Sunday, November 06, 2005


The Times (and Lupica) address jobs and housing at Atlantic Yards: who's Orwellian?

[Updated with subheadings 6/6/09]

So the New York Times finally addressed the drastic reduction in office jobs and increase in luxury housing at Atlantic Yards, in an 11/6/05 article headlined Routine Changes, or 'Bait and Switch'?. While the article did go well beyond previous coverage in the Times and other dailies, it notably gave developer Forest City Ratner the benefit of the doubt in several places.

And, while welcome, the article failed to appear before the mayoral debates, when it might have had some impact (and better informed Atlantic Yards critic Freddy Ferrer). Also unmentioned is the failure of the Times itself to earlier inform readers of the changes in the project.

Reasons for skepticism

Look at Forest City Ratner's manipulation of numbers--office jobs, construction jobs, basketball attendance, and more--and there's ample reason for skepticism, as noted by Daily News sports columnist Mike Lupica in his 11/6/05 column headlined Math doesn't add up in Ratner world. (Yes, Lupica relies partly on this blog.) 

Unlike the Times, Lupica sees fit to mention the "15,000 construction jobs" long touted by Ratner; the claim actually means 1,500 jobs a year for ten years. The Times in other contexts has reported that construction jobs are calculated in job-years.

Blaming "opponents"

The deck below the Times headline stated "Fewer Jobs and More Condos, Ratner's Opponents Complain" and the headline on the jump page was "Ratner Project's Opponents Complain That It Has Changed." 

First, in an article of 37 paragraphs, only five were devoted to the views of critics. The deck might better have stated "Ratner Officials Defend Project Changes." The article made no attempt to query project supporters who had enthused about the once-promised 10,000 office jobs. It's quite possible that not only opponents but supporters would complain about the drastic cut in office jobs. 

The article neglected to point out that the developer maintains the slogan, "Jobs, Housing, and Hoops," and its supporters still tout job creation, even as the number of possible jobs has declined drastically.

Misreading "Atlantic Yards"

Take the caption on the front of the Metro section, which stated, "A development executive of Forest City Ratner Companies, James P. Stuckey, looking out over the Atlantic Yards last month."

Actually, "Atlantic Yards" is the name of a development yet unbuilt. The railyard behind Stuckey is more precisely called "Vanderbilt Yard." And the caption could give the misimpression that the block of buildings behind the railyard would not be part of the project footprint.

Correction confirmed

One paragraph in the story confirmed a correction I requested on Nov. 3. I pointed out that a Times correction that stated that Atlantic Yards "calls for an arena for the Nets basketball team and office, residential and commercial building--not just residential" itself deserved a correction, because the project is predominantly residential.

Indeed, the new article cited the transformation of Atlantic Yards into essentially a large residential development with an arena and a relatively small amount of office and retail space attached to it.

Fewer jobs, more condos

The lead of the new article set the stage at the December 2003 news conference announcing the project:
It would provide 10,000 office jobs and more than 4,000 units of rental housing, half of it set aside for low- and middle-income families. Its centerpiece would be a Frank Gehry-designed arena for the Nets basketball team, topped by a "lushly landscaped" public park with "outstanding panoramic vistas facing Manhattan."
...In other respects, however, the Atlantic Yards envisioned today looks very different from the one unveiled nearly two years ago. The project's size has jumped by a million square feet, and its dollar cost by 40 percent, to $3.5 billion. Commercial space, once a substantial portion of the overall square footage, has dropped dramatically, replaced by thousands of for-sale apartments and a hotel.
Nearly three-quarters of the office jobs originally projected are gone; the new apartments do not count as part of the so-called 50-50 agreement under which 2,250 apartments are to be rented below market rates, and the park on the arena's roof is to be accessible only to residents.

To be specific: there would only be space for 2,500 office jobs, not 10,000, and 2,800 market-rate condos have been added to 4,500 rentals.

"Projects change, markets change"

The explanation from Stuckey is that "Projects change, markets change." The Rev. Clinton M. Miller, of the Downtown Brooklyn Leadership Coalition, counters, "They were willing to say anything to get community support, and that is why it is dangerous for the community to accept promises from the outset." 

