Tuesday, October 25, 2005
A correction: Bloomberg's 'retouched' press release vs. the governor/ESDC
In a post earlier today, I erroneously concluded that Mayor Bloomberg had retouched a press release:
Is Mayor Mike Bloomberg trying to distance himself from Bruce Ratner, the man behind the controversial Atlantic Yards development? An apparently retouched mayoral press release from last March offers a clue. It deletes two sections from the original press release: a reliance on the projections of the developer's paid consultant, as well as thanks to Ratner and his company.
After making that charge, I learned that the explanation was simpler but still confounding--the mayor apparently did issue a press release, a day before the governor and the Empire State Development Corporation (ESDC), with fewer jobs promised and a reliance on the New York State Economic Development Corporation (NYCEDC) rather than Ratner's paid economist Andrew Zimbalist.
But it remains disturbing that the governor and the ESDC were relying on Zimbalist rather than a more independent agency. And it remains disturbing that the press releases from the governor and the ESDC cite both the mayor and governor--they begin with the boilerplate "Governor George E. Pataki and Mayor Michael R. Bloomberg today announced..."--and then quote Zimbalist's figures.
Bloomberg has previously been criticized for relying on the economic projections of self-interested private developers rather than more independent agencies, as in a 5/23/04 New York Times article headlined "Stadium Opponents Criticize City for Adopting Jets' Economic Study." Therefore it was disturbing to see, as I point out in Chapter 3 of my report, that a March 2005 press release from New York's mayor and governor relied solely on the economic projections of Andrew Zimbalist, Forest City Ratner's paid consultant, and that Zimbalist's report contains many dubious assumptions. The press release I was using came from the governor's office but was headlined "GOVERNOR PATAKI AND MAYOR BLOOMBERG ANNOUNCE MEMORANDUM OF UNDERSTANDING FOR ATLANTIC YARDS PROJECT IN BROOKLYN." So the mayor can be seen as partly responsible for the press release.
The March 2005 press release appears on three web sites: those of the mayor, the governor , and the Empire State Development Corporation. The latter two releases, which are identical and dated 3/4/05, contain this passage:
The project is expected to create 15,000 construction jobs and over 10,000 permanent jobs. According to an economic analysis completed earlier this year for FCRC by the economist Andrew Zimbalist, the net fiscal benefit to the City and State from the Atlantic Yards project is estimated to be at least $2.819 billion over thirty years, or a present value of at least $812.6 million.
(Emphasis added. Actually the economic analysis was completed in 2004.)
The press release on Mayor Bloomberg's web site, dated one day earlier, 3/3/05, contains the exact same text as the other two press releases, except for two key changes. (Why is it dated a day earlier? In a 3/4/05 article headlined "Deal Is Signed for Nets Arena in Brooklyn," the Times reported that Bloomberg had planned to issue a statement on 3/4/05, but did so earlier as word leaked out.)
The mayor's press release changed the number of projected jobs and didn't cite Zimbalist for the economic projections:
The project is expected to create over 12,000 construction jobs and approximately 8,500 permanent jobs. According to an economic analysis completed earlier this year for the New York City Economic Development Corporation [NYCEDC], the net fiscal benefit to the City and State from the Atlantic Yards project is estimated at $1 billion in present value over the next thirty years.
(Emphasis added.)
The mayor's press release allows Bloomberg to distance himself from Ratner's consultant, but the numbers are confusing, since there's no source for his jobs figure. While the press release contains a hyperlink to the NYCEDC's home page, no Atlantic Yards analysis is available at the site, so it's impossible to confirm that $1 billion figure. The only NYCEDC analysis I know about was dated 6/27/05 and released in response to a Freedom of Information Act request. It projects a net fiscal benefit only to the city, not the state. Also, in the memo, the NYCEDC estimates fewer jobs than Bloomberg's press release announced nearly four months earlier:
It is expected that approximately 2 million square feet of commercial space will be added to the City as a result of this project. This new construction creates the potential for 7,100 jobs to be added based on an average of 250 square feet per employee and a 7% average vacancy rate.
Note that Forest City Ratner's projection of 10,000 jobs for the same amount of space was based on 200 square feet per employee--while the industry standard is 250--and with no acknowledgement of a vacancy rate. (The source of the mayor's 8,500 jobs figure isn't clear.) Also note that the amount of office space has since been cut by more than two thirds, and thus an updated NYCEDC analysis should acknowledge some 2,229 office jobs.
Brooklyn Borough President Marty Markowitz also issued a 3/4/05 press release, citing "over ten thousand permanent new jobs."
