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I'm still surprised how hard it is to get a relatively straightforward correction in the New York Times. As I wrote in a 12/27/05 post, a caption in the business section that day stated that a shopper was outside the Atlantic Center mall, while he actually was outside the Atlantic Terminal mall.

The two malls from Forest City Ratner are quite different--Atlantic Center is mostly dun-colored, while Atlantic Terminal is red brick. But I initially erred by misidentifying the building in the fuzzy background of the photo as Atlantic Center, which is east of Atlantic Terminal, while it was actually Site V at Atlantic Center, which is south of Atlantic Terminal and across Flatbush Avenue. (Note that the photos at the above links from the Forest City Ratner web site show a now-departed Macy's store at Atlantic Center and a somewhat earlier design for Atlantic Terminal.)

There was other evidence, of course, that the shopper had just been to the Atlantic Terminal mall. The version of the photo in the online version of the newspaper was cropped to show only Atlantic Terminal (right). And the shopper was carrying two bags with the bullseye logo of Target, an anchor tenant of Atlantic Terminal. The other bag that's identifiable, as seen in the print copy version of the picture, has the red star of Macy's, which does not operate in either of the mall complexes, but has a store on the Fulton Mall in Downtown Brooklyn.



I went back to the malls yesterday to try to reenact the photo as seen in the print edition of the Times. It was taken from the southeast border of the Atlantic Terminal Mall (at top left of the Atlantic Yards site plan), looking southwest at Site V, which is across the street (in blue and yellow on the map, below the diagonal Flatbush Avenue). Note that the Atlantic Terminal mall and the Atlantic Center mall, the modified L-shaped building to its east, are outlined in black but are not part of the Atlantic Yards project, as both are on the north side of Atlantic Avenue.

First, I took a photo to try to capture the same light poles (which now lack the festive holiday decorations, obviously, as pictured in the Times) and the mall to the right.


Then I took a closer-in shot to gain a clearer sense of the P.C. Richard sign in the background, as well as the traffic on Flatbush Avenue.


Then I rotated slightly to capture the name of the mall: Atlantic Terminal.


I backed up a little to capture the name and logo of Target under the name Atlantic Terminal. (Yes, it's a little dark.)


Then I rotated and took a picture of the Atlantic Center mall opposite.



There are other sides of the Atlantic Center mall that look more like Site V (which is actually considered by Forest City Ratner to be "Shops at Atlantic Center"). But the bottom line is: the shopper had been to Target in the Atlantic Terminal Mall, he was just outside the Atlantic Terminal mall, and he was headed in the direction of both the Atlantic Center mall and a parking garage.

The caption stated: "Keino Bennet leaving the Atlantic Center Mall in Brooklyn yesterday." It still should be corrected.

Is Brooklyn Borough President Marty Markowitz backing away from the Atlantic Yards arena-cum-skyscrapers project? No, but maybe. If you see him at public meetings regarding the project, he maintains his enthusiastic support. But at last night's State of the Borough Address, held at Brooklyn Technical High School in Fort Greene, Markowitz gave Atlantic Yards far less attention than in his 2005 and 2004 addresses. (Photo of Mayor Mike Bloomberg, Marty's wife Jamie, and Borough President by Kathryn Kirk, from Brooklyn-usa.org.)

That's reading the tea leaves, of course, but that's all we have. A State of the Borough Address is many things--a chance for fellow politicians to pay homage, a shout-out to various neighborhoods and ethnic groups, a recounting of achievements, and a chance to honor those who've "done Brooklyn proud." (A particular favorite last night was Keith Beauchamp, the filmmaker whose documentary helped reopen the investigation of the murder of Emmett Till.)

But it's also a chance to lay out goals, and in his previous addresses, excerpted below, Markowitz devoted several paragraphs to the Atlantic Yards project. Last night he gave it part of a sentence--plus the prominent closing segment in a post-speech video. Maybe that's because some of the previously stated goals--such as 10,000 permanent jobs--have fallen by the wayside, or maybe it's because he didn't want to remind people of potentially ruinous traffic. Maybe it's that there are more changes to come, like a new design from architect Frank Gehry. Or maybe it's simply that we're still waiting for a Draft Envirornmental Impact Statement from the Empire State Development Corporation.

Marty got to Atlantic Yards in the middle of his address. "Maybe it's an obsession with realizing Brooklyn's promise, or maybe it goes back to my childhood, but everything I do has the same objective. Fulfilling government’s core duties of providing affordable housing, quality health care, public safety, and a sound education for all — and making Brooklynites proud of our home town," he said. "I pushed for two of the largest affordable housing initiatives in New York City history with the Greenpoint-Williamsburg re-zoning and the Atlantic Yards project — and it is worth the agita and mishegas, because I’m confident it’s good for these neighborhoods, and good for Brooklyn."

That was it--no mention of jobs, or the controversial Community Benefits Agreement, or the concerns of local residents, references he made last year. (Interestingly, the press release touted the Greenpoint-Williamsburg and Atlantic Yards as "economic development.)

By contrast, in his inaugural address yesterday, Mayor Mike Bloomberg was effusive: In Brooklyn, construction workers will put shovels in the ground at Atlantic Yards, the most exciting housing, commercial, and sports development in Brooklyn’s history.

Bloomberg, swearing in Markowitz last night, said in Brooklyn, "Standing together, we'll cheer for the Nets."

The video and the heckler

Near the end of Marty's address, a video featured six disparate people congratulating the Borough President. Among them: Yvette Jarvis, the Brooklynite who is now a City Councilor in Athens, Greece; Gavin McLoed (of The Love Boat), on behalf of Princess Cruises; the captain of the Queen Mary II, scheduled to dock in Brooklyn; a couple of seniors from Red Hook hailing the new Ikea; and beach volleyball star Holly McPeak, whose pro tour will stop in Coney Island in August.

Finally, after a montage of basketball action, Vince Carter of the New Jersey Nets declared, "I want to congratulate Marty on his reelection, and we look forward to having you sit at center court when we get to Brooklyn." Then came a quick shot of Marty holding a Nets jersey.

