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December 31, 2009

Can $8.1M in infrastructure contingency funds pay for repairs on damaged MTA tunnels when neither extent nor cost has been assessed?

Atlantic Yards Report

Remember that confidential December 2007 report commissioned by developer Forest City Ratner and provided to the Metropolitan Transportation Authority (MTA), which stated that portions of two subway tunnels were in critical condition and required repair "in the immediate future" and the "near future"?

The MTA, as I wrote in August, would not provide details concerning the amount of repairs completed or planned, or how such repairs would be funded.

Now we learn the repairs would be paid for via a contingency fund in the budget for the arena project, but the extent of the damage--nor, obviously, the cost of such repairs--has not been determined. And there's only $8.1 million available for Infrastructure Contingency.

That raises lingering questions about whether the contingency funds would be sufficient.

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Posted by eric at 10:30 AM

According to bond deal, in absence of Urban Room, Ratner can leave temporary canopy over new subway entrance for ten years

Atlantic Yards Report

Remember, a new subway entrance is supposed to be built on the south side of Atlantic Avenue--but it won't be enclosed in the Urban Room, because the latter structure is depending on Building 1, the office tower for which, as Bruce Ratner told Crain's, there's no timetable.

According to the Barclays Center Official Statement, prepared by Goldman Sachs for the tax-exempt bond deal, a document called the Transit Improvement Agreement--yet unseen--gives the developer (via a subsidiary termed, in shorthand, RailCo) ten years to house the entrance in a temporary canopy before the Metropolitan Transportation Authority would build a permanent one at the developer's expense.

In other words, they have a decade to construct Building 1.

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Posted by eric at 10:26 AM

Ratner’s Next Nets Arena Challenge: Raising $324 M.

NY Observer
by Eliot Brown

The footprint of the planned new Nets arena in Brooklyn looks like a construction site. Developer and Nets owner Bruce Ratner closed on tax-free financing and other approvals for the project last week, and now fencing with flashy renderings of the project runs along Flatbush Avenue; traffic has been redirected to make way for equipment. The massive $4.9 billion Atlantic Yards project, or at least the $900 million centerpiece basketball arena, is looking like a reality.

But a glance at a lengthy set of public documents linked with the $511 million in tax-free bonds that go toward the arena show that there is still more of the hill for Mr. Ratner to climb. If the developer doesn't raise $324.8 million within a year for the arena, he could be forced to refund the bondholders' money, returning the financing that makes the project possible, according to the documents.
...

If the money isn't deposited by Dec. 17, 2010, the documents say, this would trigger a refund of the bonds, or "extraordinary mandatory redemption," in bond speak.

Some of this money will come from Mikhail Prokhorov, the tentative new buyer of the Nets, who has agreed to pay $200 million for 80 percent of the team and 45 percent of the arena-to-be.

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Posted by eric at 10:22 AM

Here’s What Eminent Domain Looks Like, Atlantic Yards Version

NY Observer
by Eliot Brown

As of last Wednesday, the state has officially filed in court to acquire the property in the footprint of the Atlantic Yards mega-development in Brooklyn, home-to-be of the Nets.

The acquisitions are for much of the 22-acre site, as the state's development agency, the Empire State Development Corporation, is seeking to take title to the private property in the footprint and the city streets that currently run through it (they are slated to be shut down to create "superblocks," making way for the housing and arena).

The filing is a major step in the acquisition process, and now that the lawsuits challenging the use of eminent domain have been dismissed, the state needs a judge to grant it the title to the properties in the footprint. (The state would then turn over the properties to the developer, Forest City Ratner, which is reimbursing the state for the property it acquires, though it is also receiving significant subsidies for acquisitions and other purposes.)

There are a handful of holdouts left in the footprint who are refusing to leave, including Develop Don't Destroy Brooklyn spokesman Daniel Goldstein, who told me Wednesday afternoon he would continue to fight (i.e., litigate).

"There's going to be numerous challenges to that filing," he said.

Click thru, or here, to see the filing for condemnation.

Posted by eric at 10:15 AM

Yormark moves the goalposts, asserts Brooklyn "sometime in calendar year 2012," claims construction has commenced

Atlantic Yards Report

On 11/24/09, after the decision in the Atlantic Yards eminent domain case, Forest City Ratner and the Nets said "the intent that the Nets will play ball in the Barclays Center in the 2011-2012 NBA Season."

Yesterday, Nets CEO Brett Yormark offered some clarification, telling the YES network, "We will be getting into the Barclays Center sometime in calendar year 2012."

That means the 2012-13 season, I'd bet. Remember, a market study attached to the Barclays Center Arena Preliminary Official Statement (prepared by Goldman Sachs) states, "It is assumed that the arena will open in May of 2012. As such, the year ending June 30, 2012 only reflects two months of operations." And there's no revenue for 2011-12 ticket sales.

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Here's Yormark on video:

YESNetwork.com, Nets CEO Brett Yormark on the move to Brookyn

Posted by eric at 10:06 AM

Some 2009 AY round-ups, from the Daily Eagle, Curbed, the New York Post, and Streetsblog

Atlantic Yards Report

Norman Oder rounds up the round-ups. You'll have to wait until next year (coming soon) for his.

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Posted by eric at 9:52 AM

The 2009 Streetsie Awards: Urban Abomination of the Year

Streetsblog

Chalk up a well deserved Streetsie for the Atlantic Yards project — which has yet to even begin construction.

Well, people's choice voters, you chose to bestow this award on the deteriorating public space near Bruce Ratner's Atlantic Yards project. This seems a little premature to us. Forest City hasn't turned whole city blocks into oceans of surface parking plus a big ugly arena just yet, though transgressions like this certainly deserve to be shamed...

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Posted by eric at 9:31 AM

ESDC files, shares condemnation petition, but condemnees will resist; will January 29 be the day it's resolved?

Atlantic Yards Report

While it's difficult to challenge a condemnation petition--"It has to be limited to procedural defects, and that’s rare," attorney Michael Rikon told me--the Empire State Development Corporation's (ESDC) legal filing to take private (and public) property within the Atlantic Yards footprint won't be a walkover. (The petition is at bottom.)

"We will challenge the petition. It is defective in many respects," stated attorney Matthew Brinckerhoff, who is representing condo owner and Develop Don't Destroy Brooklyn spokesman Daniel Goldstein (and perhaps others). "The details will be laid out in our opposition to the petition, which we are working on."

Brinckerhoff was the lead attorney for the plaintiffs in the unsuccessful constitutional challenge to the ESDC's use of eminent domain; he has asked the Court of Appeals to reopen the case in light of seemingly contradictory decision by a lower court in the case challenging the ESDC's use of eminent domain for the Columbia University expansion.

Henry Weinstein, who owns more than an acre of property in the southeast segment of the AY footprint, a block slated to become an interim surface parking lot, told me he would "fight tooth and nail."

George Locker, who represents several rent-stabilized tenants, stated, "The New York Court of Appeals has held that the New York State Division of Housing and Community Renewal, and not the New York State Supreme Court, has 'original and exclusive jurisdiction' over the eviction of Rent Stabilized tenants and the demolition of Rent Stabilized housing.... Given the clear and controlling law on this question, ESDC will be unable to remove my clients from their homes. Instead, Ratner, like all other landlords, will be compelled to make an application to NYS DHCR after the current leases expire, including one in 2011."

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Posted by lumi at 5:14 AM

The 2009 Streetsie Awards: Worst City Agency

Streetsblog

Forest City's East River Plaza is one of the reasons why The NYC Economic Development Corporation (EDC) received this years "Streetsie" award for Worst City Agency:

EastRiverPlaza1sm.jpg

Aching to build a huge parking deck but don't have enough cash? The NYC Economic Development Corporation is here to help. This quasi-public agency's predilection for financing suburban-style development was on full display in 2009. Two EDC specials held grand openings: The Gateway Center Mall on the South Bronx waterfront, with its 2,800 parking spots and atrocious walkways; and East River Plaza, a big-box retail complex with a 1,248-car garage hulking beside the FDR Drive in Harlem. These are utterly hostile environments for anyone who doesn't get around in a car, subsidized by taxpayers and located in neighborhoods with very high asthma rates. How does it all fit with PlaNYC and the vision of a more sustainable city? It doesn't. Not one bit.

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NoLandGrab: Forest City's web site describes the East River Plaza as a "vibrant commercial center," which is developerspeak for "big-box retail complex with a 1,248-car garage."

Posted by lumi at 4:51 AM

December 30, 2009

Support Develop Don't Destroy Brooklyn With An End-of-Year Tax Deductible Contribution

Develop Don't Destroy Brooklyn

There is one day left to make your end-of-year donations and receive a tax break for 2009...

You can donate right now, right here: www.dddb.net/donate

If you have not yet decided whether you will make an end-of-year tax-deductible contribution to fund the legal fight against Atlantic Yards, please consider the following:

As a community, we've been fighting Bruce Ratner's Atlantic Yards plan for six long years. Without your incredible support, this would not have been possible.

We understand that times are now tough all around. These tough times have affected our war chest, too.

That's why we need your support now more than ever.

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Posted by eric at 11:25 PM

New Long Island Rail Road Terminal draws raves

Park Slope Courier
by Stephen Witt

Speaking of upside down things at the Atlantic Terminal, the notorious Steve Witt heaps praise on the new LIRR terminal design, completely ignoring the god-awful Sarcophagi ringing the entrance.

Rays of daylight cascaded through the glass ceiling of the new Long Island Rail Road Terminal as Brooklyn resident Krystle James leaned against the twin staircases leading from the sub-ground level upto either Flatbush Avenue or Hanson Place.

“This is really nice,” said James, who was waiting for her train to Long Island to visit friends.
...

After nearly six years of construction, the $116 million project is expected to officially open next week.

The project brought together the resources and coordinated planning of the Metropolitan Transportation Authority, the city’s Economic Development Corporation and developer Forest City Ratner to revitalize Brooklyn’s major transportation complex, according to a 2004 press release announcing the project.

FCR owns the Atlantic Terminal Mall, which leads into the new transit entrance.

If it took six years for Forest City, the MTA and the EDC to build a $100 million station entrance, how long might it take Forest City, the MTA and the ESDC to build the $4.9 billion-plus Atlantic Yards?

Oops, time to cue gratuitous Nets plug:

“I’ve seen them making this for a long time,” said Shatasha Brown of Flatbush as she walked through the new concourse with a friend and a young child in a stroller. “This is looking really cute, and it’s good they’re bringing a basketball team here. Brooklyn should have its own team like every other city has its own team.”

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NoLandGrab: While the headline promises raves, the article delivers "really nice" and "really cute." Wait 'til they see the Sarcophagi.

Posted by eric at 10:03 PM

Old Glory inverted atop Ratner mall

Park Slope Courier
by Gary Buiso

In Ratnerville, up is down, private is public (is private), and wrong is right.

Keen-eyed last minute holiday shoppers may have thought something was awry on Dec. 24 if they looked at the state of Old Glory flying atop the Atlantic Terminal Mall. The flag was being flown upside down — a signal of dire distress. Was this a not-so-subtle comment on the state of the retail sector?

Joyce Baumgarten, a spokesperson for mall owner Forest City Ratner Companies, set the record straight, chalking up the topsy-turvy affair to an “honesthuman error.”She said it was only in the upside down position for a scant 20 minutes — just long enough for our eagle-eyed shutterbug to snap the flag’s sorry state.

According to the United States Flag Code, a set of advisory rules, the flag is flown upside down as a distress signal.

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Posted by eric at 9:49 PM

A CASE TO STAY THE COURSE FOR THE NETS

NetsAreScorching
by Mark Ginocchio

It’s difficult to advocate staying the course when the ship is sinking, but for the New Jersey Nets, it may be their best option.
...

Of course, it’s possible that Kiki and company get slammed by the fan base and the media for doing nothing, and letting this season get further out of hand. There will be talk about all of the empty seats at the Izod Center, and how owner Bruce Ratner has put a lock on the team’s wallet until Russian billionaire Mikhail Prokhorov presumably takes over. While there is some truth to these claims, it doesn’t change what the 2009-10 New Jersey Nets were all about headed into this season – riding out this storm with the promise of better times ahead.

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NoLandGrab: Staying the course might be okay, if the Nets were planning to refund all the money season ticket holders have plunked down to watch what might be the worst team in NBA history. Which they're obviously not going to do.

Posted by eric at 9:38 PM

The Daily Bulletin Year In Review

Brooklyn Daily Eagle

The Eagle's legal-issues column looks back at 2009, when Atlantic Yards figured prominently in the halls of (in)justice.

February

Appellate Division dismisses appeal challenging the Atlantic Yards environmental impact statement, making opponents of the multibillion dollar project still without a victory in any meaningful lawsuit or litigation.

March

Atlantic Yards opponents file motion seeking appeal with the New York Court of Appeals in Albany challenging the state’s use of eminent domain.

And that's just the warm-up.

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Posted by eric at 9:29 PM

Realty's best & worst of '09

NY Post "Between the Bricks"
by Lois Weiss

More looking back at the year about to conclude, and while the idea of giving someone a "brick" would not seem much of an award, this being the Post, we guess she means it as a compliment.

This Annus Horribilis is thankfully over, making it time for the Annual Golden Brick awards.
...

Russian Brick to Bruce Ratner and Forest City Ratner for selling the Nets to a Russian billionaire and closing on the Atlantic Yards purchase despite years of NIMBY lawsuits.

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Posted by eric at 9:17 PM

Curbed Awards '09 Architecture: Starchitects, Ugly Buildings & More!

Curbed

Atlantic Yards figures in two coveted Curbed Awards.

As is our yearly tradition, it's time to make up a bunch of awards and hand them out to the most deserving and important people, places and things in the real estate, architecture and neighborhood universes of New York City! Yep, it's time for the Sixth Annual Curbed Awards!

Our Favorite Architectural Sell-Outs
Dude, can you believe they're using that Vampire Weekend song in a fucking commercial now? Or that those dudes at that hip architecture firm SHoP scored a commission from fucking Bruce Ratner to redesign his fucking Brooklyn basketball arena at the same time they're remaking the East River waterfront? It's like there's nothing pure anymore.
...

Don't Make Nicolai Angry, People
3) SHoP rolls out a new design for the Brooklyn Nets stadium: "Still falls short of the high architectural standards... the larger project remains worrisome."

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Another look back at 2009...

Mobilizing the Region, 2009 NY Year in Review: A Struggle to Hold the Line

Land use and parking continued to be a missing link in the city’s sustainability efforts, best characterized by auto-oriented big-box developments like the Gateway Center Mall in the South Bronx and East River Plaza in Manhattan. The state-run Atlantic Yards project also survived several legal challenges this year, and developer Bruce Ratner officially closed on the project. Brooklyn Speaks, a coalition of city and borough organizations calling for a better Atlantic Yards plan, filed its first lawsuit over the project in November (the coalition has previously recommended a stronger transportation plan for the site).

Posted by eric at 9:22 AM

Grading the First 30: Nets

HoopsWorld
by Alex Raskin

The bodies are starting to pile up at the Izod Center. Coach Lawrence Frank was fired and replaced by general manager Kiki Vandeweghe and injuries to Devin Harris, Keyon Dooling, Jarvis Hayes, Chris Douglas-Roberts, Yi Jianlian, Bobby Simmons, Tony Battie, Courtney Lee and others have bogged the Nets down to a 2-29 record. Young star Brook Lopez has been frustrated by the significant attention from opposing defenses and rookie Terrence Williams tweeted a few too many times. But as the team is losing on the basketball court, owner Bruce Ratner has been winning in the legal court. One by one, the obstacles are falling and a move to Brooklyn looks as likely as ever… A move up in the Atlantic Division, however, is less likely.
...

Overall Grade: F — There is nothing in New Jersey that deserves a passing grade this season, but the franchise's overall health isn't nearly as bad. With the legal hurdles between East Rutherford and Brooklyn clearing up, tons of cap space and a new owner on his way, the Nets are a blank canvas with a growing roster of young talent… Of course, none of that is reflected by their on-court performance.

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Also...

TSX — The Sports eXpress, Weekly NBA Rankings (12/28)

30. New Jersey Nets (2-28) If you want a blueprint on how to dismantle a team in six years, just ask Bruce Ratner. From Two-time Eastern Conference Champion to two wins in 30 games.

Posted by eric at 8:59 AM

Ready for Freddy's

The media can't get enough of Sunday's theatrical beheading of "eminent domain theft" — it's even responsible for the Atlantic Yards fight's first-ever appearance in the beverage trade press.

DRAFT News, Brooklyn bar fights for its right (to stay open)

Our first Brooklyn drinking experience took place at Freddy’s Backroom in Prospect Heights. The quirky neighborhood bar known for having a shark decorating the entryway and its diaorama club is a wonderful place to grab a beer, meet some folks, and hear tales about the old days.

It’s also an endangered locale. The Atlantic Yards project threatens to use eminent domain to close down the venue in the name of progress. In protest, patrons of Freddy’s built a nine-foot tall guillotine from Pabst Blue Ribbon cans and symbolically executed the plan.

Brownstoner, Closing Bell: Freddy's Bar - Heads Roll in Survival Fight

Complete with costumed Executioner and Death, the event culminated with the decapitation of “Poor eminent domain, born of a noble purpose of building hospitals and roads... being used to take Americans from their homes, not just for a British bank but also for Russia”. The event apparently drew more media than some of the more important legal and governmental meetings for AY.

Posted by eric at 8:45 AM

During a short walk from Fort Greene to Prospect Heights, the contrasts and contradictions of Brooklyn

Atlantic Yards Report

Like an Atlantic Yards-centric version of David Hartman and Barry Lewis, Norman Oder takes a walk through the neighborhoods that will bear the brunt of Bruce Ratner's megaproject.

It was just a short walk, less than a third of a mile. But Brooklyn's contrasts and contradictions were manifest during a walk I took on November 24, a few hours after we learned that the state Court of Appeals had green-lighted the state's use of eminent domain, justified in part by removing "blight" in Prospect Heights, to build the Atlantic Yards project.

There, at the corner of Fulton Street and South Portland Avenue, a major shopping corridor in the gentrified section of Fort Greene, Brooklyn Borough President Marty Markowitz hosted a press conference outside the new Greenlight Bookstore, a most-local independent bookstore started with the help of a prize in a small business plan contest sponsored by the Brooklyn Public Library.

The new novel by Brooklyn author Jonathan Lethem, a member of the Develop Don't Destroy Brooklyn advisory board and noted critic of the Atlantic Yards plan, was in the window.

Markowitz and other were boasting "Shop Brooklyn" buttons, announcing a seasonal initiative. Markowitz's press people--the only ones looking wary at the cheery event--had sent out a notice that Markowitz would address the Atlantic Yards eminent domain decision at the event, but first there was some promotion to do, and Markowitz managed his usual enthusiasm.

After ten minutes of boosterish speeches by Markowitz and Wellington Sharpe of the Fulton Area Business Alliance, however, I couldn't stick around.

There was a Develop Don't Destroy Brooklyn press conference just a few blocks away, a straight shot down South Portland Avenue, then across broad Atlantic Avenue, past the Vanderbilt Yard and then buildings within the Atlantic Yards footprint that, as of that day, were more likely than ever to be demolished.

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Posted by eric at 7:57 AM

Perkins sets hearing January 5 on Columbia University eminent domain case, need for reforms

Atlantic Yards Report

The Senate Standing Committee on Corporations, Authorities and Commissions, chaired by Senator Bill Perkins, will hold a hearing 4-7 pm on Tuesday, January 5, titled "Unconstitutional: What the Appellate Division’s Eminent Domain Ruling Means for the Columbia Expansion."

While the hearing seems focused on the recent decision stopping--for now--the Empire State Development Corporation's pursuit of eminent domain for the Columbia University expansion, some of the broader questions invoke the Atlantic Yards example and situation:
How should the process be reformed? What are the benefits of a moratorium on eminent domain takings pending legislative action?

Note that oral testimony is open to the public, with a three-minute limit, and written testimony is also accepted. It's unclear who's been invited.

Perkins is the most prominent legislative supporter of eminent domain reforms, while Gov. David Paterson backs an appeal by the ESDC to the Court of Appeals.

The court ruled in the other direction in the AY eminent domain case, saying that administrative agencies have significant discretion, so it will be a tough but not impossible challenge for the plaintiffs in the Columbia case.

Click through for the hearing notice.

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Posted by eric at 7:43 AM

December 29, 2009

Gotham Gazette's 2010 predictions: three contributors are down on AY (where's Marty?)

Atlantic Yards Report

From the department of wishful thinking:

If you didn't know better, by reading Gotham Gazette's 2010 predictions you'd think that Forest City Ratner's Atlantic Yards project is on its last legs rather than survived a key decision on eminent domain and seen the sale of $511 million in arena bonds.

That's not to say that the kinks in the bond deal--escrow until the delivery of property by condemnation--don't leave wiggle room for additional challange. But the advantage has to go to FCR, and it's surprising that no contributor--hey, where's Marty Markowitz?--pointed that out.

Excerpts from the article are below, with each individual's statements excerpted except for those from Daniel Goldstein.

If Atlantic Yards proceeds, one legacy may be tougher legislation on eminent domain.

State Senator Bill Perkins

I would like to see continuing types of reform we were able to pass this year like the public authorities reform bill.

I am looking forward to introducing legislation on eminent domain reform. I think there is a movement that has been galvanized around that issue.

Daniel Goldstein, Develop Don’t Destroy Brooklyn

Gov. Paterson enacts a statewide moratorium on eminent domain.

The Feds indict Bruce Ratner.

Cuomo commences a thorough investigation of the Empire State Development Corp.

The state legislature approves a bill removing "blight" as a justification for eminent domain.

Mikhail Prokhorov moves the Nets to Moscow, where they proceed to win a game.

Mayor Bloomberg comes to his senses and realizes that Atlantic Yards would be a huge stain on his legacy.

Brooklyn gets the kind of world-class development, at its crossroads, that it deserves.

Councilmember Letitia James

The Atlantic Yards project will continue to be challenged in the New Year, and I predict the courts will make the right decision to stand against eminent domain and big development in Brooklyn.

Nicole Gelinas, contributing editor, the Manhattan Institute's City Journal

The Atlantic Yards project in Brooklyn will finally die.

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Here's the original source article.

Posted by eric at 11:29 PM

Brooklyn Broadside
Atlantic Yards Closing: A Long Time Coming

Brooklyn Daily Eagle
by Dennis Holt

We can't help but thinking that someone went overboard when it came to spiking Dennis Holt's eggnog.

It was with mixed emotions that I read last week, right before Christmas, that all the legal papers for the Atlantic Yards project had been signed and executed. By one account, there were 640 documents.

I thought about how anti-climatic and dusty the signing of all those papers must have been. Among all the parties present, however, one must have been able to hear sighs of relief.

Such a setting could not have been imagined more than six years ago when the Frank Gehry models were first revealed to a packed room at Borough Hall.
...

Few people there could have foreseen the bitterness and anger that lay in the future for this project. Fewer still could have foreseen the shouting matches that were to take place in the many upcoming required public hearings — more taking place on this proposal than in any proposal in Brooklyn’s history.

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NoLandGrab: Actually, we think it was probably quite easy to foresee the rancor the Atlantic Yards project would engender, especially once the audacity and magnitude of the land- and subsidy-grab became clear. And please, can we put to rest once and for all the nonsensical idea that this project received an inordinate amount of public scrutiny? Quick, Dennis, explain for us the structure of the Brooklyn Arena Local Development Corporation.

Posted by eric at 11:13 PM

EMINENT DOMAINIA: The Big Apple Bites!

The Brooklyn Paper, Judge puts breaks on Broadway Triangle
by Andy Campbell

A Manhattan Supreme Court justice halted all further operations in the “Broadway Triangle” last week, only one day after City Council voted in favor of rezoning the mostly commercial land into residential space.

Justice Emily Goodman granted a restraining order last Tuesday after opponents filed a second lawsuit against the city rezoning, claiming that city officials steered the land to two politically connected groups in a back room deal.

The stay is effective until the lawsuit gets its first hearing in March, buying a bit of hope for the Broadway Triangle Community Coalition.

“The justice’s decision shows that there’s merit to the lawsuit,” said Marty Needleman, the coalition’s attorney. “It’s really gonna raise the ante for Bloomberg.”
...

Councilwoman Diana Reyna (D–Bushwick), who was once Lopez’s protege, has opposed the Broadway Triangle plans, calling the proposal a flat-out lie. She held her head in her hands and sobbed when vote tallies were announced last week.

NoLandGrab: While some will argue that the city's Uniform Land Use Review Process (ULURP) is far preferable to an Altantic Yards-style state override of local zoning and control, the Broadway Triangle situation proves that when powerful interests want your land, it doesn't much matter. One difference, though — at least this judge appears capable of spotting a rigged bidding process when she sees one.

Posted by eric at 11:33 AM

This cop calls in her own crime!

The Brooklyn Paper, Police Blotter
by Stephen Brown

Even cops aren't safe when it comes to Bruce Ratner's Brooklyn malls, where some employees, apparently, double as crooks. With neither mall built to its allowable Floor Area Ratio, and the blighting influence of crime readily apparent, the Atlantic Center and Atlantic Terminal would be prime candidates for eminent domain condemnation — except for the simple fact that state agencies with condemnation powers are in the business of serving developers like Bruce Ratner.

Cop caper

Even off-duty cops run into trouble at the notorious Atlantic Center Mall.

An officer shopping at the Burlington Coat Factory had her purse snatched after she absentmindedly left it on a clothing rack on Dec. 26.
...

Trouble at Target

And there was more crime at the Atlantic Terminal Mall’s Target store, as well. Here’s a rundown of last week’s action:

• Security cameras caught an employee rifling through a customer’s wallet and taking her credit cards and cash on Dec. 19.

The crime occurred at the customer service desk of the chaotic department store at the intersection of Flatbush and Atlantic avenues, where the victim made a purchase and accidentally left her wallet behind at around 12:45.

Security cameras caught an opportunistic employee looking through the wallet and stashing it in her jacket, cops said. The suspect then brazenly used the stolen credit card at the same register where she was working.

• The next day, another unethical employee allegedly took advantage of a customer by passing credit card information to a friend, which then used it to buy merchandise at the store.

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Posted by eric at 11:09 AM

How many jobs, really? ESDC quietly added nearly 4000 construction job-years between June and September

Atlantic Yards Report

So, how many jobs would there be at the Atlantic Yards project?

The numbers are confusing, as the Empire State Development Corporation (ESDC) in September significantly changed its projection on construction jobs without explaining exactly why. And Forest City Ratner, in its most recent press release, has doubled the number of permanent jobs projected.

Not only did the Empire State Development Corporation jack up the figures by "nearly 4000 construction job-years" from 12,568 to 16,427, but the developer inflated them further, and then, as an added bonus, threw in some totally bogus figures:

Those numbers were distorted somewhat in Forest City Ratner's press release last week after the master closing. The developer stated:

Atlantic Yards will create close to 17,000 union construction jobs, as well as 8,000 permanent jobs once the project is complete.

While I initially thought the figure of 17,000 construction jobs was way off base, given the longstanding estimate of 12,568 job years, it's not as far off base. Still, it should be job years, not jobs. And 16,427 is not "close to 17,000;" rather, it's closer to 16,000.

Also, the claim of 8000 permanent jobs is bogus. Remember, the ESDC memo and FCR legal memo both claim 3998 jobs in New York City and 4277 jobs in New York State, inclusive of New York City. Whoever wrote the press release apparently added those two figures together.

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NoLandGrab: Again, we wonder, if Atlantic Yards is such a great project, why is the developer constantly lying about it?

Posted by lumi at 6:29 AM

Bars vs. Banks - Revolt is Declared! Barclay's Bank and ACORN Can Go To Hell.

Brownstoner, Closing Bell: Freddy's Bar - Heads Roll in Survival Fight
Nets Daily, Arena Critics Turn Their Aim Towards Prokhorov, Russia

Posted by lumi at 6:21 AM

Ratner exec identified as $4.1M Prime buyer

ThePrime.jpg The Real Deal

Richard Pesin, an executive vice president with Forest City Ratner Companies, the group behind the controversial Atlantic Yards development project, has been identified as the purchaser of a $4.1 million penthouse apartment at the Prime, a condo at 333 West 14th Street.

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Develop Don't Destroy Brooklyn notes that the property may be blighted due to "underutilization and unsafe conditions."

Posted by lumi at 5:45 AM

New Leader Seeks Stronger Voice for Art Society

The "Paper of Record" [The NY Times] gets it wrong (again), this time in an article about the Municipal Art Society (emphasis added):

Committed preservationists in particular say that it hasn’t been aggressive enough lately, on issues like the redevelopment of Atlantic Yards in Brooklyn and of 2 Columbus Circle.

NLG, FOR THE RECORD: "Atlantic Yards" hasn't been developed, so it can't be developed again. The MTA's "Vanderbilt Railyard" comprises about a third of the property Bruce Ratner plans to develop and add to his real estate portfolio, which includes the Atlantic Center Mall and Atlantic Terminal Mall, both located across the street from the footprint of "Atlantic Yards."

Judging from The Times's refusal to correct past distinctions that muddy the debate on "Atlantic Yards," don't hold your breath waiting for a correction.

Atlantic Yards Report, The Times takes a look at the Municipal Art Society, but gets the Atlantic Yards angle wrong

Norman Oder's critique of the article goes into more detail:

Wait a second. The criticism of MAS's role on AY doesn't come so much from "committed preservationists" as Brooklyn activists like planner Ron Shiffman, who said the MAS critique "falls short because it avoids discussing the process issues and attempts to apply a design solution to a fundamentally flawed and ill-conceived plan."

And there's no such thing as "the redevelopment of Atlantic Yards," because AY was never developed in order to be redeveloped. Atlantic Yards is a project, not a place.
...
First, the MAS came significantly late to the Atlantic Yards debate, beginning in June 2006 as the project approached approval in the next six months.

Then again, MAS did take the initiative by offering a sophisticated critique of urban planning issues, such as the function of open space, thus helping fill a vacuum in the discussion.

However, additional streets were a feature of the UNITY plan alternative, announced more than 18 months earlier. And, while criticizing superblocks, MAS accepted a superblock for the arena.

[For MAS,] Atlantic Yards has never been an issue of development versus no development; the issue was whether pragmatism versus principle, whether better future process could redeem past bad process.

MAS, by forming BrooklynSpeaks, gave that a shot, but now many of the groups in BrooklynSpeaks have gone to court, in recognition that their "mend it don't end it" strategy got them nowhere with the state and the developer.

Posted by lumi at 5:31 AM

December 28, 2009

Atlantic Yards Bar Going Down in a Blade of Glory

Curbed

Photo: Amy Greer/NoLandGrab

Following up its Chains of Justice stunt, Dean Street's Freddy's Bar—the Prospect Heights dive that find itself in the unfortunate position of being located within the Atlantic Yards footprint o' death—unveiled a nine-foot-tall PBR guillotine and decapitated a bogeyman named Eminent Domain over the weekend. We'll assume Freddy's didn't make it onto Bruce Ratner's Christmas card list this year. With the eminent domain clock ticking, the next move has to be arming themselves with peanut slingshots, right?

link

Also...

Gothamist, Freddy's Bar Sharpens Guillotine to Protest Atlantic Yards

Last week staffers and tipplers handcuffed themselves to the bar to protest the establishment's increasingly likely demise, and this weekend they kicked it up a notch by building a nine-foot-tall guillotine made from PBR cans and executing an effigy representing "eminent domain theft." (One yank on a Blue Point beer tap brought the blade down.)

Posted by eric at 3:26 PM

Bar builds guillotine out of beer cans to protest Atlantic Yards

NY Daily News
by Mike McLaughlin and Erin Durkin

Aux barricades!

It's an open revolt at one Brooklyn watering hole that faces the wrecking ball to make way for the controversial Atlantic Yards project.

Staff and regulars at Freddy's Bar & Backroom built a 9-foot guillotine out of beer cans - and then executed an effigy that represented the state's power of eminent domain.

"You cannot take property from one person and just give it to someone else," said Donald O'Finn, manager of the bar on Dean St. in Prospect Heights.

"So far we have worked within the law, but ...the law has become so corrupt by money and greed that we cannot obey it," he said. "We are declaring revolt."

article

Posted by eric at 11:14 AM

It came from the Blogosphere...

Brownstoner, Why Architecture Matters: Paul Goldberger and AY

The Leonard Lopate Show on WNYC on Christmas Day, was a rebroadcast of the original 11/17/09 show with New Yorker (and former NYT) architecture critic, Paul Goldberger. Speaking before the recent closing of the bond issue and property transfer (and erection of the arena propaganda, above), Goldberger went on record saying that he thought that AY “was, and is, a mistake”. He based that on his opinion that mega-projects don’t improve street life, and he hoped that the slowdown in the economy would give the project time for improvement, and the correction of mistakes.

