Friday, September 09, 2005

 

Field of Schemes on Ratner's $100 million bid and the IBO report

Neil deMause, on his Field of Schemes site, wonders "Net loss or Net gain?" pointing out that Forest City Ratner's $100 million bid for the MTA railyard is less than the $150 million offered by rival Extell and far less than the lands appraised value of $214.5 million.

DeMause also deconstructs the Independent Budget Office (IBO) report, which predicted the arena would be economically successful. He notes: First of all, the IBO's conclusions result primarily from assumptions of how many current Nets fans would accompany the team from Jersey to Brooklyn, bringing their sales tax dollars with them - assumptions that, according to the IBO report, were provided by Ratner himself... Tweak the assumptions to have only 30% of Nets attendance represent new spending instead of 50%, and the arena would be a net loss.

Finally, while the IBO deducts the $224 million in direct cash subsidies (plus sales- and property-tax deductions) that the arena would get from the city and state, the actual public subsidy would be significantly greater - more like $451 million according to my estimates, though that could go down a bit once Ratner's increased bid is taken into account. Needless to say, tacking on an extra $227 million in costs would turn a $107 million windfall into a whole mess of red ink - so don't enter that "slam dunk" in your scorecard just yet.

 

The Brooklyn Papers points out: no one covered my report

Weighing in a week late (the Times report came out near their deadline), the Brooklyn Papers points out, in a 9/10 article headlined Report rips NY Times on Ratner, that, well, no one from the dailies covered the report.

My response, in a letter to the editor:
As the author of the report dissecting New York Times coverage of Forest City Ratner's Atlantic Yards proposal (Report rips NY Times on Ratner, 9/10/05), I'm disappointed but not surprised that daily newspapers in New York didn't cover the report's release. However, they are hardly the only audience for the report. I expect Times Public Editor Byron Calame to take a close look at it and report publicly on the issues raised. I also hope that others in the journalism world, including academics, will examine it.

For example, the Times ignored two polls (one its own!) that said that New Yorkers overwhelmingly opposed a taxpayer-subsidized arena. The Times has not explained how job estimates have been slashed, nor that the promised "15,000 construction jobs" means 1,500 jobs a year over 10 years. The Times has not reported any criticism of the Community Benefits Agreement, though an expert on such agreements says this one lacks legitimacy. And the Times has, at some critical junctures, failed to acknowledge its parent company's business ties to Ratner--in one case, the newspaper ignored an admonition from the Public Editor to do so. There are many more such examples.

 

Times profile of Norman Siegel ignores Atlantic Yards

The 9/9/05 Times profile of Public Advocate candidate Norman Siegel, An Outsider Wants to Take His Watchdog Role Inside, fails to mention Siegel's role in the Atlantic Yards debate, in which he has challenged incumbent Betsy Gotbaum on her incoherent position. Given that it was not written by the reporter who covered the two debates, it's plausible that the reporter profiling Siegel, who likely perused recent clips before meeting Siegel, didn't even know about the Atlantic Yards issue. That is, if the reporter only looked at Times clips; a more comprehensive search would turn up, for example, a Village Voice article and blog entry about the controversy.

Thursday, September 08, 2005

 

I didn't call the Times 'biased,' despite the Brooklyn Downtown Star headline

Well, headline writing isn't always easy, compressing complex thoughts into shorthand. The Brooklyn Downtown Star, reporting on my report, headlined the 9/8/05 article Journalist Calls the Times Biased. But I very carefully avoided that charge.

Of course, lower down in the story, the newspaper quoted a press release that itself quotes from my report: The Times's inconsistent coverage of Forest City Ratner's Atlantic Yards development doesn't mean that reporters and editors at the Times have been told to go easy on Forest City Ratner. However, given the two companies' corporate relationship, the newspaper should report on FCR exactingly, taking care to dispel any suspicion of conflict of interest. The Times has failed to do so.

So, to reiterate, I didn't call the Times biased. My report says that coverage has been "inadequate, misleading, and mostly uncritical." Those are strong enough charges in themselves and, unlike charges of bias, can be backed up with evidence.