The audience was quite enthusiastic about the Nets, but the ending of that segment, and the resumption of Markowitz's speech, was interrupted, at least for one section of the audience, by Schellie Hagan of the Prospect Heights Action Coalition, which has long opposed the Atlantic Yards project. She had periodically heckled Markowitz during his speech by shouting, "What about eminent domain? What about Prospect Heights?," and she upped the volume when the Nets were mentioned. One fellow attendee angrily urged her to shut up, and a squad of auxiliary police officers approached. Hagan and her sister Patti Hagan, who had also participated in some heckling, agreed to be quiet, and soon left the building, as Markowitz's portion had finished.

Unmentioned power brokers

Among those in the VIP section of the audience: Forest City Ratner president Bruce Ratner and VP Jim Stuckey. Neither Ratner nor any of the other powerful developers in Brooklyn--Joseph Sitt of Thor Equities, David Walentas of Two Trees Management, and Shaya Boymelgreen of Leviev Boymelgreen--were mentioned in the speech, though they, more so than the many Brooklynites hailed by Markowitz, are Brooklyn's power brokers. (I don't know if those other three developers were present.)

Brooklyn touches

It was the first State of the Borough I've attended in person and, while the speech has some formulaic inclusiveness, it's hard not to be impressed by the diversity of Brooklyn. (That can lead to unintended consequences: the table with kosher food was near the entrance, and the crowds were so thick that many non-Jews lined up for the kosher food, despite the protests of the servers.)

And Marty's people know how to put on a show. The program opened with songs from the multiethnic Brooklyn Youth Chorus Academy and an invocation from a Borscht Belt-y rabbi. Then Marty entered, in the midst of the Brooklyn "Steppers" Marching Band. (Photo by Kathryn Kirk, from Brooklyn-usa.org.)


As he spoke, a giant postcard saying "Greetings From Brooklyn, NY" was projected on screen. After a reference to the "Leaving Brooklyn, Fuhgeddaboudit" sign Marty managed to get placed on Brooklyn roads, he announced a new sign for the Jackie Robinson Parkway: "Welcome, Brooklyn's in the House." No wonder Bloomberg hailed Marty as Brooklyn's "the best salesman" Brooklyn's ever had and Senator Hillary Clinton called him "the most enthusiastic cheerleader for any community in the U.S."

Most impressive was a witty visual rebuke to the 3/7/2005 New Yorker cover that depicted, as the Daily News described it, "a horrified Adam and Eve exiled from Manhattan by God - into a dark and forbidding Brooklyn." Markowitz defended Brooklyn back then and last night introduced the cover of "The Brooklyner" (Price: Affordable), which showed Adam and Eve strolling peacefully over the Brooklyn Bridge into the borough, beckoned by God.

Also, all attendees were given a booklet containing the more than 1,000 entries submitted in a call for a new Brooklyn slogan. Among them: "Brooklyn is like an everything bagel;" "Brooklyn: Where Life Gets Interesting;" and "Brooklyn: "It's More than a Freakin' Tree."

Past speeches

From Marty's 2005 address:
Meanwhile, new residents, businesses, and cultural institutions — not to mention the upcoming arrival of the NBA’s Brooklyn Nets — are increasingly making Brooklyn a true land of opportunity.
Now, I fought hard to get a national sports team to call Brooklyn home.
I know of three things that bring people together like nothing else — music, religion, and sports.
As a boy, I’m happy to say that I was able to watch the Brooklyn Dodgers play every summer, just a few blocks from where I lived.
This year, by the way, we mark the 50th anniversary of the Dodgers’ legendary 1955 World Series championship.
I want to tell you what I remember about that time.
After that World Series victory — life as we knew it stopped in the borough of Brooklyn, because for two weeks, there was a non-stop party in the streets.
That was then, and this is now.
The Atlantic Yards Project will include the Nets arena, as well as residential and commercial buildings. Every city in America competes for a national sports team. If you’re lucky, you get a chance like this once in a lifetime.
Brooklyn — now is our time.
I expect Atlantic Yards to result in two things that are vital to Brooklynites — more jobs and more affordable housing. I want to say right now, that I fully understand — and I share the concerns — of local area residents who have spoken out in opposition to this development.
People of good will can differ. And constructive opposition is something I value and cherish — because I honestly believe that, in the end, it makes for a better plan.
The Nets arena — and the Atlantic Yards project — will go forward, but it must work for both Brooklyn and for the community surrounding the arena.
Because people do not move out of Brooklyn today seeking a better life. They move out because they can’t afford the good life we have here.
It is estimated that Atlantic Yards will create about 10,000 permanent new jobs. That is above and beyond the 15,000 construction-related jobs that it will create over the next decade. And we can all be proud that 100 percent of those workers will be union employees.
Under a proposed groundbreaking Community Benefits Agreement, as many as possible of those new jobs will be filled by Brooklyn residents, and I promise you, those jobs will go to those who need them most — particularly low income residents living in public housing nearby.
I believe this project will help give individuals and Brooklyn families the chance they need — and deserve — to break the cycle of poverty, with opportunities to work at jobs that will grow into careers.
I want every Brooklynite to be given the same chance I had.
As someone who grew up in poverty — and who grew up in public housing — I know what an opportunity can mean. And with this project designed by a world class architect, Brooklyn-born Frank Gehry, Atlantic Yards will be an unmistakable statement that the new center of this universe we call New York City has shifted to the intersection of Flatbush and Atlantic!

From Marty's 2004 address:
Oh yeah, I almost forgot.
There's one other little project that's coming to Brooklyn.
The borough of Kings is about to get its crown back.
Brooklyn needs this arena because Brooklyn's best -- like the Lincoln High School team -- deserve a place in Brooklyn where they can compete at the highest levels, and watch the stars of the game.
Just as the Dodgers thrilled Brooklynites in the first half of the 20th century, the Nets will be the team that unites us in the 21st.
It's a moment in our history that future generations are going to look back on as a turning point, and they're going to thank us for making it happen!
If everything goes according to plan, in a few years we will bring a new center of life to the heart of this borough.
I want to thank Mayor Bloomberg for his enthusiastic support of this project – it couldn't have happened without you, Mayor. And thank you to Governor Pataki.
I will of course make sure that this is the best possible project for all Brooklynites, including those in the immediate neighborhood. I will do everything in my power to make sure that as few people as possible will be displaced -- that any negative impacts are minimized -- and most importantly that they are treated with dignity and respect.
For 26 years, I have kept my promises to Brooklynites.
And I will keep this one too.
This project must be a great resource for the entire neighborhood -- and for the entire borough.
The world-class arena and surrounding area will be designed by renowned architect Frank Gehry – and will include:
4400 units of new housing – up to half of which will be at below-market rates for middle and moderate income households – which we desperately need.
Many new businesses and stores, which will create thousands of new, much needed jobs.
Six acres of public park land.
And even a skating rink on top of the arena.
And we're going to make sure that those who have missed out on construction and contracting opportunities in the past – especially women and minority owned businesses -- have their rightful place at the starting gate for this project -- and aren't just watching the race.
Above all, the Brooklyn-wide pride for a top basketball team – which is the urban sport – will bring all of our neighborhoods and cultures even closer together.