Unmentioned in the article is Forest City Ratner's aggressive attempt to sell the project--with 10,000 new jobs and the 50-50 housing agreement--to the public in fliers like this and this.

Cost increase

So why did the project cost grow from $2.5 billion to $3.5 billion? The Times's answer:
Several factors have converged to raise the project's price tag, including increasing construction costs, the above-market prices the developer has paid to buy out residents who live on the project's footprint, the extra $50 million the developer offered for rights to build over the Metropolitan Transportation Authority rail yard, and the cost of renovating the yard itself.

The extra $50 million the developer offered? Forest City Ratner's initial $50 million bid for the MTA's Vanderbilt Yard was made in mid-2005, and the additional $50 million was announced in September. The Times's formulation suggests that the developer was only planning to offer a lowball $50 million all along. 

However, at the 5/4/04 City Council hearing on Atlantic Yards, Stuckey pledged a fair payment: [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... by whatever independent process that they normally use. 

Remember, the railyard was appraised at $214.5 million, and sold to the developer for only $100 million.

From offices to housing

So why was office space traded for luxury housing?
Officials of Forest City Ratner said they eventually realized that they would have to reduce the amount of commercial space, to accommodate condominium units that would help pay for the project, including the below-market rental housing.

Eventually realized? That's disingenuous. The developer and the community group ACORN signed the Housing Memorandum of Understanding (MOU) dated 5/17/05 to great fanfare at a press conference 5/19/05. A week later, at a 5/26/05 City Council hearing , Forest City Ratner announced plans to increase the amount of housing by 1,500 or perhaps 2,800 units. (Ultimately, they chose 2,800 units.) 

The evidence suggests that Forest City Ratner had the condo plan in the cards for a while, but wanted ACORN on board first. After all, the MOU acknowledges that Forest City Ratner could change the size of the project if the developer deemed it "economically necessary."

How big are offices?

The Times pointed out that there's another reason for fewer office jobs:
The earlier estimates were also based on a ratio of one job per 200 square feet of space, but the Empire State Development Corporation, which released the September planning documents, uses a less generous ratio of one job per 250 square feet of space, amplifying the reduction.

Actually, the ESDC doesn't mention the square footage issue at all; that was the New York City Economic Development Corporation (NYCEDC). 

And there's another way to frame this change: Forest City Ratner was overoptimistic from the start. It's not untrue that the 250 square-feet-per-job is a "less generous ratio," but that's not the full story. It's the industry standard, as noted not only by the NYCEDC but also in documents from Ratner's own consultant, economist Andrew Zimbalist.

Residential vs. commercial

The Times article added some useful clarity about size and density:
The move to include more housing also increased the total square footage of the project. Because the ceilings of residential units are several feet lower than those of commercial units, however, it did not require more floors in each building. Indeed, the project will have one building less than originally planned, lowering its overall density somewhat.

Interesting, but it seems to contradict the Times's 7/5/05 article headlined "Instant Skyline Added to Brooklyn Arena Plan," which stated:
But the real impact would be in the size and density of the buildings, which are taller and bulkier than once envisioned.
With 17 buildings, many of them soaring 40 to 50 stories, the project would forever transform the borough and its often-intimate landscape, creating a dense urban skyline reminiscent of Houston or Dallas.

Adding Site 5

Also the new article didn't point out that Ratner added a building on Site 5, now home to the low-rise Modells and P.C. Richard stores across Flatbush Avenue in Park Slope.

Toting up the jobs

So how many jobs will there be after all? The Times cited unnamed "critics":
Critics said, though, that even the reduced job estimates were overstated, because they do not account for likely vacancy rates or for jobs lost when businesses currently occupying the site are forced out. Based on those factors, they said, the net gain from the project would be fewer than 1,000 new office jobs.

Unmentioned is perhaps the most important factor: many office jobs would likely not be new, just moved from Manhattan. After all, working from the original plans, the New York City Economic Development Corporation stated:
The fiscal impact analysis, however, assumes that only 30% of these jobs...are new to the New York economy.

The Times unfairly implies that only critics offer further caveats on job claims; so does the NYCEDC, a booster of the development.

Housing bait-and-switch?