NetsDaily, Trade Assets

Blogger NetIncome looks at the Nets' basketball future.

In a few weeks, Mikhail Prokhorov is expected to be approved as the Nets principal owner. He will own 80% of the Nets through his personal investment vehicle—Onexim. That’s a far higher percentage than Bruce Ratner currently owns. Ratner personally owns only 7% of the team. The biggest stake, 23%, is owned by Forest City Enterprises, controlled by Ratner’s Cleveland cousins. FCE ate all the Nets losses as well. So not only will Prokhorov have the money to invest in the Nets. He will also have the freedom to make deals without having to call anyone in Cleveland. It’s his baby.

Assuming he takes over by the Feb. 19 trade deadline, and assuming he wants to move before the off-season, what assets do the Nets have to do deals between now and then?

The Huffington Post, Alan Singer: Pet Peeves for the New Year

Borough President Marty Markowitz is the "clown prince" of Brooklyn. Turn him on, wind him up, and he talks about who knows what. He shows up at public functions dressed in costumes. No one knows what the Borough President is supposed to do or how this one got elected. What we do know is that he is smart enough to support development projects with companies like Forest City Ratner that will offer him a nice retainer when he leaves office.

Posted by eric at 11:03 AM

Christmas for kids at borough hall

YourNabe.com

When an article in the Courier has no byline, it can only mean one thing — this baby came straight from the press release.

Dozens of children in need received tender tokens of love when Borough President Marty Markowitz joined the New Jersey Nets and the Salvation Army for a holiday gift drive at Borough Hall.

Hoop stars Darryl Dawkins and Terrence Williams helped present “hundreds of toys” to youngsters whose families are served by the Salvation Army, and who were feted with a program of cheer which included a merry mingle with Kris Kringle.

The toys were among more than 1,100 donated by the Barclays/Nets Community Alliance — a partnership between Barclays Bank, the Nets and Forest City Ratner Companies — to the Salvation Army. The charity also funded children’s holiday parties at each of the five main Salvation Army centers serving Brooklyn.

link

Posted by eric at 10:51 AM

Video: a walk around the arena block footprint shows traffic, demolitions, and perspectives from a wide road and a low-rise neighborhood

Atlantic Yards Report

TC-Traffic1209.jpgTour guide Norman Oder takes Norman Oder on a walking tour of Bruce Ratner's Atlantic Yards project:

Early in the afternoon on December 24 I took my camera to shoot some video (bottom) around the footprint slated for the arena block, the western third, more or less, of the site plan.

I wanted to see the new advertising signage erected by Forest City Ratner after the master closing and I wanted to see the impact of the new traffic plan, in which Fifth Avenue is limited to northbound traffic between Flatbush and Atlantic avenues, and southbound traffic is diverted to Sixth Avenue.

My conclusion: on a high-traffic day, the traffic was pretty bad, with gridlock at Atlantic Avenues going into Fort Greene Place (the northern extension of Fifth Avenue between the Atlantic Terminal and Atlantic Center malls), though it was manageable with the help of traffic officers.

That's an interim condition, of course, because Fifth Avenue would be completely demapped, either compounding the problem or provoking new solutions.

Check out the rest of the article for a map of the tour and Oder's observations on neighborhood character and the real estate market.

Also...

The Real Deal, As construction begins, a walk around AY

Posted by lumi at 5:39 AM

The "Fightin' Freddy's" Declare Eminent Domain Smackdowns!

Found in Brooklyn

F.I.B passed by Freddy's as a 9 foot guillotine constructed of Pabst Blue Ribbon cans symbolically decapitated Eminent Domain in a suit. Manager Donald O'Finn spoke as did the grim reaper who questioned the cold war and called Bruce Ratner a "traitor to the country" by collaborating with one of the richest men in Russia to "take Americans from their homes". A dapper Gangs of New York style Undertaker declared "bar vs. banks" smackdowns coming to a "corner near you" before the decapitation.

link

Posted by lumi at 5:29 AM

December 27, 2009

Off with his head! Freddy’s Bar unveils guillotine to slay ‘Eminent Domain’

The Brooklyn Paper
by Gersh Kuntzman

Brooklyn Paper editor Gersh Kuntzman's video camera captured the highlights today as "eminent domain" met its timely and deserved fate outside Freddy's Bar & Backroom, the venerable Prospect Heights watering hole that doubles as ground zero in the fight to stop Atlantic Yards.

Fans of Freddy’s Bar in Prospect Heights beheaded an effigy of eminent domain on Sunday, using a guillotine fashioned from cans of Pabst Blue Ribbon. The bar is facing condemnation to make room for Bruce Ratner’s Atlantic Yards basketball arena.

Click through for the video.

link

Posted by eric at 11:05 PM

At another Freddy's media event, a makeshift guillotine is used to execute an eminent domain effigy

Atlantic Yards Report

Norman Oder has the play-by-play from today's Freddy's event, complete with video, plus NoLandGrab photos by Amy Greer.

Last week the staffers and regulars at Freddy's Bar & Backroom, slated to be demolished for the Atlantic Yards arena, installed "chains of justice" so resisters can handcuff themselves to the bar to protest the anticipated eviction.

This week came another media event, the guillotine, a creative structure made out of Pabst beer cans, used to execute an effigy representing "eminent domain theft."

And yes, the media came out--far more than at some of the important legal arguments or governmental meetings. Everybody loves a good metaphor.

Bar manager Donald O'Finn read from a scroll, declaring a revolt against eminent domain law and criticizing the role of ACORN, the British bank Barclays, which bought the arena naming rights that the state gave away, and Russian billionaire Mikhail Prokhorov, slated to become majority owner of the Nets.

"It's just like a foreclosure, except they're foreclosing on a neighborhood, and we're not even behind on the mortgage," O'Finn declared.

article

Click here to "cut" to a slide show.

Posted by eric at 6:19 PM

The 2009 Park Slope 100

Only the Blog Knows Brooklyn

Several folks prominent in the fight against Atlantic Yards made Louise Crawford's annual list of movers, shakers and people who just make living in Park Slope a little bit better.

Dominique Bravo because you helped to save the Montessori Day School of Brooklyn several years ago by finding them new space when they had to leave the YWCA . Your help enabled 100 local families to continue to get high quality child care in the Park Slope area. Now you're working with Park Slope Parents on the child care survey. You also sit on the board of PS 122 and Develop Don't Destroy Brooklyn. Brava to Bravo!

Candace Carponter because as Co-Chair of the Council of Brooklyn Neighborhoods and the Head of the Legal Team for Develop Don’t Destroy Brooklyn Brooklyn, you have lobbied endlessly to preserve the very qualities that define Brooklyn and make it a special place to live. When you are not campaigning for your politician of choice, your are busy raising your daughter, running your own law firm and are the President of the Parent Association at the Berkeley Carroll School. Whoa.

Adrian Kinloch and Brit in Brooklyn because as a transplanted Londoner your big, bold photos bring much to the Brooklyn blog landscape.

Reverend Billy and the Life After Shopping Gospel Choir because you believe that Consumerism is overwhelming our lives. Because you believe that our neighborhoods and "commons" places like stoops and parks and streets and libraries, are disappearing into the corporatized world of big boxes and chain stores. Because you are singing and preaching for local economies and real – not mediated through products – experience. Sing on. Amen.

Scott Turner because you are one very funny man. But that's not all. You're a dedicated Develop Don't Destroy activist, who runs the pub quiz every Thursday at Rocky Sullivan's. You're a graphic designer and a writer, who pens OTBKB's weekly Greetings From Scott Turner column, which is way funny and smart AND you have a one-man-band called Rebelmart. We approve.

And while their profiles didn't mention it, let's not forget that the PS100's Rev. Dr. Daniel Meeter and Martha Southgate are also members of DDDB's Advisory Board, and that several of this year's local City Council candidates, principally Josh Skaller, Ken Baer, Ken Diamondstone and Jo Anne Simon, have been outspoken and long-time critics of Atlantic Yards.

link

Posted by eric at 11:49 AM

Freddy's Bar Armors Neighbors - Erects Guillotine Made of Beer Cans - Declares Eminent Domain Revolt

Develop Don't Destroy Brooklyn

From our comrades at Freddy's Bar and Backroom, a 2nd Sunday of resistance:

Media Alert

What: Freddy's Bar Armors Neighbors - Erects Guillotine Made of Beer Cans - Declares Eminent Domain Revolt
It's Bars vs. Banks

When: Sunday, December 27, 2pm.

Where: Freddy’s Bar & Backroom
485 Dean St. (Corner of 6th Avenue)
Brooklyn, N.Y.
Listed as one of the Best Bars in America by Esquire Magazine;
Last week voted One of the Best Bars in Brooklyn by the Village Voice.

Scheduled to be torn down for ACORN, a British Bank, and a Russian Billionaire, there's a brewing standoff at this Brooklyn bar:

Last Sunday, Freddy’s Bar installed the Chains of Justice (see Cuff Love, NY Post by Leonard Greene and A.P. coverage later in this alert), to prevent the wrongful Eminent Domain taking of the neighborhood where it is situated in Prospect Heights, Brooklyn.

In preparation for the upcoming seige of the bar, this Sunday, December 27, we are declaring revolt and collecting money for armor plating to protect homeowners and renters from eviction, at an event featuring a 9 foot guillotine to guillotine Eminent Domain effigy.

Billionaires Bruce Ratner and Mikhail Prokhorov are on the verge of using the State of New York to seize the neighborhood for a stadium using New York State’s outdated Eminent Domain laws. They hope to build a stadium named for Barclay's Bank, for the soon-to-be Russian owned N.J. Nets, and some housing to be operated by ACORN. We say the banks and foreigners have taken enough from America, and that ACORN needs to reform its ways and keep their paws off our bar and neighborhood.

As evictions loom ever larger following the Atlantic Yards Master Closing which authorizes the state to wrongfully take over the embattled neighborhood, locals are standing their ground and escalating the battle to stay in their homes. The threat to the neighborhood has galvanized us – and to prove it, we are raising funds for galvanized steel plates to put on neighbors doors to resist eviction.

Eminent Domain Revolt is being declared in our neighborhood. We are overthrowing the rule of the Real Estate Royalty who keep outdated laws on the books and use the government to do their bidding. We are up against a real estate company that is the second biggest political donor and lobbyist spending force in the state. The law must be changed. Period.

Senator Bill Perkins, Chairman of the New York State Senate Corporations, Authorities and Commissions Committee has begun a crusade to rid New York State of Eminent Domain Abuse. He has asked Governor Patterson for a moratorium on Eminent Domain takings until the Columbia decision against the Empire State Development Authority’s pattern of operating in bad faith, and abusing Eminent domain has been reconciled with the Atlantic Yards decision in the Court of Appeals. And we are behind him 100%.

They will try to take the neighborhood and the bar with Eminent Domain, and we are going to stop them.

Brooklyn’s Prospect Heights, where Freddy's Bar is located, faces a unique twist: The State of New York is moving to take properties from families and businesses and, instead of building a road or a school, the State will hand the land over for private use by Russia’s richest man, who, in partnership with billionaire Bruce Ratner is building a stadium to house the NBA’s worst team. 8 acres of the 22 total acres the State is taking will be for the stadium. The rest, it has recently been revealed, will be leveled, with nothing required to be built on it for decades.

link

We say Eminent Domain Abuse in New York State is going to end right here, right now because our neighborhood will not be taken. Over 5000 people have pitched in for the legal fight, and hundreds of Freddy’s patrons stopped by last Sunday throughout the day to practice handcuffing themselves to the "Chains of Justice" mounted on the bar. The bar patrons and neighbors have had enough. If we have to now resort to guillotines and armor plating, so be it. This is one bar that will not be taken by the evil known as Eminent Domain.

In light of the recent decision against Columbia University and the Empire State Development Corporation’s attempt to steal properties by eminent domain, and the confusion in the Courts that seems to allow taking Brooklyn properties for Ratner, but not Harlem properties for Columbia…we are angry. We are giddy for the victory against Columbia, but angry that our neighborhood can be taken, that our bar can be taken. We will stand in support of the Prospect Heights neighborhood, and the extended neighborhood of 5000+ supporters who have donated time and money to fight against eminent domain. Last week we installed chains on the bar because we believe the links of the chain represent all the individuals unbreakably locked in a chain gang seeking fair rights for the individual in the contemporary flurry of land-grabbing corporate greed.

The Backroom at Freddy’s Bar was the birthplace of this particular rebellion for fair treatment, the front room is where we brought out the hardware to back it up. And the sidewalk in front of the bar is where we will guillotine Eminent Domain Abuse in effigy.

The Declaration of Revolt and Guillotining Ceremony will happen on Sunday, December 27th at 2:00pm.

We invite you to this video-, audio- and photo-genic event….

Posted by steve at 11:11 AM

AYR: Kink In Arena Deal; Deceptive Times Letter; Cheap Nets Tickets

Atlantic Yards Report

Project Finance on escrow situation: "one important kink in the deal's structure"

Proceeds from the bond sale for the proposed Nets arena are being held in escrow for up to one year in case developer Bruce Ratner is unable to secure title for the land needed for the proposed Nets arena.

I again checked to see if any mainstream press outlets had even mentioned the murky Brooklyn Arena Local Development Corporation (BALDC)--answer: no--but was reminded that two finance publication pointed out that the arena bond deal would not be done after the sale was completed.

In other words, though the project may be closer than ever, it's not over, given the escrow provisions.

Who wrote that pro-Bruce letter to the Times? A Ratner spouse (and the Times either didn't ask or was lied to)

If you search the term "Bruce Ratner"--not "Bruce C. Ratner" on the New York Times web site, the "closest match"--not the newest--is a letter, and some footnotes are in order.

The letter, published in the 6/11/06 edition of the Times, responded to architecture critic Nicolai Ouroussoff's piece about the complex and difficult relationship between architect Frank Gehry and his clients, notably developer Bruce Ratner:

After reading this article, I am left feeling that Bruce Ratner, taking a huge gamble, is proceeding in a smart, businesslike way. The risks are enormous and Mr. Ouroussoff pays no heed at all. Perhaps he ought to start a fund to develop any mad, beautiful, outrageous or significant work of architecture of his own and put his money where his mouth is.

Michael Salzberg Bethesda, Md.

...

Why did someone from suburban Washington, DC take such a keen, supportive interest in the Atlantic Yards project?

Why did he claim that the project is a "huge gamble" when, unlike many others in the city, it proceeded as a single-source deal rather than via a request for proposals?

Is Salzberg just a typical enthusiast for development?

No.

Salzberg is the spouse of Deborah Ratner Salzberg, who is president of Forest City Washington, Inc., a member of the board of directors of Forest City Enterprises, Inc. (parent company of Forest City Washington and Forest City Ratner), and a cousin of Bruce Ratner

...

So Salzberg wasn't exactly a disinterested party. Was the Times expected to catch this? Yes, as Letters Editor Thomas Feyer wrote in a 5/23/04 essay headlined Our Compact, Updated:

If your letter is selected, we will try to reach you and ask a few questions: Did you write the letter? (We're not amused by impostors.) Is it exclusive to The Times? (It should be.) Do you have a connection to the subject you're writing about? (Readers should be able to judge your credibility and motivation.)

Daily News finds a silver lining in the availability of cheap Nets tickets

In an article today headlined Cheap premium tickets available to see New Jersey Nets, NBA's worst team, the New York Daily News reports:

New Jersey Nets fans finally have something to be happy about.

Premium tickets to see the woeful NBA team play are selling for less than the cost of a stadium beer - as little as $7 - on sites like eBay and StubHub.com.

Well, it depends on which fans we're talking about. If fans with season ticket packages are unloading tickets because they don't want to see the team any more--or if they can't attract friends/guests--then those fans aren't happy; they're losing money.

And perhaps the market is simply speaking; a ticket has become cheaper than a movie because the quality of entertainment is (often) lower. And, of course, the cost of a visit, including parking/transportation and refreshments, is much higher than the ticket.

Posted by steve at 8:35 AM

Hockey Team Found For Brooklyn Arena

As part of the sale of bonds for the proposed Nets arena, Bruce Ratner tried to imply that a hockey team might play someday in the arena even though the facility's design cannot accommodate a hockey rink.

It appears that a Russian team has been found that will not need a regulation-sized rink.

NoLandGrab: There's cruelty in forcing bears to play hockey just so we can be entertained. It's also cruel to force residents of Prospect Heights to endure decades of developer-created blight for the benefit of a well-connected developer and a Russian oligarch.

Posted by steve at 8:06 AM

Bloomberg excited over money-losing project

Queens Crap

Mayor Bloomberg continues to ignore the cost-benefit analysis of the proposed Nets arena done by the City of New York Independent Budget Office (IBO).

From Atlantic Yards Report:

A statement from the mayor:

STATEMENT OF MAYOR MICHAEL R. BLOOMBERG ON PROGRESS OF ATLANTIC YARDS DEVELOPMENT
“While the rest of the country wrings its hands about the national recession, we’re building our way out of it. The $4.9 billion Atlantic Yards project - the most extensive development ever undertaken in Brooklyn - is moving forward, bringing thousands of units of housing and thousands of jobs for New York City’s middle class. In the past few weeks alone, we’ve made major investments or reached critical milestones on development projects decades in the making at areas like the Hudson Yards, Hunter’s Point South, Coney Island, Willets Point and other neighborhoods across the City. This is no time to wait and see what happens with the national economy and just hope for the best. We’re acting more aggressively than ever to create jobs and ensure New York City’s best days are still to come.”

Well, as the mayor conveniently forgets, the New York City Independent Budget Office (IBO) found the arena--the only part of the project with a design--to be a net loss for the city. As for the thousands of units of housing, they depend on yet-to-be-announced city subsidies.

And while construction of the arena and other buildings surely would bring construction jobs, the number of permanent jobs projected has been steadily shrinking, with the market for office space questionable.

link

Posted by steve at 7:43 AM

Who Buffed The Anti-Atlantic Yards Murals?

Gothamist

Welcome to the monoculture of Ratnerville, where one does not differ.

In the months before developer Bruce Ratner closed the deal on his $4.9 billion plan to move the New Jersey Nets to Brooklyn and construct high-rise buildings on the Atlantic Yards site, someone painted over a series of murals created by opponents of the project — and anti-Atlantic Yards activists claim that Ratner is at fault.

Mural painter Patti Hagan told the Atlantic Yards Report that the mystery re-painter — a man dressed in "chinos and a button down shirt" who "did not look anything like a guy who painted for a living" — buffed the long-standing protest signs just before Russian magnate and Nets buyer Mikhail Prokhorov visited New York. Hagan says she consulted with the Borough President's graffiti squad, the Mayor's graffiti squad and the local precinct, and none of the groups were responsible for the removal of the mural on Carlton Avenue between Dean and Pacific.

Before being painted, the murals — some of which read "GEHRY THY NAME IS EMINENT DOMAIN" and "SU CASA ES BRUCE CASA" — had been okayed by property owner and Atlantic Yards opponent Henry Weinstein. But the mystery re-painter didn't ask Weinstein's permission before buffing the wall with a coat of gray paint. Weinstein, who has resisted selling his land to Ratner, had this to say:

"I have not authorized anyone to remove The Community Messages that [the artists] worked so hard to create. This was so much more than a community message. The No Eminent Domain Abuse slogan painted on the roll down gate has been published and distributed in newspapers, magazines and TV both in the United States and Internationally. It is a violation of Our Constitutional Rights to Free Speech. It is so offensive that it has been obliterated, for the sake of some Russian Oligarch and his cronies not being offended. It is a disgrace."

Gothamist has emailed Forest City Ratner for comment and we'll update when we hear back.

link

Posted by steve at 7:30 AM

December 26, 2009

Atlantic Yards Report Saturday Morning Trio

Atlantic Yards Report

Goldberger on Lopate: "Atlantic Yards was and is a mistake" (but might be re-thought over time)

Yesterday's Leonard Lopate Show on WNYC Radio, Why Architecture Matters, was a rebroadcast of an 11/17/09 interview with New Yorker architecture critic Paul Goldberger, keyed to his new book of the same name and his book titled Building Up and Tearing Down: Reflections on the Age of Architecture, an anthology of criticism, mostly from The New Yorker.

Goldberger, speaking before the eminent domain case had been decided in the Court of Appeals and before the bond sale--both of which have given AY significantly more momentum--said Atlantic Yards "was and is a mistake," given that megaprojects don't do much for street life, and suggested that the silver lining of the recession might give it time to be improved.

...

At about 13:45, Lopate quoted Goldberger quoting celebrated critic Lewis Mumford: "The great function of the city is to permit, indeed, to encourage and incite, the greatest possible number of meetings, encounters, challenges between all people, classes, groups, providing a stage upon which the drama of life may be enacted."

"I wonder whether city planners think in that way, ever," Lopate continued. "For example, the city's still behind the Atlantic Yards project, isn't it? The Municipal Art Society has said it would be a total disaster because it would cut people and neighborhoods off from each other."

"I think city planners do think in terms of streets and neighborhoods perhaps more than they did in the 60s, when the World Trade Center was designed," Goldberger responded. "But we have begun, in the last few years, to almost come full circle, and again fall under the spell--or into the thrall--of gargantuan mega-projects, which generally are in fact destructive of that very street life that Lewis Mumford was talking about, and I think you and I both agree is essential to the city."

...

"No, I think Atlantic Yards was and is a mistake and it's one of the reasons, I suppose--y'know, every silver lining has a cloud, every cloud has a silver lining--and the silver lining of the recession is that that is certainly not going to happen immediately and may give us some time to rethink some of the mistakes," he said.

Civic News coverage of BrooklynSpeaks lawsuit quotes a PSCC trustee: "All attempts at persuasion have failed"

Well, I'm getting to it a bit late, but coverage in the Park Slope Civic Council's (PSCC) Civic News of the BrooklynSpeaks lawsuit challenging the Empire State Development Corporation's approval of the revised Atlantic Yards plan is worth a read.

...

Notably, it reminds us that those who tried to "mend-it-don't-end-it" finally hit the wall:

Assemblyman [Jim] Brennan, whose office attempted to facilitate communication between BrooklynSpeaks and the state, said he finally concluded that “there has never been any interest in any modification of the project or its governance. The state government, basically acting as the agent of Forest City Ratner, never had any interest in reforming or modifying the project to address any community or public concerns about balancing public good versus private interest.

...

And this may have been the first lawsuit ever filed by the PSCC, one of the members of BrooklynSpeaks:

The same point [about BrooklynSpeaks being pushed into opposition] was made by several speakers at the Oct. 1 meeting where Civic Council trustees voted overwhelmingly--with no nays and three abstentions--to join the lawsuit, believed to be the first such step in the organization’s 113-year history. Trustee Michael Cairl captured the trustees’ sentiment: “A lawsuit is the last chance open to us to affect the outcome of this project. All attempts at persuasion have failed.”

Another plan for the old Times building is a reminder of the missing back story

In an December 23 article headlined Former Times Building to Be a Hotel and Condos, the New York Times's Charles Bagli reports:

Lev Leviev, the Israeli billionaire, made many New Yorkers sit up and take notice when he bought the former New York Times Building on West 43rd Street in 2007 for $525 million, three times what the seller paid for it 30 months earlier.

It was a bold declaration that Mr. Leviev, who planned to spend an additional $170 million transforming the landmark building into a first-class office building, wanted to be a real estate player in New York. It was also a deal emblematic of an era when buyers and bankers imagined that rents and values would soar forever.

Now Leviev wants to turn the building into a mix of luxury shops, a bowling alley, a high-end hotel, and 26 penthouse condominiums on top. And some of the lenders who lent Leviev $711 million have had to take a bath.

It's a prime example of real estate froth and well worthy of coverage.

But the Times, as I wrote four years ago still hasn't reported, as the Village Voice explained in an 11/20/04 article headlined The Times' Sweetheart Deal, that the Times Company had underestimated the profit on the sale of its long-term headquarters by some 50 percent, which might have eliminated the need to subsidize the new Times Tower built on 8th Avenue in partnership with Forest City Ratner.

Posted by steve at 9:08 AM

Basketball's Billionaires - Owning an NBA team during a recession is no slam-dunk.

Forbes
By Steven Bertoni

Russian industrialist Mikhail Prokhorov is trying to buy his way into the brotherhood of basketball billionaires. In September his company, Onexim Sports, announced it would pay $200 million for a majority stake in the NBA’s New Jersey Nets.

He might want to think twice before writing the check.

Over the last year, basketball’s 10 billionaire owners saw the value of their teams shed a collective $110 million as the recession and job losses punished ticket sales. Team values for the entire NBA fell 3% to an average of $363 million--the first drop in the 11 years that Forbes has calculated team valuations. (See: The Business of Basketball).

Despite the drop in value, NBA players are raking in the cash. Player costs were $2.3 billion during the 2008-09 season--up $100 million from the last year.

Prokhorov, the sports-crazy metals billionaire with a net worth of $9.5 billion as of March 2009, will get an 80% stake in the middling Nets, plus 45% ownership of team’s proposed new Brooklyn home, the Barclays Center.

The NBA could rule on the deal in early 2010. Current Nets owner, Bruce Ratner, bought the team for $300 million in 2004.

link

Posted by steve at 7:07 AM

Use eminent domain to build public works, not help developers

Courier Life

This letter to the Flushing News points to the need to revise New York's eminent domain law.

An adverse court ruling in the Willets Point matter should not deter efforts at seeking to preserve the livelihood and families of the hundreds of workers who will be displaced by this outrageous give-away of private property for the benefit of private real estate interests (“Willets Point owners lose suit,” Flushing Times, Dec. 3).

If a student in any class from the sixth-grade through college was asked about eminent domain, I am sure there would be a uniform response that government has the right — indeed, the duty — to take private property for just compensation to accomplish a public purpose. Pressed to define “public purpose,” reference would be made to public works, like a government building, a roadway, public transportation facilities, bridges, etc.

When asked if it included taking private property to be turned over to a private, for-profit real estate developer, the answer would be no way. I am sure the general public would respond the same way.

Recently, the state Court of Appeals, in a 6-1 decision, supported the use of eminent domain in Bruce Ratner’s New Jersey Nets arena project in Brooklyn on the same dubious economic claim. A good deal of the project will be subsidized directly and indirectly by taxpayers. Many homeowners will be forced out of their homes, all for the benefit of a private real estate developer.

As a result of the Kelo case, 35 states enacted legislation upholding the public’s traditional understanding of eminent domain and prohibiting the taking of private property and turning it over to a private real estate developer. New York state was not one of those 35 states — not surprisingly, given the fact that the Brennan Center for Justice, a public interest center at the New York University School of Law, rated New York’s state Legislature the worst state Legislature in the nation.

I think the Willets Point people would be best served by a concerted grassroots effort at engaging all members of the state Legislature and exacting an agreement to enact legislation that will prohibit the kind of result that occurred in the Kelo and Ratner matters, under pain of which legislators will be opposed in any election in which they seek office.

Since the taking of private property is political and not economic, it should be opposed on a political basis. I have no doubt the public will embrace and support such action.

Benjamin M. Haber Flushing

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Posted by steve at 7:00 AM

2009 The Year in Review

Brooklyn Daily Eagle

May

Bruce Ratner celebrates the topping off of his first residential building in Brooklyn, with fanfare. It is a 34-story, 360-foot-tall, 335,000-square-foot rental tower with metal and glass facade at 80 DeKalb Ave. in Fort Greene, which includes affordable units.

September

Three months after the leak of an unofficial, preliminary “hangar”-type design for Bruce Ratner’s Barclays Arena disappointed many, the firm releases a new design for the 675,000-square-foot arena that was hailed as an architectural step forward. According to the Associated Press, the price for the project is $800 million, reduced from an earlier estimate of $1 billion.

October

The Court of Appeals hears oral arguments on the constitutionality of using eminent domain to seize land at Atlantic Yards so that Bruce Ratner can build a basketball arena for the New Jersey Nets. Eagle reporter Samuel Newhouse travels to Albany on bus rented by Develop Don’t Destroy Brooklyn to cover the case.

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Posted by steve at 6:55 AM

Brooklyn’s Top 10 Sports Stories of the Decade

Brooklyn Daily Eagle
By John Torenli

2. Coming Soon?
Ratner Promises To Bring Nets to Brooklyn

We’re obviously still waiting (and waiting) for the first major pro sports franchise in our borough since 1957.

But Downtown real estate magnate and Cleveland native Bruce Ratner is getting closer and closer to delivering — as evidenced by the New York State Court of Appeals’ decision earlier this month to approve the state’s use of eminent domain at Atlantic Yards.

“Once again the courts have made it clear that this project represents a significant public benefit for the people of Brooklyn and the entire city,” said Ratner, who headed up the ownership group that purchased the New Jersey Nets from YankeeNets for approximately $300 million back in 2003.

...

If the Nets are playing ball in Brooklyn sometime in the next few seasons, they’ll surely be the No. 1 local sports story of the coming decade and perhaps the new century.

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NoLandGrab: Actually what we've learned from the recent Court of Appeals ruling is that the Eminent Domain law is so weak in New York that just about any benefit is sufficient justification for takings by the state. The promises of affordable housing and promises of jobs used as political cover for Atlantic Yards remain vague and pushed far into the future.

Posted by steve at 6:45 AM

Bruce Ratner Wastes No Time Rubbing It In

Curbed

Bruce Ratner rushed to place branding on the blight he brought to Prospect Heights.

It took six years to close on the Atlantic Yards deal, but only a few hours to finally build something on the site: a salute to the sponsors and a preview of all that quality NBA basketball to come. A merry Landgrabiversary to all!

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Posted by steve at 6:39 AM

Brooklyn Nets: A Reality Check

NetsAreScorching
by Mark Ginocchio

This blog entry looks back on when the proposed Atlantic Yards land grab was first announced and the struggle that ensued.

Obviously, this master plan of mine (and Bruce Ratner’s) hit some snags. Residents of the Prospect Heights neighborhood in Brooklyn where the arena was to be built were not about to hand their land over to a developer without a fight. And then there was the whole issue of financing this big thing, which became even more questionable when the famous, and now former arena-architect Frank Gehry was waxing poetic about “Miss Brooklyn” skyscrapers. Meanwhile, the Nets got steadily worse where it mattered most to me – on the basketball court. The “Big Three” were traded away to create roster flexibility (aka, salary relief) and this year, the Nets got off to the worst start in NBA history. Then, there was all this talk that if the Nets weren’t in position to break ground in Brooklyn by the end of this year, the project was probably never going to happen. Yet, after so many letdowns with this team and this organization, it was hard for me to say if any of this Brooklyn stuff even mattered anymore.

Now, yesterday’s “master closing” announcement from Ratner and Co. is probably not the definitive victory dance in this fight – but is a clear sign that after all of these years, delays, lawsuits and controversies, this project is as close to reality as it’s ever been. And I must admit, I’m suddenly getting reacquainted with the 2003 version of myself (it’s like the Sport Fan’s version of The Lake House). Finally, the era of the Brooklyn Nets is upon us. For the first time in my life, I will have liked something before it became hip and cool to Brooklyn folk. Now all I need is my Strokes t-shirt and an apartment in Williamsburg and I’ll fit right in.

A letter in the comments section reminds us why the idea of building a shiny, new arena comes at a price that should give sports fans pause.

The reality is that in New York City today, a politically-connected developer can appropriate entire city blocks in your neighborhood, remove public streets, condemn private property, and create a construction wasteland lasting decades. And neither you nor the elected officials that represent you have any say whatsoever. Even if you love the idea of having the Nets play in Brooklyn, the politics should be unacceptable.

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Posted by steve at 6:28 AM

Atlantic Yards Developer Officially Closes On Project

NY1

The massive Atlantic Yards project is one step closer to becoming a reality.

Developer Bruce Ratner announced yesterday that his company Forest City Ratner and all other parties have signed all the necessary documents and officially closed on the project.

This comes a week after the company sold more than $500,000 in bonds to finance the new arena for the Nets. It also completed a plan to sell 80 percent of the team and 45 percent of the arena, to Russian billionaire Mikhail Prokhorov.

Mayor Michael Bloomberg praised the latest developments, saying the project will bring thousands of units of housing and thousands of jobs.

But the group Develop Don't Destroy Brooklyn is not giving up its fight to stop the project. It says there are two outstanding lawsuits challenging the state's use of eminent domain in light of the recent decision against Columbia University.

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Posted by steve at 6:25 AM

December 25, 2009

Brutally weird holiday news from NYT: Stadium Boom Deepens Municipal Woes (no mention of AY or other NYC projects)

Atlantic Yards Report

Like us, Norman Oder finds The Times' stadium-finance story just a wee bit myopic.

There's no mention of New York City in the article.

Well, the sports facility financing schemes in New York are different and, to their architects, much superior: the amount of direct subsidy is much smaller, for land and/or infrastructure rather than construction, while the cost of construction is magically shifted to PILOTs (payments in lieu of taxes), given that the land is (and, in most but not all cases, was) tax-exempt. And the Internal Revenue Service has now banned such plans, after grandfathering in the one for the arena.