It's one of the biggest questions--perhaps the biggest--surrounding the proposed $3.5 billion Atlantic Yards development: would this project be a winner or a loser economically?

The answer: we don't really know, beyond generalities, even though developer Forest City Ratner estimates billions of dollars of new revenue to the city and state, and some of FCR's assumptions have been forcefully challenged by not only critics but also by two city agencies, which estimate costs and revenues differently.

And our government isn't helping us find out more.

Yesterday, the issue came up briefly, and inconclusively, at the meeting of the Brooklyn Borough Board Atlantic Yards Committee. The topic: socioeconomic conditions, which, according to the state environmental impact process, covers a lot of ground, including direct or indirect displacement of residential and commercial tenants,and adverse effects on specific industries.

There's no requirement to figure out the fiscal impact of the project. The Environmental Impact Statement (EIS) from the state Empire State Development Corporation won't address it--a draft should be issued in a few months--and the Borough Board meetings are supposed to track issues in the EIS process.

Yesterday, Borough President Marty Markowitz, an enthusiastic supporter of the project, brought up the issue, querying George Sweeting, a deputy director of the city's Independent Budget Office (IBO), with a leading question. According to a September 2005 report from the IBO, Markowitz said, "this project would result in a small net fiscal gain to the city over 30 years. If you evaluated it on the basis of the commercial, and retail, and residential sections, would it result in... a bigger net gain?"

Sweeting responded cautiously but positively. "The paper focused solely on the arena. We had a pretty good sense of the subsidies and benefits that were available," he said, adding that calculating the impact on the entire city was complicated, since it would require determining whether new residents at Atlantic Yards were new to the city (and thus new taxpayers), and who would occupy apartments vacated by New Yorkers moving to the project.

However, given that most of the subsidies available on the non-arena portion are of-right, and available to any developer, Sweeting said, "it's a virtual certainty we would find a larger net fiscal benefit."

But how much larger--a few million, or a few billion? A benefit sufficient, for example, to absorb a potential huge increase in traffic and transit costs? (The arena would represent less than ten percent of the project square footage.) That tantalizing question was put aside.

Certain tax breaks indeed would be available to any developer, as Sweeting said, as would some affordable housing subsidies--though these would be cumulatively much larger than typical. However, other benefits that don't fall under the rubric of subsidies would not be of-right; those include the conveyance of city streets, city infrastructure costs, the opportunity to override city zoning, and the opportunity for the state to invoke eminent domain. Note that Develop Don't Destroy Brooklyn calculates a very large set of subsidies.

A look at the arena numbers

The IBO report estimates that, over 30 years, the arena would produce $28.5 million (present value, 2005 dollars) more in revenue than the project would cost the city, and that "the combined state and local 30-year net fiscal surplus would be $107.0 million (2005 dollars)."

The IBO's conclusions have been challenged. Sports facility analyst Neil deMause, on his Field of Schemes site, noted that the IBO underestimated the amount of subsidies due to the developer, and also made optimistic calculations--based on assumptions provided by the developer--about the number of fans coming from New Jersey. Change those numbers and the "small net fiscal gain" could turn into a loss.

Why would the arena benefit the state more than the city? The report states: Much of the difference between the results for the city and the state is attributable to the fact that all those who earn income at the arena—Nets players, executives, coaches and other staff, and other workers—must pay New York State personal income taxes, while only New York City residents pay New York City personal income taxes.

Public costs for the project

Even though the IBO didn't try to estimate revenues from the new taxpayers who would move into Atlantic Yards, it did try to estimate some public costs posed by the project as a whole, not just the arena. The IBO report estimates that the cost of delivering new education, sanitation, and police services over 30 years would be $530 million in current dollars (present value), or $208.6 million more than the $321.4 million estimated by Andrew Zimbalist, the sports economist FCR hired to estimate the fiscal impact of the project.

However, the cost almost certainly would be even higher. The IBO's higher cost prediction was based on an estimated 6,000 housing units, not the 5,850 number used by Zimbalist. However, the developer now plans at least 7,300 units onsite, plus up to 1,000 additional units offsite. More people require more city services.

And the IBO report doesn't address the cost of traffic. Transportation engineer Brian Ketcham, looking at the entire range of development for northwestern Brooklyn, including Atlantic Yards, estimated that traffic could generate $250 million a year in externalities, including the cost of air pollution, traffic noise, and lost productivity.

As noted above, Develop Don't Destroy Brooklyn calculates a very large set of subsidies.

$6 billion in revenue?

Forest City Ratner cites $6 billion in new revenue to the city and state to be created by the project over 30 years, but less frequently acknowledges the $1.1 billion in public costs. Note that the apples-and-oranges issue here. The IBO uses present value--the cumulative number in current dollars, rather than the cumulative number after 30 years. So the developer should use present value as well; under one scenario, that means $2.1 billion in revenues and $572.6 million in costs. Under present value, note that the ratio of costs to revenues is higher. (See Chapter 3 of my report for all these figures.)

But those revenues depend on some dubious assumptions, ones criticized by the New York City Economic Development Corporation (NYCEDC), which is a general supporter of the project.

For example, as noted in Chapter 3 of my report, NYCEDC disagrees with Zimbalist’s estimates of how many staffers associated with the basketball team would live in New York City and pay city income tax. Zimbalist, in his 2004 report and 2005 report, assumes that 30 percent of the Nets players will live in the five boroughs and pay city and state taxes, while 75 percent of the arena workers will live in the city. However, NYCEDC estimates that 20 percent of the players, 35 percent of the executives and team staff, and 50 percent of the facility staff would reside in New York City.

