TimesRatnerReport

One URL for the Empire State Development Corporation (ESDC), the state's chief economic development agency, is nylovesbiz.com, and the homepage logo features a heart. That suggests that the relationship between the agency, known formally as the New York State Urban Development Corporation, and the businesses it works with is hardly adversarial and may not merely be collaborative--a description offered by an agency lawyer during the court hearing 2/14/06--but positively embracing.

But that rosy image is belied by Justice Carol Edmead's ruling that the lawyer advising ESDC on the proposed demolitions within the Atlantic Yards footprint should be disqualified because he recently worked for developer Forest City Ratner. She called it "a severe, crippling appearance of impropriety," and said that the relationship could not always be collaborative, because the agency and the developer differed at one point on whether the demolitions required agency approval.

Can the agency be expected to do a fair job in both promoting economic development and evaluating the environmental impact of the proposed Atlantic Yards development? ESDC Chairman Charles Gargano gives little cause for confidence. He recently said he knew nothing of any conflict of interest posed by the agency's lawyer, didn't know the agency rents space in a mall owned by Ratner, and endorsed the Atlantic Yards project without reservation, even before the environmental impact statement has been issued.

Other statements made on the Brian Lehrer Show, cited below, show Gargano unaware that the Atlantic Yards plan began via a developer rather than an open process, overestimating the number of public hearings associated with the review of the Atlantic Yards plan, and claiming--even though his agency's goal is job creation and economic growth--that the reason to support the project is because it would create housing.

Republican fundraiser

Though he had a successful business career, Gargano is better known for his job as a prodigious fundraiser for Republican candidates like President Ronald Reagan, Sen. Alfonse D'Amato, and Gov. George Pataki, who appointed him to his current post. Under the administration of President George H.W. Bush, he was named ambassador to Trinidad & Tobago; he sought the ambassadorship to Italy under the current president, going so far as to submit a letter from Manhattan D.A. Robert Morgenthau clearing him of any wrongdoing in charges of politically-motivated grantsmanship, according to a 3/17/01 article in the New York Times.

An 11/7/99 review by the Daily News showed that 40 of 201 companies that received ESDC loans or grants had given political contributions to Gov. Pataki or other Republican causes. In a 9/26/96 article in Newsday, state Sen. Franz Leichter, a Democrat from Manhattan, called the ESDC a "political slush fund" for Pataki, citing 11 procurement contracts to firms politically linked to Republicans. (Forest City Ratner head Bruce Ratner is a Democrat, but companies he controlled have historically made contributions to various politicians, including $7,500 to since 2000 to state groups affiliated with Governor Pataki, according to a 12/10/03 article in the New York Sun.)

On the radio


On 11/15/05, Gargano appeared on the Brian Lehrer show on WNYC, and was mostly asked about the Atlantic Yards project. Lehrer began by reading an article about a fundraising walk held two days earlier by opponents of the project, citing objections to the density of the plan, the lack of democracy, and to use of eminent domain. He then cited a commentary posted that day by Tom Angotti, a professor of urban studies at Hunter College, that said "the planning for Atlantic Yards is all backwards." Lehrer asked Gargano, "Is this a through-the-looking-glass version of how development should work? (Photo from Brian Lehrer show.)

CG: If you understand development and how it does work, we have a process in government, state government and I’m sure other government bodies have the same, whereby we put out first of all, on any area we’re trying to develop, we put out what we call an RF-- I, request for-- EI, expressions of interest. The reason why we do that is we want to pick the brains of the private sector, and see what kind of ideas they have, and after all, they’re the ones with the resources who are going to build these projects, so we want their ideas. We put out this RFEI, that’s the initial—that’s the first part of the process, and it has worked very well for many, many decades. So it’s not necessarily so that the governments put out a plan of how they want to see something done. An example of that is 42nd Street. Now 42nd Street--the finished product is a very good project, however, that plan, over more than a dozen years, was changed three or four times, until the government came up with a plan that was acceptable to all. So I believe bringing in the private sector, and their ideas, with their engineers and architects, and their resources, is the proper way of going about it.

There was no such RFEI issued for the Atlantic Yards project, though there have been for other projects. As Brooklyn Borough President Marty Markowitz said in affidavit, he urged Bruce Ratner to buy the Nets basketball team, and Ratner concluded that a standalone arena made little economic sense.

The agency had a previous relationship with Ratner, on several projects. For example, as the Village Voice reported in a 6/17/02 article headlined Paper of Wreckage, Gargano met with Ratner in 2000 to discuss the state agency's role in condemning properties on Eighth Avenue in Manhattan for the Times Tower that Forest City Ratner would build in partnership with the New York Times Company.

