding" struck between ACORN and Ratner in May, 2005, ACORN agrees to help "advance the Project" by "appearing with the Developer before the Public Parties, community organizations and the media". The Memorandum also includes an agreement that not-for-profit ACORN will team up with Ratner to develop 600 to 1000 "for-sale units" both on site at Atlantic Yards, and in other unspecified locations. The majority of these units will be sold to "families in the upper affordable income tiers."

Atlantic Yards is a veritable vision of urban planned, state capitalist hell. Complete with circles of affordability. Still, if enough people want Ratopia so be it. Let Forest City Ratner submit the project to local public process, negotiate to buy property within the footprint from those willing to sell, and then build to their heart's content.

But that's not the way the footprint is being played. Largely because Forest City Ratner has the quasi-public, Empire State Development Corporation (ESDC) on their side.

The ESDC is New York State's lead economic development authority. The quasi-public ESDC administers an extensive array of programs that channel billions of public dollars, both state and federal, as well as tax abatements and other advantageous arrangements, to developers and corporations the ESDC deems worthy. The ESDC is also the parent organization of hundreds of smaller, locally based development authorities statewide. The ESDC operates outside many of the strictures placed on regular government agencies and is more insulated from public oversight. The rationale being that less accountability to voters and taxpayers equals greater efficiency when boosting economic development with government power and public money.

The ESDC has declared the Atlantic Yards Project a "State Project" under New York State's Urban Development Corporation Act. This allows Forest City Ratner to override certain forms of local public review, including ones relating to planning, land use, and zoning. The ESDC is also monitoring the Atlantic Yards Project for its environmental impact-- as required by the State Environmental Quality Review Act (SEQRA). Though the state's Department of Environmental Conservation (DEC) enforces regulations to implement SEQRA, the ESDC, when involved with projects of corporations or developers, is the lead agency monitoring those projects for possible environmental damage.

The most impressive power of the quasi-public ESDC, is its ability to bestow the power of eminent domain-- the right of government to seize private property in the name of "public use".

EDA & Out

When Forest City Ratner announced the Atlantic Yards Project in late 2003, it was made clear eminent domain would be used to assemble properties within the footprint. Governor George Pataki, Senator Chuck Schumer, and New York City Mayor Michael Bloomberg were standing beside Bruce Ratner when the announcement was made, putting their imprimatur on the project. At that point, no official process had made the neighborhood open for eminent domain. In 2005, the ESDC signed onto Atlantic Yards. Their first official document declared a prime purpose of the project was to "eliminate blighted conditions". In New York State, a determination of "blight" is required in order to allow development related eminent domain.

Though describing the entire neighborhood (as opposed to a few empty lots or dilapidated buildings) in the Atlantic Yards footprint as blighted seems a stretch, New York State's criteria re blight is as broad as it is vague; which is one reason why New York is among the top states for eminent domain abuse (EDA).

Among the "blights" qualifying a home or commercial property for eminent domain is "underutilization". In other words, if you own a Mom & Pop store, and are paying less municipal taxes than might be produced by a project touted by a taxpayer subsidized developer, bulldozers could rev your way. Same story if you live in a neighborhood of 50 properties, and 10 of them are run down. No matter how tidy the other 40, you're living in a contiguous slum in need of a blight fix. And then there's the "diversity of ownership" blight, which makes "assemblage of property difficult". As in, too many cooks spoil the urban plan-- and the developer buyout. Old man Jones and that young couple down the street might not want to sell their homes no matter how fair the offer. Some folks are funny that way. Or maybe they just want to gouge. Individuals don't have the right to be as profit driven as developers using the power of the state to twist arms.

Over the last few years, arm twisting in the Atlantic Yards footprint has been intense. Even before the ESDC came on the scene, property owners in the neighborhood knew the threat of eminent domain lay behind every Ratner offer. They were told they could deal with The Rat-- or wait and deal with The State. Owners who folded got a reasonable price. Buyout agreements included gag orders and promises not to attend public meetings about Atlantic Yards. Ratner temporarily waived the gag orders in early April, so that some evacuees from the footprint could speak with the New York Times-- for an article titled "Forced to Move, Some Find Greener Grass". The New York Times was careful to disclose that Forest City Ratner is the development partner "building a new Midtown headquarters for The New York Times". Though they didn't mention the project utilized eminent domain.