Of course the tax exemption for the Metropolitan Transportation Authority's Vanderbilt Yard was supposed to increase the price of the property when sold, but there was only one other bidder, given Forest City Ratner's head start. As the New York City Independent Budget Office (IBO) observed, "It is clear that the MTA’s ability to maximize its return from property sales has been constrained."

And the PILOTs in the case of the AY arena would rely significantly on the naming rights that the state simply gave away.

And Forest City Ratner has been good at getting the city, state, and MTA to modify agreements in its favor. Meanwhile, the IBO's analysis that the arena would be a net loss for the city has not been refuted, despite the Times's willingness to quote a deceptive response from the New York City Economic Development Corporation ( an agency that has failed to release a promised cost-benefit analysis).

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Posted by eric at 9:54 AM

Stadium Boom Deepens Municipal Woes

The New York Times
by Ken Belson

Two days after the Atlantic Yards Master Closing, and after six years of editorializing in favor of Bruce Ratner's basketball arena (which New York City's Independent Budget Office projects as a money-loser for city taxpayers), The Times publishes a cautionary tale on the folly of taxpayer-funded sports venues. It's a must-read, but a bit late, no?

Years after a wave of construction brought publicly financed stadiums costing billions of dollars to cities across the country, taxpayers are once again being asked to reach into their pockets.

From New Jersey to Ohio to Arizona, the stadiums were sold as a key to redevelopment and as the only way to retain sports franchises. But the deals that were used to persuade taxpayers to finance their construction have in many cases backfired, the result of overly optimistic revenue assumptions and the recession.

Nowhere is the problem more acute than in Cincinnati. In 1996, voters in Hamilton County approved an increase of half of one percent in the sales tax that promised to build and maintain stadiums for the Bengals and the Reds, pay Cincinnati’s public schools and give homeowners an annual property tax rebate. The stadiums were supposed to spur development of the city’s dilapidated riverfront.

But sales tax receipts have fallen so fast in the last year that the county is now scrambling to bridge a $14 million deficit in its sales tax fund. The public schools, which deferred taking their share for years, want their money.
...

In many cases, the architects of the deals are long gone by the time the bill comes due.
...

Problems persist. In 2004, Todd Portune, the commissioner who unseated Bedinghaus, sued unsuccessfully to change the Bengals’ lease. In 2006, the Cincinnati public schools agreed to defer their payments from the sales tax fund for three years to help cover shortfalls.

Still, the gap between expected and actual sales taxes continues to grow, something the county administration had been warning for years. In August, the administrator predicted not only a $14 million shortfall next year, but also a $94 million gap in 2014, a year after interest payments on the stadium bonds rise 44 percent. By then, the Reds will no longer be paying rent.
...

So they have ordered more cuts in basic county administrative services, something that creates a slippery slope, said David Pepper, the commissioner who voted against the proposal.

“It’s like the movie where the blob keeps growing and eating away at other elements of county government,” Pepper said. “We’re beginning to cross a line in the sand by taking money from the general fund to pay for the stadiums. Once you put that money in jeopardy, you put the whole county at risk.”

article

Posted by eric at 9:43 AM

A "no eminent domain abuse" snowmanlady and from Pottersville to Ratnerville

Atlantic Yards Report

From Ratner foe Patti Hagan, a snowmanlady (as per Hagan) in her Prospect Heights front yard. (The vodka bottles come from a neighborhood clean-up.)

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Posted by eric at 9:38 AM

Who's responsible for painting over those anti-AY murals? Patti Hagan suspects Forest City Ratner (but there's no direct evidence)

Atlantic Yards Report

For years there were murals on the east side of Carlton Avenue between Dean Street and Pacific Street, painted by Patti Hagan and Schellie Hagan of the Prospect Heights Action Coalition (PHAC), on property owned by Henry Weinstein, who has resisted selling his building and adjacent lots to Forest City Ratner.

(Photo by Tracy Collins)

It's gone now and, after eliminating governmental entities in charge of graffiti removal suspects, Patti Hagan suspects Forest City Ratner, though with no direct evidence. (Photo by Collins.)

I think it's certainly plausible that the mural was painted over by project supporters, but I also think that FCR would be savvy enough to keep its distance. (I haven't had a chance to ask about it, but FCR doesn't answer my questions, anyway.)

Hagan also think the removal was tied to the October visit to New York by prospective Nets owner Mikhail Prokhorov. She thinks Prokhorov would have come to Brooklyn. However, given that there were no media reports of such a visit, I think it's more likely some of his associates visited the AY footprint.

Read on to find out whom Patti Hagan suspects as the perp.

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NoLandGrab: Given the density of Bruce Ratner's spycams in the neighborhood, the crime most surely was caught on tape. Will Forest City release the video?

Posted by eric at 9:27 AM

A Christmas Eve Story of Alternative Realities: The Fight Not To Go To Pottersville (Or Ratnerville)

Noticing New York

What if Dan Goldstein had never been born? Michael D.D. White explores the parallels between "Pottersville" and Prospect Heights, including this personal (first-person-plural) moment of truth:

ItsAWonderfulRatnerville.gif

The depressing effects of the Ratner monopoly are real. They resulted in giving us our own George Bailey moment of choice. When we left government and eagerly thought of continuing our involvement with the building of the city we went to a developer friend we very much admire who we have known long enough for them to have attended our first wedding in the early 70s. (As a wedding present they gave us a small beautifully carved decanter.) We were at that time advised that our very best hope for the kind of job we sought was to approach Ratner. We were compelled to be honest in that moment and explain that was one thing we couldn’t do and that it would be a betrayal of our Brooklyn neighbors. On the other hand, we would have happily considered going to work for the competing developers whose options are being foreclosed by Ratner’s eminent domain abuse.

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Posted by lumi at 9:22 AM

Yards opponents never say never

Brooklyn Downtown Star, Editorial

The Downtown Star salutes Atlantic Yards opponents for fighting the good fight.

For a somewhat small but passionate few, this is still the top story, an all-consuming every day beast to contend with. The people in this category include the developer Bruce Ratner, of course, the state, the city and finally the stalwart opponents of the plan.

This last group, more than anyone else, has shown a limitless energy for the project that is at once crazy and courageous. Led by, at various times, elected officials like Councilwoman Letitia James, the community activist Daniel Goldstein, and many, many others, they just don’t seem to stop.

Goldstein in particular reminds one of the Jamaican bobsledder in the movie Cool Runnings: when asked if the words give up mean anything to him, he answers “Not a thing.”

At some point, maybe even any day now (though judging by this project’s history maybe not for years) Atlantic Yards will break decisively in one way or another.

Considering that the odds are always on the side that has the most money and power, it’s a solid bet Ratner takes it in the end and goes on to build his arena, collection of buildings and what not, and in so doing transforms Brooklyn in a meaningful way - for better or for worse, you be the judge - for generations to come.

Until that moment comes, its worth pausing to acknowledge the tremendous community effort to block the project.

However it plays out, they’ve put up a hell of a fight.

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Posted by eric at 9:19 AM

New deal would give Islanders control of Coliseum

Newsday

Well, just two days after the Master Closing, here's one lie that we can likely put to rest — the Islanders are on the verge of locking in a new lease in Uniondale, so they will not be helping the Barclays Center arena meet its overblown revenue projections, something that was hinted at in the arena bond offering.

A new deal to give the New York Islanders control of the Nassau Coliseum could help end a long-standing roadblock to renovating the arena and building the Lighthouse Project.

The Islanders and SMG, the Coliseum's manager, have agreed to a sublease that would hand control of the arena and its revenue to the team. Outgoing County Executive Thomas Suozzi approved it this week.

In a letter, dated Monday, to incoming County Executive-elect Edward Mangano, Legislative Presiding Office Diane Yatauro and incoming Presiding Officer Peter Schmitt, Suozzi said he planned to approve the sublease "before the Christmas holiday."

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Posted by eric at 9:11 AM

December 24, 2009

While JDA bonds are state-guaranteed, its "creation" (not subsidiary) BALDC operates by different rules

Atlantic Yards Report

So, the murky, single-purpose Brooklyn Arena Local Development Corporation (BALDC) is not a subsidiary but a creation of the Job Development Authority (JDA), the Governor's counsel told state Senator Bill Perkins.

Why is it so important to keep a distance? Because the bonds issued by the JDA itself--I'm not sure about subsidiaries--are guaranteed by the state, while the $511 million in tax-exempt bonds issued by the BALDC are non-recourse, with no guarantees. (BALDC officials last month said such a bailout wasn't foreseeable, but wouldn't rule it out.)

And bonds backed by the JDA would certainly require review by the Public Authorities Control Board (PACB), which was avoided in this case.

What the JDA usually does

The JDA, which has no dedicated staff, is an alter ego of sorts of the Empire State Development Corporation (ESDC), which has shepherded and approved Atlantic Yards. I already pointed out that the ESDC's own web site indicates that its Urban Development Corporation (UDC) program authorizes Sports Stadium Assistance, while the JDA helps New York companies build and expand facilities and acquire machinery and equipment.

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NoLandGrab: A "creation?" Like something that comes out of the kitchen of a three-starred Paris restaurant? The Paterson administration's embrace of "creationism" is only the latest bizarre step in the bizarre six-year history of Atlantic Yards. Perhaps they meant "cretin?"

Posted by eric at 10:17 AM

Key Steps for Brooklyn Arena Plan as Critics Fight On

WNYC Radio

Plans for a new basketball arena in Brooklyn are gaining momentum, but opponents say they'll keep trying to stop the massive project.

Developer Forest City Ratner signed key documents yesterday, letting the nearly $5-billion, 22-acre Atlantic Yards project to proceed, and a state agency moved to condemn some property needed for the Brooklyn development.
...

But lawsuits against the project continue. Opponents say the project would destroy a neighborhood to enrich private interests in the name of public benefit. They vow to challenge the condemnation, or forced sale.

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Related coverage...

Brownstoner, Atlantic Yards, The Morning After

Yesterday's news about the closing of the bond and real estate deals related to the Atlantic Yards project (along with the go-ahead for property seizure via eminent domain) certainly had an air of finality about them, but the project's opponents are insisting that the fight is not over.

Posted by eric at 10:06 AM

No, Atlantic Yards is much more than a sports story; it's a development story

Atlantic Yards Report

The New York Times relegated the Atlantic Yards master closing story to two paragraphs in the Sports section.

Now that the days of original web site bball.net are over, it should go without saying that Atlantic Yards is more a real estate development and government story than a sports story, but apparently it has to be said. (The original Times coverage yesterday appeared on the CityRoom blog.)

From the POS

Just for a sense of what's at stake, consider this excerpt from the Barclays Center Preliminary Offering Statement (POS), prepared by underwriter Goldman Sachs:

The following documents related to the Arena Project (together with certain other documents and letters of credit related to other portions of the Atlantic Yards Project as described and set forth in the Commencement Agreement, the “Vesting Title Documents”) will be released from escrow and recorded (as applicable) promptly following the date that ESDC files the order entered by the New York State Supreme Court, Kings County granting the condemnation petition, together with acquisition maps and any required bond or undertaking, with the City Register, Kings County and the satisfaction of certain other conditions pertaining to required improvements to the transit system on the Arena Block (the “Vesting Title Conditions”): (1) the Development Agreement, (2) the Arena Block Declaration, (3) the DEP Easement, (4) the Arena Premises Interim Lease Agreement (and a memorandum thereof), (5) the Lot 7 Sale and Purchase Agreement, the deed to Block 1119, Lot 7 on the Borough of Brooklyn Tax Map and other closing documents required under such agreement, (6) the Lot 47 Transfer Agreement, the deed to the Lot 47 MTA Premises and other closing documents required under such agreement, (7) the Lot 42 Transfer Agreement, (8) the Parking Easement, (9) the Transit Improvement Agreement (and a memorandum thereof), (10) the Transit Improvements Easement, and (11) the TA Naming Rights Agreement.

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Posted by eric at 10:01 AM

Nets Keep Losing, Moving Closer to Brooklyn

NBC New York
by Josh Alper

If you ignore the fact that the Nets are a professional basketball team, things are going quite well for them.

Bruce Ratner, the team's owner, just signed documents to close on Atlantic Yards, the proceeds from the sale of tax-exempt bonds are in an escrow account waiting to be spent on construction and the state filed to raze the remaining holdout tenants under eminent domain.

The opponents of the deal will continue to fight, right down to chaining themselves to the bar at Freddy's, but things appear to be too far down the road now for their fight to result in victory. They can take some pride in inflicting much damage to Ratner's bank account, the financial value of the Nets and, as a direct result of those money hits, the quality of the basketball team.

It's not what they were looking to accomplish, of course, but they've essentially salted the earth under the Nets over the last few years. The team's standing as a real-estate play on a disputed piece of land turned them from a perennial playoff team to the biggest laughingstock in sports. They added another notch to their bedpost on Wednesday night by losing to the Timberwolves for the second time this season. The Wolves have just six wins overall, which should tell you just about everything you need to know about the way the Nets have held up through the legal battles.

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Related coverage...

Bergen Record, Nets fall at home to another last-place team

With their latest loss, 103-99, Wednesday night at the Izod Center to the almost-as-awful Minnesota Timberwolves, the Nets moved ever closer to an avalanche of pingpong balls in next year’s lottery.
...

Though their last lead came in the first quarter, the Nets were in this one to the end. But that figured to be the case, considering this was one of the NBA’s worst matchups for this point in a season.

With the teams having a combined .123 winning percentage entering play, this game was on par with the Mavericks (5-27) versus Nuggets (2-28) in 1998, and last year’s meeting of the Thunder (3-27) and Wizards (4-23), according to Stats Inc.
...

At least in the organization’s view, it was already a good day before the team tipped off – with the announcement that three major agencies had closed on the proposed Atlantic Yards project.

“I think it’s important because it creates a great buzz around the team,” Vandeweghe said of the Nets’ potential move to Brooklyn.

NoLandGrab: If that's the result of a "great buzz," yeesh.

Posted by eric at 9:55 AM

AY fight in final stages, but not over, says DDDB attorney; bond, documents wait in escrow until eminent domain completed

Atlantic Yards Report

So, is the Atlantic Yards fight over, now that the "master closing" has been completed and the site bears "branded signage"?

Well, no, which is why various documents and proceeds from the bond sale were put in escrow, but it's even more of a David-and-Goliath fight.

The risk of litigation was priced into the bonds, and the appetite for the bonds suggests that buyers were comfortable with the risks.

However, according to the Barclays Center Preliminary Offering Statement (POS), prepared by underwriter Goldman Sachs, various documents, such as leases and mortgages, won't be released from escrow until various "Vacant Possession Release Conditions" are satisfied, including the delivery via eminent domain of the properties necessary for Phase 1 of the project.

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Posted by lumi at 5:22 AM

PROSPECT HEIGHTS - erased

Photo, by Tracy Collins, via flickr Atlantic Yards Photo Pool.

Carlton Avenue near Dean Street
Prospect Heights
Brooklyn, New York

There used to be a mural on this wall by the Prospect Heights Action Coalition (PHAC) critical of Atlantic Yards . It was painted over sometime this fall by someone other than the PHAC, without their permission.

Anyone know who did it?

This entire block (bounded by Dean Street, Carlton Avenue, Pacific Street and Vanderbilt Avenue) would be completely demolished and replaced by a "temporary" surface parking lot to support the Barclays Center basketball arena. At some time in the future (possibly decades), this block would be the site of several Atlantic Yards skyscrapers.

NoLandGrab: ID'ing the perps shouldn't be difficult, what with all the spy cameras Bruce Ratner has deployed in the neighborhood.

Posted by eric at 12:53 AM

State Officials Help Ratner Set Himself Up For a Much Bigger Loss

Noticing New York

Among other things Ratner sidestepped proper use of a public agency to issue the bonds. Instead, in a jury-rigged maneuver a private 501(c)(3) not-for-profit was set up to bypass various laws and procedures. The public officials who stepped outside their prescribed roles and public duties to assist him to take these risks have already been determined in court to have been acting in bad faith to implement pretextual schemes in almost exactly the same situation in the Columbia eminent domain case.

Of course Ratner should be considered a big boy who knows the risks he has taken. This should be clear because the Preliminary Offering Statement for the bonds had Ratner, rather than lawyers, provide an assessment of the litigation risks. Nevertheless, our government officials have never treated Ratner as a big boy who should be assuming his own risks. Instead, they have repeatedly stepped in with the merest of excuses to bail him out each and every time he wails about hardship.

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Posted by eric at 12:48 AM

Perkins to Cuomo: issue an opinion as to whether AY bond process was legal

Atlantic Yards Report

Well, if state Senator Bill Perkins can't get a written statement from Governor David Paterson's office regarding the Atlantic Yards bond deal, maybe Attorney General Andrew Cuomo will weigh in.

Perkins, as he promised, sent a letter to Cuomo yesterday:

I write to request your opinion of the recent bond issuance on behalf of Forest City Ratner for the construction of the arena at Atlantic Yards.

On December 18, 2009 I sent a letter to Governor Paterson outlining my concerns. Your office was carbon copied. In essence, the ESDC crafted an unusual transaction whereby a nearly defunct entity, the Job Development Authority (JDA) was used to form the Brooklyn Atlantic Yards Development Corporation (BALDC) which then issued the $511 million worth of arena construction bonds.

I believe that the bond issuance was done in this manner to avoid a review by the Public Authorities Control Board (PACB) and the state Comptroller. I respectfully request that your office issue an opinion as to whether the process employed during the bond issuance was legal, as the public must have utmost confidence in the processes of government.

Enclosed please find a copy of my letter to the Governor. I look forward to your diligent response.

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Posted by eric at 12:43 AM

Bloomberg salutes AY progress, continues to ignore IBO findings on loss to the city

Atlantic Yards Report

A statement from the mayor:

STATEMENT OF MAYOR MICHAEL R. BLOOMBERG ON PROGRESS OF ATLANTIC YARDS DEVELOPMENT
“While the rest of the country wrings its hands about the national recession, we’re building our way out of it. The $4.9 billion Atlantic Yards project - the most extensive development ever undertaken in Brooklyn - is moving forward, bringing thousands of units of housing and thousands of jobs for New York City’s middle class. In the past few weeks alone, we’ve made major investments or reached critical milestones on development projects decades in the making at areas like the Hudson Yards, Hunter’s Point South, Coney Island, Willets Point and other neighborhoods across the City. This is no time to wait and see what happens with the national economy and just hope for the best. We’re acting more aggressively than ever to create jobs and ensure New York City’s best days are still to come.”

Well, as the mayor conveniently forgets, the New York City Independent Budget Office (IBO) found the arena--the only part of the project with a design--to be a net loss for the city. As for the thousands of units of housing, they depend on yet-to-be-announced city subsidies.

And while construction of the arena and other buildings surely would bring construction jobs, the number of permanent jobs projected has been steadily shrinking, with the market for office space questionable.

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Posted by eric at 12:39 AM

Merry XMAS: Governor Grinch and His Pal Bruce Ratner Prepare to Steal Homes and a Neighborhood

Develop Don't Destroy Brooklyn

Who said these guys were in charge?

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Posted by eric at 12:35 AM

Nets Closer to a Newark Layover

Off the Dribble [NY Times NBA Blog]
by Ken Belson

The Nets took one giant step toward moving to Brooklyn on Wednesday when the developer Bruce C. Ratner closed on his 22-acre Atlantic Yards project. But the Nets also inched closer to moving to Newark.

New Jersey’s economic czar, Jerry Zaro, has been working on a plan to have the Nets leave the Izod Center at the end of the season and play their remaining games in the state at the Prudential Center. The goal is to turn that arena in Newark into a sports-centric venue and to let the Izod Center host the bulk of concerts and other entertainment in the area.
...

Brett Yormark, the Nets’ chief executive, said he has had preliminary conversations with Christie’s transition team.

“Hopefully, they’ll come to an understanding,” he said. “The state knows our interest in moving to Newark, it’s well documented.”

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NoLandGrab: Wha?! Well documented? Yormark told the Star-Ledger in May of 2008 that "sharing the Prudential Center with the Devils 'is of no interest to us.'"

Posted by eric at 12:27 AM

Atlantic Yards Deal Closes

The Bond Buyer
by Ted Phillips

The Brooklyn Arena Development Corp. on Wednesday closed on the sale of $511 million of tax-exempt bonds to partially finance the controversial $1.06 billion Barclays Arena in Brooklyn.
...
The bond proceeds will be put in escrow while the state works to assemble the properties needed for the site through eminent domain. ...

Also on Wednesday, Sen. Bill Perkins, D-Harlem, announced he had made a formal request to New York Attorney General Andrew Cuomo for a legal opinion on whether the Empire State Development Corp., the lead agency on the project, had complied with all necessary legal and statutory requirements of the state’s public authorities laws.

Last week Perkins called on Gov. David Paterson to halt the sale after raising questions about the deal’s legality under state law.

Paterson spokeswoman Marissa Shorenstein said in a statement Tuesday night that, “the governor’s Counsel has reviewed Senator Perkins’ letter regarding Atlantic Yards and does not agree with Senator Perkins’ analysis.”

article


Additional coverage...

NY Post, Ratner closes on Atlantic Yards

As developer Bruce Ratner finally closed on his long-delayed Atlantic Yards project in Brooklyn, state officials today wasted little time kicking off eminent domain proceedings to seize private land the arena and housing project needs.

AP via CBSSports.com, Developer signs key docs for controversial Brooklyn complex

Plans to build a new arena for the New Jersey Nets as part of a massive development are gaining momentum after six contentious years, but opponents say they'll keep trying to stop the massive project.
...

Supporters say Atlantic Yards will transform a rundown railyard area near downtown Brooklyn into a bustling complex of office towers, apartments and the 18,000-seat arena. The project will create thousands of jobs and affordable apartments, Ratner says.

But some local homeowners, tenants and business owners say it will destroy a neighborhood to enrich private interests in the name of public benefit.

Opponents say they will fight the condemnation proceedings, which a state economic-development agency formally launched Wednesday. The state's highest court last month approved the use of eminent domain -- the government's condemnation power -- for Atlantic Yards.

Brooklyn Daily Eagle, Bloomberg Cheers Ratner; Opponents Continue To Fight

Reaction to the news of the closing, from both supporters and opponents of Atlantic Yards, was predictable.

Mayor Michael Bloomberg said, “While the rest of the country wrings its hands about the national recession, we’re building our way out of it. The $4.9 billion Atlantic Yards project — the most extensive development ever undertaken in Brooklyn — is moving forward, bringing thousands of units of housing and thousands of jobs for New York City’s middle class.”

Borough President Marty Markowitz didn’t have a statement by press time, but he has been a strong supporter of the project from the beginning.

But Develop Don’t Destroy Brooklyn, a group of local residents adamantly opposed to the project, called the closing premature and said in a statement, “The property owners and tenants fighting to keep their homes and businesses will vigorously challenge the legal papers filed by the ESDC today. There are also two outstanding lawsuits against the project that would stop it cold.

The New York Times, Gains for Atlantic Yards

Posted by eric at 12:04 AM

December 23, 2009

Atlantic Yards signage installation

Photo, by Tracy Collins, via flickr Atlantic Yards Photo Pool.

Atlantic Avenue at Flatbush Avenue
Prospect Heights
Brooklyn, New York

Forest City Ratner, the developer of Atlantic Yards, announced the master closing today, which means that all of the documents and contracts have been signed.

They wasted no time installing signage on the site.

More views here, here and here.

Posted by eric at 11:56 PM

After master closing, Ratner crows, installs "branded signage"; DDDB says new lawsuit coming, likely against ESDC/BALDC

Atlantic Yards Report

After the master closing for Atlantic Yards was concluded today, the Empire State Development Corporation (ESDC) chose not to send out a press release, but--as seen in the press releases below--Forest City Ratner expressed satisfaction and Develop Don't Destroy Brooklyn asserted that the seeming final governmental step was by no means final, promising a lawsuit.

A lawsuit based on the status of the murky Brooklyn Arena Local Development Corporation (BALDC) presumably would go into untested legal ground. Until that and other outstanding lawsuits are resolved, it's possible that the developer won't move into certain phases of construction, but utility work and demolition is ongoing, a condemnation petition has been filed (but likely will be challenged), and executives have promised a groundbreaking by the end of January.

New signage

The first tangible step: Forest City and the Nets "have placed branded signage along fencing at the arena construction site," so get used to the Atlantic Yards site as a billboard.

Also stay tuned in a week or two for the actual documents from the closing; they just might explain the penalties and incentives behind the deal.

Some factchecking

Note that FCR's claim that AY "will create close to 17,000 union construction jobs, as well as 8,000 permanent jobs once the project is complete" is dubious.

Rather, the the ESDC's 2009 Modified General Project Plan states that construction "will generate 12,568 new direct job years" (e.g., about 1257 jobs a year for a decade) and that operations "at the Arena and mixed-use development will support an annual average of 4,538 new jobs in New York City (direct, indirect, and induced)."

[Update: The 9/17/09 ESDC board memo [PDF], distributed on the day the project was reapproved, states that construction would generate 16,427 new direct job years. So FCR's number is more in the ballpark, but not precise. However, there would be 3998 permanent jobs in New York City and 4277 jobs in New York State, inclusive of New York City. That doesn't total 8000.]

article

Posted by eric at 2:31 PM

Ratner Seals Deal for Atlantic Yards, Clearing Path for Nets Arena

The NY Observer
by Eliot Brown

Given the fact that there are just a handful of shopping hours left until Christmas, and the fact that we're not going to let Atlantic Yards ruin our holiday, we'll be publishing very truncated coverage of today's master closing. [We note that Governor Paterson and Bruce Ratner have already completed their gift-giving and gift-getting today, respectively.]

The first word goes to Eliot Brown at The Observer.

If Atlantic Yards is Bruce Ratner's Odyssey, he's approaching Ithaca.

More than six years after the ambitious project was unveiled to the world, the Brooklyn developer announced Wednesday that he had completed a "master closing" for the project, executing mountains of contracts with numerous governmental agencies and finalizing the financing of $511 million in tax-free bonds to help finance the new $900 million Nets basketball arena.
...

This removes all obvious hurdles to the start of the $4.9 billion project, which initially envisioned housing towers, an office building and an arena, all Frank Gehry-designed, shooting up from the Prospect Heights neighborhood simultaneously. Now, with an economic collapse and a lending drought, the project will start only with the arena, the piece previously viewed as the least profitable. Mr. Gehry is gone, as are many of the initial deals struck for Atlantic Yards: After it was initially approved in 2006, the city put in another $100 million to help the project. Earlier this year, the M.T.A., which owns some of the land, renegotiated its deal to give Mr. Ratner its most valuable parcel for just $20 million and the cost of a new rail yard, rather than $100 million for that parcel and another that is more difficult to develop.

But beyond Mr. Ratner's uncanny ability to wrest more from government, what is most surprising is that the project was not swallowed by the economic crisis, as Mr. Ratner's Forest City Ratner and its investors continued to pour money into the development and the Nets. Forest City reports around $70 million a year in pre-tax losses on the Nets, and its revenues have plummeted recently; the team started the season with a record 18 consecutive losses.

A Forest City executive said this summer that the company and its investors had spent $500 million thus far on the project, only with very preliminary levels of construction on infrastructure to show for it.
...

With respect to the arena, there are still a number of lawsuits pending challenging the process--though one was rejected last week--and there may still be more. Jeff Baker, an attorney for Develop Don't Destroy Brooklyn, said Monday that he expects a lawsuit in coming days that would challenge the process of approving the tax-free bonds, though he did not say who would bring it. Recently, opponents and critics of the project, along with State Senator Bill Perkins, have criticized the bond approval process, for which the state's development created an entity that avoided having to seek approval from the Public Authorities Control Board, apparently circumventing another level of review.

article

NoLandGrab: It's amazing how much the ESDC seems to get done around the holidays. Must have a workshop full of elves.

Additional coverage...

Curbed, Revenge of the Megaprojects: Atlantic Yards Officially Closed for Business

Though, as previously reported, the documents won't be made publicly available for a week or two, the Atlantic Yards master closing scheduled for today has happened, a Curbed tipster reports.

City Room, Documents Signed, Atlantic Yards Moves Ahead

Sometime after 9:49 Wednesday morning, the developer Bruce C. Ratner put down his pen after signing 640 separate documents relating to the closing on his long delayed 22-acre Atlantic Yards project in Brooklyn, and let out a long sigh of relief.

After six long years, his planned project is showing big signs of moving forward.

At roughly the same time, the proceeds from selling $511 million in tax-exempt bonds for the development’s first project, an 18,000-seat arena for the Nets basketball team, went into an escrow account. And the state filed a petition in court to condemn a portion of the 22-acre parcel, including some parcels owned by residents who oppose the project and the state’s use of eminent domain. Also, Mr. Ratner and his partner, the Russian billionaire Mikhail D. Prokhorov, put up about $230 million for the next stage of the project.

“It’s incredible,” Mr. Ratner said. “I always told everyone that it was going to get done, but there were moments when I don’t think I really believed it myself.”

Brownstoner, Atlantic Yards Signed, Sealed, Delivered

The Daily Fix [WSJ Blog], Nets’ Brooklyn Arena Appears Inevitable With Financing Deal

WSJ.com, Developer: Brooklyn Arena Project's Participants Close Deal

NetsAreScorching, CLOSING BELL: RATNER CLOSES ON BROOKLYN PROJECT

Gothamist, Ratner Finally Closes On Atlantic Yards Deal

Posted by eric at 2:09 PM

DDDB PRESS RELEASE: Governor Paterson Allows ESDC to Move Forward With Illusory Atlantic Yards and Eminent Domain Home & Business Theft Two Days Before XMAS

Despite “Master Closing” Big Legal Challenges Against Project Remain

Brooklyn, New York—Even foreclosing banks and unpaid landlords provide a moratorium on foreclosures and evictions for the holiday month.

However, not Governor Paterson and the State of New York.

Without compunction, Governor Paterson and his appointees on the Empire State Development Corporation (ESDC) today filed legal papers to start the process of stealing the homes and businesses of Brooklynites by eminent domain, to eventually evict them and give the vacant buildings to Bruce Ratner for one dollar. Ratner would then demolish those homes and businesses in an effort to construct a taxpayer subsidized, money-losing arena—the world’s most expensive arena, Barclays Center—in the middle of a fiscal crisis and a housing crisis.

Forest City Ratner also announced that they have signed a “master closing” for the Atlantic Yards project with various city and state agencies. But Ratner failed to disclose that he was forced to put the closing and arena bond proceeds into escrow because of numerous outstanding issues, including several serious legal challenges.

The property owners and tenants fighting to keep their homes and business will vigorously challenge the legal papers filed by the ESDC today.

There are also two outstanding lawsuits against the project that would stop it cold (with oral argument scheduled for January 15th) and one pending decision by the Court of Appeals on a motion to reargue the challenge to the state’s use of eminent domain in light of the recent eminent domain decision against Columbia University.

Develop Don’t Destroy Brooklyn is also currently planning on suing, most likely the ESDC and the mysterious Brooklyn Arena Local Development Corporation, for bypassing the legally mandated review of the $511 million arena bond financing by the Public Authorities Control Board and New York State Comptroller Thomas DiNapoli.

“Governor Paterson, who once opposed eminent domain, has clearly decided that the best thing to do for the holidays is to evict men, women and children from their homes. He has decided that the avoidance of minimal scrutiny and review of the largest project in Brooklyn’s history is an acceptable way to govern. He has decided that reform apparently means allowing and supporting the same old bad faith, backdoor dealing with powerful, land-grabbing real estate developers,” said Develop Don’t Destroy Brooklyn spokesman Daniel Goldstein. “Shame on Governor Paterson for throwing good money—taxpayer money—at Ratner’s boondoggle money pit and for stealing a viable neighborhood to do it. Ratner’s project will never produce the benefits the developer and the ESDC have lied about for years, and should it go forward the Governor and other project supporters will rue this day.”

“I want to make it very clear to the Governor, the ESDC and Ratner, that Develop Don’t Destroy Brooklyn, our scores of allied community organizations and our thousands of supporters will not easily give up our fight against Atlantic Yards,” Goldstein said.

It should be noted that there is not a single city or state politician in and around the Atlantic Yards project site that still supports the drastically altered project. And there are none anywhere, besides project cheerleaders Marty Markowitz and Michael Bloomberg, who vocally support it.

After six years of exposing the Atlantic Yards project as a corrupt, boondoggle financed on the backs of New York taxpayers, Governor Paterson, Mayor Bloomberg, Sheldon Silver, Charles Schumer, and Marty Markowitz apparently have decided that the best thing for New Yorkers is to look the other way as state and city appointed bureaucrats sign papers handing over 22-acres of prime real estate to a single developer to turn into massive parking lots for decades.