Avoiding democracy, or just red tape?

Lehrer continued to quote Angotti's essay, pointing out that, because the ESDC is in charge, Forest City Ratner can avoid the city's Uniform Land Use Review Process (ULURP), which would require votes by the local community board, borough president, city planning commission, and city council. Lehrer asked, "So, are you helping Forest City Ratner do an end run around the usual land use democracy?

CG: That’s one way of categorizing it, but we don’t believe that’s the case at all. More than 40 years ago, the Urban Development Corporation [the ESDC’s predecessor name] was created with the powers of getting projects done. That doesn’t mean that we abuse any kind of process or circumvent any process. But what we’re trying to do is get projects built that are in dire need of being developed, such as 42nd Street as I mentioned before, and there’s a whole host of projects. And it’s not a question of circumventing or trying to avoid a process. It’s a way of going about it, with the scoping process that we have, and then environmental impact review. So we go through a lot of process. What we try to eliminate is a lot of red tape that doesn’t necessarily make for a better project

The difference between process and red tape is unclear, but unmentioned was how, by going through the ESDC, the project can override city zoning and be built at a higher density than otherwise allowed.

Lehrer followed up by asking, "Why shouldn’t a big project like this that affects several city neighborhoods go through the ULURP land review process.... Why isn’t that just better democracy?"

CG: Well, you’re going through many, many layers of government, and we don’t think it really is always necessary. As I said before, we do go through a process here, we do go through a scoping process, and we have public hearings to allow the public to comment while we’re going through the scoping process. And then when we develop a draft EIS, we have public hearings once again. In the meanwhile, we have a lot of public hearings, with the community and other members, interested parties. So, it’s a lengthy process in itself, but that doesn’t mean we have to go through many layers of government when sometimes it’s not necessary.

Public hearings? There was only one public hearing so far, on 10/18/05, after the draft scope of analysis was issued, and there may be only one more, after the Draft Environmental Impact Statement is released, likely in the next few months. There are no public hearings "in the meanwhile."

Opponents NIMBYs?

Lehrer pointed out that project opponents were unhappy that there was no public hearing until the one held in the previous month. Gargano responded by raising the spurious NIMBY claim.

CG: Well, one of the things I think we have all learned in our lifetime is the fact that when we are in a particular area, we want nothing else to happen in that area, we don’t want any future development, we don’t want any cleanup, even blighted areas. Look, I received a lot of criticism when we started working on 42nds Street, and we had all these peep shows, sex shops, prostitution, drug sales. And there were objections there, that we were getting a lot of these-- cleaning up a blighted area and getting a lot of these undesirable establishments moved from there. So everyone has their own opinion and that’s fine--

Lehrer interjected, "So it sounds like what you’re saying is the way to keep things moving that the direction that the leaders of the state want is to lock out public input?" Gargano repeated his "process" mantra.

CG: That’s not so. We do have enough public process in everything we do. As I said before, we have a number of public hearings and we do have a process where the public is involved. I don’t think it’s trying to exclude the public. I think what we have to do, when there is a need to accomplish something where it's for the public good, we have to find a way of doing it, and not getting blocked in red tape for long periods of time.

Competing plans

Lehrer read another section from this article, citing the community-developed UNITY plan for the Vanderbilt Yard, as well as the plan for the railyards submitted by the Extell Development Co. that was rejected by the Metropolitan Transportation Authority (MTA). Lehrer asked if it was "right or fair for the MTA to reject the alternative proposals without a public hearing"? Gargano said it wasn't his business.

CG: Well, first of all, the MTA owns the property, you’d have to speak to the MTA on what the process is. But I know that the MTA does own that property, and they have their own processes they have to go through, when they sell their property. So I’m not going to question them, but obviously that question has to go to the MTA.

Lehrer asked, "Do you have your own opinion that the Ratner plan is better on the merits than the Extell plan?"

CG: What I do know is we have a lot more detail on the Ratner plan. We know--again, this is a question of what the MTA has decided, who to sell the property to, we’re not a part of that, Empire State Development. I can tell you what I do know. The Ratner plan is a very detailed extensive plan to clean up the blighted area within that area, finally develop railyards. Isn’t it interesting that these railyards have sat for decades and decades and decades, and no one has done a thing about them, just accepted them in their community, throughout Brooklyn. I remember these yards, I grew up in Park Slope, Brooklyn. These railyards have been sitting there for 40 or 50 years, or longer, obviously, that I remember. The reality is, when someone comes in to develop, all of a sudden everybody is up in arms about how valuable they are. We just had that on the West Side of Manhattan, with the Jets. Now all of a sudden, now that the Jets have decided to stay in New Jersey, which was a big loss in my opinion to us here in New York, now all of a sudden, where’s the interest for those railyards at this point? Very little.