More crucially, NYCEDC and Zimbalist differ significantly on those assumptions mentioned by the IBO's Sweeting: how much revenue would be generated by the new residents in the project. Zimbalist, in his first report, in 2004, projects that the average annual income of households in the development would be between $80,000 and $90,000. In his second report, in 2005, he projects that the average annual income would be $94,875. (If he were to do another report, acknowledging the addition of another 1,300 market-rate condos, his estimate would undoubtedly rise.)

But Zimbalist and the city agency apparently disagree significantly in methodology. NYCEDC assumes that the new units "will represent an equivalent increase in households Citywide, either directly in the project itself or as infill in units vacated by households relocating to the project. Income tax revenue is based on an average income of $45,000, the Citywide average for all industries." (Emphasis added.)

Given that income tax revenue is key to Zimbalist's estimates, this represents a discrepancy deserving of further study. Also note considerable challenges to Zimbalist's assumptions in this report by urban planner Jung Kim and economic anthropologist Gustav Peebles.

The overburdened IBO

I caught up with Sweeting after the session yesterday and asked him again about the challenge of doing a full fiscal impact study. "You would have to make assumptions about the kind of firms that come in, assuming there's still a commercial component," he said. "That would tell you what the salaries are. You make assumptions about the income taxes that would result, and the corporate taxes."

He continued, "To estimate tax revenue [on the residential component], you'd need to know the average household income of the people coming in. Then you want to make at least some calculations about how many of them are new to the city and how many are from elsewhere in the city."

Were Zimbalist's assumptions appropriate? "I'm not going to criticize the assumptions he made," Sweeting said. "The way we set it up, once we got to a positive fiscal impact for the arena, that was the part that we felt comfortable tackling."

But that's a fraction of the entire project, I said, pointing out that the NYCEDC and Zimbalist differ. "That's why that assumption about how many are new is a key part of the analysis," Sweeting acknowledged. "And you also want to think about who takes the apartments, does that create space for other new people to come in, or maybe that solves some of the shortage of affordable housing."

"We just chose not to do that," he said. "But that's not a reflection on the quality of the work of other people who have tried to do it. It's just not something we had the time or the resources to get into."

Sweeting pointed out that, as stated during the meeting, the project as a whole would likely generate greater fiscal benefits than the arena would. Still, a solid estimate of the project's fiscal impact remains elusive. Can any other agency pin it down?

"Not that I'm aware of," Sweeting said. "We could, if we had nothing else to do."

Will we ever know?

At the 5/26/05 City Council hearing on the project, urban planner Mafruza Khan of the Pratt Center for Community Development testified:
Given the wide divergence in [subsidy] estimates, from $200 million to over $1 billion, we do want to emphasize that it is impossible for the public to know whether this project is a good deal without knowing how much it will cost to taxpayers. It is being asked to buy something without knowing how much it will cost.

Given the wide divergence in estimates of revenues, as well, it remains impossible to know whether the project is a good deal. However, the press has not pursued this question. In an 11/27/05 editorial, the New York Times declared:
The city's nonpartisan Independent Budget Office calculates the arena would produce a modest benefit for the city and state, $107 million over 30 years. Even that may be optimistic...
The Nets arena is not destined to be a cash cow, but the borough deserves a sports team, so long as the price is not too high.

But the Times didn't acknowledge that the IBO report mostly concerns the arena. We still don't know the price of the Atlantic Yards project.

Now that the demolition controversy is back in the news, some back story: the smallest of the six buildings Forest City Ratner plans to raze--a one-story garage at 622 Pacific Street (small building at left, below)--had been purchased by an investor who planned a five-story building there. That's before the investor, Menachem Friedfertig, publicly asked the developer for $4 million, according to a 9/2/04 New York Sun report. Did he get it? Unclear--but he likely got far more what he paid: $382,000 on 5/20/03, which was two months before the Atlantic Yards plan was mentioned by the Newark Star-Ledger 7/23/03 and nearly seven months before it was announced officially on 12/10/03.

The building is among those Forest City Ratner either owns or has under contract, according to a company press release, though available documents, at PropertyShark.com, do not indicate that the ownership has changed.But the transaction adds another layer to the issue of blight and its role in a future eminent domain case. Is the area blighted because it has deteriorating buildings? Is a deteriorated building less an indication of blight if the market was already responding? Or will it make little difference, since as a law professor has noted, current state law on blight is extremely loose?

At 622 Pacific Street, the 25 ft x 68 ft building sits on a lot 25 ft x 73.75 ft. Under current city zoning rules, it could support a Floor Area Ratio of 4, or a maximum of 5,382 square feet. That would suggest a five-story building, much smaller than the arena+high-rises slated to be built at that part of the site. Note that, because Atlantic Yards is a state project, city zoning rules don't apply.

According to the New York Sun, whose 9/2/04 article was headlined Message to Ratner: ‘I Want My $4M’: Brooklyn Developer Looks To Cash In, an effort to develop the site likely added leverage:
Friedfertig pushed ahead with a plan to develop the building, with medical offices on the first floor and five stories of residential condominiums above. He even went so far as to hire architects and get permission from the city’s Department of Buildings....
Despite the risk of eminent domain, Mr. Friedfertig’s threat to wring millions out of Mr. Ratner is formidable because he has the city’s approval to build his development....
“I am waiting for Ratner to make a realistic offer, or I could just go ahead with the development,” Mr. Friedfertig said.
Architects Joe and Moshe Friedman have drawn up plans for Mr. Friedfertig’s building, and the developer expects that each condominium could be sold for about $1 million — the same price Mr. Ratner has paid for other apartments that have stood in the way of the Atlantic Yards development. An additional $1 million to $2 million could be generated by the medical offices, bringing the total for the developed building to $6 million to $7 million, Mr. Friedfertig said.

Friedfertig had the plans drawn up in early 2004, which suggests he could also have been using the condominium project as a bargaining chip. He clearly felt he had lucked out, telling the Sun, "I have the winning lottery ticket and I want my $4 million." Forest City Ratner has not been a chintzy spender. An 11/6/05 New York Times article reported that, one factor that has contributed to the higher projected cost of Atlantic Yards, from $2.5 billion to $3.5 billion, has been the above-market prices the developer has paid to buy out residents who live on the project's footprint. And the company has likely paid above-market prices to buy out other property owners. Such costs factor into Forest City Ratner's profit estimates, which remain unreleased by the MTA.