The most powerful “leaders” in the state have apparently decided that the best way to change the face of Brooklyn—the best way to spend massive taxpayer subsidies, grant extraordinary tax breaks and gifts, sell public land at a sweetheart price, give away city streets, abuse eminent domain, provide a city zoning override, create millions of square feet of density for free for a politically-connected developer—is to do it without ever having any legislative, democratic oversight, and to avoid even the minimal oversight and accountability provided by the financial review of State Comptroller DiNapoli and the Public Authorities Control Board.

Posted by eric at 1:54 PM

FOREST CITY RATNER PRESS RELEASE: FCRC CLOSES ON ATLANTIC YARDS

Master Closing on the Project Means Barclays Center, Thousands of Jobs, Affordable Housing and the Nets Coming to Brooklyn

(Brooklyn, NY) – December 23, 2009 – Bruce Ratner, the Chairman and CEO of Forest City Ratner Companies (FCRC), the developer of Atlantic Yards in Brooklyn, announced today that FCRC, the Empire State Development Corporation (ESDC), the Metropolitan Transportation Authority (MTA), the City of New York, and other parties have executed all necessary documents and officially closed on the project.

“Today, what has long been a vision for the future of Brooklyn becomes a reality,” Mr. Ratner said. “Six years after we announced our plan for Atlantic Yards we are very pleased to be closing on the project with our public partners. Today’s closing represents a vital step forward for New York City, one that is all the more important because of the economic challenges our City faces. The jobs we are creating today, as we set forth on the arena and one of the boldest affordable housing initiatives in our City’s history, will create a new dynamic center in this wonderful borough.”

While construction on the Barclays Center and the project site in downtown Brooklyn has commenced and is ongoing, today’s closing includes the issuance of bonds and the execution of various real estate documents, including the arena lease, financing, development, and purchase and sale agreements.

To date, 35 buildings, roughly 56% of the structures on the site, have been demolished and construction of the temporary rail yard has been completed. Removal of the Vanderbilt Yard tracks and critical upgrades to the sewer and water infrastructure in the area are underway.

Mr. Ratner thanked the Governor, the Mayor, the Brooklyn Borough President, ESDC, the MTA – Long Island Rail Road and the vast majority of the people of Brooklyn and New York who have stood by us and have long believed in the benefits and promise of Atlantic Yards.

Atlantic Yards will create close to 17,000 union construction jobs, as well as 8,000 permanent jobs once the project is complete. The project involves the redevelopment of 22 acres in downtown Brooklyn, which will include approximately six million square feet of residential space (6,430 units of affordable and market-rate housing), an 18,000-seat sports and entertainment arena to be known as the Barclays Center, 247,000 square feet of retail use, approximately 336,000 square feet of office space, and eight acres of publicly accessible open space.

FCRC and the Nets today also have placed branded signage along fencing at the arena construction site, which includes logos of the major partners of the Barclays Center. Those partners include Barclays, which is the naming rights partner, along with ADT, Cushman & Wakefield, EmblemHealth, MGM Grand at Foxwoods, Anheuser-Busch, High Point Solutions, IZOD, Jones Soda, and MetroPCS.

Posted by eric at 12:14 PM

Pacifc Dean shelter to close January 15 for demolition; PHNDC establishes relief fund for affected families

Prospect Heights Neighborhood Development Council

Here's a chance to help homeless families being displaced by Bruce Ratner's Atlantic Yards project.

Residents of the Pacific Dean Annex shelter on Dean and Pacific Streets between Carlton and Vanderbilt Avenues were advised Monday, December 7 that the facility would close permanently on January 15 and begin demolition shortly thereafter.

Shelter operators and NYC DHS are working to find permanent housing for the 88 families that currently occupy the shelter. Families unable to find permanent housing by January 15 will be transferred to another shelter.

The Prospect Heights Neighborhood Development Council has established a fund to accept donations for relocation assistance to the shelter families. PHNDC will work with the NYC Department of Homeless Services to distribute all money raised to needy families. Community members can donate using this online form. When completing the form, please indicate you’d like your donation to be used for the “Pacific Dean Shelter Family Relocation Fund”. Donations are tax deductible.

link

Posted by eric at 10:20 AM

Prokhorov Going After Distressed Basketball Teams and Megaprojects

Develop Don't Destroy Brooklyn

Three Russian Tycoons Join Prokhorov in War Chest
NY Times

Russia’s richest man, Mikhail Prokhorov, intends to hook up with three other wealthy compatriots to create a joint war chest that will go after distressed banks and firms...

...and basketball teams and corrupt megaprojects.

link

Posted by eric at 10:00 AM

As master closing proceeds, with filing of condemnation, Perkins says governor's response unacceptable; is lawsuit coming?

Atlantic Yards Report

Ratner-moneybags2.jpg With the governor's blessing, it looks like the "master closing" for Bruce Ratner's subsidy-sucking, eminent-domain-abusing, public-accountability-circumventing, Atlantic Yards megaproject will proceed today, despite the use of a questionable quasi-governmental "creation" to issue the arena bonds.

No one has a written statement responding to questions raised by state Senator Bill Perkins about irregularities in the issuance of arena bonds, but the Empire State Development Corporation (ESDC) yesterday said it expected the Atlantic Yards project to proceed through final approvals today, with the final contracts signed and the eminent domain process to begin in earnest.

"We anticipate the Master Closing to happen tomorrow," spokeswoman Elizabeth Mitchell said yesterday in an email message. "It will include the bond closing, deposit of the funds and real estate documents in escrow, and the filing of the condemnation petition. ESDC expects possession of the title on or near February 1st, 2010."

"We are going to continue to demand that there is going to be accountability and transparency with this project," Perkins said. "We think it’s clearly in violation of the type of scrutiny that is required by law… I know that a lawsuit is being considered." But he didn't say what role he might play in such a lawsuit or who might be plaintiffs.
...
I spoke yesterday with Perkins, who said he’d spoken with Peter Kiernan, Paterson's Counsel, on Monday.

“I asked him, as per our prior conversation on Friday, what he came up with," Perkins recalled. "And he said 'We’re satisfied with what we got from ESDC and others.' I said, 'Well, what does that mean?' He said, "It’s a creation of JDA.' So I said, 'OK, Is that a subsidiary?' He says, 'No, it’s a creation.' I say, 'What does that mean? Because that sounds like a new word in the context of the conversation… because you said at first it was a subsidiary.'"

article

NoLandGrab: By calling the BALDC a "creation", not a "subsidiary," of the Job Development Authority (JDA), the BALDC is not subject to any of the laws regulating either the Empire State Development Corporation or the JDA?

This is another example of the mind-boggling contortions New York State has performed, in order to give Bruce Ratner what amounts to the largest single-source private development project in NYC history.

State government has run amok... disgusting!

Posted by lumi at 5:49 AM

Flatbush at 5th and Pacific, east

Photo, by neighborhood photographer Tracy Collins, via flickr Atlantic Yards Photo Pool.

Flatbush Avenue at Pacific Street and 5th Avenue looking east along Pacific Street
Prospect Heights, Brooklyn, New York

The southbound lane of 5th Avenue between Atlantic Avenue and Pacific Street has been closed for infrastructure work for Atlantic Yards.

Buildings on the right (624 Pacific Street, 636 Pacific Street, 648 Pacific Street and 24 6th Avenue) would be demolished. The MTA Vanderbilt rail yard is to the left. This would be the site of the Barclays Center Arena, so this block of Pacific Street and a block of 5th Avenue would be demapped.

Posted by lumi at 5:46 AM

EMINENT DOMAINIA: The Big Apple Bites!

Courier-Life Publications, Broadway Triangle a Council 'hit'
By Aaron Short

On the last day of the 2009 session, the City Council passed the Broadway Triangle rezoning plan by an overwhelming margin, 36 voting yes, 10 no, with 4 abstensions, ending months of political wrangling and demonstrations.
...
In likely his final act as a Council member, David Yassky (D-Williamsburg) urged his colleagues to support the Broadway Triangle rezoning, which they largely did,

“This is not an Atlantic Yards situation where ULURP was circumvented. It went through full ULURP process and had dozens of public and semi-public meetings in the decade leading up to this. Anybody who wanted to put up an alternative proposal for this site has had their plan heard and not necessarily adopted.”

NoLandGrab: Um David, just like Bruce Ratner's Atlantic Yards project, Broadway Triangle is using the threat of eminent domain to take property from business owners, which is not even mentioned in the article.

Posted by lumi at 5:35 AM

The Year That Wasn't: What Didn’t Happen in 2009

Gotham Gazette
By Gail Robinson

The Nets did not play in Brooklyn
This was the year the NBA New Jersey Nets were slated to make the move from the Meadowlands and open the 2009-2001 season in Brooklyn. The team, under the ownership of Bruce Ratner, would play in the edgy Frank Gehry-designed Barclay Center at Atlantic Yards.

The Nets still may move to Atlantic Yards. But not until 2012. And when that happens Bruce Ratner will not own the team. He sold it to Russian billionaire Mikhail Prokhorov, who anted up $200 million to essentially buy the team and perhaps save the beleaguered Atlantic Yards project in the process. In June, beset by an array of financial problems and legal challenges, Ratner scrapped Gehry's arena plans and brought in Ellerbe Becket, an architectural firm based in Kansas City. So instead of playing in an architectural landmark, the Nets will slam dunk (or try to) in an arena that one observer said "looks a lot like every other stadium we've ever seen."

Fans may not care. The Nets opened this season with a record of no wins and 18 losses, the worst start in NBA history, and have not improved much since.

aticle

NoLandGrab: Actually, the original plan was for the Nets to play in Brooklyn in 2006.

Posted by lumi at 5:15 AM

December 22, 2009

ATLANTIC YARDS RATNERVILLE CONSTRUCTION UPDATE

ATLANTIC YARDS CONSTRUCTION UPDATE
Weeks beginning December 21, 2009 and December 28, 2009

In an effort to keep the Atlantic Yards Community aware of upcoming construction activities, ESD and Forest City Ratner provide the following outline of anticipated upcoming construction activities.

Please note: the scope and nature of activities are subject to change based upon field conditions. All work has been approved by appropriate City and State agencies where required. In addition to the activities described below noise attenuation and vibration monitoring measures are underway in connection with the Memorandum of Environmental Commitments dated 12/08/06.

If you have any questions please feel free to contact our project Ombudsperson at: 212-803-3233 or AtlanticYards@empire.state.ny.us

Long Island Rail Road/Vanderbilt Yard Work

  • Installation of Lighting

  • Completion of Temp Yard Punch list

  • Removal of old Track in BL1119 and BL1120

  • Relocation of the MG Set from BL1119 to BL 1120

  • Installation of a new Access Road in BL1120

  • Work is anticipated to continue through the end of the year.

Environmental Remediation

  • The environmental consultant will begin shallow excavation and drilling to test and classify soils in blocks 1127 and 1119. Work will continue on these blocks and 1118 for 3 months. This is prep work required in advance of any actual removal of soil from the site.

Infrastructure

  • Infrastructure work related to installation of new sewer chambers at the intersection of 6th Avenue at Pacific Street is complete. Infrastructure work related to the installation of new a water main along the east side of Flatbush Avenue is complete.

  • The traffic and pedestrian safety barriers along the north side of Flatbush Avenue and Block 1118 for sewer installation is complete for the current phase of the work. Additional protection will be installed during this two-week period to modify traffic on 5th Avenue and Pacific Street. A copy of the public notice detailing the traffic directional changes on these two streets is attached.

  • The contractor continues to conduct pile drilling, excavation work, and pipe and chamber installation on Blocks 1127 and 1118 in connection with sewer installation. Work will continue for 5 to 6 months.

  • During the course of this work, the contractor may encounter unforeseen contaminants, underground storage tanks or other structures. In the event that this happens and where appropriate, notification will be given to the DEC and remediation steps were implemented.

Demolition

  • The Abatement contractor began installation of scaffolding in preparation for the removal of asbestos at the roof at 475 Dean Street.

  • The Abatement and Demolition contractor will install sidewalk protection as required by the Department of Buildings in preparation for the removal of asbestos and demolition of 648 Pacific Street. The start of this work is dependent upon approvals by the Department of Buildings.

  • The Abatement contractor will install sidewalk protection as required by the Department of Buildings in preparation for the removal of asbestos and demolition of 467 Dean Street. The start of this work is dependent upon approvals by the Department of Buildings.





Posted by eric at 11:56 PM

Love it or hate it, here's our look back at 2009

The Brooklyn Paper via NYPost.com

To some, it was the worst year in decades. To others, it was merely mildly horrible. But for us at The Brooklyn Paper, 2009 will go down in history as another 12-month period when lots of interesting, important, newsworthy, exciting, traumatic and Atlantic Yards things happened.

Here’s our gimlet-eyed view on the year that was.
...
June

Gehry canned: Whatever your opinion about Bruce Ratner’s Atlantic Yards, most people liked architect Frank Gehry’s original, ambitious design. So there were howls when Ratner fired Gehry to supposedly save money. Opponents to the mega-project piled on Ratner after the announcement, saying that the scaled-down arena was proof of the developer’s financial instability. Later in the year, Ratner releases a new arena rendering that either looked like the future of American architecture or a George Foreman grill, depending on whom you asked. Ratner would end the year with a spate of good news, including a couple of big court wins, a deal with a Russian billionaire to buy 80 percent of his money-losing Nets, and a slam dunk sale of hundreds of millions in bonds that will pay for construction of the arena.

December

Bonds away: Bruce Ratner sells $511 million in tax-free bonds, putting him on decent enough financial footing to beginning construction on Atlantic Yards, his supposedly $4.9-billion arena, residential and office complex. Only the arena and one or two buildings are on the table right now, but the developer stills says he’ll build the whole thing.

article

Posted by eric at 11:48 PM

Double Dee Double Dip

Noticing New York

One post was not enough today for the prolific Michael D.D. White.

Getting Personal: LeBron James, George W. Bush and the Perhaps Not-So-Propitious Mix Bruce Ratner Is Seeking

Might LBJ see some Dubya in Bruce C. Ratner?

Perusing Texas Monthly’s 2010 Bum Steer Awards feature (just out) we read this:

In response to a question from Maxim, the men’s magazine about whom he’d like to dunk on, Cleveland Cavaliers star LeBron james said, “if it doesn’t have to be a basketball player, George W. Bush. I would dunk on his ass, break the rim and shatter the glass.”

(Here is the original Maxim story: ICON: LeBron James, Friday 10/16/2009.)

If Mr. LeBron has such personally negative feelings for George W. Bush that could turn into a problem for Mr. Ratner. We have commented before about how Bruce Ratner seems to have taken much of his Atlantic Yards play book from the disreputable sports-orientated eminent domain abuse land-grabbing schemes that launched the young Mr. Bush into full crony capitalism mode:

. . . this misdirection of public funds . . . it is not unique to New York State; it looks as if we caught some bad habits from George Bush's exploits in Texas.

David and the Gargantuan and Growing List of Atlantic Yards Opponents

We just wrote about how Crain’s departing New York Business editorial director Greg David wanted to “personalize” the mega-issues and mega-destruction associated with the proposed Atlantic Yards mega-monopoly. The way he irresponsibly whittled it down it down was that someone named Daniel Goldstein was the sole personage responsible for holding up the arrival in Brooklyn of an unsigned basketball superstar named LeBron James.
...

Mr. Goldstein is not by any means the only member of a significant and ever-growing opposition to the project.
...

This post will supply what we did not supply in that post, a starting list of the plaintiffs, groups and individuals who have mobilized to oppose the horrific and tragically corrupt Atlantic Yards megadevelopment.

Posted by eric at 11:21 PM

It came from the Blogosphere...

NYGeog, Atlantic Yards protesters, some top tens of 2009 & Mapping New York

Not far from my neck-of-the-woods, some Atlantic Yards resistance took a practice run at what could be the most easy form of protest - handcuffing oneself to a bar. When the wrecking-balls come in they'll do it for real protesters say.

eOculus, 2000s: Decade of Decadence or Decency?
By Jessica Sheridan, Assoc. AIA, LEED AP

As the decade comes to a close, many stories highlighting the architecture of the “aughts” seem to be focusing on starchitecture and a supposed era of design gluttony. Those stories claim that the 20-teens will bring an end to the big dreams and excessive indulgences of developers riding the coattails of Robert Moses. However, while I agree that there were plenty of large-scale proposals that could prove to change the face of future development — from the World Trade Center to the West Side Rail Yards to Atlantic Yards — many of those proposals have been put on hold, placed aside (temporarily?) and replaced by watered down compromises.

Queens Crap, Broadway Triangle tweeding plan passes City Council

“This is not an Atlantic Yards project that circumvented [the process],” Councilman David Yassky (D-Brooklyn Heights) said at what would be his final hearing in office. The Triangle is in his district and, as such, he played a large role in seeing it get through the Council.

“We’re going to have 800 affordable apartments. We went through the process and had public input.”

1) The Atlantic Yards scheme did "circumvent the process" on many levels.
2) Both AY and the Broadway Triangle rely on eminent domain abuse, something not mentioned in any of the articles I have read thus far regarding this rezoning vote.
3) David Yassky is an asshole.

Real Estate News, Opinion, and Commentary, The Gambit of Eminent Domain
By Dan Krell

Many contend that the use of eminent domain is increasingly abusive, as highlighted by the case of Kelo v. New London. If you recall, Kelo v. New London involved the taking a private land to be used by developers to revitalize a Connecticut waterfront into upscale homes, a commercial district, and a large (private) research campus. The case was fought through the court system all the way up to the Supreme Court of the United States (SCOTUS). In 2005, the SCOTUS ruled 5-4 in favor of the municipality, New London, CT, with the majority accepting an expanded interpretation of “public use.”

...

Since the case of Kelo v. New London, similar cases have emerged up across the country. Two high profile cases in New York are being fought and again raising the question about eminent domain abuse.

A case ruling in favor of the State involves the development of a Brooklyn neighborhood into “Atlantic Yards” (Atlantic Yards is to include commercial and residential development, including the Barclays Center- where the New Jersey Nets will call home). Property owners who fought the condemnation of their property for the development of Atlantic Yards were thrown a major obstacle in their fight when they learned that the New York Court of Appeals upheld the condemnation. Additional appeals are probable.

...

Eminent domain continues to be a complex and deeply debated issue. If eminent domain’s expanded definition is to allow commercial development for the public good, then consider a recent Wall Street Journal report (November 11, 2009; “Pfizer and Kelo's Ghost Town”): The local and state government spent $78 Million to raze the Kelo neighborhood, only to find out that developers pulled out. The land is now vacant and without any tax benefit.

Brooklyn History 413, One Page Position Paper: Due 12/22

This paper will include the following:
1) A statement introducing your position
2) Three well-founded and informative arguments that support your position
3) One argument against your position that you refute
4) A conclusion

Example:

The Atlantic Yards stadium should not be built! The idea to build a stadium is ill-conceived, expensive and harmful to an already over-crowded community.
Bruce Ratner bought the New Jersey Nets not because he was a basketball fan but because he wanted a reason to build a money-making stadium in Brooklyn. Ratner plans to build this stadium at one of the busiest and most dangerous intersection in the entire city. It is already incredibly dangerous to cross the street at the corner of Atlantic and Flatbush and here Ratner wants to add 10 new apartment buildings and a stadium that will attract drivers from all over New York City and New Jesrsey! The children playing in the area will be at risk and the traffic will create new air pollution!
Bruce Ratner is receiving tax breaks to build an un-needed project for the city of New York. Mayor Bloomberg and the Governor Patterson are actually using taxpayers’ money to support this project when we are in a recession and our schools budgets are getting slashed! Bruce Ratner is trying to convince the city the neighborhood in which he wants to build is “blighted” and that the government should use the power of eminent domain to kick people out of their homes! This was a well-kept neighborhood with a mix of luxury and middle and low income apartments that Ratner has bought out and torn down, now blighting the community! Ratner has blighted the area that was once a completely viable neighborhood! Now he wants to claim that the area is useless except for his project.
People are excited about the idea of professional sports coming back to Brooklyn but what they don’t understand is that Ratner doesn’t even care about sports. He is using the arena as an entry-point into building luxury condominiums that help no one but the already well off.
As a long-time community resident I am strongly opposed to Bruce Ratner’s plans to build this arena. The city should stop the plans and leave the community as it is. The money the tax payers are giving towards this project should be diverted towards social services.

Posted by steve at 4:31 PM

Did the ESDC board fully consider the changed terms and revised timetable of the MTA deal? Despite responses in pending lawsuit, the record says no

Atlantic Yards Report

While some of the lawsuits challenging Atlantic Yards have been dismissed but face possible appeals, one extant lawsuit has not yet faced a judge and, as a "master closing" looms tomorrow, we shouldn't forget the serious allegations in that lawsuit.

The plaintiffs, Develop Don't Destroy Brooklyn and several other community groups, argue the Empire State Development Corporation (ESDC), rather than take a "hard look"--as required by state law--and delay its approval process, instead bowed to the developer's timetable to move the project forward so tax-exempt arena bonds could be issued by a crucial end-of-year deadline.

The suit charges that the ESDC did not evaluate the impact of Forest City Ratner's (FCR) revised deal with the Metropolitan Transportation Authority (MTA) for the 8.5-acre Vanderbilt Yard, which immediately conveys only an initial parcel needed for the arena block (for $20 million) and allows the developer "to extend the full acquisition of the balance of the MTA property beyond 2030" and to abandon the project "with virtually no penalty."

In fact, the suit charges, the ESDC Board was "never officially informed about the changed financial terms with MTA or the consequences of that change."

And that's the crux of the lawsuit, with the ESDC and FCR offering various responses and rationalizations, but not--to my reading--offering a credible refutation.

link

Posted by steve at 9:04 AM

Pol says Brooklyn arena financing is illegal

New York Post
By Rich Calder

Here is further mention of State Senator Perkins' letter to Governor Paterson regarding concerns that bonds for the proposed Nets arena are illegal.

A state Senator says that a $511 million finance plan to help pay off an NBA arena proposed for Brooklyn appears to be illegal.

Sen. Bill Perkins (D- Harlem), chair of the Senate Committee on Corporations, Authorities and Commissions, sent a letter to Gov. Paterson Friday addressing legal concerns about the $511 million in tax-exempt bonds floated for developer Bruce Ratner’s project by the state-created Brooklyn Arena Local Development Corporation.

He said the funding plan raises “the spectre of fraud,” and that the bonds are “effectively worthless.”

At issue is the BALDC’s origin.

It was created by the Job Development Authority, a dormant state public authority, rather than directly through the Empire State Development Corporation.

...

ESDC did not return a message seeking comment.

All concerned are still awaiting a definite statement from Governor Paterson on this matter.

When asked about the letter Saturday, Paterson said “If there is information in the letter that is asking us to take a look to see that everything was done properly, we would certainly be happy to do that.”

A spokeswoman for Paterson today sent the Post an e-mail saying “In addition, I can add that there is an objective, ongoing review being conducted by our counsel on the procedures. Top administration officials along with the chairmen of ESDC and the MTA met with Assemblyman [Hakeem] Jeffries last week to address concerns that he has with respect to Mr. Ratner’s commitment to building affordable housing. We are carefully reviewing.”

link

Related coverage...

Atlantic Yards Report: Still waiting for the ESDC to comment on the BALDC questions, but something's percolating

Ok, so perhaps the counsel for Paterson, Peter Kiernan, will produce a statement sometime Tuesday, a day before the expected "master closing" in which all contracts are supposed to be signed.

As for Jeffries' concerns, the affordable housing depends on incentives and penalties built into the contractual documents that won't be made available, as well as the city's willingness to allocate scarce tax-exempt housing bonds to this project above others.

Posted by steve at 7:54 AM

Markowitz basks in Barclays/Nets photo op

Atlantic Yards Report

That's Borough President Marty Markowitz at a media event--as opposed to, say, the much quieter announcement of the lawsuit that helped him raise the money for his new home--in which his favorite developer brought holiday toys to Brooklyn children. To his left is Forest City Ratner's Scott Cantone; to his right is Nets rookie ("star" in the press release) Terrence Williams, in the Santa hat.

...

At the press conference, Markowitz again invoked the Brooklyn Dodgers. "You're so lucky," he addressed the children. "Brooklyn will be back on the map in the national sports arena." He ended his five-minute address by excitedly saluting the Brooklyn Nets.

...

The Salvation Army takes sides

To quote Eric McClure of NoLand Grab:

Far be it for us to throw a wet blanket over a little holiday cheer for children who might otherwise have none, but perhaps this explains why the Salvation Army's Travis Lock testified before a board meeting of the Empire State Development Corporation on September 17th, saying "It is my sincere hope this morning that you would move forward with this project, the Atlantic Yard projects, on behalf of the Forest City Ratner Corporation."

Yes, Lock said exactly that, without irony. And that's Lock in the video, too.

link

Posted by steve at 7:29 AM

About that fire yesterday in the footprint: a close call

Atlantic Yards Report

Just before this past Sunday's "Chains of Justice" event at Freddy's, there was a fire several doors away at 479 Dean Street. This is the residence of David Sheets, a plaintiff in the Atlantic Yards eminent domain suit.

While rumors circulated that the fire may have been suspicious, Sheets said that wasn't so. A year ago, during winter, he'd smelled what seemed like burning wood, but the problem didn't persist.

But this time the problem recurred--a hole in the flue, Sheets said--exacerbated because he'd turned the heat up in the cold. The oil boiler heated to the point where the wood in the wall began smoldering.

It ignited into a slow creeping fire. When Sternfeld returned, there were flames in the apartment. "Half of my kitchen is gone, half of my living room is gone," Sheets said, citing the hacking and hatcheting the firefighters had to do to allow the water to get through.

Still, earlier today at least, he was still expecting to stay in the apartment, with repairs on the way. And he was grateful he'd survived a very close call.

link

Posted by steve at 7:22 AM

Public authorities: not reformed quite yet

New York Fiscal Watch
By Nicole Gelinas

Did the ESDC cut one corner too many and end up helping to issue fraudulent bonds?

Are New York’s public authorities fixed? Little more than a week ago, Gov. Paterson signed a bill to “rein in” New York’s “free-spending public authorities.”

But State Senator Bill Perkins of Harlem thinks that the convolutions New York’s Empire State Development Corporation (ESDC) put itself through to get the Atlantic Yards basketball arena funded “vitiate the longstanding efforts of the Legislature to reform public authorities and make them more accountable and transparent.”

Moreover, Atlantic Yards may not even pass muster under the law, Perkins says.

How could that happen?ESDC, the state agency in charge of Atlantic Yards, has worked with developer Bruce Ratner to complete the $511 million bond deal for the arena portion of the Brooklyn project through something called the “Brooklyn Arena Local Development Corp,” or BALDC.

...

Whatever the complexities, the PACB and the comptroller should vote on the debt issuance, because the Atlantic Yards debt carries a moral guarantee from Albany. A vote “would have required the PACB to undertake a substantive review of the financial merits of the bond issue, which are questionable,” Perkins notes.

link

Posted by steve at 7:03 AM

Eminent Domain Abuse: The Gifts That Keep On Giving and the Gifts That Don’t

Noticing New York

Michael White examines the case of Kelo v. City of New London for lessons learned. One lesson is that gifts given to a party that haven't been worked for are often not particularly valued. This seems to be the case in Kelo where Pfizer was the recipient of much government largesse.

We are making a point of two things here: How far the societal norms were bent out of shape in order to pile benefit on Pfizer and the fact Pfizer is taking a walk nevertheless. At first blush the principal relationship between those two things may seems to be its sadness, but probably isn’t. More likely the most important relationship between these two things is that the heedless piling on of benefits to Pfizer may actually be regarded as a cause of Pfizer’s departure. That, by analogy brings us back to Sam’s rule: What you don’t charge for is likely to wind up being undervalued.

Development, like psychoanalysis, should not involve an investment of commitment or effort on only one side. What is sad is that what was bulldozed for the unappreciative Pfizer’s benefit was just the opposite: It was people like Susette Kelo and her neighbors who, having invested in their property without subsidy and fully paying their taxes, were not going to leave. The lawsuit brought by Ms. Kelo and her neighbors, in fact, reflected their tenacious fight and commitment to stay. Had they been allowed they would be there still, still paying taxes.

This blog entry also points to how so many of those pushing for eminent domain in the Kelo case have all moved on, as it becoming more and more the case with the proposed Atlantic Yards project.

Finally, there is a suggestion for gift-giving for those who oppose eminent domain abuse in general and the proposed Atlantic Yards project in particular.

The perfect holiday gift? Make a donation to Develop Don’t Destroy Brooklyn, the lead opponents against Atlantic Yards. Or you might want to consider purchasing lots of these very handsome and convenient Develop Don’t Destroy Brooklyn tote bags which will support the cause. (See: Gift Idea: Develop Don't Destroy Bag.) Give the gift that keeps giving to fight he gifts that keep taking. One way in which none of us would like the Atlantic Yards epilogue to sound like the Pfizer epilogue is for it to end with a blight-delivering loss.

link

Posted by steve at 6:53 AM

Atlantic Yards project deemed unnecessary... in 1985

Queens Crap

There's a historical pattern in this state of the government going after private property multiple times using the threat of eminent domain, until it's finally developed by one of their preferred parties. And each and every time, there are developers salivating over the prospect of being handed cheap land without having to go through the time, cost and effort of acquiring it themselves. Take the Atlantic Yards project, for example which actually was resurrected in order to enrich then-Governor Pataki's college roommate, Bruce Ratner.

The Urban Development Corporation, now known as the Empire State Development Corporation, was looking to site a sports arena in or near NYC way back in 1985. Sites evaluated included Atlantic Terminal, Flushing Meadows (including Willets Point), Coney Island, Midtown near Madison Square Garden, Sunnyside Yards, Yonkers Raceway and Co-Op City.

Atlantic Terminal was eventually ruled out because it would compete with existing venues. So we're wondering why there has been a new need identified for that location when there are more large venues available now than in 1985.

The proposed project also has a much smaller footprint now, calling into question whether or not it will pay off. Although I suppose that doesn't really matter to Ratner since we taxpayers will be left footing the bill whether it fails or not.

Click through to see the supporting documents for this history lesson.

link

Posted by steve at 6:31 AM

Council OK’s Broadway Triangle rezoning

The Brooklyn Paper
By Andy Campbell

Because the "Broadway Triangle" project went through the city's ULURP process, outgoing Councilmember David Yassky was able to look past a development featuring a no-bid contract. He tried to justify his decision by pointing to the even worse process used for the proposed Atlantic Yards project.

“This is not an Atlantic Yards project that circumvented [the process],” Councilman David Yassky (D-Brooklyn Heights) said at what would be his final hearing in office. The Triangle is in his district and, as such, he played a large role in seeing it get through the Council.

“We’re going to have 800 affordable apartments. We went through the process and had public input.”

link

Posted by steve at 6:13 AM

Mayor Touts Council O.K.'s for West Side Yards, Broadway Triangle; Rebukes Kingsbridge Rejection

The New York Observer
By Eliot Brown

The proposed Atlantic Yards project gets a mention as a project that may happen soon, although there's no more market for office space or condo's than for the other large projects listed. The ESDC, the tool of developer Bruce Ratner, has put all of its efforts into seeing that an economically questionable arena gets built.

Speaking to reporters, the mayor ticked off a list of projects he put under the banner of progress: Coney Island, Willets Point; Hunter's Point South in Queens; Homeport in Staten Island.

"For decades, leaders have tried to tap the potential of these projects, but they're actually getting done now," he said. "These projects are leaping off the drawing boards and into reality. They're creating jobs for New Yorkers and affordable housing for families."

Such a characterization as "leaping" is a stretch to be sure, as the largest projects, while approved by the Council, now depend on the market, and few, if any, are moving anywhere fast. The city has made some movement in these projects, though no one can realistically expect Coney Island or Willets Point to be developed any time soon. (Then again, the Atlantic Yards project is poised to move forward at the end of the month.)

link

Posted by steve at 6:05 AM

December 21, 2009

Eminent Domain

The New York Times, Letters

To the Editor:

Re “Eminent Domain in New York” (editorial, Dec. 14): New York’s eminent domain laws are in need of reform. The Empire State Development Corporation’s attempted taking of private property on behalf of Columbia University illustrates how the current process lacks accountability, transparency or meaningful public participation.

The corporation cited “blight” to justify property condemnation. But the current definition of “blight” is vague. Absurd criteria, like the cracked sidewalks and loose awnings cited in Columbia’s decision, could be used to identify any neighborhood as blighted.

Furthermore, weak disclosure laws allowed Columbia to ignore Freedom of Information Law requests from property owners.

The appellate court wrote that “many commentators have noted that ‘few policies have done more to destroy community and opportunity for minorities than eminent domain.’ ” Current laws are a holdover from the so-called urban renewal schemes that decimated low-income and minority neighborhoods.