The Times quoted a critic on the housing promises:
"The problem is, Bertha Lewis and Mayor Bloomberg and Ratner are out there calling it a 50-50 plan, not a 50-50 plan just for rentals," said Daniel Goldstein, the spokesman for Develop Don't Destroy Brooklyn. "It's a bait and switch. What they announced as a revolutionary housing deal is not."

And the Times pointed out that the numbers were important:
The 50-50 deal and the more generous job numbers were frequently cited by politicians and others supporting the project, and favoring Mr. Ratner's bid to buy air rights over the rail yards for tens of millions of dollars less than their appraised worth.

In letters dated last June and July - weeks after Mr. Stuckey outlined the potential conversion to more residential units at a May hearing - more than two dozen union leaders and elected officials expressed their support for Mr. Ratner's bid. Many of them cited the developer's earlier promise of 10,000 permanent jobs in the project's commercial portion and the so-called 50-50 housing deal with Acorn.

Blame the press

So why were the officials misinformed? The Times article doesn't say, but the press--and the Times itself--could be blamed. It neglected to cover the 5/26/05 City Council hearing and, on 6/28/05 printed a brief article based on a mayoral press release, claiming there would be 8,500 office jobs. A front-page 7/5/05 article about the project, headlined "Instant Skyline Added to Arena Plan," did not mention the decrease in office jobs. Meanwhile, Stuckey had announced the changes at the hearing, and Forest City Ratner's own Brooklyn Standard publication, released 6/17/05, promised only 6,000 jobs. Mayor Bloomberg issued an incorrect 9/14/05 press release claiming there would be 8,500 permanent jobs and only 4,500 residential units.

So why didn't the Times ask some of these officials if they feel they were misled, or of if they have reevaluated their support?

Stuckey's explanation

Here's the juiciest part of the article:
In an interview, Mr. Stuckey, the executive of Forest City Ratner, suggested that Forest City Ratner was paying a price for being forthcoming about its plans....
"What's interesting is that we've been out talking to people for two years. And this week, the approval process began," he said in an interview in October. "Here we are opening ourselves up - tremendous transparency, for two years. Yet the criticism is, 'Wait a second, they didn't tell us something about the evolution of their planning process before the public process began'? Just think about what that means."
"It's Orwellian, almost," Mr. Stuckey added.

In Stuckey's defense, the company has published some information about its project in the Brooklyn Standard (the first issue mentioned 6,000 office jobs and the latest issue merely "thousands"), and information has been available from the Empire State Development Corporation since mid-September--though most of the press was too lazy to analyze it.

Who's Orwellian?

But are critics Orwellian? Wouldn't the developer's deceptive fliers--like this and this--qualify? Or the Brooklyn Standard, which the Times itself dismissed as "basically an ad." Or the latest Brooklyn Standard, with its deceptive and possibly fake bylines? 

Or the Community Benefits Agreement, decried by experts as not legitimate because it involved only selected groups? 

And what about the company's web site, which until early November continued to maintain the December 2003 press releases that promised 10,000 jobs and 4,500 housing units? (For the original web site, go to the Wayback Machine. Start with the Dec. 17, 2003 iteration--the updates in 2004 merely change the names of the spokespeople.)

About that park on the arena roof

The Times reported:
Officials of Forest City Ratner - the development partner in building a new Midtown headquarters for The New York Times Company - gave several reasons for the switch to a private park. One was that as the buildings rimming the arena were re-mapped to house more residential units, there were fewer public access points for the roof of the arena. Another was that the city building code would have treated the park as a public assembly area, requiring cumbersome safety features. Finally, Mr. Stuckey said, discussions with planning experts revealed that "generally, open space up in the air doesn't work - people don't use it."
While the new plan closes the park to the public, he said, it adds more park acreage to the overall project.
"We took what was on the roof and put it on the ground where people can use it," he said.

Then again, Ratner spokesman Joe DePlasco had said that it was also to help the residential tenants.

Original promise

And the original fact sheet gushed:
The roof of the Arena offers an exciting opportunity to create new public space, with 52,000 square feet in four lushly landscaped areas for passive recreation and a promenade along the outside edge of the roof with outstanding panoramic vistas facing Manhattan. For active recreation, an outdoor ice-skating ink connects the four gardens; in warmer months the rink will become a running track. This open space not only provides a destination for community residents as well as for the workers in the office buildings-–it also allows the commercial buildings surrounding the arena to be connected at the sky-lobby level.