The second change in the mayor's press release involves a deletion from the original, which contained this passage:
"Today, we are one step closer to bringing professional sports back to Brooklyn," said Governor Pataki. "But even more importantly, we are also a step closer to creating thousands of new jobs, much needed housing, including affordable housing, and providing greater hope and promise for the future. The new Arena will not only be home to the Nets, but will host local community events, as well as concerts and school athletics for neighboring high schools and colleges. I want to thank Bruce Ratner and Forest City Ratner Companies for contributing to Brooklyn's revival."
(Emphasis added)
The mayor's press release dropped the last two sentences of that paragraph, thus eliminating Pataki's praise for Ratner, who happens to be a friend of the governor's from law school.
It's unclear why the mayor's office made these changes, or why they weren't communicated to the governor and ESDC. The changes on the mayor's press release help him from seeming to irresponsibly rely on a developer's paid consultant. But the other press releases, which also attribute the announcement to both the mayor and the governor, rely on that consultant.
I had suspected, based on strong circumstantial evidence, that someone in the mayor's office revised a press release after the fact. The governor, ESDC, and Brooklyn Borough President issued press releases a day after the mayor, but promising more jobs than the mayor did. Now I suspect that someone in the mayor's office took a shared press release and revised it before it was issued, but neglected to inform others issuing the press release.
I found a New York Observer article from March, headlined "The Jets vs. Nets: Brooklyn Arena Deal Template for Stadium," which cited the mayor's press release:
The Mayor’s after-hours announcement on March 3 of a deal on the Brooklyn arena for the Nets basketball team was first seen as a pleasant distraction from his troubled negotiations over the West Side football stadium.
...Ka-boom! Out comes the press release from the Mayor’s office proclaiming "an historic project that will continue to energize the borough of Brooklyn" and bring 12,000 construction jobs and 8,500 permanent jobs. The city and state will chip in $200 million "in site preparation and public infrastructure improvements," the press release added.
...The city estimates a $1 billion return—which is good, because a new study by the Pratt Institute (the most objective source to conduct a study to date) finds that all these tax breaks could end up costing the city about $1 billion.
Other questions remain about the mayor's statements regarding Atlantic Yards. Notably, why did the mayor's office issue a press release in September citing that 8,500 jobs figure, even thought there's space for far fewer?
Is Mayor Mike Bloomberg trying to distance himself from Bruce Ratner, the man behind the controversial Atlantic Yards development? An apparently retouched mayoral press release from last March offers a clue. It deletes two sections from the original press release: a reliance on the projections of the developer's paid consultant, as well as thanks to Ratner and his company.
After making that charge, I learned that the explanation was simpler but still confounding--the mayor apparently did issue a press release, a day before the governor and the Empire State Development Corporation (ESDC), with fewer jobs promised and a reliance on the New York State Economic Development Corporation (NYCEDC) rather than Ratner's paid economist Andrew Zimbalist.
But it remains disturbing that the governor and the ESDC were relying on Zimbalist rather than a more independent agency. And it remains disturbing that the press releases from the governor and the ESDC cite both the mayor and governor--they begin with the boilerplate "Governor George E. Pataki and Mayor Michael R. Bloomberg today announced..."--and then quote Zimbalist's figures.
Bloomberg has previously been criticized for relying on the economic projections of self-interested private developers rather than more independent agencies, as in a 5/23/04 New York Times article headlined "Stadium Opponents Criticize City for Adopting Jets' Economic Study." Therefore it was disturbing to see, as I point out in Chapter 3 of my report, that a March 2005 press release from New York's mayor and governor relied solely on the economic projections of Andrew Zimbalist, Forest City Ratner's paid consultant, and that Zimbalist's report contains many dubious assumptions. The press release I was using came from the governor's office but was headlined "GOVERNOR PATAKI AND MAYOR BLOOMBERG ANNOUNCE MEMORANDUM OF UNDERSTANDING FOR ATLANTIC YARDS PROJECT IN BROOKLYN." So the mayor can be seen as partly responsible for the press release.
The March 2005 press release appears on three web sites: those of the mayor, the governor , and the Empire State Development Corporation. The latter two releases, which are identical and dated 3/4/05, contain this passage:
The project is expected to create 15,000 construction jobs and over 10,000 permanent jobs. According to an economic analysis completed earlier this year for FCRC by the economist Andrew Zimbalist, the net fiscal benefit to the City and State from the Atlantic Yards project is estimated to be at least $2.819 billion over thirty years, or a present value of at least $812.6 million.