I am preparing legislation to address the flaws in existing law, and have requested Gov. David A. Paterson to impose a statewide moratorium on condemnation actions.

Since 2005, 43 states have changed their eminent domain laws to better protect home and business owners. It is now time for New York to do the same.

(Senator) Bill Perkins

Albany, Dec. 14, 2009

The writer is chairman of the New York State Senate Corporations, Authorities and Commissions Committee.

link

Posted by eric at 4:52 PM

HOLIDAY STORY PHOTO OP TODAY

The office of the Brooklyn Borough President put out the following press advisory earlier today:

BP MARKOWITZ, NETS PLAYERS CHRIS DOUGLAS-ROBERTS AND TERRENCE WILLIAMS, NETS LEGEND DARRYL DAWKINS TO DELIVER TOYS TO 60 BROOKLYN CHILDREN

4:00 P.M. – 5:00 P.M.
TODAY, MONDAY, DECEMBER 21
BROOKLYN BOROUGH HALL

...

Today, Monday, December 21, Brooklyn Borough President Marty Markowitz will join NETS players Chris Douglas-Roberts and Terrence Williams, NETS legend Darryl Dawkins and The Salvation Army to deliver hundreds of toys to 60 children at Brooklyn Borough Hall. The toys are being donated by the Barclays/Nets Community Alliance, which includes a partnership among Barclays, the NETS, and Forest City Ratner Companies. Presented by National Grid, a NETS sponsor, the event will provide toys to children who otherwise might not have received any during the holiday season. The Barclays/Nets Community Alliance is donating to The Salvation Army more than 1,100 toys for Brooklyn youngsters, as well as funding children’s holiday parties at each of the five main Salvation Army centers that serve Brooklyn, including in Bay Ridge, Bedford-Stuyvesant, Brownsville, Bushwick and Sunset Park.

Far be it for us to throw a wet blanket over a little holiday cheer for children who might otherwise have none, but perhaps this explains why the Salvation Army's Travis Locke testified before a board meeting of the Empire State Development Corporation on September 17th, saying "It is my sincere hope this morning that you would move forward with this project, the Atlantic Yard projects, on behalf of the Forest City Ratner Corporation."

At that meeting, the ESDC board voted to enhance public funding for Atlantic Yards.

Posted by eric at 4:38 PM

White space

WhiteonBlight.jpg

Brit in Brooklyn Adrian Kinloch, camera in hand, took a stroll around the Atlantic Yards footprint yesterday. Mother Nature had lain a blanket of white over Bruce Ratner's manufactured blight, and as Kinloch put it, "the snow really enhanced FCR's work."

Click here for a peek at a few more of BIB's gorgeous (non-Atlantic Yards-footprint) post-snowstorm photos.

Posted by eric at 4:26 PM

The Week in Crime: Special Shopper’s Edition

The Local [Fort Greene/Clinton Hill]

With just four shoplifting days to go, it appears that crooks are dreaming of a "blight" Christmas at Bruce Ratner's Atlantic Center and Atlantic Terminal malls.

* A woman tried to walk out of Target on Tuesday night with 215 unpaid-for items, including 101 health and beauty items, 66 things from the grocery department, 13 seasonal objects and 11 toys. Danita Gardner, 40, was charged with grand larceny.

* Grand larceny, Dec. 14: Woman waiting for bus near Pathmark is jostled in a crowd. Discovers on bus that her wallet, containing $250 cash, is missing.

* Assault, Dec. 15: 25-year-old woman charged with assaulting police officer trying to arrest her in front of Atlantic Terminal.

* Grand larceny, Dec. 18: Woman’s wallet, containing $100 cash, a $150 gift card and a notary license, removed from her jacket pocket at Daffy’s in Atlantic Terminal.

link

Posted by eric at 4:13 PM

Perkins Will Lead Statewide Crusade for Eminent Domain Reform

NY Observer
by Jimmy Vielkind

As far as Bill Perkins is concerned, the issue of eminent domain has got legs.

"It's really a corruption of our notion of democracy," said Perkins, a Democratic state senator who represents Harlem. He was speaking Saturday at a Pentecostal church on 125th Street. The room was one-third filled by people who are concerned about the issue and active in fighting its application around the city: at the Atlantic Yards project in Brooklyn, in Willets Point in Queens and just down the road in Manhattanville, where Columbia wants to build a new campus.

Perkins was prompted to action two weeks ago, when an appellate court ruled that the Empire State Development Corporation acted improperly by declaring parts of Manhattanville blighted ahead of condemnation for Columbia's campus. Columbia first asked ESDC to look into eminent domain in 2004.

Perkins on Saturday reiterated his call that ESDC not appeal this decision, and called for a moratorium on the use of eminent domain for private development until a commission can be formed and recommend revisions to the eminent domain procedure law.

"This is a very, very important movement," Perkins said, announcing a formal hearing in Harlem on January 5. "We're going to be going around the state to develop a case for reform."

He said the current law is a "corruption of our democracy." He's also said it's like "a gun to the community's head."

article

Posted by eric at 4:06 PM

Ratner sells bonds to finance new arena

Park Slope Courier
by Stephen Witt

The Courier catches up with last week's Atlantic Yards developments.

Investors quickly snapped up $511 million in bonds bringing Developer Bruce Ratner one major step closer to building the $1 billion Barclays Center arena at the Flatbush/Atlantic avenues intersection.

Raising half the money to build the arena also brings the borough closer to having its first major professional sports franchise since the Dodgers left Brooklyn following the 1957 season.
...

The project is expected to officially break ground before the end of the year, and Ratner said he hopes to have the arena completed by the end of the 2011-12 NBA season.

article

Posted by eric at 4:01 PM

Mayor says big projects will go forward in NYC in 2010

SILive.com

Mayor Michael Bloomberg said today that, going into 2010, major public and private projects are moving forward in the city despite the recession.

Here are his remarks as prepared for delivery on 1010 WINS News Radio:

"Great cities grow and change. And despite the lingering impact of the national recession, growth and change are reshaping New York - for the better.
...

And the proposed Atlantic Yards project at the heart of Brooklyn got a big vote of confidence last week from private investors, who snapped up more than $500 million worth of bonds for that housing and commercial development in just two hours time.

link

Posted by eric at 3:47 PM

Alphabet soup: if the UDC aims to offer Sports Stadium Assistance, why was the BALDC created by the JDA (which finances machinery and equipment)?

Atlantic Yards Report

The text on the web page of the Bond Program offered by the state's economic development agency compounds questions raised by state Senator Bill Perkins about the legitimacy of the bonds issued for the Atlantic Yards arena.

It states:
Empire State Development is the parent organization for New York’s two principal economic development financing entities: the Empire State Development Corporation (formerly known as the Urban Development Corporation), and the Job Development Authority. In 1995, these agencies, which had previously functioned independently, were consolidated in order to increase efficiency, reduce overhead and enhance the delivery of the State’s economic development initiatives. Reorganized as Empire State Development, the combined agencies now function as a streamlined economic development organization whose primary mission is the facilitation of business growth and job creation across New York State.

As part of this economic development role, Empire State Development Corporation oversees the issuance of debt under the programs of both the Urban Development Corporation and the Job Development Authority. On the UDC side, bonding programs include Corporate Purpose, Correctional and Youth Facilities, Sports Stadium Assistance, and various educational and civic related project revenue bonds. The Job Development Authority issues both taxable and tax exempt bonds to finance its business lending programs. These programs are designed to promote job growth by providing loans to assist New York companies to build and expand facilities and acquire machinery and equipment.

(Emphases added)

The questions

If the UDC is supposed to offer Sports Stadium Assistance, then why was the Brooklyn Arena Local Development Corporation (BALDC) created instead by the Job Development Authority (JDA)?

And if the JDA aims to help companies "build and expand facilities and acquire machinery and equipment," then why is it financing an arena?

link

Posted by eric at 10:52 AM

How Atlantic Yards impacts the MTA’s bottom line

2nd Ave. Sagas
by Benjamin Kabak

Late last week, amidst all of the talk about the MTA’s budget crisis, State Sen. Pedro Espada nearly made a good point. In a letter to MTA CEO and Chairman Jay Walder, Espada urged the authority head to examine the state of the MTA’s real estate holdings. His point though was a bad one.

“MTA budget gap needs must be measured against real numbers, and the MTA must prioritize fiscally prudent lease and sale of assets before deciding to leave children, seniors and hard-working citizens stranded without a safe, reliable and affordable means to get to and from work, school, grocery shopping and doctor’s appointments,” Espada wrote. “I would like to hear from you as soon as possible regarding the MTA’s real property holdings as a solution to the Authority’s serious budget concerns.”

Now, it doesn’t take an economic genius to understand the folly of Espada’s remarks. First, he is urging the MTA to sell its real estate holdings during one of the greatest periods of market depression in U.S. history. Second, MTA real estate sales are simply another one-off quick fix and provide no long-term secure solution to the agency’s financial problems. To sell now, in other words, would be folly.

Unfortunately, for transit advocates, Espada missed an opportunity to make a point. He could have used the MTA’s summertime decision to accept just $20 million up front from Bruce Ratner for the Vanderbilt Yards land rights to question whether the MTA is fiscally smart enough to take advantage of its real estate holdings. Originally, in 2005, the MTA extracted a promise for $100 million from Ratner, and even then, the price was a below-market rate. Today, the deal looks even worse.
...

At a time when the agency must maximize its revenue potential, the authority — and the state along with it — is simply handing over free money to Bruce Ratner while the rest of us face the specter of service cuts. A full market rate payment for the Vanderbilt Yards land wouldn’t close the 2010 gap by itself, and since the MTA can sell that land only once, it wouldn’t help the future. But a better deal would benefit both the authority and its riders.

article


Related coverage...

Brooklyn Daily Eagle, Brooklyn Broadside: MTA Cutbacks: Why a Sudden Budget Shortfall?

Dennis Holt, on the other hand, sees no connection between Atlantic Yards and the MTA's budget woes.

The hullabaloo and horror stories now begin as the Metropolitan Transit Authority fires the shot heard ’round the town. One hundred and seventy fingers are pointing in every conceivable direction in an attempt to find fault.

Daniel Goldstein of Develop Don’t Destroy Brooklyn even blames Bruce Ratner for the whole mess. Most other statements are more rational.
...

So, here we go again: Profound public policy should be combined with practical common sense; but one can bet that no one will make that ideal merger permanent.

NoLandGrab: "Common sense" might dictate that the blatant giveaway of MTA-owned land for a fraction of its value might relate in some way to the agency's ever-widening budget gap, but Holt won't take his own advice.

The Brooklyn Paper, Rejection! Court turns down Yards foes in suit over MTA’s sweetheart deal

A state court has once again rebuffed an effort to throw a wrench in Bruce Ratner’s Atlantic Yards machine, rejecting a lawsuit that accused the MTA of improperly selling its Vanderbilt rail yard by not seeking new bids after reopening the original 2005 deal with the developer this summer.

The suit, filed by panoply of elected officials and opposition groups, claimed that the Metropolitan Transportation Authority broke a state law that was passed in the wake of Atlantic Yards to curb abuses by state authorities through stricter transparency and ethics guidelines.

Posted by eric at 10:39 AM

As Perkins pushes for reform of eminent domain laws, Paterson stands ground, backs ESDC's appeal in Columbia case

Atlantic Yards Report

How things have changed. A little more four years ago, state Senator David Paterson and Council Member Bill Perkins were of the same mind on eminent domain, especially concerned about Columbia University's planned expansion in West Harlem, an area in their districts.

They called for a moratorium on the use of eminent domain in the wake of the U.S. Supreme Court's controversial 5-4 Kelo vs. New London decision upholding eminent domain for economic development.

Now Perkins is in the state Senate, the leader of a somewhat lonely legislative effort to reform the state's eminent domain laws, much criticized by not only the libertarian Institute for Justice but also civil rights lawyers like the diehard liberal Norman Siegel. And now Paterson is governor, with a much larger constituency and having inherited some projects--like Atlantic Yards and Columbia--that depend on eminent domain.

And, in separate appearances Saturday just a few blocks (and a few hours) away, Perkins highlighted the need for change, and Paterson stood his ground.

article

Posted by eric at 10:33 AM

Back on the chain gang

Here's a round-up of media coverage of yesterday's "Chains of Justice" protest at Freddy's, the last-bar-standing in the footprint of Bruce Ratner's Atlantic Yards project.

NY Post, 'Cuff' love protest for doomed bar

Patrons of a popular Brooklyn watering hole chained themselves to the bar yesterday to protest a court's upholding its closing to make room for the controversial Atlantic Yards project.

Freddy's Bar & Backroom regulars slapped on handcuffs and chains in a symbolic protest they vow to repeat when authorities actually try to seize the bar.

Last month, New York's top court said the state can force homeowners and businesses to sell to make way for the development.

"It's more than a bar, it's a community meeting place," said Donald O'Finn, owner of the Dean Street bar in Prospect Heights, who said that the chain links "represent all the people in the community."

Photo: G.N. Miller/Post

NetsAreScorcing, NETS ON THE NET: 12/21/09 CIVIL DISOBEDIENCE EDITION

In a sign that opponents of the Atlantic Yards development are going to continue to disrupt the progress of this project, despite the recent legal victories and financing handed over to developer/Nets owner Bruce Ratner, patrons at Freddy’s Bar in Brooklyn, which is slated to be knocked down for the Nets new arena, chained themselves to the bar in protest.

sharocks the blogspot, more reason to hate atlantic yards

must support: freddy's backroom. the proposed atlantic yards project that will bring a new jersey basketball into my hood is threatening my favorite neighborhood bar, freddy's backroom. in a protest against the impending take over, freddy's installed chains on the bar. no joke, here's proof.

get your pints and support freddy's. here's hoping the take over will be delayed indefinitely.

rotoinfo, Critics Threaten Civil Disobedience to Stop Arena

Construction crews have been working outside Freddy’s Bar for a while now, waiting for condemnation to permit them to finish the job. On Sunday, patrons at arena critics’ favorite watering hole chained themselves to the bar for an hour in a symbolic protest. They pledged to do the same thing when they’re asked to leave in a few months. Others opposed to Bruce Ratner have said they’ll do the same.

Runnin' Scared, Anticipating Atlantic Yards Eviction, Freddy's Bar Wraps Itself in Chains

The locals at Freddy's Backroom -- a cozy Prospect Heights bar with a rabble-rousing clientele -- could be found getting sloshed at an especially early hour on Sunday. At high noon, and with the assistance of a group of mildly drunken onlookers, manager Donald O'Finn was fastening a giant metal chain to the bar's wooden counter.

The locals then handcuffed themselves to the chain and spent the afternoon watching football, drinking whiskey with their free hands.

AP via NBC New York, Freddy's Patrons Protest Atlantic Yards

AP via Boston Globe, Supporters of popular Brooklyn bar try to handcuff eminent domain ruling

Posted by eric at 9:43 AM

DDDB PRESS RELEASE: Atlantic Yards Arena Bonds Appear to Be Illegal

Answers Sought From Paterson Administration

NEW YORK, NY — The $511 million triple tax-exempt bond issued by the Brooklyn Arena Local Development Corporation (BALDC) on December 15 appears to be structured and issued illegally.

State Senator Perkins (D- Harlem), Chair of the Senate Committee on Corporations, Authorities and Commissions, sent a letter to Governor Paterson on Friday explaining the legal concerns, which the Senator described as "raising the spectre of fraud," and rendering the bonds "effectively worthless."

Senator Perkins said at a Saturday community meeting confronting eminent domain abuse that he spoke to the governor's counsel, Peter Kiernan, who was taking the matter seriously. He asked that the Governor halt reportedly imminent closing on Atlantic Yards project agreements. He said that if the state did not respond, legal action would be considered.

In sum the letter explains that the BALDC has no legal authority to issue PILOT (Payments in Lieu of Taxes) backed bonds because they have no legal authority to lease tax-exempt land.

The letter can be found at: http://dddb.net/documents/letters/PerkinsPatersonBALDC.pdf [PDF]

link

Posted by eric at 9:35 AM

December 20, 2009

fire at 479 Dean

Photo, by Tracy Collins, via flickr Atlantic Yards Photo Pool.

At noon today, a fire broke out in the apartment of David Sheets (479 Dean, the building on the extreme far left), one of the plaintiffs in the eminent domain lawsuits of Atlantic Yards. I've heard that it was a hole in the flue of the boiler.

Noon today was also the press conference at Freddy's Bar (485 Dean, the building on the extreme far right) where they installed "The Chains of Justice" to be used by protestors in the event that the ESDC moves to condemn and demolish Freddy's.

All buildings in this photo would be demolished, and this would be the southeast corner of Barclay's Center arena. Click here for Collins's most recent photos, including several of today's Chains of Justice event and the aftermath of the Dean Street fire.

Posted by eric at 11:59 PM

At Freddy's the "chains of justice" are installed

Atlantic Yards Report

Today was the installation of the "chains of justice" at Freddy's Bar & Backroom, so regulars can, in protest, chain themselves to the bar if condemnation proceeds.

I couldn't make it but photographer Tracy Collins shot a set of photos, including the response of the fire department to a fire down the block at one of the few remaining occupied buildings.

article

Additional coverage...

AP via WCIX.com, Fans chained to NY bar in eminent domain protest

On Sunday, supporters bolted a chain to the establishment's bar, and some patrons hundcuffed themselves to it for about an hour while sipping on pints of beer. They say they'll do it again when authorities try to seize the property.

Posted by eric at 11:51 PM

Angry Santa Appears at Freddy's "Chains of Justice" Installation

Found in Brooklyn

An irate Santa made a surprise visit to Freddy's Bar & Backroom during the installation of the "Chains of Justice" to the bar.

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Posted by steve at 8:51 PM

State senator charges Nets bonds are illegal

Field of Schemes

Neil deMause looks at the legality of bonds created for the proposed Nets arena.

Freddy's Bar, one of the buildings slated for demolition to make way for the new Nets arena in Brooklyn, is installing chains today so that patrons can attach themselves to their barstools if the bulldozers come. But as surprise last-ditch efforts to forestall the Atlantic Yards arena project go, there might be more significance in a state legislator's surprise insistence that the arena bonds sold last week are illegal:

Suggesting that bonds for the Brooklyn arena were issued improperly, state Senator Bill Perkins yesterday asked Governor David Paterson to halt the "master closing" for the project scheduled for Wednesday and to stay condemnation proceedings until "serious questions... are addressed."

Had the bonds been issued by an Empire State Development Corporation (ESDC) subsidiary, they could be repaid via for payments in lieu of taxes (PILOTs), but the issuance would have had to have been approved by the Public Authorities Control Board (PACB), Perkins wrote in a letter. However, in an apparent effort to avoid the PACB, the ESDC created the Brooklyn Arena Local Development Corporation (BALDC), and that murky entity--which issued $511 million in bonds--should not possess a property tax exemption, the letter said.

In English, that seems to mean this: In order to take advantage of the Yankees dodge and use federally subsidized tax-exempt bonds for the arena, the Nets need to claim that their bond payments are really "payments in lieu of property tax." (For reasons that I really can't bear to explain again, tax-free bonds can only be paid off with tax revenue, not private rent payments.) But of course, to be "in lieu of" property tax, the property in question needs to not be charging tax that it otherwise could be.

...

Whether this legal argument is valid, I have no idea — as the one property-tax expert I contacted today remarked, "This is way above my pay grade." That said, major development projects in this city have been scuttled by more unlikely sources, so anything is possible. It'll be very interesting to see if Gov. Paterson responds, and if not, whether Perkins (or local opponents) then throws another lawsuit on the fire.

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Posted by steve at 8:44 PM

Asked About Taking a Promised Hard Look at Atlantic Yards Before Issuing Arena Bonds Does Paterson Understand AY?

Noticing New York

Michael White catches up with Governor Paterson

Governor Paterson was asked questions today about the hard look his administration said it would take at Atlantic Yards. Questions came from Norman Oder of Atlantic Yards Report (see, Saturday, December 19, 2009, Hail Mary or silver bullet: Perkins, raising questions of fraud in arena bond sale, asks Paterson to put Atlantic Yards on hold) and Noticing New York was able to ask our own question at the same brief press conference.

At a critical time the governor probably still needs to get up to speed on Atlantic Yards.

Our question to the governor and his response were as follows:

NNY: Governor, you are trying to close a budget gap and the MTA is trying to close a budget gap. You said that you will take a serious, hard look at the Atlantic Yards project. That project is perhaps $2-3 billion in public subsidies and it’s calculated by the city Independent Budget Office to be a $220 million net loss to the public, that’s the net loss not te cost. Don’t you think that perhaps taking that serious look should happen before bonds are issued for the arena?

Paterson: The bonds were issued for the arena. There are a number of projects that probably add up to tens of billions of dollars that we could take off the table if we were trying to save cash. The whole premise of these sort of public-private arrangements is to create jobs and bring revenues back into the state. So, if you take a snapshot in time it is a loss. If you take a snapshot in time funding the educational system is a loss, but the revenues that you generate from the workforce in the years to come far outweigh the investment that you make.

...

The governor’s statement that the bonds have been issued is not correct. Goldman Sachs has found buyers for the bonds but the bonds are not currently scheduled to be “issued” until this Wednesday, December 23rd, and that date could be postponed if the governor and his counsel decide they need time to think about whether they should be issued at all. This is a very important distinction for the governor to understand since he had just finished answering questions from Mr. Oder about the serious likelihood that the bonds, if issued, would be illegal.

Read the rest to see that Paterson still needs to come up to speed on the Atlantic Yards Project. Otherwise, he might continue to try and compare the proposed Atlantic Yards project to the construction of a public school. Also, he might want to understand how the almost phantom Job Development Authority's (JDA) creation the Brooklyn Arena Local Development Corporation (BALDC) resulted in the issuance of illegal bonds.

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Posted by steve at 7:06 PM

Big Picture Questions: Does MTA Chairman Jay Walder Comprehend Atlantic Yards Link to MTA Cutbacks?

Noticing New York

This past Wednesday, the MTA board voted to approve service cuts. Public testimony was allowed before the vote. Michael White was there to condemn the sweetheart deal/development monopoly granted by the MTA to Bruce Ratner.

Our message was that the MTA’s giveaways to the proposed Atlantic Yards Forest City Ratner mega-monopoly are probably the most prominent example of why the MTA is was having to vote to implement these cutbacks. After we and the rest of the public spoke, MTA Chairman and Chief Executive Jay Walder made a statement that sounded uncannily as if he had listened to and taken to heart what we and others said that morning about the drain on the budget due to Atlantic Yards. Maybe it sounded that way until you remember how politicians and political appointees with an idée fixe about the Transaction Fixée (The Wired Deal) can mouth all the words of good, responsible government without meaning any of them.

Read the rest of the post to see how the deal given Ratner for the Vanderbilt Yards is hurting the MTA and how the bidding process was rigged so that only Ratner can have sole ownership of the Vanderbilt Yards at far below their value.

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Posted by steve at 6:22 PM

TODAY: Freddy's Installation of the Chains of Justice (Ratner and NY State's Injustice)

Develop Don't Destroy Brooklyn

Below: A Media Alert from Our Comrades at Freddy's

What: Freddy’s Chain Gang to Install the Chains of Justice (should they be needed)

When: Sunday, December 20, High Noon.

Where: Freddy’s Bar & Backroom

**************

With the coming of this Christmas everyone should be concerned with New York State and Governor Paterson’s capacity to hand privately-owned property over to corporations for profit. It is a disturbing trend that casts an ominous shadow over all of our futures in this country.

Scrooge and the Ghost of Christmas Yet to Come, or the Ghost of Christmas Future, is intended to represent the uncertainty of the future:

Scrooge queries the ghost: “answer me one question. Are these the shadows of the things that Will be, or are they shadows of things that May be, only?”

Still the Ghost pointed downward to the grave by which it stood.

“Men’s courses will foreshadow certain ends, to which, if persevered in, they must lead,” said Scrooge. “But if the courses be departed from, the ends will change. Say it is thus with what you show me!”

What is it that the Courts are showing us regarding the power of our own Scrooges?

**************

An overwhelming number of Freddy's Bar patrons plan on chaining themselves to the bar if Scrooge Ratner and Grinch Paterson's Atlantic Yards Project attempts to shutdown and demolish Freddy's Bar and Backroom. This Sunday, December 20th, we are installing chains onto the Bar itself for just such a purpose.

In light of the recent decision against Columbia University and the Empire State Development Corporation’s attempt to steal properties by eminent domain, and the confusion in the Courts that seems to allow taking Brooklyn properties for Ratner, but not Harlem properties for Columbia…we are angry. We are giddy for the victory against Columbia, but angry that our neighborhood can be taken, that our bar can be taken. We will stand in support of the Prospect Heights neighborhood, and the extended neighborhood of 5000+ supporters who have donated time and money to fight against eminent domain. We believe the links of the chain represent all the individuals unbreakably locked in a chain gang seeking fair rights for the individual in the contemporary flurry of land-grabbing corporate greed.

The Backroom at Freddy’s Bar was the birthplace of this particular rebellion for fair treatment, the front room is where we bring out the hardware to back it up.

The Chain will officially be installed on Sunday, December 20th at 12:00 noon.

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Posted by steve at 12:48 PM

Waiting for a follow-up on the BALDC (and more evidence of Paterson inattention)

Atlantic Yards Report

We're awaiting responses to yesterday's disclosure that bonds sold for the proposed Nets arena may be illegal.

Well, I know that the daily newspapers are aware of the letter from state Senator Bill Perkins raising serious questions about the Brooklyn Arena Local Development Corporation (BALDC).

Since there's no follow-up today, I'd look for a response tomorrow. I suspect some lawyers for the state are busy doing some research and writing a memo.

...

Meanwhile, Michael D.D. White reports on Gov. David Paterson's answer to another question posed at the impromptu press conference yesterday.

White said AY would cost $2-$3 billion in public subsidies; Paterson responded that any project, at a snapshot in time, might be a loss.

The $2-3 billion figure is debatable, and Paterson didn't object to that number simply because he's not up to speed. (He should know more about AY, but, then again, he's got some major crises in front of him.)

However, what's not debatable is that no government entity, including the New York City Independent Budget Office (which looked only at the arena), has attempted a credible cost-benefit analysis for Atlantic Yards as a whole, with estimates encompassing both a ten-year buildout (as promised) and a much longer one.

And, as noted yesterday, Paterson is not up to speed either on the questions raised about the BALDC.

In a day or so, however, more clarity should emerge.

link

Posted by steve at 8:23 AM

EMINENT DOMAINIA: Atlanta-Area Florist Ratchets Up Battle Over Eminent Domain

This news advisory announces an unusual move: Mark and Regina Meeks are looking to
"add thousands of new owners to their land deed, thus making it forever impossible for the land to be taken through the controversial process of eminent domain."

Land Battle Watched by the World Gains New Weapon

ATLANTA-AREA FLORIST RATCHETS UP BATTLE OVER EMINENT DOMAIN - ANNOUNCES NEVER-BEFORE SALE OF LAND TO STAVE OFF GOVERNMENT LAND SEIZURE

STOCKBRIDGE, Ga., December 16, 2009 - At a news conference and flanked by anti-eminent domain abuse demonstrators, owners of Stockbridge Florist & Gifts unveiled their newest weapon in their high-stakes battle over control and ownership of their property - the public. In a first-ever, history-making land offering, Mark and Regina Meeks are selling land at the site of their flower shop to ANYONE and EVERYONE. In a never attempted land deed modification, the Meeks will seek to add thousands of new owners to their land deed, thus making it forever impossible for the land to be taken through the controversial process of eminent domain. "While a last resort, we believe selling our land to the public is our only way of keeping what's ours, preserving our livelihood, and recouping at least a fraction of our losses," flower shop owner Mark Meeks said. Details can be found at www.stockbridgefloristfund.com.

[Read the rest of the press advisory after the jump.]

Mark and Regina Meeks have lived under constant and imminent threat of eminent domain since 2005 when elected officials in Stockbridge, Ga. began condemning the Meeks' land through eminent domain. Despite winning an appeal in April of 2006, the Meeks fear the City of Stockbridge will make another attempt at condemnation due to conclusions in the Court's order which "do not prevent the Condemnor from filing another petition." Supporters of Stockbridge Florist & Gifts include numerous national organizations, activists and both state and local chapters of the NAACP.

"I stand with them," said Edward Dubose, the President of Georgia's NAACP from his south Ga. home. "This is also happening in our community. When the government has unchecked, unlimited reach to take property, entire communities of ours could be devastated. We've seen it happen."

"We have been working on this idea for over a year and feel that we have no other alternative," Meeks said. The land offering should attract landowner-partners who, for as little as $25.00, will purchase a piece of history, stave off eminent domain condemnation, and help the Meeks recover some of more than $300,000 in legal expenses. "The burden of five court cases and associated legal fees has us on the brink of financial disaster. And we've endured the emotional suffering that comes with uncertainty and injustice."

Monies generated will also help to fund the Private Property Project, a non-profit organization aimed at preserving property rights and serving as a future resource center for property owners in the U.S.

Georgia State Rep. Steve Davis, R-Henry Co., also speaking at the news conference, explained why legislation to reform eminent domain standards and procedures throughout Georgia is paramount on his agenda during the 2010 legislative session which begins in early January. "I don't believe government should be in the business of land development or sales. However, when there is a need for the use of an individual's or company's property for a legitimate public purpose, then we must ensure that all other options have been attempted and that property owners are justly compensated without the need to defend themselves from their government," Davis said.

Stockbridge Florist & Gifts has been owned and operated by Mark and Regina Meeks for 26 years. Their story has, in the past, been featured on CNN, FOX News, MSNBC, WSB-TV, WGCL-TV, WXIA-TV, WAGA-TV and has appeared in major U.S. newspapers.

Posted by steve at 7:44 AM

Officially Worthless - Atlantic Yards JunkYard Bonds - Shady Backroom Plan Backfires

Freddy's Brooklyn Roundhouse

$511 million in worthless bonds for Atlantic Yards were sold in the last week. Only problem: To get around government regulations, the crafty Ratner had his bonds sold through the Labor Authority, instead of by an ESDC subsidiary, and the Labor Authority isn't authorized for tax exempt status for real estate bonds! Senator Bill Perkins issued a letter last week officially calling the shady bonds "effectively worthless," since they were sold as tax-free bonds, and they are clearly not tax free.

Save-the-neighborhood advocates called it early when they brought a garbage truck to the bond-rating agency (which missed a big issue with the bonds) and tossed mock bonds into it, calling the bonds, JunkYard Bonds, to associate them with junk bonds. Only these bonds are worth even less than junk bonds without true tax-exempt status.

During a week when the Governor claimed New York State was about to be insolvent, and one week after he signed a law to reign in public authority spending, the State issued bonds in a backdoor way to help its special friend, billionaire Bruce Ratner. And now this has backfired. But there is more in Ratner's stocking. The MTA is cutting 2 train lines, and free student metrocards to honor it's less than half-price deal with Ratner in its no-bid sale of the Vanderbilt Railyards.

Posted by steve at 6:54 AM

Condemned For Christmas 2009 - The Mittens Are Off

Freddy's Brooklyn Roundhouse

Christmas # 6 of Bruce Ratner's attack on Prospect Heights for his Atlantic Yards project. The lawsuits against Ratner's use of the ESDC and MTA for his private benefit continue in full force. And the neighborhood is making it clear they are not going to be evicted. The recent court decision against the ESDC's attempt to seize property for Columbia University has revealed a pattern of Eminent Domain Abuse on the part of the ESDC. A new law has passed specifically prohibiting the ESDC and MTA favoritism toward Forest City Ratner. Can it be applied to this case? After a long battle there is renewed hope, and anti-Ratner activism is on the rise.

Posted by steve at 6:49 AM

December 19, 2009

Serious Legal Questions Raised About Atlantic Yards Arena Bond

Develop Don't Destroy Brooklyn

It appears that the Brooklyn Arena Local Development Corporation, which sold $500 million worth of triple tax-exempt, PILOT backed bonds, had no legal authority to do so.

The following letter was sent December 18, 2009 from Senator Bill Perkins (Chair of the Senate Committee on Corporations, Authorities and Commissions) to Govenor Paterson.

A very brief summary of the letter:

The Empire State Development Corporation (ESDC) had the Job Development Authority (JDA) create the Brooklyn Arena Local Development Corporation (BALDC) to avoid creating a subsidiary that would have required approval from the Public Authorities Control Board (PACB) to issue bonds for the proposed Nets arena. But since the BALDC is not a subsidiary and does not have real estate tax-exemption authority, it cannot use payments-in-lieu of taxes (PILOTs) to secure the bonds, and the bonds "are effectively worthless".