Wednesday, September 07, 2005

 

IBO says Ratner underestimates costs at Atlantic Yards by at least $208.6 million

Well, the Independent Budget Office (IBO) didn't say it that directly, but that's the message, and one the press hasn't yet picked up. Forest City Ratner's consultant, sports economist Andrew Zimbalist, predicts the combined costs for sanitation and education services for the entire project over 30 years would be $321.4 million in present value terms. Zimbalist, incredibly, doesn't assume additional costs for public safety, writing: Based on conversations with former budget officials, FCRC concludes that the increment in fire and police budgets would be negligible. Note that Zimbalist doesn't even put that conclusion in his own words--does he believe it? His reports are linked from here.

The IBO report, Atlantic Yards: A Net Fiscal Benefit for the City?, estimates that the cost of delivering new education, sanitation, and police services over 30 years would be $530 million in present value terms, or $208.6 million more than Zimbalist does. The IBO notes that its higher predictions are based on an estimated 6,000 housing units, not the 5,850 number Zimbalist uses. However, Forest City Ratner might build 7,300 units under its "Alternative" plan. That suggests even higher costs. [Update: Indeed, this number was chosen.]

The IBO, surprisingly, leans toward Zimbalist in one area, saying that the additional costs for providing fire protection "would be relatively low," though the agency didn't use the term "negligible." However, the IBO disagrees with Zimbalist on costs for police service, saying, rather definitively, that "costs to the city for policing the new Nets arena could be significant." Well, yes.

 

The IBO punts on the total costs for Atlantic Yards; the Times hardly notices

The 9/7/07 Times piece I already wrote about, Offer Is Doubled by Developer to Build Arena in Brooklyn, also discussed the Independent Budget Office's (IBO) report on the arena. The Times article said: Also yesterday, the New York City Independent Budget Office released a report stating that the arena would generate a modest but positive fiscal impact for the state and the city. After a significant public investment, which includes a $200 million subsidy, tax-exempt financing and numerous tax breaks, the arena would create an estimated fiscal surplus of $107 million over 30 years, or $28.5 million for the city alone, the budget office estimated.
Supporters and opponents of the project immediately seized on the report to buttress their arguments....
"As we have said all along," said James P. Stuckey, the company vice president overseeing the project, "Atlantic Yards is about more than basketball. It's about affordable housing and jobs and creating a development that complements the borough and the surrounding communities."


Ah, but the Times let Stuckey get away with talking about more than the arena, and the IBO report,
Atlantic Yards: A Net Fiscal Benefit for the City?, despite its title, isn't really about the proposed 22-acre development. It's just about the arena. As the IBO states: Given the minimal special benefits flowing to the rest of the project and the methodological limitations in estimating the fiscal impacts of mixed-use developments, IBO has not done an analysis of the housing and commerical portion of the plan.

Methodological limitations? That suggests, well, that the IBO thinks that Andrew Zimbalist's fiscal analyses, commissioned by Forest City Ratner and relied on by city and state boosters of the project, are purely speculative. So Stuckey's comments about housing and jobs are just verbiage--they're not supported by the report.

Also, the IBO takes Forest City Ratner's word that its $50 million cash bid is worth $329.4 million, because the developer will make other improvements, but the IBO says nothing about improvements promised by rival bidder Extell beyond its $150 million cash bid.

In the Times, the IBO's [Ronnie] Lowenstein said she acknowledged the limitations of doing a strict economic impact analysis for the arena alone. She said it was hard to estimate the increased number of jobs and spending for the entire project, although she believes the proposed housing would have a positive effect. Yes, but how much? See the above post, for some skepticism the Times left out.

 

The Times ignores Betsy Gotbaum's record on Atlantic Yards

A 9/7/05 Times editorial, Our Choice for Public Advocate, endorsing Betsy Gotbaum for Public Advocate, closes by praising the incumbent Gotbaum: And she railed against spending hundreds of millions of taxpayers' dollars for a stadium on the West Side of Manhattan.

Conspicuously absent is any mention of Gotbaum's indefensible record on Bruce Ratner's Atlantic Yards plan (which also would require hundreds of millions of taxpayers' dollars): in a nutshell (as she even told me when I ran into her on the campaign trail), she's for the project, unless there's eminent domain; then she's against it. But Bruce Ratner told her there wouldn't be any eminent domain, so she trusts him--even though several landowners within the proposed project footprint have vocally indicated their intentions not to sell, and that the Memorandum of Understanding between Ratner and the state includes eminent domain.