Developer's blight?

Also, a look at city records suggests that charges of "developer's blight"--that the building deteriorated while under the control of Ratner--may be murky here, as there were several violations and complaints, including a partially collapsed roof cited in January 1998. Then again, it's not clear why the building now poses an immediate danger and must be demolished. By contrast, there are fewer complaints at the recently-inhabited row houses at 461 and 463 Dean Street, at right. There's one violation, from 1922, at 461 Dean Street, and three boiler violations, two dismissed and one active, at 463 Dean Street. That's not to say that complaints are a proxy for deterioration.

Jay Butler, a professional engineer who conducted an external review of the buildings on behalf of community groups suing to stop the demolitions, acknowledged that he couldn't make definitive judgments without going inside, but stated: I cannot conclude that the buildings pose an imminent threat to public safety. Any defects to the buildings or threats to public safety appear to be consistent with conditions found at countless other buildings in New York City.

He did not comment on 622 Pacific Street because, despite statements in Forest City Ratner's initial press release, the report to the developer by LZA Technology did not mention the building. According to the lawsuit filed Wednesday, the lawyer for ESDC said that the agency's Emergency Declaration did not apply to 622 Pacific Street, but noted that the developer planned to submit another engineer’s report in support of demolition there.

The New York Observer, in a post today on the blog The Real Estate headlined Life in a Small Town, noted that Charles Gargano, chairman of the Empire State Development Corporation, had brushed off questions of a conflict of interest because the agency is using a lawyer who formerly worked for Forest City Ratner's Atlantic Yards project. "I don't know whether we are using the same lawyer,” he told the Daily News.

However, reported the Observer:
It turns out, according to a document The Real Estate obtained through a Freedom of Information request, that Forest City actually recommended the law firm to the E.S.D.C. A letter, dated Feb. 18, 2004, states that “[Forest City] has requested that [E.S.D.C] authorize and/or oversee the following services to be performed with the project” including “legal services to be provided by Sive, Paget & Riesel in connection with the environmental analysis of the project.”

While it is standard for developers to pay for the legal and consulting costs that the state incurs from the project, and the state works with the consultants, the Observer set out the issue:
The question is, do developers regularly get to select—or even recommend--the consultants? And should they?

ESDC did not explain whether the developer usually gets to play that role, and lawyer David Paget did not return the Observer's messages. The issue is murky: Paget had worked for the ESDC several times before, which means that Forest City Ratner's recommendation was likely not the sole reason to consider him.

While the community groups suing to block Forest City Ratner's demolition plans did not get a temporary injunction today, the case will come return to court on Februar 14, which, the Observer said, "would be almost a week before Forest City said it would be able to begin work anyway."

A set of community groups, led by Develop Don't Destroy Brooklyn (DDDB), filed suit yesterday to reverse the Empire State Development Corporation's approval of Forest City Ratner's plans to demolish six buildings controlled by the developer within the footprint of the proposed Atlantic Yards development. The suit also argues that the ESDC lawyer, David Paget, should be disqualified because he until recently represented Forest City Ratner on the project. The suit also names Forest City Ratner as a defendant.

While this dispute may seem relatively minor in comparison to a decade-long, $3.5 billion project, the lawsuit asserts that the demolitions indicate that the project is a done deal: ESDC’s actions do significant harm to the SEQRA process by giving the public the perception that the Atlantic Yards Project is a foregone conclusion headed toward approval and that physical actions are underway to permanently change the fabric of the community.

The plaintiff group includes: Fort Greene Association, Boerum Hill Association, Society for Clinton Hill, Pratt Area Community Council, Fifth Avenue Committee, Prospect Heights Action Coalition, Atlantic Avenue Betterment Association, Prospect Heights Neighborhood Development Council, East Pacific Block Association, Dean Street Block Association (4th to 5th) and DDDB.

What the engineer said

None of the news coverage quoted from the affidavit of a professional engineer, Jay Butler, who conducted an external review of the buildings. Acknowledging that he couldn't make definitive judgments, Butler stated:
Based upon that review I cannot conclude that the buildings pose an imminent threat to public safety. Any defects to the buildings or threats to public safety appear to be consistent with conditions found at countless other buildings in New York City. Such defects can be safely stabilized with commonly-used repair measures.

The Village Voice's blog, Power Plays, in an entry headlined Nets Foes Shoot Suit, took a look at city records and found a mixed record: some, but not all, "like most buildings, had multiple violations of building and environmental codes."

Will part of the suit prevail?

The New York Times had the most extensive coverage, in an article headlined Local Groups Sue to Halt Big Project in Brooklyn. It suggested that part of the lawsuit has a stronger chance of prevailing:
Philip Weinberg, a professor at St. John's University and an expert on the state's environmental review law, said the lawsuit faced "an uphill battle" in trying to get Mr. Paget disqualified. "There's nothing in the law or the regulations saying they can't have the same counsel," he said.
In general, he said, courts have tended to defer to public agencies on questions of fact, which might include whether the buildings are unsafe enough to warrant demolition. Still, Mr. Weinberg added, the agency "is supposed to play it down the middle," and "courts are supposed to step in if it doesn't pass the smell test."

Gargano unaware

The Daily News focused on the conflict-of-interest claim, in an article headlined Same lawyer repped state, Ratner: suit. The newspaper reported the developer's explanation, and ESDC chair Charles Gargano's indifference:
A Ratner spokesman said Paget has not worked for Forest City since at least the fall, when he began working for Empire State Development Corp., and never worked for both simultaneously...
Asked about Paget's alleged conflict, Empire State Development Corp. Chairman Charles Gargano said he was unaware of any problem.
"I don't know whether we are using the same lawyer," said Gargano. "I don't know of any conflict."

Gargano, it should be noted, has already endorsed the project without changes.

The New York Post ran a two-paragraph summary, headlined HOOPS-ARENA FOES SUE STATE. The New York Sun didn't cover the story.

The back story on timing

Though the Times did the most to explain the request by City Council Member Letitia James to gain access to the buildings with an independent engineer, even its report lacked some key details:
City Councilwoman Letitia James, whose district includes the site and who is an outspoken opponent, asked the company to allow her to inspect the buildings with a different engineer. At first, Forest City Ratner officials agreed to the inspection, but said later that Ms. James could not bring an engineer.

