No Land Grab

Will Day One be D-Day?
By Norman Oder

Despite reports that Assembly Speaker Sheldon Silver was wavering and might stall the Atlantic Yards plan, he voted in favor for it at a meeting December 20 of the Public Authorities Control Board. Developer Forest City Ratner didn't make major changes requested by some critics, but did offer some last-minute concessions: the height of the flagship Miss Brooklyn tower would be brought down by a little more than 100 feet, just below the iconic Williamburgh Savings Bank. And, in a nod to a request made by state assemblymember elect Hakeem Jeffries, the 22-acre site would include 200 affordable homeowner units, along with 2,250 affordable rentals - and some 4,000 market-rate residential units.

The vote by the Public Authorities Control Board (PACB) to approve state financing occurred this Wednesday, December 20. Assembly Speaker Sheldon Silver, who controls one of the three votes and has stalled or killed other state projects, was said to be unwilling to vote yes before the end of the year. So reported NY1, quoting a source briefed on the matter. However, Skip Carrier, a Silver spokesperson, was cautious. "We are still in discussions," he said Tuesday. "At this point there is no way to know. People at the Division of Budget are still giving us paperwork, and we are still reviewing it. The decisions will absolutely be based on the financials. It's been a complicated project from the get-go and there have been some recent changes."

As for a call for a delay expressed by four Assembly members representing districts including or close to the proposed project site, Carrier said, "On every project we take into account the opinions of the local delegations." The PACB, controlled by three members (Governor George Pataki, Senate Majority Leader Joseph Bruno, and Silver) ended up voting to approve Atlantic Yards, even though Silver has rejected or stalled other projects, such as the West Side Stadium and Moynihan Station. A delay would set up some challenges for Silver and Spitzer, both of whom have expressed general support for the project but have been pressured recently to look more closely at project's financials - and the environmental impact of a basketball arena and 16 towers squeezed into the northern boundary of low- and mid-rise Prospect Heights.

A host of civic groups held a press conference Monday calling for a delay in the project. Organizer Kent Barwick of the Municipal Art Society posited that a new administration could better address issues like the project's potential transportation impact and a role for citizen input. Meanwhile, the Empire State Development Corporation (ESDC), the state authority overseeing the project and overriding city regulations on zoning, found itself under new scrutiny regarding its financial analysis of Atlantic Yards.

The scrutiny first emerged last week on the Atlantic Yards Report blog (written by this author). The ESDC had lowered its estimate of the project's net fiscal impact - the amount of taxes to the city and state - by about a third, or nearly a half-billion dollars, without discussing it publicly or highlighting it in documents. The ESDC scrambled to explain that an eight percent decrease in the project's size, mainly in office space (which generates more spinoff employment), was responsible for the decline. But the memo released last Friday didn't explain, for example, how an eight percent decrease led to an 18 percent cut in construction jobs.

Richard Brodsky, a Democratic Assemblyman from Westchester who chairs the Assembly committee that oversees authorities, held an ESDC oversight hearing on Monday. Though Brodsky covered a range of issues beyond Atlantic Yards, he did look closely at the ESDC's fiscal impact memo. Chairman Charles Gargano and more than a half-dozen top agency officials testified, but none could answer certain questions about the memo.

Brodsky asked why the discount rate - the interest rate used to calculate the expected rate of return for the project - had been changed from 6 percent to 3 percent from the predecessor memo prepared in October. (The December memo offers no explanation as to why.) "I thought it was 6 percent too," acknowledged Ann Hulka, the senior VP for real estate development named as the recipient of the memo. "But I haven't had a chance to talk to Kathy." She referred to Kathy Kazanas, who wrote the memo but was unable to attend the hearing.

Brodsky, questioned afterward by reporters, said it wasn't his role to advise Silver. But he offered his own opinion: "As of right now, I need to know more of the facts that we sought and didn't get today, and we'll get those by the end of the year." Part of those facts may be more stringent review of the project's financials.

While the agency has twice released a brief memo summarizing the project's fiscal impact, Hulka revealed that an outside consultant, the firm KPMG, conducted an independent financial analysis. That document had not been provided, because of confidentiality issues, and Brodsky said he would listen to such claims. Still, he opined that there was "not enough to tell you: is this a good deal or a bad deal?"

Also Monday, the influential Regional Plan Association (RPA) joined the Municipal Art Society and several other civic groups in calling for a delay in consideration of the plan. The RPA in August had offered cautious endorsement of the project, championing the arena block (Phase 1) but calling for changes in transportation plans, open space, and project design in Phase 2. "The Atlantic Yards project will bring substantial benefits to the region and the city, but it is also a major piece of city-making in the midst of successful residential neighborhoods," said RPA VP Chris Jones Monday. "A delay in PACB approval should be used to develop a more comprehensive transportation plan and improve the project's design."

MAS helped launched BrooklynSpeaks and has called for substantial changes before Atlantic Yards can be approved. Still, MAS and other groups emphasized they weren't opponents of development. "We're not here to kill the project," declared MAS President Kent Barwick. "We're here to resuscitate the role of the public."

Adding its voice was the Citizens Union, a longstanding good government group, which had previously not weighed in on the issue. Citizens Union president Dick Dadey called for a "limited delay" in the process and noted that it "does not align itself with those who oppose the project and wish to use the process of delay to kill the project, because we believe that economic development is needed so that the city can continue to be a dynamic place of business and meet the needs of a growing population."

"The fact that the Empire State Development Corporation, when it adopted the plan, failed to make any public mention of lowering significantly its estimate of how much tax revenue the project would generate is emblematic of our concerns," Dadey wrote in a letter to the PACB. Brooklyn Assemblyman James Brennan reiterated that he has been unable to get the project financial plan, which would help ascertain whether sufficient returns to support development could be derived from a significantly smaller project.

Jon Orcutt of the Tri-State Transportation Campaign said the mass transit system was not up to snuff and suggested a "real planning process" to tackle the problems.

"We're looking forward to an administration with a completely different kind of management for the Empire State Development Corporation," Barwick said. "This is a project which, as the next 15 to 20 years go by, ought to have a guiding hand. There ought to be a continuing subsidiary of the state, with citizens from Brooklyn guiding this project." (Barwick, like some others, assumes that the ten-year buildout projected by the ESDC and Forest City Ratner, is overly optimistic.)

As for challenging the project in court, as project opponents Develop Don't Destroy Brooklyn have done, Barwick kept a distance, saying that there have been no successful challenges to the law establishing the ESDC. "If the courts decide that the process has been defective," Barwick said, "while we're waiting for the courts to decide that, we have an opportunity to let a new administration take hold of it and assess it, and if it can be repaired to the point where it makes sense for Brooklyn, then perhaps it should be approved."

Also Monday, three local elected officials reiterated a call for delay in the project approval, Eric Adams, the State Senator-elect for the 20th District and a retired New York Police Department captain, said he was "very concerned about the terrorism aspect. I'd hate for us to rush right through it." The adjacent transit hub was targeted for a terrorist attack in 1997, but state environmental review laws, written well before the 9/11 attacks, don't require a stringent review of security aspects.

Speaking at a meeting organized by the Prospect Heights Neighborhood Development Council, Adams cautioned, "I don't want to get your hopes up," pointing out that Spitzer supports the project. Assemblymember-elect Hakeem Jeffries told the group he'd expressed to Silver concerns about affordable housing and the project's impact on infrastructure.

Councilwoman Letitia James said of Spitzer, whose transition team she'd contacted, "He supports the project, but he shares our concern. He'd like an opportunity to review it." How much of that concern Spitzer shares remained unclear.