Looking at the housing

The Times noted:
The agreement signed last May between Mr. Ratner and Ms. Lewis applied only to the 4,500 rental units envisioned in the original plan. But it included a provision that if the developer added more residential units, the firm would develop 600 to 1,000 moderately priced for-sale units on or near the project site, in effect offering something close to a 50-50 ratio for all the housing associated with the project.

Not quite. There's no assurance that the new units would be near the project, and it's important to tease out the definition of "affordable." The MOU states:
Developer and ACORN will work on a program to develop affordable for-sale units,which are intended to be in the range of 600 to 1000 units,over the course of ten (10) years and can be on or off site.It is currently contemplated that a majority of the affordable for-sale units will be sold to families in the upper affordable income tiers.

The upper-affordable income tiers include families earning more than $100,000 a year —surely not ACORN’s constituency. Of the Atlantic Yards rentals, 30% would go to middle-income families, 20% to lower-income ones.

Letting Ratner off the hook

Here's where the Times let Ratner get away with being disingenuous:
At the time, officials of Forest City Ratner said they were already contemplating adding 1,500 condominium units, in part because community leaders had pushed Mr. Ratner to include more housing in the project... Forest City Ratner officials said that they had remained faithful to the Acorn agreement, which did not require that half of the new for-sale units be priced affordably.

They added more market-rate housing to help out ACORN? That doesn't make sense. Also, while the developer has indeed been technically faithful to the ACORN agreement, none of the press coverage of the initial announcement raised the possibility that there would be additional units.

New math

The Times suggested that the project might indeed provide 40 percent affordable housing:
But if the developer chooses to build the maximum of 1,000 moderately priced for-sale units described in the Acorn agreement and builds them off-site, then the total number of for-sale and rental units associated with the project would reach 8,300, of which 3,250 would be priced below market rates - about 40 percent.
Much of the city's moderately priced housing is built through an arrangement called the 80-20 Program, under which city and state agencies subsidize construction projects by providing developers with tax-exempt bonds. In exchange, the developers set aside 20 percent of the apartment units for tenants who earn 50 percent or less of the area's median income.

But what percentage would be truly affordable, to people earning under Brooklyn's median income? Despite the mention of the 80/20 program, Atlantic Yards is actually a 50/30/20 program, noted City Limits Weekly. 

As noted in Chapter 1 of my report, the project relies on a regional area median income (AMI) of $62,800 (for a family of four), rather than the $35,000 AMI in Brooklyn. The average middle-income household--occupying 30% of the total 4,500 units and 60% of the “affordable" rentals--would earn $75,000. So if most of the "affordable" condos go to people earning $75,000 and up, how is ACORN helping its constituency?

Back to Lewis

The Times article ends by quoting ACORN's Bertha Lewis. While in Ratner's latest Brooklyn Standard, she continued to insist that the 50-50 program had not been compromised (mentioning the 2,250 rentals but nothing about the offsite condos), here she was a little more circumspect:
Ms. Lewis said that Acorn remained a strong supporter of the project and of the agreement with Forest City Ratner. But she said she was negotiating with the company, and with the government agencies that help subsidize housing, to help make a greater proportion of the for-sale apartments available below market prices.
"We know that when we get through this thing, half of all the housing is going to be affordable - half of the rental, half of everything else," she said. "We haven't gotten down to the last part of this. But our whole principle is 50-50."

So the article ends with ACORN, not any critics. Wouldn't it be worth pointing out that ACORN is required to publicly support the project? The MOU states:
"ACORN agrees to take reasonable steps to publicly support the Project by, among other things, appearing with the Developer before the Public Parties, community organizations and the media as part of a coordinated effort to realize and advance the Project and the contemplated creation of affordable housing.”

Why not ask ACORN why its efforts mostly help people outside its constituency?

"Carefully sculptured"

One more thing. The Times article offered an unsubstantiated assessment of the project design:
The other towers - some smaller than before, some larger - still stand amid acres of green space carefully sculptured to welcome residents of the adjoining streets.

That may well be what's intended, but it certainly deserves comment from an authority.

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