[The text of the letter can be found after the jump.]

link

Senator Perkins' letter:

David A. Paterson, Governor State of New York State Capitol Albany, New York 12224

Dear Governor Paterson:

On Tuesday, December 15, 2009, the Brooklyn Arena Local Development Corporation (BALDC) sold $511 million of tax exempt bonds to help finance the Atlantic Yards arena. BALDC is a not-for-profit corporation and was created by the Job Development Authority under section 1411 of the Not-For-Profit Corporation Law. The Job Development Authority (JDA) is a mostly defunct public authority that exists, along with the Urban Development Corporation, as part of Empire State Development Corporation (ESDC).

It appears that ESDC chose to have the JDA create the BALDC so as to avoid creating an ESDC subsidiary, which would have required approval from the Public Authorities Control Board (PACB) and the Comptroller to issue the arena bonds. Pub. Auth. § 51. PACB approval in this case would have been disadvantageous for two reasons: (1) it would have required the PACB to undertake a substantive review of the financial merits of the bond issue, which are questionable; and (2) it would have delayed the bond issue, likely past the December 31 deadline set by the IRS for issuing tax exempt bonds (after December 31, a rule change will not permit tax exempt bonds to be issued for stadiums).

However, as a local development corporation, and not an ESDC subsidiary, the BALDC cannot legally finance the arena using the convoluted financing methods applied in this case. Of particular importance, the BALDC does not have the authority to grant a real property tax exemption for the land that it will lease to Arena Co., which is Forest City Ratner’s arena management company. The BALDC is subject to Real Property Tax Law (RPTL) § 420-a, a different section than the one that applies to public authorities and their subsidiaries, § 412. Under § 420-a, not-for-profit property is tax exempt only if the corporation is “organized or conducted exclusively for religious, charitable, hospital, educational, or moral or mental improvement of men, women or children purposes”.

In June, 2009, the Court of Appeals addressed § 420-a and its application to LDCs. The court held that land leased by an LDC to a manufacturing company, for economic development purposes, was not eligible for the property tax exemption. Lackawanna LDC v. Krakowski, 12 N.Y.3d 578 (2009). Accordingly, if economic development does not fall within § 420-a as a basis for an LDC’s tax exemption, there would seem to be little basis for the BALDC to claim tax exempt status for the Atlantic Yards arena land(1).

Additional support for the arena not having a valid tax exemption is provided by two Fourth Department cases involving stadiums. In the first, County of Erie v. Kerr, 49 A.D.2d 174 (4th Dept. 1975), the court held that the county-owned facility was tax exempt because it served the “public” purpose of providing entertainment facilities for Erie County residents. However, being a “public use” for purposes of RPTL § 406 does not automatically satisfy the more restrictive provisions of § 420-a. In Syracuse University v. Syracuse, 92 A.D.2d 46 (4th Dept. 1983), the court acknowledged as much by holding that the university was not entitled to a full tax exemption under § 420-a where the stadium was used for commercial events, in addition to events connected with the university’s educational purposes. Moreover, there are separate exemptions in the RPTL for stadium uses. In particular, subsection 10 of § 420-a exempts stadium facilities owned by educational institutions. Basic tenets of statutory construction indicate that had the legislature intended to generally exempt not-for-profit property used for stadiums from property taxes, it would have done so. Furthermore, RPTL § 429 exempts stadiums housing both: (1) a professional basketball team; and (2) a major league hockey team. Not only will the Atlantic Yards arena be too small to support a major league hockey team, there is no such contractual obligation, as required under § 429.

In light of this analysis, the BALDC property is not tax exempt if used for arena purposes. Consequently, payments-in-lieu of taxes cannot be used to secure the bonds, and they are effectively worthless. If ESDC knowingly misrepresented the legitimacy of these bonds, this raises the spectre of fraud.

ESDC could have easily avoided this result if it had created the BALDC as a formal subsidiary under section 12 of the Urban Development Corporation Act, as it would then qualify for a tax exemption under RPTL § 412. There is no reason for using the JDA to create an independent non-subsidiary local development corporation, except to create a loophole and avoid review by the PACB and the New York State Comptroller.

Although ESDC has not represented the BALDC as one of its subsidiaries, the exact corporate nature of the BALDC is unclear. It is clear that the BALDC is either a subsidiary or not a subsidiary, and in either case, the bond issuance is illegal. If it is a subsidiary, the Public Authorities Law required approval by the PACB as a precondition to the bond issuance. There was no such approval. If BALDC is not a subsidiary, it has no real property tax exemption to back the bonds.

In the Lackawanna case, the Court of Appeals “decline[d] LCDC's invitation to read the Real Property Tax Law together with the Not-for-Profit Corporation Law in such a manner as to establish a ‘tax loophole’ where one would not otherwise exist”. The same logic applies here: ESDC should not be permitted to establish a loophole to avoid PACB review where no loophole should exist.

ESDC’s murky and exotic financing methods vitiate the longstanding efforts of the Legislature to reform public authorities and make them more accountable and transparent.

On December 2, you promised “an objective and thorough review” of the Atlantic Yards project and its financing. I urge you now to keep that promise. You should also act immediately to halt the closing of the bond issuance scheduled for next Wednesday, and to stay the condemnation proceedings. The project should not be permitted to go forward until the serious questions raised in this letter are addressed.

Thank you for your attention to the very important matter. I look forward to hearing from you at your earliest convenience.

Sincerely,

Senator Bill Perkins 30th Senatorial District

cc: Andrew Cuomo, Attorney General Thomas P. DiNapoli, State Comptroller Peter Kiernan, Counsel to the Governor

(1) It should be pointed out that the BALDC’s bond issue was only for the arena block, and not for the entire Atlantic Yards project, so it does not encompass the bulk of the affordable housing planned as part of the development (which could possibly be considered “charitable”).

Posted by steve at 4:48 PM

Hail Mary or silver bullet: Perkins, raising questions of fraud in arena bond sale, asks Paterson to put Atlantic Yards on hold

Atlantic Yards Report

Did the Brooklyn Arena Local Development Corporation (BALDC) slip up in authorizing bonds for a proposed Nets arena? State Senator Bill Perkins thinks so and is calling on Governor Paterson to take action.

Suggesting that bonds for the Brooklyn arena were issued improperly, state Senator Bill Perkins yesterday asked Governor David Paterson to halt the "master closing" for the project scheduled for Wednesday and to stay condemnation proceedings until "serious questions... are addressed."

Had the bonds been issued by an Empire State Development Corporation (ESDC) subsidiary, they could be repaid via for payments in lieu of taxes (PILOTs), but the issuance would have had to have been approved by the Public Authorities Control Board (PACB), Perkins wrote in a letter. However, in an apparent effort to avoid the PACB, the ESDC created the Brooklyn Arena Local Development Corporation (BALDC), and that murky entity--which issued $511 million in bonds--should not possess a property tax exemption, the letter said.

Perkins, speaking at a public meeting in Harlem this morning, said that last night he spoke to the governor's counsel, Peter Kiernan, who was taking the matter seriously.

Paterson, interviewed this afternoon at a separate event, did not seem aware of the controversy.

...

The bond issuance, Perkins said, "prevents it really from going forward," adding that "we consider [it] an illegal action."

Perkins, who has stood out as the legislator most interested in reforming the state's much-criticized eminent domain laws, said he expects to hold hearings on the Columbia case, the Willets Point plan, and even another hearing on Atlantic Yards, in light of the bond issue.

"Essentially what we have here is a situation in which it unfortunately it appears that the government is in cahoots with the developers, that the best interests of the community are not being represented but rather the best interests of, let's say, the elite," he said.

...

The "spectre of fraud"

The letter, citing a unanimous Court of Appeals decision from June, suggests that the arena does not deserve a tax exemption:

In light of this analysis, the BALDC property is not tax exempt if used for arena purposes. Consequently, payments-in-lieu of taxes cannot be used to secure the bonds, and they are effectively worthless. If ESDC knowingly misrepresented the legitimacy of these bonds, this raises the spectre of fraud.

The letter was also sent to Attorney General Andrew Cuomo and state Comptroller Thomas P. DiNapoli.

What next?

I asked Perkins (off camera) what happens now.

"We sent that out yesterday; I spoke with the governor's counsel," he responded. "He seemed to acknowledge that he needs to take a look at it. He indicated that he would get back to me."

And if they don't?

"I'm going to reach out to them again this week," he said. "But in the event that they have a different point of view, we'll see some legal measures we can take."

"As I said to him, the murkiness of this situation flies in the face of the [public authorities reform] legislation we just passed," Perkins said. "This is a representation of the old way of doing business."

Read the rest of this blog entry to get an explanation from Amy Lavine, a staff attorney at the Albany Law School's Government Law Center, who first discovered this issue.

link

Posted by steve at 3:06 PM

Atlantic Yards Report: Hired Help Versus Chains of Justice

Bernard King, off Ratner's payroll, now hopes Knicks sign LeBron James

Brooklyn-born basketball star Bernard King, a three-year Net and six-year Knick, was once a paid booster of the Nets' Brooklyn move, but was dropped after he was accused of spousal abuse. (He avoided jail time and battery charges by agreeing to counseling.)

Now, he tells FanHouse:

King doesn't work for the Knicks, anymore. He lives in Atlanta, where he owns a company that works with businesses to help cut energy consumption. Yet he still follows NBA basketball closely. After scoring more than 19,000 points in his career, it's tough to stop.

"Once a Knick, always a Knick," he said. "I know if they sign LeBron, I'll be back there in New York at the games a lot more. A franchise can be rebuilt quickly through free agency, and the Knicks might be one of those now."

So Bruce Ratner just rented King's support. Well, he still has King's brother Albert on the payroll.

NYC EDC's Pinsky: "increased competition for bids almost always means better rates for the public"

In the latest edition of City Hall News, Seth Pinsky, president of the New York City Economic Development Corporation (NYC EDC) pens a piece headlined During A Crisis, Construction Spending Can Buoy New York's Economy.

The key passage:

While, of course, the primary goal of our capital spending is to renew the city’s infrastructure and put people back to work, in recent months, we at the New York City Economic Development Corporation have become aware of a secondary benefit of our new-found market position. Specifically, we have begun to see a rise in the number of bids—and bidders—chasing the $2.5 billion in capital projects that we plan to manage over the next five years. Besides the more than 9,800 jobs these projects are expected to create, this is also great news for taxpayers, because increased competition for bids almost always means better rates for the public. Over the long run this will result in projects completed more quickly and more efficiently.

(Emphasis added)

Almost always apparently means, say, Willets Point but not Atlantic Yards or the key public component thereof, the Vanderbilt Yard.

Coming Sunday: chains installed at Freddy's in the event of eminent domain

At noon tomorrow at Freddy’s Bar & Backroom, "chains of justice" will be installed:

An overwhelming number of Freddy's Bar patrons plan on chaining themselves to the bar if Scrooge Ratner and Grinch Paterson's Atlantic Yards Project attempts to shutdown and demolish Freddy's Bar and Backroom. This Sunday, December 20th, we are installing chains onto the Bar itself for just such a purpose.

Posted by steve at 8:10 AM

From Nickel To $200 Million To Saving Atlantic Yards

Multifamily Investor

This profile of oligarch Mikhail Prokhorov includes a description of Phase 2 of the proposed Atlantic Yards project. The ESDC, tool of developer Bruce Ratner, has said Phase 2 will take 10 years to complete, but Ratner says it will take 25.

The investment fund Onexim, headed by Russian billionaire Mikhail Prokhorov, executed its agreement with Forest City Ratner to buy a 45 percent stake in Atlantic Yards — which the developer has said will cost up to $900 million — and 80 percent of the Nets. According to the underlying letter of intent, Onexim will also have an option to buy a 20 percent stake in the larger Atlantic Yards project, which calls for another 16 towers surrounding the arena over the 22-acre site. Most of these towers are slated to be residential.

link

Posted by steve at 7:48 AM

December 18, 2009

Financial 411: Inner Citi Problems

WNYC Radio

Former Crain's NY Business editor Greg David, who four years ago made believe he was having second thoughts about the unfettered use of eminent domain when his far-wiser teenage daughter challenged him about it, has apparently had a re-change of heart, telling Financial 411 host Amy Eddings:

"Daniel Goldstein, the person who's been holding out against [Bruce Ratner's Atlantic Yards project], had better start packing his bags."

The segment begins around the 3:30 mark.

link

NoLandGrab: Daniel Goldstein is hardly the only person in the project footprint whose property is not for sale, especially for a money-losing, subsidy-sucking arena. Given Mr. David's experience as editor of a business magazine, we'd have expected him to understand the concept of return (or in this case, the lack of return) on investment.

And as for the young Ms. David, all we can say is: we're sorry, it's not your fault, we don't get to choose our parents.

Posted by eric at 7:45 PM

Senator Perkins hosts public meeting on eminent domain Saturday, schedules public hearing for January 5

Atlantic Yards Report

Tomorrow, state Senator Bill Perkins will hold a Community Meeting on Eminent Domain at Manhattan Pentecostal Church, 541 W. 145th Street (between Broadway and Amsterdam; map), from 9:30 am to 12 noon.

He will discuss the recent Appellate Division ruling which blocked the Empire State Development Corporation (ESDC) from using eminent domain for the Columbia University expansion--a decision that will be appealed.
...

Also, Perkins, who held a public hearing in September 2008 on eminent domain, will announce plans to initiate legislation regarding eminent domain.

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Posted by eric at 4:57 PM

What's It Going to Be, Gov. Paterson? Ratner's Big Toy or the Rent?

The Huffington Post
by Daniel Goldstein

...The governor said it's well past the time that the hard choices must be made, and he likened the state's fiscal situation to a family strapped for cash at the holidays.

"Sometimes it comes down to the choice of toys for Christmas or money for rent," the governor said. "Responsible parents pay the rent."

-- Governor Paterson's favorite stump speech and interview line, as reported on Nov. 24 by Karen DeWitt on Albany Public Radio.

It's time for Governor Paterson to make the hard choices not just when it comes to the little guy but when it comes to big money -- when it comes to the entrenched, powerful real estate interests that seem to control the agenda, policy and fiscal decisions. He cannot continue to balance the budget on our backs -- there is nothing more for the little guy to give up.

If we must all share in the budget cutting pain, let's all really share.


Toys or rent?

Governor Paterson is going around New York State making this apt analogy with our state budget and priorities. I heard him say it at Brooklyn town hall on Dec. 1 and I heard him say it on WNYC-radio this morning.

It is striking and concise.

So is this -- Governor Paterson is directing his administration to go full throttle forward with the state's biggest toy: the publicly funded, money-losing "Barclays Center Arena" Bruce Ratner wants to build for Mikhail Prokhorov (Russia's richest man) in Prospect Heights, Brooklyn as part of the bait-and-switch project known as Atlantic Yards.

Toys or rent?

The $1.1 billion arena is the most expensive in history. It is paid for, in part, by diverted property tax payments, triple tax-exempt bonds, at least $205 million from New York City taxpayers and at least $100 million in direct state taxpayer subsidies. All told, the NYC Independent Budget office found that Ratner would receive $726 million in special government benefits just for the arena.

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Posted by eric at 4:43 PM

Master closing scheduled for December 23, but ESDC won't release deal documents (penalties, incentives) for at least a week

Atlantic Yards Report

A master closing involving the Metropolitan Transportation Authority, Empire State Development Corporation (ESDC), and developer Forest City Ratner is expected to be held next Wednesday, December 23.

But the ESDC tells me that the documents won't be made publicly available until a week or two after the closing.

That's backwards, isn't it?

Fine print important

Keep in mind that contract documents, rather than the more aspirational and vague Final Environmental Impact Statement and the Modified General Project Plan, are where we get to see the real oversight of the project.

The State Funding Agreement, which was signed in September 2007 but didn't surface until March 2008, gave FCR up to a dozen years (after the delivery of property by eminent domain) to build Phase 1 of the project without penalty.

And the City Funding Agreement, which also was signed in September 2007 but wasn't revealed until April 2008, allowed the developer to build a project 44% smaller than planned.

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NoLandGrab: You may have heard this from us before, but, at the risk of repeating ourselves, if the Atlantic Yards project is all it's cracked up to be, why all the secrecy?

Posted by eric at 10:52 AM

What about the AY fiscal impact analysis promised by the NYC EDC? It's a trade secret

Atlantic Yards Report

We reproduce the entirety of this AYR post so you can experience the full infuriating effect of stonewalling by official Atlantic Yards supporters.

So, whatever happened to the Atlantic Yards fiscal impact analysis promised by the New York City Economic Development Corporation (NYC EDC) last June?

It's a trade secret, given that the agency rejected my Freedom of Information Law (FOIL) request. And that's odd, because the NYC EDC cited the document in an effort to convince the public that the arena and project made fiscal sense.

Nor has the Empire State Development Corporation released a credible cost-benefit analysis. Despite significant questions about the benefits of the project to the public, judges--such as the one in the case regarding the Metropolitan Transportation Authority's revision of the Vanderbilt Yards deal--have deferred to agency projections that are fantasies.

IBO vs. NYC EDC

Remember, at a state Senate oversight hearing on May 29, an IBO representative offered testimony that asserted the AY arena would be a money-loser for the city. (That testimony was followed up in a September report.)

I criticized testimony by NYC EDC president Seth Pinsky for relying on an outdated, not credible analysis from 2005.

Promises, promises

On June 1, WNYC reported:

[Spokesman David] Lombino says the Economic Development Corporation will release an updated economic analysis soon, reflecting the changes to the project since the last one in June 2005.

On June 3, the New York Daily News reported similarly:

A spokesman for the Economic Development Corp. insisted that by only analyzing the arena - and not the 16 residential and commercial towers also proposed for the site - the IBO had released inconclusive information.

"In light of new conditions, the city is updating a cost-benefit analysis, and any decisions related to the project will be informed by this revised analysis with the goal of ensuring a significant net positive fiscal impact to the city," said EDC spokesman David Lombino.

But it never was released.

Asking for the document

In a FOIL request, I asked for "any NYCEDC cost-benefit analysis of the Atlantic Yards project conducted in 2008 or 2009."

I was told no:

Please be advised that NYCEDC has withheld the remainder of the requested documents as documents determined to be exempt from disclosure pursuant to the following FOIL Section(s):

§87 (2)(d) records that are trade secrets or are submitted to an agency by a commercial enterprise or derived from information obtained from a commercial enterprise and which if disclosed would cause substantial injury to the competitive position of the subject enterprise;

§87 (2)(g) records that are inter-agency or intra-agency materials which are not: (i) statistical or factual tabulations or data, (ii) instructions to staff that affect the public, (iii) final agency policy or determinations or (iv) external audits, including but not limited to audits performed by the comptroller and the federal government.

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NoLandGrab: We're gonna keep asking this until we're blue in the face, but if Atlantic Yards is such a great project, and its benefits are so bountiful, why not be transparent and honest about it?

And one more question: why would any judge defer to these lying scoundrels?

Posted by eric at 10:41 AM

WPU earns the support of State Senator Bill Perkins

Willets Point United

This morning, WPU members Jake Bono, Jerry Antonacci and Len Scarola and WPU's attorney Mike Rikon, attended a meeting with Senator Bill Perkins who is leading the charge against Eminent Domain abuse in New York State. He expressed his support for our group's cause. More importantly, he will eventually push for legislation that would overhaul eminent domain law in NY State. He is the only elected official that has put his/her name to the possibility of such a reform.

WPU will be attending Senator Perkins' town hall meeting regarding the Columbia University development project THIS SATURDAY MORNING from 9:30 am - 11:30am. He stated that this type of local meeting is the beginning phase of his plan that will influence a climate of change with respect to eminent domain law and is CRITICAL to the eventual passing of any legislation in support of property rights. He plans on holding a meeting for each major current eminent domain case; Columbia U, Atlantic Yards & possibly Willets Point. He even expressed interest in holding a meeting on Didden vs. The Town of Port Chester. The purpose is to expose all the corruption involved with these cases. (A Willets Point hearing would require several days.)

Saturday, December 19th
Community Meeting on Eminent Domain
Manhattan Pentecostal Church
547 West 125th St
New York, NY 10027
9:30 AM - 11:30 AM

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NoLandGrab: Bill Perkins is one of the few examples of what's right in Albany.

Posted by eric at 10:35 AM

Russian Passes Background Check, and Vote Looms on His Bid for Nets

The New York Times
by Richard Sandomir

Mikhail D. Prokhorov has survived the N.B.A.’s background examination, helping the billionaire Russian oligarch take another step toward acquiring 80 percent of the Nets and 45 percent of the proposed Barclays Center in Brooklyn. He is said to be Russia’s richest man.

“There were multiple investigations of him by interested parties and there was nothing that was disclosed that would cause us not to move forward with his application,” N.B.A. Commissioner David Stern said Thursday.

The positive results of the vetting process were made known to the league earlier this month.

Oh, please, was there ever any doubt that Prokhorov would pass the NBA's muster? Anything short of his being a baby-killer would've made him A-OK, as finding a replacement for the current disastrous ownership regime (we mean you, Bruce Ratner) had to be Job One at the NBA.

Prokhorov must still submit all the documents required by the league’s advisory finance committee, which will then make a recommendation on his application to the Board of Governors. Stern said the league would continue to look into Prokhorov until a vote by the full ownership late next month or in early February.

Sure. Has anyone seen Stern's glasses?

He needs to be approved by 23 of the league’s 30 owners. A spokesman for Prokhorov had no comment.

The N.B.A.’s decision to make known its clearance of Prokhorov’s background came a day after his company, Onexim Sports and Entertainment Holdings, closed on the deal to pay Forest City Ratner Companies, which is developing the Barclays Center as part of the Atlantic Yards project, $200 million for his stakes in the team and the arena.

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Related coverage...

GlobeSt.com, Ratner, Onexim Finalize Atlantic Yards Deal

Since the agreement was originally announced in late September, a couple of the hurdles facing the massive project have been cleared. The New York State Court of Appeals last month upheld a lower-court ruling that okay’d the state’s use of eminent domain to seize properties not already controlled by FCRC, and on Wednesday the state’s highest court ruled against the plaintiffs in another Atlantic Yards-related case. The lawsuit brought by State Sen. Velmanette Montgomery and others sought to annul the Metropolitan Transportation Authority’s June 23 sale of property and development rights for its Vanderbilt Yard facility to FCRC. A spokesman for the group Develop Don’t Destroy Brooklyn, one of the plaintiffs, says a decision on whether to appeal the ruling hasn’t been made yet.

Brooklyn Daily Eagle, Brooklyn Broadside: Atlantic Yards, Brooklyn Bridge Park Projects Proceed Rapidly

The other element, which won’t take place until next year, is to open the door for the 80-percent sale of the New Jersey Nets to Russian magnate Mikhail Prokhorov, a name that will probably become well known in the coming years in Brooklyn.

The rest of the financing will be a small subsidy from the city and private sector capital.

NoLandGrab: Right, what's another $130 million or so in subsidies? Those young whippersnappers can darn tootin' pay for their MetroCards. When Holt was their age, kids were working in sweatshops, not riding around on cushy buses and subways.

Brooklyn Daily Eagle, The View from the Cheap Seats

Nets' owner Bruce Ratner announced that an agreement has been reached with Mikhail Prokhorov regarding his stake in the Nets franchise and the proposed arena in Brooklyn. The final hurdle is approval by the remaining NBA owners who have already indicated they'd sign off on the deal. No decision has been reached on Prokhorov's request that the Nets be allowed to play with seven players on the court and shoot at a nine foot basket.

The Eagle also has Ratner's press release.

Develop Don't Destroy Brooklyn, Atlantic Yards Is Not Now, and Never Was, About Affordable Housing

Russia's richest man makes it clear what Atlantic Yards is about and it ain't affordable housing.

Money-losing arena anyone?

Posted by eric at 9:56 AM

Freddy's to Fend Off Atlantic Yards Project With "Chains of Justice" This Sunday

Fork in the Road [Village Voice Food Blog]
by Rebecca Marx

More reaction from the Freddy'sphere to Sunday's planned installation of Ratner-proof chains.

Freddy's, the Prospect Heights watering hole we recently named one of Our 10 Best Brooklyn Bars, has for the past few years been dealing with the threat of destruction courtesy of Bruce Ratner's proposed Atlantic Yards Project. This Sunday, Freddy's staff and supporters are fighting back by installing so-called "Chains of Justice" around their beloved bar.

Freddy's manager, Donald O'Finn, has sent out an e-mail announcing that an "overwhelming number of Freddy's Bar patrons plan on chaining themselves to the bar if Scrooge Ratner and Grinch Paterson's Atlantic Yards Project attempts to shutdown and demolish Freddy's Bar and Backroom. This Sunday, we are installing chains onto the Bar itself for just such a purpose...."

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Additional coverage...

JEREMIAH'S VANISHING NEW YORK, Freddy's Chain

That's the same bar today. If these men are still alive, and able-bodied, maybe they'll show up on Sunday, too, handcuffs in hand, ready to take a stand against corporate greed and dirty politics.

Found in Brooklyn, Chained to the Bar * !Freddy's Bar Patrons Revolt Against Ratner * Sunday at Noon!

Posted by eric at 9:43 AM

On Brian Lehrer Show, DDDB's Goldstein points to Paterson, but the governor hasn't spoken out on his AY pledge

Atlantic Yards Report

So, maybe it's up to Gov. David Paterson now.

At about 16:30 of yesterday's Brian Lehrer segment, Recent Developments, Develop Don't Destroy Brooklyn spokesman Daniel Goldstein was the guest. He said that, while legal strategies remain, only Paterson can stop the planned "master closing" of contracts regarding Atlantic Yards scheduled for next week.

And Paterson, who on December 1 made a public pledge to conduct a further inquiry into Atlantic Yards, has not made a statement since, with queries to his aides coming up blank.

Click through for some highlights from the show, and Norman Oder's commentary.

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Posted by eric at 9:36 AM

Newark Mayor Booker: deal to move Nets to Newark isn't dead

Atlantic Yards Report

Yesterday, I wrote that, while the deal to move the New Jersey Nets temporarily to Newark seemed to have fallen apart, these deals are negotiable.

Indeed, in an interview last night on WBGO's Newark Today with Cory Booker, the mayor said the deal is not dead and "the conversation is still going on... We still have a chance of creating settlement between the Izod Center and the Prudential Center to create greater revenue."

He suggested that the plan is getting snagged by the transition between the outgoing Gov. Jon Corzine and the incoming Gov. Chris Christie.

"When [Christie] sits down and looks at the facts, I think he's going to find a way to make a win-win happen," Booker said.

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Posted by eric at 9:31 AM

Brooklyn Borough President Marty Markowitz purchases $1.45 million home in Windsor Terrace

NY Daily News
by Erin Einhorn and Erin Durkin

Lifelong tenant Marty Markowitz is trading his Park Slope rental for a home of his own - a two-story, three-bedroom brick house in Windsor Terrace.

The borough president and his wife, Jamie, dropped $1.45million on the new house - a semidetached home nestled on a tree-lined street a block from Prospect Park - on Nov. 30 with a $417,000 mortgage.

"I've always been a tenant, all my life. This is the first time I'm a property owner," Markowitz said.

Ah, the irony! As the Empire State Development Corporation and Forest City Ratner get ready to seize the properties of the remaining homeowners in the footprint of the Atlantic Yards project — for which Markowitz has played chief cheerleader for the past six years — Markowitz himself is becoming a first-time homeowner.

Markowitz wouldn't give details about the purchase, initially refusing to say where he got the money for his $1 million-plus down payment.
...

Later, an aide said about $750,000 of the down payment came from the sale of a Manhattan Beach home his wife inherited from her parents when they died.

The rest came from savings and from a settlement paid to Markowitz in a slip-and-fall case [NLG: Say what?!], his spokesman Mark Zustovich said.
...

Still, the sale comes with controversy.

Markowitz used his chief of staff, Carlo Scissura, as a lawyer for the property deal. City law says city lawyers can't represent their public official bosses in private legal matters.

Markowitz initially denied Scissura was involved. "I do not believe he was the attorney of record," he said.

When the Daily News noted that Scissura is listed as the lawyer in property records, Zustovich argued that the law applies only to lawyers working for the city as attorneys, not as chiefs of staff.

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Related coverage...

Atlantic Yards Report, When Markowitz played poor at the affordable housing information session, he and his wife had a down payment in hand

But the purchase, and the funds behind it, also undermine one very conspicuous "man of the people" claim Markowitz made in the midst of the Atlantic Yards debate.

At a 7/11/06 affordable housing information session sponsored by Forest City Ratner, Markowitz declared, as I reported, that “this is an exciting time to live in Brooklyn,” but, regarding new developments, “Sadly, almost all are beyond our reach—yours and mine.”

I noted that Markowitz earned $135,000, and eats a lot of free meals.

Now the Daily News tells us that about $750,000 of the down payment for the $1.45 million house came from the sale of a Manhattan Beach home Markowitz's wife Jamie Snow inherited from her parents.

And a check of records suggests that Markowitz and Snow had that money in hand when the BP appeared at that affordable housing information session.

Snow's mother died on 7/7/04. The family house was sold on 2/7/05 for $1.4 million, with Jamie Snow Markowitz, her brother, and her mother's estate listed as the sellers. The affordable housing information session came 17 months later.

Develop Don't Destroy Brooklyn, BEEP Markowitz's New Home Is Blighted

Congratulations to the BEEP on his new home!

There is only one problem. It seems to be underutlized. It also looks like there are a few sidewalk cracks, and we can't be sure but that bush looks more like a big patch of weeds. And it looks like the mortar is cracking in some spots.

In other words, we're sorry to inform the Borough President that his new home is blighted and must be taken by eminent domain. Because, it really could serve a better purpose than housing him and his wife.

Them's the breaks.

Posted by eric at 12:29 AM

Due diligence on the BALDC leads down a rabbit hole, while other state agencies are more transparent than ESDC/JDA/BALDC

Atlantic Yards Report

The Brooklyn Arena Local Development Corporation (BALDC) was omitted from most press coverage of the arena bond sale, with some reports claiming that Bruce Ratner sold the bonds himself and others acknowledging the role of an unnamed "local development corporation," or LDC.

It's enough to leave readers wondering, perhaps to wonder if the unnamed BALDC might be similar to the Atlantic Avenue LDC, or the LDC of East New York, or the Myrtle Avenue Revitalization Project LDC, or the BAM LDC.

It's not.

About the BALDC

Should someone be curious about the obscure, single-purpose entity that authorized and issued the bond, maybe they'd try to find a web site for the BALDC. There isn't any. There's no way to see its bylaws or learn about its board members.

The BALDC was created by the New York State Job Development Authority (JDA), a sibling agency of the ESDC, “to facilitate financing for the arena and certain infrastructure improvements related to the project.”

Why the JDA? “ESDC and JDA have differing statutory powers,” spokesman Warner Johnston told me earlier this year.

The JDA has no staff and no budget. But the JDA's creation of the BALDC allowed the arena bond transaction to skirt the review of the Public Authorities Control Board and the Comptroller, because only subsidiaries which have the same members or directors as the ESDC or JDA are included, according to Develop Don't Destroy Brooklyn attorney Jeff Baker.

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NoLandGrab: We've asked this before, we'll ask it again — if the Atlantic Yards project is so great, why be so secretive about it?

Posted by eric at 12:22 AM

December 17, 2009

Our cartoonist’s take on the MTA service cuts

The Brooklyn Paper

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Posted by eric at 10:08 PM

12/20: Freddy's Installation of the Chains of Justice (Ratner and NY State's Injustice)

Develop Don't Destroy Brooklyn

Below: A Media Alert from Our Comrades at Freddy's

What: Freddy’s Chain Gang to Install the Chains of Justice (should they be needed)

When: Sunday, December 20, High Noon.

Where: Freddy’s Bar & Backroom

**************

With the coming of this Christmas everyone should be concerned with New York State and Governor Paterson’s capacity to hand privately-owned property over to corporations for profit. It is a disturbing trend that casts an ominous shadow over all of our futures in this country.

Scrooge and the Ghost of Christmas Yet to Come, or the Ghost of Christmas Future, is intended to represent the uncertainty of the future:

Scrooge queries the ghost: “answer me one question. Are these the shadows of the things that Will be, or are they shadows of things that May be, only?”

Still the Ghost pointed downward to the grave by which it stood.

“Men’s courses will foreshadow certain ends, to which, if persevered in, they must lead,” said Scrooge. “But if the courses be departed from, the ends will change. Say it is thus with what you show me!”

What is it that the Courts are showing us regarding the power of our own Scrooges?

**************

An overwhelming number of Freddy's Bar patrons plan on chaining themselves to the bar if Scrooge Ratner and Grinch Paterson's Atlantic Yards Project attempts to shutdown and demolish Freddy's Bar and Backroom. This Sunday, December 20th, we are installing chains onto the Bar itself for just such a purpose.