The Times didn't point out that Forest City Ratner's explanation--that letting that engineer inspect the property would cause undue delay--was undermined by the five-week gap between the receipt of the initial engineering report and the public announcement of the demolition plans.

A reference to that delay would have added some context to statements yesterday from the developer, which appeared in most coverage. The Times reported:
In a statement, Bruce Bender, an executive vice president of Forest City Ratner, defended its initial engineering report and said the lawsuit amounted to "delay tactics."
"While the opponents have another agenda," Mr. Bender said, the developer "will not play games with the public safety and is proceeding as any responsible property owner should and must."

Another look at that delay

Previously, I had speculated that Forest City Ratner had waited five weeks to announce its action on 12/15/05, in part because it needed to get its plans for asbestos abatement in order.

However, it seems likely that the delay could be attributed, perhaps in major part, to the ESDC's Declaration of Emergency, which was dated 12/15/05, the day the company alerted the New York Times. Then again, a look at the ESDC document shows that it was drafted on 12/5/05 (see the footer on the last page). Is it possible that the ESDC had its document ready 10 days earlier but only issued it after discussions with Forest City Ratner? That's speculative, but also consider that the lawyer for the ESDC formerly worked for the developer.

Whatever the scenario, the 11/7/05 report from Forest City Ratner's engineering consultant stated that the buildings posed "an immediate threat to the preservation of life, health, and property." If the threat really was immediate, shouldn't the company have made a public statement upon receipt of the report and/or urged the ESDC to expedite its review?

It's not easy for newspapers to write about themselves, but it can get dicey when newspapers hire outsiders to cover themselves as well, as the recent experience in Seattle suggests. This issue has resonance regarding the New York Times's coverage of its parent company's Times Tower project with Forest City Ratner, its coverage of eminent domain, and also the coverage of FCR's Atlantic Yards project.

Let's backtrack. In his 12/4/05 column, headlined When a Newspaper is the News, New York Times Public Editor Byron Calame suggested that newspapers set up links to coverage of themselves by other publications. I suggested links regarding coverage of the parent New York Times Company's project with developer Forest City Ratner to build the new Times Tower: after all, other newspapers, notably the Village Voice and New York Observer, have provided more aggressive coverage.

One letter-writer to the Times offered another idea, arguing that "truly independent and critical coverage of yourself" requires hiring reporters who don't work for the Times--in essence, a freelance contractor like the Public Editor. I found an example in Seattle, where the Seattle Times had hired a well-respected freelancer to report on its efforts to end the Joint Operating Agreement--shared business arrangements but separate editorial functions--between the the Times and the Seattle Post-Intelligencer.

However, that three-year arrangement has come to an end, apparently because the reporter turned out to be a little too aggressive. It came down to a judgment call about the scope of his duties--an issue that should intrigue New York Times readers.

In a 12/17/05 article headlined 'Seattle Times' Won't Extend Contract of JOA Freelancer, the trade magazine Editor & Publisher reported that the memo from Managing Editor David Boardman regarding the nonrenewal of Bill Richards' contract was vague: "We have decided to take that coverage in-house moving forward."

Reason: tough coverage?

Richards had an innovative arrangment. He was paid without any required quota of stories, and could cover any angle of his choosing--and the Times would have to publish it. Were there a disagreement, they could go to a mediator, but neither side did so. In fact, paper had nominated Richards for a Pulitzer Prize.

Still Richards wrote that one deal appeared to have violated anti-trust laws and also questioned the newspaper's accounting practices. The story is very much alive, with upcoming hearings in a lawsuit. "It is easier for an outsider to cover," Richards told E&P. "The business has gotten tougher and tougher to cover yourself. It's like getting your left fielder to cover your baseball team."

Richards told the Seattle Weekly, in a 1/11/06 article headlined Conflicted Disinterest that he was not told why his contract wasn't renewed, but offered some speculation: "Reading between the lines, I could sort of guess they were not happy with the aggressiveness of the coverage." Richards added that he was "stonewalled" by the Times's publisher, a key source.

Times Managing Editor David Boardman described it as a dispute over scope, which he distinguished from aggressiveness: "We valued that [aggressive coverage]. Where we sometimes differed with Bill was on what information was truly relevant to this ongoing struggle [over the future of the JOA] and what wasn't," he told the Seattle Weekly. "It was just a whole combination of issues, and we made the decision that, moving forward, we would try a different approach."

What would the NY Times do?

Imagine for a moment that the New York Times hired a respected freelancer to cover the Times Tower, to catch up with articles in the Voice and the Observer, and even recent coverage by the New York Sun. Would the freelancer stop at the legal battle brewing over the exercise of eminent domain to assemble land for the Times Tower? Would the reporter follow his/her journalistic curiosity and look into other development projects involving Forest City Ratner and/or the exercise of eminent domain? Would the heightened consciousness ensure that the Times acknowledged, in a national survey of the eminent domain dispute like the 1/18/06 article Developers Can't Imagine a World Without Eminent Domain, that its parent company has also benefited from eminent domain? (It didn't.)

I'm not suggesting that the Times Tower project and the Atlantic Yards project are equivalent; in the former, the newspaper is challenged to ensure that its coverage does not appear self-serving. The challenge regarding Atlantic Yards--a project regarding the parent company's business partner but not Times itself--is more indirect. Public Editor Calame wrote his 6/29/05 Web Journal: The Times's most important obligation, of course, is to make sure there's no bias in any articles it does publish about Mr. Ratner. But avoiding the perception of any tilt toward Mr. Ratner in its pages is also essential.

Because of that, he offered a recommendation: The New York Times, I believe, has an obligation to alert readers when they are reading substantive articles about a company or individual with whom the newspaper has some business or professional relationship.

That same recommendation would seem to apply to the Times's coverage of eminent domain in general. To adapt Calame's language: The New York Times, I believe, has an obligation to alert readers when they are reading substantive articles about a controversial issue that has been crucial to the newspaper's business strategy.

More subtle than bias

Calame was dealing with disclosure, a threshold issue, but the issue is more subtle than bias. I doubt it was bias, for example, that led the Times to ignore the 5/26/05 City Council hearing on Atlantic Yards, where Forest City Ratner officials announced significant changes in the plan, subtracting office space (jobs) and adding condos. (See Chapter 6 of my report.) It was neglect; editors and reporters were not taking the project seriously enough.