4 Every Force

While the pressure being brought to bear on people living neath the shadow of the Atlantic Yards footprint is immense, Godzilla is not experiencing a complete slam dunk. Those still standing in the neighborhood, plus individuals and organizations from nearby areas, or other parts of the borough who oppose the impact of Ratopia on the larger footprint of Brooklyn, are tough minded, tenacious and capable. This is after all, Brooklyn. In the forefront is Develop Don't Destroy Brooklyn (DDDB). DDDB, plus 14 other petitioners, recently won a ruling against the ESDC and Forest City Ratner in New York State Supreme Court. The issue was conflict of interest, involving attorney David Paget of the law firm Sive, Paget & Riesel, P.C. Until Supreme Court Justice Carol Edmead ruled otherwise, Paget was working as council to the ESDC, reviewing environmental aspects of the Atlantic Yards Project. Until 2004, David Paget and Sive, Paget & Riesel had worked for Forest City Ratner. On the Atlantic Yards Project.

Since the quasi-public ESDC represents the public interest when it exercises its authority to override local laws and approval process, monitor environmental impacts, and take private property for the benefit of others, DDDB et al had argued that "it's important that the ESDC's review of the (Atlantic Yards) Project be transparent and objective." Whereas, the Ratner Companies and the ESDC argued, among other things, that no conflict of interest existed because "...the relationship between the ESDC and Ratner Companies is not adversarial, but collaborative."

For those fearing their homes will be claimed by eminent domain, it must be comforting to know that if it happens, the "taking" will done by collaborators.

Though DDDB et al, lost on some other issues raised in the same court case, their win was significant because the ESDC is often accused of being crony cozy. Criticisms of deals given to politically connected developers and corporations have been expressed by state legislators, public watchdog groups, and various New York State newspapers. Yet little has resulted. No major reforms, or in-depth investigations. So it's kind of cool that the little Davids from the Atlantic Yards footprint in Brooklyn, managed to nail the ESDC on a conflict of interest charge. Hopefully their victory will inspire others to pick up larger slingshots.

Meanwhile, Governor George Pataki, plus legislators in the New York State Senate and Assembly, have included a total of $100 million in this year's state budget for Forest City Ratner and the Atlantic Yards proposal. Even though the proposal hasn't yet worked its way through the complete state review process. Perhaps Godzilla needed something to tide him over till the real money shot.

Carola Von Hoffmannstahl-Solomonoff

"Today, New York property owners face the use of eminent domain by the Empire State Development Authority and a number of the other 640-plus state, regional and local authorities....History records a consistent effort on the part of the state's elites to take the power to scrutinize expenditures out of the ordinary citizen's reach and to remove government from the control of their directly elected representatives."

Carol W. LaGrasse, President, Property Rights Foundation of America, Testimony before the New York State Senate Judiciary Committee, Public Hearing on Eminent Domain, 04/03/06

"There is a quality even meaner than outright ugliness and disorder, and this meaner quality is the dishonest mask of pretended order, achieved by ignoring or suppressing the real order that is struggling to exist..."

Jane Jacobs, The Death and Life of Great American Cities, 1961

Sources include but are not limited to:

"Forced to Move, Some Find Greener Grass," Nicholas Confessore, New York Times, 04/10/06

New York State Senate Judiciary Committee, Senator John A. Francisco, Chairman, Public Hearing on Eminent Domain, Testimony: Daniel Goldstein, Develop Don't Destroy Brooklyn, 04/03/06

Final Disposition, Develop Don't Destroy Brooklyn, et al. v. Empire State Develop. Corp., et al., Supreme Court of The State of New York, New York County, Hon. Carol Edmead, 02/14/06

Memorandum of Understanding, Atlantic Yards Development Company, LLC (the "Developer") and Association of Community Organizations for Reform Now ("ACORN), 05/17/05

"Life in the Atlantic Yards Footprint," Daniel Goldstein, Community Gazette for District 35, 2005

Estimated Fiscal Impact of Forest City Ratner's Brooklyn Arena, Jung Kim, MS London School of Economics and Gustav Peebles, Ph.D., Columbia University, 06/21/04

Statement of Paul J. Gessing, Director of Government Affairs, National Taxpayers Union, before the New York City Council on Proposed New Jersey Nets Arena, 05/04/04

Forest City Ratner Companies-Company Overview, Forest City Enterprises Inc., www.forestcity.net

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Copyright (c) 2006 by Carola Von Hoffmannstahl-Solomonoff. This material may be freely distributed subject to the terms and conditions set forth in the Open Publication License. This license relieves the author of any liability or implication of warranty, grants others permission to use the Content in whole or in part, and insures that the original author will be properly credited when Content is used. It also grants others permission to modify and redistribute the Content if they clearly mark what changes have been made, when they were made, and who made them. Finally, the license insures that if someone else bases a work on this Content, that the resultant work will be made available under the Open Publication License as well.


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