In light of the recent decision against Columbia University and the Empire State Development Corporation’s attempt to steal properties by eminent domain, and the confusion in the Courts that seems to allow taking Brooklyn properties for Ratner, but not Harlem properties for Columbia…we are angry. We are giddy for the victory against Columbia, but angry that our neighborhood can be taken, that our bar can be taken. We will stand in support of the Prospect Heights neighborhood, and the extended neighborhood of 5000+ supporters who have donated time and money to fight against eminent domain. We believe the links of the chain represent all the individuals unbreakably locked in a chain gang seeking fair rights for the individual in the contemporary flurry of land-grabbing corporate greed.

The Backroom at Freddy’s Bar was the birthplace of this particular rebellion for fair treatment, the front room is where we bring out the hardware to back it up.

The Chain will officially be installed on Sunday, December 20th at 12:00 noon.

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Additional coverage...

Runnin' Scared, Freddy's Bar To Install Chains for When Bruce Ratner Tries to Evict Them

The fight to keep homes and businesses from being eminent-domained for the Bruce Ratner Atlantic Yards boondoggle goes badly. So the management at Freddy's Bar -- the fun watering hole and longtime Voice favorite imperiled by the land grab -- is installing chains.
...

Asked how they expect to hold out against Ratner, O'Finn tells us, "We will fight the best fight we can." Drinks will be served.

Curbed, Brooklyn Bar to Bruce Ratner: Hell No, We Won't Go

Beloved Prospect Heights dive Freddy's Bar is located at Dean Street and Sixth Avenue, which—consulting our Atlantic Yards footprint pop-up map—means the place is totally screwed. But the suds slingers are not going quietly! They're enlisting fellow eminent domain haters to take part in what the anti-Atlantic Yards campaign has been sorely lacking: civil disobedience! Announcing, ladies and gentlemen, the Chains of Justice.

Posted by eric at 3:09 PM

Recent Developments

WNYC Radio

Develop Don't Destroy Brooklyn's Daniel Goldstein visits The Brian Lehrer Show, beginning at about the 16:30 mark.

WNYC Reporter Matthew Schuerman reports on recent developments at development hotspots around the city: Atlantic Yards, West Harlem, Kingsbridge Armory and the Broadway Triangle. He is joined by Bronx borough president Ruben Diaz, Jr. for more on the Kingsbridge project and Develop Don't Destroy Brooklyn's Daniel Goldstein on his fight against the Atlantic Yards project.

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Posted by eric at 1:10 PM

It came from the Blogosphere...

Field of Schemes, Nets-to-Newark deal "all but collapsed"

What appears to have happened: Earlier this week, state senate president Richard Codey introduced a bill to set up a new company, jointly owned by the state and the city of Newark, that would collect a $3-a-ticket tax and redistribute it to both the Izod Center and the Prudential Center. How exactly reshuffling money between the two facilities was supposed to help wasn't clear, but it turns out it doesn't much matter: Newly elected Jersey governor Chris Christie apparently didn't want to be rushed into a decision, so the deal is dead for now.

In any case, with Atlantic Yards construction looking like it's moving ahead — another lawsuit was dismissed yesterday, if you're keeping count — any Nets move would be for two seasons only.

MultifamilyInvestor, The Last Nail In The Coffin For Atlantic Yards Resistance?

Critics of the Atlantic Yards project found the timing curious. This week, the Metropolitan Transit Authority announced massive service cuts to the subway system. This decision, based on budget shortfalls, directly affects Brooklyn straphangers.

Critics noted that Ratner is only obliged to pay only $20 million of his promised $100 million lump sum for the right to build over the MTA’s Vanderbilt Yards. The $100 million lump sum has already faced scrutiny because the MTA never entertained multiple bids in an auction process that its own bylaws required.

Big Government, Activist Brooklyn Judge Delivers for ACORN, Re-funds Group

Judge Nina Gershon imposed an injunction on the Congress to prevent it from cutting off funds, according to the Wall Street Journal.

The Center for Constitutional Rights filed suit in Brooklyn federal court on behalf of ACORN. That’s curious, given that ACORN is now headquartered in Washington, DC. Not to mention the Congressional action, of course, occured in Washington, DC.

Brooklyn is home of ACORN chief organizer Bertha Lewis. It’s also home to the Working Families Party, the political party co-founded by ACORN. Brooklyn is also the district of Nadler, who runs on the Working Families ticket and has been the group’s most strident supporter in the Congress.
...

(The Center for Constitutional Rights, by the way, is headed up by Michael Ratner. Big Government readers may remember that Michaels brother, Bruce, is a deep-pocketed real estate developer and sugar-daddy for ACORN.)

Atlas Shrugs in Brooklyn, Half a Month Passes, Brooklyn GOP Website Remains Stymied by Inaction and Poor Design

Brooklyn Republicans who stumbled upon an Atlantic Yards Report video on YouTube are a little concerned about strange bedfellows.

Anyone see Eric Ulrich and Marty Golden with ACORN leader Bertha Lewis making love to the Atlantic Yards Project in August?

Republicans and ACORN? Hmm…

NoLandGrab: Hey, isn't that former Democratic City Council candidate John Heyer standing in the background, while insufferable Republican Marty Golden spouts falsehoods about Atlantic Yards jobs? It's beautiful the way this project brings people together.

Brooklyn Born, PhotoWednesday 12/16/09 : "Pay Your Fair!" Edition

Before the M.T.A. starts throwing kids under the buses and trains how about collecting Ratner's fare?

FastCompany.com, A Sports Arena Grows in Brooklyn

Fast Company is a little slow getting to this story.

And too bad about the stadium's residents: The New Jersey Nets, an NBA basketball franchise are a woeful 2-22. Perhaps by 2012, when the stadium is slated for completion, they'll get good. Or at least okay. Or maybe just less bad. Hey, anything can happen, right? Even a sports stadium in Brooklyn.

NLG: How about the stadium footprint's residents?

Brooklyn Heights Blog, Mr. Junkersfeld and the Evolution of Cadman Plaza

A short film about the history of Brooklyn's Cadman Plaza, where eminent domain was used to clear private properties and an elevated railway for actual public open space, includes this set-up:

Finally, this film is especially topical today with the use of eminent domain with respect to the Atlantic Yards project. Of course, it was a different time back then. and a one to one correspondence would be unfair.

People's World, NYC transit cuts: byproduct of giveaways to the rich

Once again, city straphangers are being threatened by the Metropolitan Transportation Authority, which claims that it is out of money and has to cut service on the city's bus and subway lines-again. But the MTA is giving hundreds of millions of dollars to big developers, say critics; still others see the cuts as a political ploy.
...

Forest City Ratner, a multi-billion dollar developer that has found hundreds of millions of dollars in public money to finance a private for-profit project called Atlantic Yards has also benefited greatly from the MTA-they are selling the Vanderbilt Yards, in Brooklyn, to Ratner for $100 million, but accepting a down payment of only $20 million and allowing the developer to pay the rest over more than two decades.

Kid Mercury's Blog, Frank Fucking Gehry: Frank Gehry Tells You To Take Your Starchitecture & Shove It!

How long does it take to flip Frank Gehry's rage switch? Ten minutes or less. The Canadian-born, "owlish" architect loses his cool with a reporter from the British newspaper the Independent when he dares to use the s-word to Gehry's face.
...

Sadly, the interviewer never manages to get the Gehry rage machine going on Atlantic Yards.

Posted by eric at 1:03 PM

At Long Last: Atlantic Terminal to Open Next Week

NBC New York

We can't possibly get any more excited about this than Brownstoner, which has already decreed it the "most momentous news in the history of time," but here it is: the Atlantic Station LIRR terminal entrance is supposed to open next week. That would be this thing, which was originally slated to be finished in 2007 after about 156 years of construction. Above: the plans versus the result. Brownstoner also reports that there'll be a completion ceremony inside the terminal tomorrow. All in all, it's been a big week already for Bruce Ratner: first the bonds for the Atlantic Yards basketball arena sell out, and now Long Islanders will be able to get there in style if the thing gets built.

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NoLandGrab: Let's not forget the lovely security perimeter surrounding the new terminal entrance — likely a preview of Barclays Center defenses.

Posted by eric at 12:53 PM

Judge, deferring to MTA version of the case, dismisses lawsuit challenging revision of Vanderbilt Yard deal

Atlantic Yards Report

We already knew that private property in New York State is only "private" to the extent that somebody richer and more powerful than you doesn't have designs on it, but now it seems that it's okay for government bureaucrats to give the rich and powerful our public assets, too.

Norman Oder reports on yesterday's court decision.

State Supreme Court Justice Michael Stallman, in a ruling issued yesterday, dismissed the case. He wrote that not only did the plaintiffs--AY opponents Develop Don't Destroy Brooklyn, joined by four elected officials and the Straphangers Campaign--not have standing to challenge the alleged violation of the Public Authorities Accountability Act (PAAA), even with standing they couldn't make their case.

They charged that the PAAA, passed in 2005, requires an independent appraisal of the property and that a seller seek out competitive offers.

DDDB said it was considering an appeal and pointed to the MTA's willingness to leave $80 million on the table--money the agency asserts it will ultimately get--at a time of severe service cuts.

Stallman, in deferring to the MTA's version of the case, agreed that the limited response to the original 2005 RFP--only Extell responded along with Forest City Ratner--was due to "the unusual nature and scope of the project" rather than FCR's inside track.

Agreeing with the MTA

Stallman agreed with the MTA that the original plan and revised deal were essentially the same, subject to two modifications: the $100 million price would instead be $20 million down for the arena block, with the rest paid over 22 years, and the replacement railyard was value-engineered.

He also agreed that the process by which only two developers answered the RFP in 2005 was fair.

He left out the generous 6.5% interest rate granted Forest City Ratner and the extended time to operate a temporary railyard. He didn't comment on the rather surprising suggestion, by MTA CFO Garry Dellaverson, that FCR had the MTA over a barrel, rather than vice versa, given the developer's need to get the deal done in order to reap tax-exempt bonds by the end of the year.

Read on for more of Judge Stallman's rationalizations, including his ruling that the public has no standing to sue to stop the giving away of public assets.

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Additonal coverage...

The Brooklyn Blog [NY Post], Courts drop MTA Suit by Brooklyn arena opponents

A state judge today sided with the MTA in a lawsuit challenging a "sweetheart deal" it gave developer Bruce Ratner to bail out his controversial Atlantic Yards project that includes an NBA arena for Brooklyn.

The suit, filed by several lawmakers and other project opponents, sought to annul the Metropolitan Transportation Authority’s revised deal with Ratner in June that allows the developer to pay off $100 million he owes the agency over 22 years for the 8.5-acre Vanderbilt rail yard site in Prospect Heights and also shave off more than $100 million of the $345 million in transit improvements he had promised there.

It also alleged the cash-strapped agency violated the Public Authorities Accountability Act by failing to obtain an independent appraisal of the site or solicit competitive offers before agreeing to a new deal.

But Judge Michael Stallman in his decision wrote the petitioners didn’t prove the revised plan "gives the MTA less than the estimated market value" or that the MTA "did not attempt to obtain competitive offers."

Reason Hit & Run, Another Loss in the Atlantic Yards Fight

More bad news on the Atlantic Yards front. Today a New York court upheld the Metropolitan Transit Authority’s (MTA) controversial deal allowing Atlantic Yards developer Bruce Ratner to acquire a crucial 8-acre rail yard for just $20 million upfront and $80 million due over the next 22 years. Remember that the MTA first struck a deal with Ratner for the property back in 2005—but without first opening the land up to competitive bidding as state law requires.

Posted by eric at 11:32 AM

Bonding with the Nets: Financing is in place at long last to bring the team to Brooklyn

NY Daily News, Editorial

Here's another example of the Daily News having to resort to lying to make its point about the promise of Bruce Ratner's Atlantic Yards megaproject:

...the Atlantic Yards plan calls for building 6,400 housing units, a third of them affordable, on a tract that has been fallow for half a century. Those will take time. Right now, it's enough that we end the dark half-century that began with the defection of the borough's Dodgers and enjoy all the jobs that building the arena will create.

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NoLandGrab: Most railyards are "fallow" if you ignore the trains coming and going throughout the day. The remaining two-thirds of the land is private property acquired under threat of eminent domain.

And while we're picking apart the vitriol, may the editorial board also "enjoy" the massive taxpayer subsidies that this project is sucking up, the traffic headeache it will create, past promises broken and those still to come.

Atlantic Yards Report, Daily News editorial claims "city will reap substantial benefits" from "fallow" tract

Here are a few more holes in the Daily Snooze's delirious editorial:

They can claim that the city "will reap substantial benefits," but they still have to grapple with the New York City Independent Budget Office's conclusion--not rebutted by the Empire State Development Corporation--that the arena would be a net loss to the city, some $220 million.
...
There's no guarantee that the housing would be built in the quantity and timing promised.

As for the "tract that has been fallow for half a century," no the Atlantic Yards site has not been fallow. Rather, the head-in-the-sand editorial writers are pointing to the Vanderbilt Yard, a working railyard that would make up less than 40% of the site.

It was not fiscally feasible to build there until recently. And when it was, there was not an open RFP process but a belated one, after Forest City Ratner was anointed the site.

Posted by lumi at 7:03 AM

Frank Gehry: 'Don't call me a starchitect'

The Independent

The starchitect who designed the first version of Atlantic Yards is quoted bellyaching about Atlantic Yards opponents:

His relatively orthodox Beekman Tower, a 76-storey residential skyscraper, is due to open next year in Manhattan. But it was with the sprawling and ambitious Atlantic Yards development in Brooklyn that he was to have made his mark on the city. Last December, however, in bid to cut costs, property developer Bruce Ratner fired Gehry from the project, scrapped six years' worth of design work in process, and replaced it with, in the words of New York Magazine, "a graceless knock-off by a journey-man stadium-builder".

Critics in the city painted a picture of a celebrity architect hung out to dry by a property magnate who had used the Gehry name to obtain tax breaks, to win out over rival bids and to secure the power to evict tenants. Asked about events, Gehry merely says the collapse was "down to a set of opposing interests that blocked the project".

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NoLandGrab: OK, how 'bout we call him an #@%&!?

Atlantic Yards Report, Gehry blames Atlantic Yards debacle on opponents, not developer's ambition

Norman Oder calls a technical foul on Gehry:

Gehry can't get away with just blaming opponents.

His design was impossible. There was no market for the office building known as Building 1, so forget about the much-touted Urban Room. And it's questionable whether the other residential towers planned to ring the arena could be built on the original schedule, given the competition for scarce housing subsidies.

And Gehry's never explained why, if he works "tight to the bone," the cost of his arena soared. Was it for security measures?

Posted by lumi at 6:49 AM

Willets Wonderings

The Architect's Newspaper Blog
by Matt Chaban

The A|N Blog's Chaban continues to do good reporting on Atlantic Yards and other controversial NYC development projects.

It appears the city’s plan to trifurcate development out at Willets Point has been a smashing success, as the Economic Development Corporation announced on Friday that 29 developers from across the country have expressed interest in the first phase of the project, an 18-acre swath of land on the western section of the 62-acre Iron Triangle that contains the densest mix of uses. “The quantity and quality of these responses are strong indicators that the development community has confidence in the successful redevelopment of Willets Point despite current economic conditions,” Seth Pinsky, president of EDC, said in a release. An RFP is expected sometime in 2010 for a selection of those 29 respondents. After that, the next hurdle is finishing land acquisition, which stands at 75 percent of the phase one area controlled by the city. If need be, the city has not ruled out acquiring what’s left through eminent domain, a specter that has cast a long shadow over the area’s redevelopment, though one that could be sunsetting.

29 companies interested in developing Willets Point "despite current economic conditions," yet in 2005, when everything was rosy, only Bruce Ratner (and Extell) was interested in developing the Vanderbilt Yard? Something's fishy.

Following a court ruling that the state could not seize land in the Manhattanville section of Harlem so that Columbia could build a new campus there, Atlantic Yards opponents are hustling to have their ultimately unsuccessful case reheard, a last-ditch effort to impede the sale of Forest City Ratner’s bonds. Whether or not they succeed, all this eminent domain tumult—combined with the recent collapse of plans for the Mother of Them All in New London, Connecticut—could nudge New York over the edge, taking it off the list of a handful of states that have yet to enact eminent domain reform since the Kelo decision four years ago. State Senator Bill Perkins certainly thinks so, calling for the governor to live up to his previous promises of a moratorium on eminent domain in the state.

Willets Point is one of the most egregious examples of eminent domain abuse, since the city, for years and years, denied the many productive businesses there the most basic services, like paved streets and sewer connections.

How could this all pay out in Flushing, Queens? David Lombino, a spokesperson for EDC, emphasized the agency’s strong track record on reaching deals with business owners in the area, despite the continued intransigence of some. “The response from the private sector is encouraging,” he said. Should it come down to eminent domain, but eminent domain is no longer there? EDC, while proffering hypothetical projects, does not respond to hypothetical questions.

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Posted by eric at 12:30 AM

Why?

Develop Don't Destroy Brooklyn

Massive taxpayer subsidies, cheap land, free land, eminent domain abuse, our city streets and a privately negotiated zoning override all for a money-losing arena to benefit the richest man in Russia...Uhm, why?

USA Today reports that Mikhail Prokhorov is one step closer to owning the 2-23 2-24 New Jersey Nets:
Russia's richest man a step closer to owning Nets

Also breaking, it looks like if Prokhorov's/Ratner's Nets ever make it to Brooklyn (still a big if despite all of Bruce Ratner's "excitement"), they'll have to suffer at least two more years in the IZOD center.

link

Posted by eric at 12:21 AM

Curious omissions of the BALDC in most press coverage of the arena bond sale

Atlantic Yards Report

There was a curious omission in most of the press coverage of the sale Tuesday of bonds for the Atlantic Yards arena: the issuing agency, the Brooklyn Arena Local Development Corporation (BALDC), an entity that deserves a lot more scrutiny.

The press release didn't claim that Forest City made the sale, but rather announced "pricing" and omitted mention of the BALDC, which, as a government-created not-for-profit corporation, is able to issue tax-exempt bonds to save the developer well over $100 million.

(When the tax-exempt bonds were supposed to total $678 million--rather than $511 million, as it turned out--the New York City Independent Budget Office estimated the savings to the developer at $193.5 million.)

Some--as I delineate below--ignored the role of the LDC completely, while others omitted its name, perhaps taking a cue from the New York Times, which, in initial CityRoom coverage, declared that developer Bruce Ratner sold the bonds, later adding "and a local development corporation."

Click through to see who made the grade — and who didn't.

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Posted by eric at 12:16 AM

Russia's richest man a step closer to owning Nets

AP via USAToday.com
by Tom Canavan

A Russian billionaire has moved a step closer to becoming the NBA's first non-North American owner.

Mikhail Prokhorov's Onexim Sports and Entertainment Holdings and the company that owns the Nets announced on Wednesday they had completed their agreement to create a partnership that would own the NBA team and develop the Atlantic Yards project in New York.

The agreement provides for the sale of 80 percent of the struggling Nets and 45 percent of a new Nets arena to Prokhorov's Onexim, subject to approval by the NBA Board of Governors.

It also includes an option for Prokhorov to acquire up to 20 percent of Atlantic Yards, which would surround the new Barclays Center arena with apartments and office towers on 22 acres in Brooklyn.

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Additional coverage...

Atlantic Yards Report, As interim move to Newark falls apart (for now), Prokhorov agreement to buy Nets moves ahead

Approval by the NBA is still in the offing, but is not expected to hit major roadblocks.

(DDDB reminds us that Russia's richest man is the major beneficiary of major government support; surely, as I and others have suggested, it would have been much harder to get political support for Atlantic Yards had Prokhorov been involved from the start.)
...

Meanwhile, a Star-Ledger article, Deal to move NJ Nets from Meadowlands to Newark's Prudential Center falls apart, explains how the possible interim move of the Nets to The Rock has stalled under the outgoing Jon Corzine administration and must be restarted by the incoming Chris Christie administration.
...

However, as the newspaper reported, the Nets are still interested in Newark.

That means they--via expected new majority owner Mikhail Prokhorov--could even pay the penalty.

Or, more likely, restart the discussions. Remember, there was once talk of preseason games in Newark, and then Nets brass said no. But after further talks, the Nets wound up playing two preseason games in the Prudential Center.

It's all negotiable.

NY Times, Russian Billionaire Moves a Step Closer to Buying the Nets

Charles V. Bagli reports:

The deal with the current owner, the developer Bruce C. Ratner, is subject to approval by the N.B.A. Board of Governors. An N.B.A. spokesman, Michael Bass, said, “We expect that the Board of Governors will vote on the application early in 2010.”

Ratner must also gain possession of the land for the arena, at the intersection of Flatbush and Atlantic Avenues, which is expected to happen in March.

NY1, Russian Billionaire Signs Off On Brooklyn Arena Deal

The agreement comes a day after Forest City Ratner announced that $511 million in tax-free bonds for the arena were sold.

Opponents were hoping the bond sale would fall flat and kill the project.

Last month, the New York Court of Appeals ruled the state can use eminent domain to force the sale of businesses and residences to make way for the nearly $5 billion project.

Posted by eric at 12:08 AM

December 16, 2009

Deal to move NJ Nets from Meadowlands to Newark's Prudential Center falls apart

The Star-Ledger
by Ted Sherman

Looks like the New Jersey Nets will be spending the next two-and-a-half years (or more) in the Izod Center.

A complex deal to bring the Nets to the state’s largest city has all but collapsed.

The temporary move by the team had been part of a wider plan intended to end a war for entertainment dollars between the Izod Center in the Meadowlands, operated by the New Jersey Sports and Exposition Authority, and the privately owned Prudential Center in Newark. The two sides have been battling for the same concert, show and entertainment bookings.

The agreement would have allowed the Nets to break their lease at the Izod Center, opening the door to a temporary move by the struggling NBA team to the more modern Prudential Center, which hopes to become a showcase for sporting events in New Jersey. The Nets would share the building with the Devils hockey team, until the team’s planned move to Brooklyn by 2012.

Most non-sporting events, such as the lucrative concerts and family shows now at the heart of a tug-of-war between the two arenas, would in turn be shifted primarily to the Izod Center, which would become an entertainment venue.

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Additional coverage...

Bergen Record, NJSEA won't waive Nets' penalty, its chairman says

“Theoretically, they could give us notice prior to Dec. 31 that they are not playing in our venue next year,” Goldberg said of the Izod Center. “But then they concurrently would have an obligation to tender a check to us for $7.5 million.

“I don’t see that there’s a possibility — given the holidays and everyone’s schedule — that there could be a thoughtful discussion [by board members] about waiving the penalty and allowing the Nets to play someplace else in 2010-11.”

In a statement, Brett Yormark, the Nets chief executive, did not address whether application of the penalty would erase any club interest in Newark.

“We continue to be encouraged about the prospect of making an interim move to the Prudential Center,” Yormark said. “Not only would this interim move be a positive for our New Jersey fans, but it would give future fans from Brooklyn and Manhattan the chance to get to know us now, given the access to mass transit near the arena.”

NoLandGrab: Could that be the same Brett Yormark who only a few months ago said the Nets had no interest in moving to Newark, even on an interim basis?

Posted by eric at 11:51 PM

Community Update: Report on the Columbia University Development Project

PLEASE NOTE: The correct address is 541 West 125th Street

Posted by eric at 11:40 PM

DDDB PRESS RELEASE: The Same Day in NYC:
MTA Approves Severe Service Cuts
Court Rules MTA-Ratner Sweetheart Deal Lawful

(Deal Left At Least $80 Million on the Table)

NEW YORK, NY — On the same day that the MTA Board approved severe service cuts—including Access-A-Ride and discounts for school kids—a New York State Supreme Court ruled against petitioners who challenged the MTA's sweetheart deal for the Vanderbilt Rail Yards with developer Bruce Ratner.

This past summer the now "unexpectedly" cash-strapped MTA left $80 million on the table when it "negotiated" a new deal with Ratner for the 8-acre yards. Instead of paying $100 million as he had agreed in 2005, Ratner would now, after Board approval, pay only $20 million.

The lawsuit (Montgomery et al. v. MTA et al.) brought by State Senator Velmanette Montgomery, Assemblyman Jim Brennan, Councilmember Letitia James, the Straphanger's Campaign and Develop Don't Destroy Brooklyn, charged that the MTA violated the Public Authorities Accountability Act of 2005 when it did not test the market for competition for the Yards or issue an independent appraisal for the piece of valuable central Brooklyn real estate.

The MTA's deal also clearly violates the letter and the spirit of the new Public Authorities Reform bill signed last week by Governor Paterson. As The Times reported, "…authorities will no longer be allowed to sell real estate for below-market value, as the Metropolitan Transportation Authority did when it sold rights to build over railyards in Brooklyn to the developers of the Atlantic Yards project."

Just last week New York City announced that it has 29 developers interested in "redeveloping" the 62-acre Willets Point, Queens district it wants to take by eminent domain. Yet the MTA claimed that it was impossible to find any interested developers, besides Ratner, for the 8-acre site in the heart of Brooklyn. Not one.

"The MTA has no shame—while giving a sweetheart deal to billionaire developers, leaving at least $80 million on the table and widening its budget gap, its Board gives a big lump of coal to school kids, disabled New Yorkers and all transit riders. It's disgusting," said DDDB's spokesman Daniel Goldstein. "It's just one more plaque for the Atlantic Yards hall of shame, in the no-bid wing. MTA gives it away, Ratner wins and the public loses. For what? A money-losing arena in the middle of a fiscal crisis. We'd like to hear Governor Paterson, Mayor Bloomberg and Speaker Quinn justify this. While the Court has ruled, these leaders can do the right thing by New Yorkers, and collect the full $100 million Ratner reneged on."

The petitioners will review the decision and decide whether or no to appeal the Court's ruling.

The ruling is at: http://dddb.net/MTAsuit.

link

Posted by eric at 4:03 PM

TISH JAMES PRESS RELEASE: Save student Metrocard program, crucial service, and MTA jobs — Cancel the Atlantic Yards sweetheart deal for Forest City Ratner!

(December 15, 2009) -- The Metropolitan Transportation Authority's latest doomsday budget cuts include a proposed cut of the student Metrocard program, which provides full and half fare Metrocards to over 550,000 students who commute to school each day. Also, numerous service cuts are proposed on routes where bus and train services are over-crowded, and waiting times are long. Lastly, severe layoffs and salary cuts within the MTA are proposed.

The MTA says these cuts will help alleviate a massive budget deficit and maintains that these proposed service cuts are for underused routes already serviced by other trains and/or buses. But, riders say they will be inconvenienced, especially because of the recent fare increase and reduction in service this year already. Some students have expressed expectations of having to choose between paying the Metrocard fare, or buying a meal for themselves. It is unacceptable that riders, specifically youth, who depend on the student Metrocard program for educational needs be subjected to unsafe walks, and/or possibly not being able to travel for classes at all.

An obvious questions for residents of Downtown Brooklyn then comes up - why is Forest City Ratner, the multi-million dollar developer of the Atlantic Yards project not paying upfront for what he has purchased from the MTA? If Bruce Ratner paid upfront what he owes to the MTA for use of the MTA's Vanderbilt Yards, then the doomsday budget cuts could be significantly reduced.

"Cancel the sweetheart deal for Forest City Ratner," said Council Member James. "Forest City Ratner should pay the $100 million owed now for the purchase of the Vanderbilt Yards. I also question why Forest City Ratner is not being made to pay the millions of dollars owed for the naming-rights deal upfront? And, had the MTA accepted a higher bidder, they would have received their funds upfront and their current budgetary gap could have been cut almost in half."

The MTA's deal with Forest City Ratner simply does not make sense. Many are questioning why the MTA, who is facing a potential budgetary gap of $615 million next year, and today faces a $343 million massive budgetary gap, is able to accept a $20 million payment towards a $100 million dollar property deal. This purchase and construction of the Atlantic Yards Development by Forest City Ratner was also given the option of spreading the balance of $80 million owed in payments over a 21 year period.

Community advocates suggest that another means of closing the budget gap would be for the MTA to do a new appraisal of the railyards valued at $271.5 million, and open up bids to other developers who would pay more of the cost upfront. Severe cutbacks in service, layoffs and especially cuts to the student Metrocard program appear unconscionable in light of the MTA's business agreement with Forest City Ratner.

Critics and opponents of Atlantic Yards have continued to argue that rival developer Extell, who submitted a bid that offered $150 million in cash, was a far better plan. For unclear reasons, the MTA board negotiated solely with Forest City Ratner. Extell head Gary Barnett in a December 2007 interview with the Observer said he was shocked that he bid $150 million, and Forest City Chairman Bruce Ratner bid $50 million, yet Ratner was offered the deal.

"Something simply doesn't sit right with the community about the preferential treatment that Forest City Chairman Bruce Ratner has received from the MTA. Now it appears as though MTA customers and specifically our youth - the future of the City - may pay dearly to support the project of a multi million dollar developer that the community doesn't want to begin with," said Council Member James.

Posted by eric at 1:35 PM

DDDB PRESS RELEASE: Bruce Ratner Has the MTA’s Money

Sweetheart Deal With Developer Is Large Part of MTA Budget Gap

New York, New York—Cutting the MTA student Metrocard?! You can blame Bruce Ratner's sweetheart deal.

The MTA board meets this morning to approve drastic service cuts because of an "unexpected" budget gap. How could that be, where did that shortfall come from?

In large part this gap is because the MTA expected to receive $100 million in cash by the end of this year from developer Bruce Ratner for rights to the Vanderbilt Yard—8 acres of the proposed 22-acre Atlantic Yards project. That is until the MTA, with Ratner over a barrel, approved a deal where the developer would only pay $20 million by the end of the year.

"Transit riders should recognize that the MTA cuts are in large part due to this sweeter, sweetheart deal the authority needlessly cut with Bruce Ratner this past summer. Both Governor Paterson and Mayor Bloomberg wanted the MTA to approve that deal, now paying negative dividends for riders," said Develop Don’t Destroy Brooklyn spokesman Daniel Goldstein. "Everyone has got their ideas of how to close the budget gap, by either cutting student cards or taking money earmarked for other purposes, but how about this: It is not too late for the Governor and Mayor to make the MTA strike a new deal with Ratner that requires him to pay what he committed to paying—$100 million at closing, rather than $20 million."

Some simple math explains how Ratner got a sweetheart deal while transit riders now get a lump of coal…

In 2005 the MTA appraised the 8-acre Vanderbilt Yards at $214.5 million. They then undertook a sham RFP process. Extell Development Company bid $150 million and Forest City Ratner (which wanted the Yards for its 22-acre Atlantic Yards project) bid $50 million. The MTA told Ratner that bid was too low and after six weeks of "negotiating" Ratner upped it to $100 million.

Ratner was then supposed to pay the MTA $100 million cash at closing. They didn't.

Fast forward to the summer of 2009. The MTA announces that it has "negotiated" a new deal with Ratner. Despite having Ratner over a barrel the MTA strikes a deal where Ratner pays only $20 million at closing. The rest would be paid over a 22-year period. The MTA and Ratner expected to close in 2009. But they haven't.

$100 million minus $20 million is $80 million. At minimum the MTA shortfall should be $80 million smaller. Of course had the MTA had a competitive bidding process for the Vanderbilt Yards there is a reasonable chance they'd have no shortfall this year.

The culmination of the "negotiation" with Ratner this past year was at the MTA Board meeting to approve the new lowball deal. The MTA did not seek any other bidders when they understood that Ratner was no longer willing to fulfill his financial commitments. They are being sued for that.

So why did they rush to screw transit riders? They had to help Ratner. MTA CFO Gary Dellaverson explained: "It relates to Forest City Ratner's desire to market the tax-exempt bonds. That's the primary driver of the timing."

Now, according to the NY Times, Dellaverson says he is "shocked." Shocked!

And that is the primary driver of the bulk of this shortfall. The math is simple.

Posted by eric at 1:23 PM

event wrap up and bond news

Battle of Brooklyn via Kickstarter

Norman Oder covered our fantastic screening/ panel discussion event - http://atlanticyardsreport.blogspot.com/2009/12/battle-of-brooklyn-film-prompts.html
we filmed the discussion and should have it online in the coming weeks.

It was great to see the first section of the film on the big screen with a big crowd. We got a lot of feedback and have already made a lot of small changes that help significantly.

link

Posted by eric at 10:44 AM

Still more EMINENT DOMAINIA: The Big Apple Bites!

inversecondemnation.com, NY Times Editorial On Eminent Domain: Columbia Case "Completely Out Of Step With Eminent Domain Law" And Is "Weakly Reasoned." Really?

It should not be a huge surprise that the Times ends up cheerleading for the wrong team in both of these cases. As you may recall, the paper was the private beneficiary of a similar eminent domain action (as noted here), so at least it cannot be accused of being inconsistent. But let's give the editorial board the benefit of the doubt and assume that its opinion wasn't driven by crass self-interest, but by a genuine belief that the Kaur decision "conflicts with the relevant law."

It is still wrong.
...