Then again, the Times coverage of the two Public Advocate debates, in which candidate Norman Siegel (who represents Develop Don't Destroy Brooklyn, among other clients) challenged Gotbaum vigorously on her Atlantic Yards stance, conspicuously failed to mention that Atlantic Yards issue. So maybe Times editorialists were unaware. I mentioned that debate coverage in my "High Rises & Low Standards" report (see link at left), issued September 1.

In the 9/2/05 Village Voice, Wayne Barrett dissected Gotbaum's failures in Save This Office : When [Norman] Siegel compared her "wonderful, wonderful" praise of the gigantic Atlantic Yards development planned in Brooklyn with her condemnation of the use of eminent domain for private projects, she insisted in the debates that she'd been told by developer Bruce Ratner that he was "not going to use it." In fact, a Ratner-tied group filed an amicus brief before the U.S. Supreme Court in the recent eminent domain case, the memo of understanding for the project explicitly authorizes "acquisitions by eminent domain," and it is the threat of such compelled sales that often makes its use unnecessary. While the project itself has compelling pluses and minuses, Gotbaum's rose-colored contradictions suggest a disquieting ignorance of well-reported fact as well as the history of publicly aided development.

Indeed. But I would like to hear more about the compelling pluses Barrett is talking about. Sure, we need housing and jobs, and a basketball team might be nice, but does he--does anyone--really know the cost? I do know that Ratner's projections, which city and state officials have relied on, are highly questionable. This project has proceeded without a full analysis of the costs in terms of subsidies, infrastructure, traffic, etc.

Tuesday, September 06, 2005

 

The Times on Ratner's New $100 Million Railyard Bid

So Forest City Ratner has doubled its bid for the MTA's Vanderbilt Yard from $50 million to $100 million, reports The New York Times in its July 7 issue. And that means the MTA would get an extra $50 million to spend on the transportation system and that the MTA board might hold a special meeting as soon as Tuesday to approve the deal.

Whoa. Maybe another $50 million is better than nothing, but the railyard was appraised at $214.5 million, a fact not in this story but one the Times has reported before. Shouldn't Ratner be paying full freight? After all, Forest City Ratner VP told the City Council Economic Development Committee on May 4, 2004 that “[F]or the land, the public land, the MTA land, is that, what we have agreed to is that we will lease or buy that land at the fair market value has done by whatever independent process that they normally use." (See www.dddb.net/times/ED050404_Transcript.pdf, p. 164; note that the transcript is imperfect, but you get the gist.)

Also, has Ratner cut the number of towers, or is the Times getting it wrong? This article states: Much to the dismay of some residents and critics of the project, two of the 15 towers planned for the 21-acre site would rise above the Williamsburgh Savings Bank, currently the tallest building in Brooklyn, and dwarf much of the surrounding neighborhood.

First, the site would be 22 acres, as described in Forest City Ratner's own June/July issue of the Brooklyn Standard. Second, on July 7, the Times reported there would be 17 buildings (including the arena), though the Brooklyn Standard says 17 towers. [Update: the ESDC project description released September 16 says 16 towers + arena.] Third, it's not that there would be two towers taller than the bank, it's that there would be 16 tall towers, several over 40 stories tall. I wish I could be more specific, but Ratner hasn't released the plans.

Also, the Times describes a development of 6,000 apartments. The article should have said "at least 6,000 apartments." Under the "Alternative Plan," which is a good bet to be chosen, Ratner would cut office space (which is harder to fill) and build 7,300 apartments.

The Times wrote that Ratner estimated that the value of his original bid was worth $329 million because he would build a larger, more modern railyard. Transportation agency officials said they were unsure whether the [rival] Extell bid included the cost of building a new railyard.

Well, Extell bid $150 million and, according to the 8/1/05 New York Observer: Extell's bid also represents much more than the $150 million in cash...[Extell's Barnett] predicts that he can move and cover the rail yards for $150 million...

Geographic alert: the Times still can't get some basic facts right. The article says: The agency would also get a new, upgraded train yard on land to the west of the existing 8.3-acre yard, which is at the intersection of Atlantic and Flatbush Avenues. The new train yard would be east, not west, of the existing yard. Also, the yard is not between two intersecting streets, Flatbush and Atlantic avenues, it's between Flatbush Avenue and Pacific Street; its western border approaches, but does not reach, Flatbush Avenue.