(Emphasis added. Actually the economic analysis was completed in 2004.)
The press release on Mayor Bloomberg's web site, dated one day earlier, 3/3/05, contains the exact same text as the other two press releases, except for two key changes. (Why is it dated a day earlier? In a 3/4/05 article headlined "Deal Is Signed for Nets Arena in Brooklyn," the Times reported that Bloomberg had planned to issue a statement on 3/4/05, but did so earlier as word leaked out.)
The mayor's press release changed the number of projected jobs and didn't cite Zimbalist for the economic projections:
The project is expected to create over 12,000 construction jobs and approximately 8,500 permanent jobs. According to an economic analysis completed earlier this year for the New York City Economic Development Corporation [NYCEDC], the net fiscal benefit to the City and State from the Atlantic Yards project is estimated at $1 billion in present value over the next thirty years.
(Emphasis added.)
The mayor's press release allows Bloomberg to distance himself from Ratner's consultant, but the numbers are confusing, since there's no source for his jobs figure. While the press release contains a hyperlink to the NYCEDC's home page, no Atlantic Yards analysis is available at the site, so it's impossible to confirm that $1 billion figure. The only NYCEDC analysis I know about was dated 6/27/05 and released in response to a Freedom of Information Act request. It projects a net fiscal benefit only to the city, not the state. Also, in the memo, the NYCEDC estimates fewer jobs than Bloomberg's press release announced nearly four months earlier:
It is expected that approximately 2 million square feet of commercial space will be added to the City as a result of this project. This new construction creates the potential for 7,100 jobs to be added based on an average of 250 square feet per employee and a 7% average vacancy rate.
Note that Forest City Ratner's projection of 10,000 jobs for the same amount of space was based on 200 square feet per employee--while the industry standard is 250--and with no acknowledgement of a vacancy rate. (The source of the mayor's 8,500 jobs figure isn't clear.) Also note that the amount of office space has since been cut by more than two thirds, and thus an updated NYCEDC analysis should acknowledge some 2,229 office jobs.
Brooklyn Borough President Marty Markowitz also issued a 3/4/05 press release, citing "over ten thousand permanent new jobs."
The second change in the mayor's press release involves a deletion from the original, which contained this passage:
"Today, we are one step closer to bringing professional sports back to Brooklyn," said Governor Pataki. "But even more importantly, we are also a step closer to creating thousands of new jobs, much needed housing, including affordable housing, and providing greater hope and promise for the future. The new Arena will not only be home to the Nets, but will host local community events, as well as concerts and school athletics for neighboring high schools and colleges. I want to thank Bruce Ratner and Forest City Ratner Companies for contributing to Brooklyn's revival."
(Emphasis added)
The mayor's press release dropped the last two sentences of that paragraph, thus eliminating Pataki's praise for Ratner, who happens to be a friend of the governor's from law school.
It's unclear why the mayor's office made these changes, or why they weren't communicated to the governor and ESDC. The changes on the mayor's press release help him from seeming to irresponsibly rely on a developer's paid consultant. But the other press releases, which also attribute the announcement to both the mayor and the governor, rely on that consultant.
I had suspected, based on strong circumstantial evidence, that someone in the mayor's office revised a press release after the fact. The governor, ESDC, and Brooklyn Borough President issued press releases a day after the mayor, but promising more jobs than the mayor did. Now I suspect that someone in the mayor's office took a shared press release and revised it before it was issued, but neglected to inform others issuing the press release.
I found a New York Observer article from March, headlined "The Jets vs. Nets: Brooklyn Arena Deal Template for Stadium," which cited the mayor's press release:
The Mayor’s after-hours announcement on March 3 of a deal on the Brooklyn arena for the Nets basketball team was first seen as a pleasant distraction from his troubled negotiations over the West Side football stadium.
...Ka-boom! Out comes the press release from the Mayor’s office proclaiming "an historic project that will continue to energize the borough of Brooklyn" and bring 12,000 construction jobs and 8,500 permanent jobs. The city and state will chip in $200 million "in site preparation and public infrastructure improvements," the press release added.
...The city estimates a $1 billion return—which is good, because a new study by the Pratt Institute (the most objective source to conduct a study to date) finds that all these tax breaks could end up costing the city about $1 billion.
Other questions remain about the mayor's statements regarding Atlantic Yards. Notably, why did the mayor's office issue a press release in September citing that 8,500 jobs figure, even thought there's space for far fewer?
# posted by Norman Oder @ 6:40 PM 