In that case, the Times had made a decision, either actively or passively, that the hearing wasn't important. It was a judgment call. Had there been a heightened consciousness about the Times Tower (thanks to someone on staff or, following the Seattle experiment, an independent freelancer), that might have led to heightened consciousness about the Atlantic Yards project.

I'm not saying the Times should hire a freelancer to cover all Forest City Ratner projects or even Atlantic Yards; the case is stronger when it comes to the Times Tower, and coverage of the other issues would like be too broad for one person. It's just that, as in Seattle, where the newspaper official said they "sometimes differed... on what information was truly relevant," outsiders may approach coverage more aggressively (or define 'scope' differently) than in-house staff.

Then again, as the Seattle experience shows, outsiders may not last. In New York, the Times's Public Editor, by constrast, has a fixed term and editorial independence. He doesn't cover a beat but writes every two weeks, usually analyzing the coverage of a complicated or charged issue. Many readers are still wondering when and if he'll address the Times's coverage of Atlantic Yards and Forest City Ratner.

A key element of Forest City Ratner's "Jobs, Housing, and Hoops" slogan was the 10,000 office jobs the developer promised to provide at the Atlantic Yards development. But that figure has always been questionable--and for more reasons than previously discussed.

First, the company calculated more jobs than would be standard for the available space. But there's another piece of evidence, one I haven't seen cited elsewhere: two weeks before the developer announced the project on 12/10/03, a city report on the rezoning of Downtown Brooklyn cautioned that only about two-thirds of the projected new office space might be filled--which meant that the additional space planned for the nearby Atlantic Yards project likely would add to a glut.

Had the press and public officials raised this issue, they might have questioned the "jobs" projections for Atlantic Yards. Today, as the New York Observer has recently reported, it's questionable that even the smaller amount of projected office space will be built in Downtown Brooklyn.

Trading office space for housing

Most of those projected jobs at Atlantic Yards have since vanished, as office space was traded for market-rate condos, a better economic bet for the developer. Forest City Ratner VP Jim Stuckey has fudged the latter explanation. At an 11/22/05 American Institute of Architects panel discussion, he said that, "As part of our meetings with the community, it’s become very clear, for a number of reasons, that we needed to do more housing, and less office." But the additional housing was 2,800 luxury condos, certainly not part of a request by ACORN, the low-income group that signed the affordable housing agreement. (Photo of Stuckey from FCR bio.)

Stuckey later in that session gave a more accurate explanation: "We took... what was planned to be office development, and we converted it to condominiums. And it’s a very simple reason why: because condominium development is… a higher land value, which then allows us to do the cross-subsidization" of the affordable housing." (I recently listened to a tape of the session.)

Routine changes?

Stuckey also explained changes in the plan, in an 11/6/05 New York Times article headlined Routine changes or 'Bait and Switch'?:
"Projects change, markets change," said Forest City Ratner's executive vice president for development, James P. Stuckey. "When you do a project over a long period of time, it's very difficult -- unless you're Nostradamus -- to figure out what the market changes and land changes and all those things are going to be."

That explanation deserves challenge, because of the developer's initial calculations as well as the Downtown Brooklyn plan.

First, Forest City Ratner promised 10,000 jobs repeatedly, such as in this flier issued in May 2004, touting "10,000 new, permanent jobs." But the developer could promise that many jobs only by neglecting to factor in a vacancy rate and calculating 200 square feet per worker, while the industry standard is 250 square feet. (Stuckey told a 5/26/05 City Council hearing that "we use [200] based upon what we know to be the case of MetroTech.")

By contrast, the New York City Economic Development Corporation (NYCEDC), hardly a project critic, projected 7,100 jobs for the same space. NYCEDC, in its report, used the industry standard and also calculated a vacancy rate. Moreover, NYCEDC estimated that only 30% of the jobs would be new to New York, rather than moved from Manhattan, a pattern with the developer's other projects, such as the office space at MetroTech or at Atlantic Terminal.

The NYCEDC document, released 6/27/05, reflects calculations made more than a year earlier and stated in part at a May 2004 City Council meeting. But anyone could have done the math. Despite the example of MetroTech, the industry standard was even used by Andrew Zimbalist, the Smith College economics professor who produced a report for Forest City Ratner projecting economic benefits from Atlantic Yards.

Looking at Downtown Brooklyn

Also worth noting is a city report on rezoning for Downtown Brooklyn Redevelopment, completed in November 2003. The Draft Environmental Impact Statement (DEIS) is not online, but the hard copy I saw contains the same relevant text that appears in the Final Environmental Impact Statement, issued in April 2004. Notably, the Executive Summary states (page S-4):
The proposed actions are projected to stimulate approximately 6.7 million square feet of new development, including 4.6 million square feet of office space.
(This also appears on page S-4 of the DEIS. The Final EIS (p. 14) gives the timeline: A DEIS was prepared for the proposed actions, and a notice of completion for the DEIS was issued on November 28, 2003. The hard copy of the DEIS I have is dated simply November 2003.))

On page S-17, the FEIS explains that the figure of 4.6 million square feet derives from careful estimates:
Together, the projected and potential development sites could total approximately 6.7 million square feet of office development. However, the appeal of these sites is primarily for back-office operations, particularly for those that require larger floorplates. This segment of the market is more limited. Therefore, although it is theoretically possible to develop 6.7 million square feet within the project area by 2013, this is not considered likely....Based on the screening criteria, it is reasonable to assume that approximately 4.6 million square feet of office development would occur in the next 10 years on sites identified by the City...
(This also appears on page S-14 of the DEIS.)

In other words, the city was saying that, even though an extra 2.1 million square feet of office space could be built in the next decade, the market for it was unlikely. And this was before the Atlantic Yards announcement added an additional 2.1 million square feet to the mix. No press coverage I found compared the two projects. Part of that may be attributed to balkanization; at the New York Times, for example, the rezoning issue was covered by Brooklyn bureau reporter, while the Atlantic Yards announcement was covered by the metro real estate reporter.