But wasn't it ESDC's job to send out an RFP to develop the railyards, or to work with the MTA to do so? And Gargano failed to acknowledge that the MTA accepted a bid for less than half the appraisal, and for $50 million less than that bid by rival developer Extell.

Nor has the ESDC apparently made any effort to conduct an independent review of the fiscal impact of the Atlantic Yards project, instead relying, in a 3/4/05 press release, on a study conducted by developer Forest City Ratner's paid consultant. Does the ESDC accept fiscal impact studies in the same way it accepts an engineering report regarding emergency demolitions?

Atlantic Yards a "wonderful plan"

Lehrer pointed out that the main opposition group, Develop Don’t Destroy Brooklyn, has pointed out that they don't oppose development, just excessive development. "Why do you think there’s no interest for 40 or 50 years, and then, all of a sudden, there are competing ones?" he asked.

CG: Well, I think what happens, it brings interest to a particular site. As the Jets brought interest to the site on the West Side railyards, similarly here, Forest City Ratner, who has been doing a tremendous amount of good development work, in Brooklyn, downtown Brooklyn, MetroTech and others. They came up with a wonderful plan here, for not only bringing back the Nets, that’s also a plus, but the main reason here is the housing that’s going to be developed, and it’s going to be affordable housing, and it’s going to be set aside for minority workers to work on the particular project, the largest percentages I have ever seen in construction. So therefore it includes the entire community when it’s being developed. It includes the entire community, who want to still live in that area. I don’t know what the other plans are and again, based upon the decision by the MTA, that’s their decision, not ours.

Does MetroTech constitute good development work? Well, it has kept back-office jobs from moving to New Jersey, but only thanks to some significant subsidies, producing a decidedly mixed record, as WNYC has reported

The agency's goal is economic development, not housing, and Atlantic Yards is mostly a project to build luxury housing. Only 2,250 of 7,300 units would be affordable. As for including "the entire community," Gargano apparently hasn't noticed criticism of the Community Benefits Agreement.

Gargano said 2/14/05, commenting on an unrelated issue, "As New Yorkers know, the benefits, programs and services that we provide companies are in return for them creating and retaining jobs in New York State." Note that the number of permanent office jobs at the Atlantic Yards project, once estimated at 10,000, would be no more than 2,500.

Too dense? Not to Gargano

Lehrer asked if he was concerned by the project's density. "A lot of people who even support the idea of this development by Ratner, including the Nets arena, were kind of taken aback when they saw the blueprint," he said.

CG: Well, there’s going to be a lot of open space as well. You can build in many ways, Brian. You can spread it out with lower buildings, or you can concentrate taller buildings and have a lot of open space. The developer proposes to include approximately seven acres of public open space within the project site, with all kinds of amenities. So you have to take the square footage over the entire area. Plus the developing has become more popular, so that we leave open space.

While that last sentence makes no sense, Gargano was repeating Forest City Ratner's claims regarding open space. However, the amount of open space would be far less than recommended by the city, given the population.

Lehrer, citing the one public hearing, asked if there would be more. Gargano repeated his favorite word: process.

CG: Oh, absolutely. There’s a lot more that has to be done. First of all, October 18, we started hearings, during the scoping process. That ended October 28, and now we’re beginning the Draft Environmental Impact Statement, and that’ll take a long period of time. From that, there will be more comment periods, and we’ll have to evaluate those comments before we go into the Final Environmental Impact Statement. So there’s a lot of process yet to go.

Personal qualms?

Lehrer tried to get Gargano to acknowledge any "environmental questions or concerns, any spot that you’re looking at and saying, ‘Well, I’m not sure of this aspect, they’re really going to have to satisfy me on this’?"

CG: I think what we have to do is make sure that we have the proper infrastructure that is required for a development of this type, and we will make sure of that, and that’s part of the environmental impact statement, it takes traffic studies, air quality, and so forth, so--

Lehrer interjected, repeating his question, asking for a personal view, and Gargano repeated himself.

CG: As I said, the infrastructure has to be built in accordance to the needs of this particular development.

Lehrer gave up and turned to questions of Ground Zero.

A few weeks later, Gargano, apparently disregarding process, offered his personal view to the New York Observer: "There is no need to scale down the project."