 

The New York Observer follows up

In a 9/5/05 post titled "Coincidence?", The New York Observer noted the Times's coverage of The Brooklyn Standard two days after my report was issued. The Observer also quotes my criticism of the initial Observer coverage (my, this is getting 'meta'): "To follow up on your blog post, I'm disappointed that you interpreted my reaction to the 'Instant Skyline' headline/article as a 'Brownstone Brooklyn' reaction to things instant. Rather, I reacted as a journalist and Brooklynite to bad journalism." He says the Times’ July 5 headline ("Instant Skyline Added to Brooklyn Arena Plan") portrayed the skyline to be a recently added element of the plan when in fact high-rise office and residential towers were part of developer Forest City Ratner’s plan from the beginning.

Well, I appreciate the opportunity to be heard, but I still have to take issue with that second sentence. Is it just me who sees the July 5, 2005 headline as deceptive? This stuff can be checked--there's a skyline at the Ratner web site (www.bball.net) with the December 2003 press release.

This is beginning to remind me of the dispute about scientific facts. Would a reporter write of a scientist that "he says the world is round" rather than acknowledge it's an established consensus?


 

The Times gets it wrong: "downtown" and "arena project"

I was so caught up in analyzing the Times's 9/3/05 analysis of The Brooklyn Standard that I neglected to point out that the article, like so many others, got some fundamental facts wrong.

The article cited a proposed $3.5 billion arena project for downtown Brooklyn. It's not "downtown Brooklyn"! As my report (www.dddb.net/times) shows (see item 11.4), even a map the Times has printed shows the site to be in Prospect Heights, across from Fort Greene, bordered by Park Slope.

Also, the term "arena project" may be a shorthand, but the project has had numerous towers (now, at least 17, according to Ratner's Brooklyn Standard) since it was announced in December 2003. [Update: the project description from the ESDC, released in mid-September, says 16 towers + arena.] It's always been a real estate deal. So it can't be a dispute between the "arena's supporters and opponents;" the arena is only about one-tenth the square footage of the entire project. By focusing on the arena as the definition of the project, the Times falls into Ratner's rhetorical trap or, as the Ratner site (www.bball.net) says, "Bring Basketball to Brooklyn." The arena is a lure to get politicians and others on board for the massive development project. The Times shouldn't be playing along.

Sunday, September 04, 2005

 

The Brooklyn Papers takes a look at BUILD's new offices

The story of the group Brooklyn United for Innovative Local Development's (BUILD) move into a Forest City Ratner-owned building on Pacific Street did make it into my report, "High Rises and Low Standards," but now The Brooklyn Papers has added a few important details: (BUILD), a community-based group formed specifically to elicit local jobs from Ratner’s project, has been granted rent-free space right next door to the only property owner on the block who has refused to sell to Ratner, Daniel Goldstein, a condo owner whose group Develop-Don’t Destroy Brooklyn has been the most vocal opponent of the project.
[BUILD's Marie] Louis said the free use of the facilities were part of what BUILD had negotiated in a so-called community benefits agreement (CBA) with the developer.
Meanwhile, Goldstein said he fears the move is an intimidation tactic by the developer.
“If Ratner’s trying to do something that he thinks would unify this neighborhood, and this community, by placing the group that strongly supports him next to the leaders of the opposition, what exactly is going on? Is he trying to instigate trouble?” wondered Goldstein.


The Brooklyn Papers again did the responsible thing--unlike some media outlets, including the New York Times--and got some perspective on what makes a legitimate CBA: Greg LeRoy is executive director of Good Jobs First, a non-profit policy group in Washington, D.C. that has advocated for community benefits agreements and supported the development of CBAs in Los Angeles development projects. He said negotiations for CBAs tend to be conducted with the agreement that no party involved will receive favors from another negotiating party.
“As a general statement of principals, anytime you have negotiations in which there are competing self-interests, and one side grants a favor to the other, or grants a favor to the member of another set of parties, that’s a red flag,” said LeRoy. “This is because the question of, ‘Is there a quid pro quo?’ inevitably arises. “Obviously, being as impartial and objective in the negotiations is something people strive for,” he said and wondered if the other individuals and organizations involved in the CBA negotiations were notified of BUILD’s reward."


Oh, and here's the kicker: the Brooklyn Papers asked, but Neither Forest City Ratner nor Cheryl Duncan Public Relations, the firm hired by Ratner to represent the CBA, would release contact or background information about the organizations that comprise the signatories to the document.

So much for transparency in this process. Yet again, a local newspaper has laid out a story for the dailies, including the New York Times, to follow.

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