Economic estimates ignore office glut

Six months later, the amount of projected office space had declined only slightly. Zimbalist, in his May 2004 report, Estimated Fiscal Impact of the Atlantic Yards Project on the New York City and New York State Treasuries, writes that the project would eventually create 1.9 million square feet of first-class office space to be added in equal increments in 2007, 2009, and 2011. He cites a "housing and commercial office space shortage in Brooklyn and New York City" and offers some questionable statistics:
Since 1988, downtown Brooklyn has absorbed an average of 600,000 square feet of new office space per year. As of early April 2004, the vacancy rate of class A office space built in Brooklyn since 1985 was less than one percent.

Zimbalist makes no mention of the Downtown Brooklyn Final EIS issued a month earlier. His report reads as if the office space at Atlantic Yards would be brought to a borough that desperately needed such office space, and as if no potential for similar space might be in the offing.

In a June 2004 critique of Zimbalist's report, ESTIMATED FISCAL IMPACT OF FOREST CITY RATNER’S BROOKLYN ARENA AND 17 HIGH RISE DEVELOPMENT ON NYC AND NYS TREASURIES, Gustav Peebles and Jung Kim pinpoint problems in Zimbalist's assumptions. For one thing, as they write in section 5.3, Zimbalist did not calculate a vacancy rate. Also, they note that Zimbalist's observation regarding the vacancy rate requires a huge caveat. Most of the Class A office space in Brooklyn is at Forest City Ratner's MetroTech development, which has relied heavily on subsidies and government tenants to fill the space.

The authors calculate that at least 55% of the Class A office space in Brooklyn was filled by the public sector or with the help of incentives to private companies. "The vacancy rate used by Dr. Zimbalist to generate 7,600 jobs is an artificial rate, inflated by government expenditures and nothing to do with what economists would call a 'market,'" they write. Because of that, they recommend lowering Zimbalist’s projections for new commercial income and sales tax revenue by up to ten percent.

Peebles and Kim could have further questioned Zimbalist's vacancy rate projections had they factored in the recently-released Downtown Brooklyn Final EIS. It cast doubt not just on the prospects for filling such a large amount of office space at the "less than one percent" vacancy rate, but also on the wisdom of building that much office space in the first place.

Responding to the market

Apparently Forest City Ratner questioned its own projections as well. By 2005, the company revised its plans, and at a City Council hearing on 5/26/05 announced a reduction in office space as part of two potential reconfigurations. Zimbalist, in a June 2005 update to his report, acknowledges those potential changes:
The FCRC Atlantic Yards General Project Plan will eventually create 1.2 million square feet of first-class office space. The Alternative Plan will create 259,078 square feet of new commercial space. Since 1988, downtown Brooklyn has absorbed an average of 600,000 square feet of new office space per year. As of early April 2004, the vacancy rate of class A office space built in Brooklyn since 1985 was less than one percent.

Even though Forest City Ratner had reacted to a potential downturn in the market--reducing an original estimate of 2.1 million square feet to a potential 259,078 square feet--Zimbalist remains nonplused. He repeats the same decontextualized citation regarding Brooklyn's "less than one percent" vacancy rate even though the developer by then was planning to cut 43% to 88% from the originally announced space. Again, he doesn't acknowledge any competing supply of office space, not from Lower Manhattan, nor from the Downtown Brooklyn rezoning.

Downtown Brooklyn today: housing

Today, even the estimates of 4.6 million square feet of office space in Downtown Brooklyn seem overoptimistic, since housing is a better bet. In a 1/16/2006 article headlined Office Builders Balking At Downtown Brooklyn, the New York Observer noted:
When city planners rezoned much of downtown Brooklyn 17 months ago, it was meant to make the city’s third-largest business district even larger. Now it is looking more and more like a bedroom community.
It is not just the half-dozen condo projects sprouting up around the edge of downtown, transforming weed-strewn parking lots into glassy towers.
Even the 10-block area envisioned as the “commercial core” of the new downtown is leaning residential. The developers of the two sites furthest along in the planning process are suggesting that as few as 200,000 square feet of office space might go up where two million square feet were once envisioned, with the balance going for hotel rooms and apartments. A third property owner wants to erect a hotel right in the middle of a site where a 20-story office tower was supposed to be built. An existing office tower in that central core—7 MetroTech Center, the 1930 Verizon building—was purchased last April to be converted into condos.
In other words, Brooklyn’s booming residential market has overtaken the supply of office space—making it harder for roughly 19,000 jobs that were originally seen as the fruit of the rezoning to find their way into the new downtown.

There's a silver lining, Brooklyn’s boosters told the Observer: Downtown Brooklyn (especially Forest City Ratner's MetroTech) has been called dead at night, but the area will gain much new life. Still, the rezoning was supposed to spur jobs more than housing:
In order to promote commercial construction in a borough that many still consider to be an unacceptable business address, commercial buildings in the core could rise 20 percent higher than apartment buildings. Yet the residential market is so strong—or the commercial market so weak—that that incentive has not tempted anyone to gamble on offices.

The difference is a Floor Area Ratio (FAR) of 12 for office space and 10 for residential space at certain parcels that have been rezoned to C-6.45. See p. 7 of the Executive Summary of the Downtown Brooklyn Redevelopment Final EIS.

Did Ratner just learn this?

The switch to housing led the Observer to cite a similar example, at Atlantic Yards:
Bruce Ratner, Forest City Ratner’s president and C.E.O., recently came to a similar conclusion. He originally proposed 2.1 million square feet of office space to be included in his Atlantic Yards complex, which lays adjacent to the boundaries of the downtown rezoning to the southeast. Then, last summer, he reduced that amount to 628,000 square feet and made up the difference with market-rate condos.

It wasn't a zero-sum trade, though, given that the project increased from an initial 7.7 million square feet to 9.1 million square feet this year, thanks in part to the addition of Site 5 across Flatbush Avenue. On that site, P.C. Richard and Modell's currently occupy a low-slung cinderblock complex; a 430-foot tower is planned.

But the bigger question is: did Bruce Ratner recently "come to a similar conclusion"? The company may have announced the changes recently, but, as noted, the addition of condos on top of the rental apartments came only a week after the affordable housing agreement was signed, which suggests the switch from office space had been in the cards for a while.

Could the switch had been considered from the start? That November 2003 Draft Environmental Impact Statement suggests that Forest City Ratner should have known that the market for additional office space was questionable, even office space well-located at a transit hub, as at the proposed Atlantic Yards. But the slogan "(Temporary Construction) Jobs, Housing, and Hoops" wouldn't work as well.

[Graphic from NoLandGrab.org]