When the Times castigates the Kaur opinion as "weakly reasoned," you have to wonder whether the editors read the same decision we did, since all Kaur did was look at the facts. Unlike Goldstein, the Kaur court did not ignore Kelo's baseline and refuse to even look at the facts in the record. Goldstein washed its hands of the inquiry, holding that courts must accept an agency's determination that a parcel is in fact blighted. How Goldstein's interpretation of the New York Constitution's public use clause is above Kelo's Fifth Amendment baseline was never explained by the court.
...

Thus, the Times editorial is 180 degrees off the mark: it is the Court of Appeals' abdication of the rule of law in Goldstein -- and not the Appellate Division's opinion in Kaur -- which "conflicts with the relevant law," and which is is "completely out of step with eminent domain law."

NEIGHBORHOOD EFFECTS, Empire State of Mind

These cases highlight just how much of a mess eminent domain proceedings are in the wake of 2005’s U.S. Supreme Court decision Kelo v. City of New London. Supreme Court decisions are no stranger to controversy, but the outrage surrounding Kelo transcended party or ideology, and led to forty-three states adopting restrictions on their own eminent domain powers.

New York, of course, is one of the seven "holdouts."

In the Brooklyn case, the issue is identical to Kelo. Bruce Ratner wants to tear down a significant portion of a vibrant neighborhood, and replace it with private economic developments including office towers, a shopping complex, and a basketball arena, which will likely be financed with a significant public subsidy.
...

The majority’s reliance on the ESDC study is quite controversial, because it’s quite possible that the ESDC has significant conflicts of interest, if not outright corruption. These problems came to light in the Columbia University case.

Amsterdam News via The Black Urban Times, Judge gives Columbia University red light

Once in a while in the big bad city, the little guy wins.

Last Friday, an appeals court blocked New York State from seizing private property in order to further the planned $6.3 billion expansion of Columbia University. The 3–2 ruling by the Appellate Division of State Supreme Court in Manhattan backed charges against the Empire State Development Corporation (ESDC), saying that by allowing the use of eminent domain, ESDC was giving the Ivy League school an unfair advantage over commercial property owners of the land.

Posted by eric at 9:55 AM

More Bondage

The Architect's Newspaper Blog, The Final Slam Dunk?

There may be a few hoops left to jump through before Bruce Ratner can begin construction of his SHoP- and Ellerbe Becket-designed arena for the Brooklyn, né New Jersey, Nets, such as completing a partial sale of the team to a Russian oligarch, prevailing in some outstanding lawsuits, and going ahead with eminent domain against the area’s remaining holdouts. But the developer appears to have cleared the final major hurdle standing in his way with the successful sale of $511 billion in tax-exempt bonds today. Yes, those hoops may still present challenges, but none had the same drop-dead, end-of-the-year deadline the bonds did, and they seemed the likeliest chance for the project’s opponents to succeed. Instead, they sold briskly in a matter of hours, or, as Ratner put it in a release, “The interest in the arena bond offering was beyond our expectations,” expectations that have always been highly optimistic, though also always on the money. Perhaps this is why they are already preparing to divert traffic starting next Monday to make way for construction.

The New York Times, $500 Million in Bonds Sold in 2 Hours for Nets’ Arena

The Times updates the story it broke on City Room yesterday.

Indeed, the demand for the bonds from institutional investors far outstripped what was available and belied the project’s tortured history and court challenges.
...

The developer and his partners will raise the rest of the money for the 18,282-seat arena privately. Ratner, the chief executive of Forest City Ratner, is expected to complete the master closing for Atlantic Yards with various city and state agencies next week. At the same time, Ratner plans to close on the sale of an 80 percent stake in the Nets to the Russian billionaire Mikhail D. Prokhorov, pending approval by the N.B.A.

The two partners will invest $293.4 million in the arena and use a $131 million subsidy from the Bloomberg administration.
...

According to the official statement for the bond offering, the N.B.A. issued a consent letter in October offering initial approval of Ratner’s financial plan for the team and the arena, including the sale of a majority interest in the Nets to Prokhorov for $200 million.

Still, Ratner and his underwriters say the N.B.A. is not expected to formally approve the Prokhorov deal until early 2010.

NY Observer, Atlantic Yards Sells Out

It's hard to imagine the project is finally in the clear, but the undying drama might not have much more to live on.

The bond sale—which had to be completed by January 1 to guarantee Mr. Ratner could use tax free bonds—was widely seen as the last serious hurdle facing the project, with opponents hoping the economic climate and legal uncertainty might scare away investors. That didn't happen. Now, Mr. Ratner just has to sell $146 million in taxable bonds—in addition to the $200 million he's pouring in—but that's expected to be relatively easy, even before today's strong showing.

Opponents are still hoping to topple the project with a number of outstanding lawsuits, but it would take a rather serious surprise for any of them to derail the project. The other longshot is the N.B.A., which may not want an enigmatic Russian oligarch as an owner—in which case, the drama would begin all over again.

Brownstoner, Investors Eat Up Atlantic Yards Arena Bonds

Not everyone felt quite as sanguine, however. “These bonds went on the market without any oversight from any state officials,” said Daniel Goldstein, spokesman for Develop Don’t Destroy Brooklyn, the main Atlantic Yards opposition group. “The state will be on the hook if the project defaults.”

GlobeSt.com, Bond Sale Complete on Atlantic Yards Arena

However, the legal challenges to Atlantic Yards are far from over. Following an appellate court’s ruling earlier this month against the state’s use of eminent domain in the planned Columbia University expansion in Harlem, plaintiffs in the Atlantic Yards case asked the Court of Appeals to reconsider its Nov. 24 decision. Specifically, they requested that the court hold off making any final decision on their motion and appeal until the court rules on the Columbia eminent domain case, which it will hear in early 2010.

NY Daily News, Developer Bruce Ratner sells $511 million in tax-free bonds to pay for new Nets arena

Ratner had to beat the clock to sell the bonds because the IRS has barred using such tax-free financing for sports stadiums starting Jan. 1. The rest of the $904 million arena will be paid for by state and city subsidies and private investment.

NY1, Investors Grab Up Brooklyn Arena Bonds

NetsDaily, With Bond Sale, Brooklyn Move Looks More Likely

Gothamist, Ratner Sells $511 Million In Atlantic Yards Bonds

Posted by eric at 9:21 AM

Bonds away! Ratner’s tax-free bonds are snapped up fast

The Brooklyn Paper
By Stephen Brown

Bruce Ratner scored roughly half the money he’ll need for his Atlantic Yards arena in a matter of hours yesterday, selling out $511 million in tax-free bonds that were snapped up by investors thanks to their high interest rate and investors’ faith in the success of the project.
...
Believe it or not, Ratner’s timing was excellent. Though the Atlantic Yards project bears little resemblance to the Frank Gehry fantasyland that Ratner first proposed in 2003, the ailing economy actually helped the bond sale.

“There is a lot of confidence in the municipal bonds market these days,” said Debra Saunders, a member of the New York Board of Municipal Analysts. “The muni-market is viewed as a safe place to go.”
...
The bonds, which are essentially loans issued by the state on behalf of Ratner, were rated just above “junk” status by the major ratings agencies earlier this month.

The opposition to the project — which dumped fake “junk bonds” into a garbage truck on Wall Street on Monday — criticized the sale as yet another example of Ratner running roughshod over the public interest.

article

Posted by lumi at 4:49 AM

The Times backs into acknowledging the much-reduced Barclays naming rights deal

Atlantic Yards Report

Tacked on to the end of the New York Times print edition article today. headlined $500 Million in Bonds Sold in 2 Hours for Nets’ Arena, is this:

Barclays agreed to pay $10 million a year for 20 years for the naming rights under a deal that has been revised twice since it was struck in 2007. The original deal was worth $400 million and was set to expire at the end of 2008. The bank agreed to extend the deal but at a reduced price.

Nets officials, however, say Barclays will pay an additional sum for other promotional rights connected to the project.

Yes, but Nets officials haven't specified that number, which likely isn't close to $10 million a year. And that means that the deal might not be a record--or just barely be one--after all.

All in all, it's pretty tepid context, given that the newspaper touted the original naming rights agreement as a record, and repeatedly cited the reported $400 million total as fact.

article

Posted by lumi at 4:48 AM

EMINENT DOMAINIA: The Big Apple Bites!

The NY Observer, Top Court Rules for Warehouse Owner Over State in Columbia Records Suit

On Dec. 3, the owner of a set of warehouses in the footprint of Columbia University's planned West Harlem expansion, with his lawyer, Norman Siegel, were handed a highly unexpected victory in a suit that challenged the use of eminent domain for the project.

And now the state's top court has ruled in his favor on a different matter: open records.

The New York Court of Appeals on Tuesday unanimously ruled that the state's economic development agency, which administers eminent domain, must turn a set of records over that Mr. Sprayregen had requested through the Freedom of Information Law. The agency, the Empire State Development Corporation, had provided numerous documents but withheld a set related to a 2004 agreement between the agency and Columbia. Mr. Sprayregen appealed the agency's denial of his FOIL request, and was denied again. He then sued in state Supreme Court and won, though ESDC did not provide all the documents, preferring to appeal. He won again at the appellate level; ESDC appealed again; and now the agency has exhausted its appeals.

Atlantic Yards Report, Court of Appeals smacks down ESDC in FOIL case related to Columbia expansion

Norman Oder explains the state's high court's decision:

The West Harlem Business Group (WHBG) then went to court, arguing that ESDC failed to articulate a particularized and specific justification for withholding the requested documents. ESDC said it not only had fully complied with its obligations under FOIL but also asserted that the documents were exempt either as intra- or inter-agency material or privileged attorney-client communications.

The Supreme Court tried to examine all documents in-camera, but, according to the ruling, ESDC failed to identify which documents fell within each particular exemption, asserting only that the documents were either non-responsive, exempt intra- or inter-agency office records, or had been previously disclosed.

At issue were five documents; the Appellate Division agreed they should be disclosed, and that was appealed.

The Court of Appeals said that "this litigation could have been avoided, or significantly limited, had ESDC in the first instance complied with the dictates of FOIL."

Posted by lumi at 4:35 AM

After bond sale, plan to to detour traffic on Fifth Avenue and Pacific Street announced

Atlantic Yards Report

Get ready for a lot more traffic on Sixth Avenue between Atlantic and Flatbush avenue.

A notice and detour map issued by the Empire State Development Corporation and Forest City Ratner--issued just after bonds were sold for the Atlantic Yards arena--indicates that directional changes on two streets will begin on Monday, December 21.

Fifth Avenue, between Atlantic Avenue and Flatbush Avenue, will become northbound only, leaving drivers formerly going south diverted to Sixth Avenue. Meanwhile, Pacific Street, between Fifth and Sixth Avenues, will become two-way. (Click on map to enlarge.)

The changes will accommodate utility upgrades underneath the intersection of Fifth Avenue and Pacific Street/Flatbush Avenue.

According to the notice, advisory signs will be posted in advance of the closure and detour signs will be posted during the work. Traffic agents will be assigned to facilitate the flow of traffic and pedestrians. Local and emergency vehicle access will be maintained on the affected streets at all times. City services will be maintained in the area at all times.

Full closure?

The notice states that these changes may be followed by a full closure of Fifth Avenue (between Flatbush and Atlantic Avenues), Pacific Street (between Fifth and Sixth Avenues), and Pacific Street (between Carlton and Vanderbilt Avenues) in early 2010.

link

NoLandGrab: Sealing off a common route of egress from Bruce Ratner's mall complex four days before Christmas ought to serve as a decent test run for a typical arena traffic snarl.

Posted by eric at 12:11 AM

Russianoff on MTA land sales: "they decided that it was a higher value to help the mayor and the governor"

Atlantic Yards Report

From today's Brian Lehrer Show, in a segment on MTA cuts, Gene Russianoff, staff attorney at NYPIRG Straphangers campaign, at about 11:50, described how the Metropolitan Transportation Authority can use capital funds funds to stave off service cuts. (The Regional Plan Association disagrees.)

"The MTA is pretty resistant to this idea. They argue that it will send them down a slippery slope of cutting their capital program. But they're already on that slope. For example, they sold Atlantic Yards"--actually, the Vanderbilt Yard--"and Hudson Yards to developers for way less than their full market value, and that was a capital asset that helped pay for fixing things, and they decided that it was a higher value to help the mayor and the governor."

link

Posted by eric at 12:06 AM

December 15, 2009

On Ratner's Bond Sale

Develop Don't Destroy Brooklyn

Those expecting a white flag from DDDB in light of today's sale of arena bonds are, well...

Ratner has sold his bonds, but if anyone thinks that is the end of the fight against Atlantic Yards, they are sadly mistaken.

Investors liked the paper and were willing to take the risk, and it is a big one. Good for them. But the 6-year long fight against the Atlantic Yards boondoggle—a publicly-funded, money-losing arena, pretending to be an affordable housing project, in the midst of a fiscal crisis—is far from over. That's why they invented escrow and that's why these bond proceeds are going into escrow.

We fully expect that the outstanding lawsuits against various aspects of the project and Governor Paterson's oversight, oversight that the project has never seen, will finally bring an end to the inertia pushing this white elephant on the people of Brooklyn, and the taxpayers of New York State.

link

Posted by eric at 9:01 PM

FOREST CITY ENTERPRISES PRESS RELEASE: Forest City Announces Pricing of $511 Million Tax-Exempt Bonds for Barclays Center at Atlantic Yards

CLEVELAND, Dec. 15 -- Forest City Enterprises, Inc. (NYSE: FCEA and FCEB) today announced the pricing of $511 million of tax-exempt bonds to finance a portion of the construction of the Barclays Center arena at the Company's Atlantic Yards project in Brooklyn. The interest rate on the bonds was 6.48%.

"We're very pleased at the strong level of interest shown by investors in these bonds," said Charles A. Ratner, Forest City president and chief executive officer. "Demand far exceeded the total dollar volume of the bonds being marketed, a demonstration of support and confidence in the arena, in Atlantic Yards and in the future of Brooklyn. I congratulate our New York team and our advisors, and thank our public partners as we take this important next step in making this great project a reality."

Co-lead underwriters for the bond offering were Goldman Sachs and Barclays Capital.

link

Posted by eric at 8:56 PM

Ratner Wins Bond Financing for Nets Arena

NY Observer
by Eliot Brown

Doubts are fading for Bruce Ratner's new Nets arena planned for Brooklyn.

Mr. Ratner, owner of the Nets, has successfully marketed $511 million in tax-free bonds to build the arena, clearing the largest remaining hurdle to the project. Mr. Ratner's firm, Forest City Ratner, announced the news Tuesday afternoon, saying the bonds were priced at 6.48 percent.

The bond sale comes amid a last-minute race to finalize numerous parts of the larger Atlantic Yards project before the end of the year, when an IRS exemption expires. Since the summer, Mr. Ratner has redesigned the arena; renegotiated a land sale in a deal rather favorable to him; renegotiated a subsidy deal with the state; nearly finalized a revised subsidy deal with the city; tentatively sold the Nets and 45 percent of the arena development to Russian billionaire Mikhail Prokhorov; and now sold $511 million in tax-free bonds.

He still needs to raise $146 million in taxable bonds, and put in more than $200 million in equity from Forest City. The arena is to cost more than $900 million, and is planned to be the first component to rise on the 22-acre Atlantic Yards site.

There are numerous lawsuits and legal actions outstanding that challenge the project.


Related coverage...

NorthJersey.com, Atlantic Yards project developers complete bond sales

"The interest in the arena bond offering was beyond our expectations," said Nets principal owner and lead project developer Bruce Ratner, who added that orders from institutional investors across the board were almost four times the supply of bonds. "Even more importantly, the overwhelming support from investors is a good sign of confidence in this project and in the city."

Bloomberg.com, Brooklyn Arena Sells $511 Million in Tax-Exempt Bonds

Brooklyn Arena Local Development Corp., the state arm created to help finance a new basketball facility in New York City, sold $511 million of tax-exempt bonds at yields lower than a comparably rated deal last week.

Bonds due in 2040 paying 6.25 percent interest were priced to yield 6.35 percent, 65 basis points less than a comparable maturity issued by Texas Private Activity Bond Surface Transportation Corp. last week, according to data compiled by Bloomberg. A basis point is 0.01 percentage point.
...

The arena bonds are rated at the lowest investment grades by Standard & Poor’s and Moody’s Investors Service, one level higher than high-risk, high-yield junk status.
...

Investors placed almost $4 of orders for every $1 of bonds offered, allowing underwriters to reduce yields about 15 basis points from initial levels. The overall interest was 6.48 percent, according to the release from Ratner.

Underwriters were led by Goldman Sachs Group Inc. and Barclays Plc, which bought naming rights to the facility.

“It was tremendously received by the marketplace,” said Greg Carey, a managing director in Goldman Sachs’ public sector and infrastructure group, in an interview today. “We had 48 major institutions participating in the transaction.”

Atlantic Yards Report, Ratner Wins Bond Financing for Nets Arena

Well, with the sale of tax-exempt bonds and a planned "master closing" next week, the Atlantic Yards arena is coming ever closer to construction.

Crain's NY Business, Atlantic Yards bonds sell for $511M

Securing financing will be the last major hurdle to starting construction on the arena, which is the centerpiece of Forest City Ratner's $4.9 billion plan to redevelop the Atlantic Yards. Last month, the developer overcame the other major obstacle when New York's highest court gave the state permission to use eminent domain to seize property on the 22-acre site that Forest City doesn't already control. Forest City plans to have the arena open by the 2011/2012 basketball season.

NetsDaily, Brooklyn Bonds Get Sold

One more hurdle has been cleared for the Nets’ move to Brooklyn. More than $500 million of tax-exempt bonds for the team’s new arena were put on sale Tuesday morning, and they were sold quickly. “There was a strong appetite for the bonds,” said a bond analyst. The master closing for the Atlantic Yards property, along with the start of condemnation of the parcels that FCR doesn’t already own, is expected next week.

The Brooklyn Blog [NY Post], Atlantic Yards passes funding obstacle, clearing way for Brooklyn Nets arena

Ratner next week is now set to complete the “master closing” for Atlantic Yards with city and state agencies.

He can now also close on the sale of 80 percent interest in the Nets to the Russian billionaire playboy Mikhail Prokhorov, who is also buying 45 percent interest in the planned Barclays Center arena.

Ratner and his partners would also invest their own cash to help pay off the arena, while tapping into a $131 million city subsidy.

NoLandGrab: Prokhorov still needs approval from NBA owners, but that would appear to be a formality, given the support of Commissioner David Stern and Ratner's stellar track record in the ownership club.

NetsAreScorching, BONDS FOR BROOKLYN ARENA SELL FAST

In a show of just how divisive this project has been, check out these two comments from the Times’ comments section:

This is great news. All of the NIMBY opposition and consequent increased costs have not stopped this beneficial economic development project from moving forward.

And:

“which is to include more than 6,000 apartments.”

Also to be included are magic unicorns and leprechauns.

AP, Bonds for new Nets arena sell well

A developer's plan to move the New Jersey Nets to Brooklyn has gotten a boost from Wall Street.

Investors quickly bought up $511 million in tax-free bonds that went on sale Tuesday to pay for part of the much-delayed project.

Posted by eric at 4:45 PM

Bonds for Nets’ Arena in Brooklyn Sell Briskly

City Room
by Charles V. Bagli

Developments in the now-six-year-old Atlantic Yards saga rarely fail to astound us.

Almost six years after he bought the New Jersey Nets with plans to move the team to Brooklyn, the developer Bruce C. Ratner quickly sold more than $500 million in tax-exempt bonds on Tuesday morning for a new basketball arena in Brooklyn.

Indeed, the demand for the bonds from institutional investors far outstripped what was available and belied the project’s tortured history, years of delays and court challenges. The $1 billion basketball arena at the intersection of Flatbush and Atlantic Avenues is the centerpiece for the 22-acre Atlantic Yards development, which is to include more than 6,000 apartments.

“There was a strong appetite for the bonds,” said Jay Abrams, a bond analyst at FMS Bonds. “The market was comfortable with the ratings the deal received and the security that was pledged.”

The developer’s underwriters — Goldman Sachs and Barclays Capital — handled the sale of the tax-exempt bonds, which totaled $511 million. The developer will sell more than $100 million in taxable bonds in the coming weeks for the 18,282-seat arena.

Next week, Mr. Ratner, chief executive of Forest City Ratner, is expected to complete the “master closing” for Atlantic Yards with city and state agencies and to begin condemnation for private property he does not already own or control. Mr. Ratner is also selling an 80 percent stake in the Nets to the Russian billionaire Mikhail D. Prokhorov. The two partners will invest $293.4 million in the arena and use a $131 million subsidy from the Bloomberg administration.

They hope to open the new arena by June 2012. The new housing at Atlantic Yards may take longer, given the flagging real estate market, although Mr. Ratner has promised to start one of the residential towers after the arena is under way. He must also contend with several remaining lawsuits challenging the project.

link

Posted by eric at 3:05 PM

Mobile bandit seized

The Brooklyn Paper, Police Blotter
by Sabrina Jaszi

Holiday shoppers who want to avoid the "blight" of being a crime victim would do well to steer clear of Bruce Ratner's Atlantic Center and Atlantic Terminal malls.

Retail rampage

Shoppers beware! Atlantic Avenue clothing emporiums are rife with crime this holiday season. One thief even struck twice in the Marshall’s in the Atlantic Center Mall on Dec. 9.

That thief’s first victim was a high schooler who told cops that the sneak brushed by her diaper bag at 2 pm and took her wallet. She lost only loose change, she said.

But minutes later, the thief snagged an older woman’s bag from her cart. She later found the bag hanging from a fence, but $200 had been removed, along with all of her credit cards.

article

Related coverage...

The Local [Fort Greene/Clinton Hill], The Week in Crime: Thieves and Assailants

With all the crimes going down, the Brooklyn Paper had to call in some back-up from The Local.

* A 23-year-old man was punched to the ground Monday at 7:30 p.m. in front of 625 Atlantic Avenue and then repeatedly socked and kicked by three men while he was down. He was treated by emergency medical personnel for cuts, swelling and pain to his left eye. Israel Rodriguez Jr, 21; Luc Vincent, 19; and Robertson Valle, 27, were charged with gang assault in the first degree.

"625 Atlantic Avenue" is AKA "the Atlantic Center mall." Surely Times brass wouldn't have ordered The Local, which last week referred to the "Atlantic Mall" in its crime report, to obscure the scene of the crime(s) (which, after all, is owned by its development partner in its headquarters building) by using the street address instead of the more easily identifiable name?

* 12/8: A woman stole $1,463 in tops, panties and bottoms from the Old Navy department store in 625 Atlantic Avenue. The police arrested Victoria Perez, 38.

* 12/8: Woman, 71, discovered $130 in unauthorized credit card charges after her wallet was swiped in Marshalls at 625 Atlantic Avenue.

Posted by eric at 12:52 PM

Senate Majority Leader Espada: "We did not confer upon [MTA] to be a house of real estate"

Atlantic Yards Report

State Senate Majority Leader Pedro Espada may be widely and legitimately criticized for his self-interested behavior, like switching parties and throwing the Senate into gridlock, but sometimes he does make sense.

During an interview on yesterday's Brian Lehrer Show, at about 18:45, host Lehrer asked Espada how the Metropolitan Transportation Authority (MTA) could avoid service cuts.

"We're going to look at ways they can have the money," Espada responded. "We're going to look at how their spending priorities are ranked. We're going to look at the vast real estate holdings that the MTA has. We did not confer upon them to be a house of real estate--a holding company for the state of New York. They have billions in assets and we need to look at where the money is... Certainly the first course of action cannot be to penalize the ridership."

Of course he hasn't tried to look into the MTA's controversial willingness to renegotiate the deal for Vanderbilt Yard.

link

NoLandGrab: We'll give the last word to AYR commenter "George": State Senator Espada helped to kill major tenant legislative reforms this past summer. He stands for nothing other than his own personal benefit. He's just discovered that the MTA owns real estate? That his constituents take the subway?

Posted by eric at 11:33 AM

"Junkyard Bonds" get tossed in garbage truck, but are state officials listening? What about the "loophole" allowing the BALDC to avoid scrutiny?

Atlantic Yards Report

Norman Oder has (surprise!) extended coverage of yesterday's "Junkyard Bond" protest.

Well, it was a very clever idea for a demonstration: dump Forest City Ratner's "Junkyard Bonds"--illustrated with images of developer Bruce Ratner and Governor David Paterson, plus the corporate logos of bond ratings agencies and the underwriter--into a garbage truck to illustrate their questionable quality and the many doubts about the procedure behind them. Wall Streeters walked by with bemusement as a few dozen protesters gathered, followed by cameras.

But is anyone in charge listening? Develop Don't Destroy Brooklyn (DDDB), which organized the demonstration (complete with garbage truck from Crown Container, a business fighting eminent domain in Willets Point) held outside at noon yesterday outside ratings agency Standard & Poor's in Lower Manhattan on Friday sent a letter to Attorney General Andrew Cuomo and State Comptroller Thomas DiNapoli.

The letter asked that they investigate both the bond structure and "bad faith acts committed by the Empire State Development Corporation (ESDC) in its advocacy for Forest City Ratner's Atlantic Yards project and Columbia University's expansion, particularly in pursuit of eminent domain for these two entities."

article

Related coverage...

Brownstoner, Junk Yard Bonds Get Trashed

Develop Don't Destroy Brooklyn put on some good theater when it organized the ritualistic throwing of mock Atlantic Yards Arena Bonds into the back of a garbage truck outside S&P's headquarters in downtown Manhattan yesterday, but the action was aimed at raising awareness about some serious issues.

Blogs 12 Brooklyn, Trash Talk

From News 12 reporter Heather Abraham's blog.

Angry neighbors didn’t just trash talk the bonds that will pay for the Atlantic Yards project, they literaly threw them away. Of course, they were fake bonds. But the point of the demonstration was to show that the bonds were garbage.

Posted by eric at 11:02 AM

The Golden Rule

MrT.gif From "MrT's" comment on Field of Schemes:

The more I hear about Atlantic Yards, the more I'm convinced your latter conclusion (a scam) is accurate. It is a scam with the backing of NY City and State Politicos, as well as Judges, IMO. This may be quite possibly the most corrupt public/ private partnership in the nation. Some new wrinkle is added every day that normally would cast doubt on this project ever seeing the light of day.

If these bonds are sold, you can be assured the fix is in. People are so hell-bent on getting a new Brooklyn arena that facts are being completely ignored. Basic approvals processes are disregarded as nuisance; as if they never existed! People talk about the corruption sting in NJ this summer - if anyone bothered to investigate this project, they could make a career for themselves in NY.

Perhaps the beloved straight-talkin' entertainer "Mr T." summed it up best:

"I believe in the Golden Rule — The Man with the Gold . . . Rules."

Posted by lumi at 4:59 AM

For FCE, are commercial mortgage loan defaults vexing--or just playing chicken?

Atlantic Yards Report

From last week's conference call with investors:

Forest City officials were asked why they had delayed a $5 million payment on a loan for land in the Atlantic Yards footprint: “I’m wondering what your negotiations are with the lender. Are you trying to get a lower interest rate? Are you trying to get them reduce the size of the mortgage? And how does that impact the potential close of the project?”

Executives declined to give a straight answer, only offering, “The lender group on our land loan has been very supportive and has been working with us in connection with making sure that this project occurs as planned.”

Norman Oder wonders if "working with lenders" is a euphemism for "tough negotiation," and Crain's Cleveland Business reported:

One of the nation's realty titans, Forest City Enterprises Inc. in Cleveland, talks about negotiations with lenders over debts in such a way that it sounds like a game of who blinks first.

article

NoLandGrab: It's the lenders who are likely to blink first, since all the properties in the Atlantic Yards footprint, including those Forest City already owns, are slated for condemnation by New York State. If the State's initial offer to Daniel Goldstein is any indication, the banks would hardly want to deal with "fair market value" for the property to which they would take title.

Posted by lumi at 4:48 AM

WPU joins Atlantic Yards protest

Willets Point United

Willets Point United members Irene Presti, Jake Bono and Jerry Antonacci attended the "Junk Yard Bonds Protest" held by Develop Don't Destroy Brooklyn today at noon in front of 55 Water Street in Manhattan, headquarters of Standard and Poor. Crown Container donated a garbage truck upon which hung a banner that stated "Deposit Atlantic Yards Bonds Here". At the end of the demonstration, junk yard bonds were tossed into the back of the truck and compacted. Unfortunately, Crown couldn't dispose of them because their transfer station permit does not cover toxic assets.

link

Posted by lumi at 4:39 AM

Demonstrations Over Atlantic Rail Yards Project

WCBS 880

WCBS Reporter Peter Haskell was on the scene where a garbage truck in front of Standard and Poor's offices is strictly symbolic.

It was brough by protesters of the Nets arena and the Atlantic Yards Project in Brooklyn.

"We sold Ratner's junkyard bonds for their arena bond issue, and we dumped them into a garbage truck," said Daniel Goldstein, an organizer.

Goldstein is referring to junkyard bonds, noting the S&P rating is just above junk bond status.

"We don't like this project. It's going to destroy our neighborhood and we've been fighting it for six years and we will continue fighting it with our last breath," said Lucy Cotaine Koteen of Fort Greene in Brooklyn.

link / listen

Posted by eric at 12:00 AM

December 14, 2009

Dan Goldstein talks trash

Videos from today's demonstration by Brooklyn community and political activist Raul Rothblatt.



NoLandGrab: Just in time for the holidays — junk bonds for sale, get 'em while they're not!

Posted by lumi at 8:42 PM

One man's junk is another man's trash

Brooklyn community activist Phil DePaolo spent his lunch hour trashing Ratner arena junk bonds at today's demonstration in front of Standard & Poors offices in Manhattan.

Photo by "Brit in Brooklyn" Adrian Kinloch.

More photos by neighborhood photog Tracy Collins on flickr.

Posted by lumi at 8:31 PM

Bloggers continue banging Brooklyn’s Atlantic Yards

The Brooklyn Blog [NY Post]
By Rich Calder

Blogging on blogging on Atlantic Yards... a sure sign that Bruce Ratner's Atlantic Yards project should be put out of our misery.

As Brooklyn’s biggest project, it is no shock that Atlantic Yards is by far the boroughs most blogged subject.

In fact, one blogger, Norman Oder, has reported the subject to death over the past four years through his Atlantic Yards Report site, pissing off developer Bruce Ratner and the state and exposing various funding anomalies that have been picked up by the major media.

But, with $4.9 billion arena and office and residential tower project hinging on whether financing can be secured by the end of the year, many other independent bloggers have also stepped up their game the past few weeks.

article

Posted by lumi at 8:25 PM

Forest City's Longshot Bond Issue in Brooklyn

Huffington Post
By Steve Ettlinger

As that bastion of moral rectitude and good judgment, Goldman Sachs, prepares to market Forest City Enterprises' just-above-junk-rated bonds for the very controversial Atlantic Yards development in Brooklyn -- which includes the most expensive basketball arena in the country (and history, I suppose) -- I'm struck by how tenuous the whole thing is. The bonds are being issued by Brooklyn Arena Local Development Corporation.

When you think about it, you really have to wonder how Bruce Ratner has found the stamina to persist. I wondered, that is, until I saw how much profit there is to be made when the government gives you much of what most developers would have to buy themselves.

Let's see: There's the deal for acquiring the air rights to the MTA's rail yards for $100 Million less than their estimated value (at a time when the MTA is missing $200 million cash from its budget -- arrrggghh). There's the $100 Million or so that Bloomberg put in the NYC budget for land acquisition assistance. There's those wild payments instead of taxes (PILOTS) if FCE manages to sell the bonds in three weeks, saving them millions. What stinks is that the IRS found such deals so bad for us taxpayers that they've outlawed them, but not until Dec. 31, hence Ratner's rush. Those are just the obvious ones, the things that normal developers, who lack Ratner's tight links to Bloomberg and Pataki, could not easily get.

Now FCE is desperate to sell these bonds before Dec. 31, and the tension must be high considering the numerous obstacles to the successful completion of the project.

Full article

[Photo of author Steve Ettlinger at today's demonstration by Tracy Collins.]

Posted by lumi at 7:47 PM

DDDB PRESS RELEASE: RATNER’S JUNK YARD BONDS

Forest City Ratner’s Questionable & Risky Atlantic Yards Arena Bonds

Cuomo and DiNapoli Urged to Investigate these Bonds and The Empire State Development Corporation

NEW YORK CITY—At a demonstration targeting Bruce Ratner's Junk Yard Bonds, outside Standard & Poor's offices at 55 Water Street in Manhattan, citizen watchdogs raised numerous serious and troubling questions about the bonds that are reportedly imminently about to come to market for Forest City Ratner's money-losing Atlantic Yards arena.

They also dumped mock Ratner Arena Junk Yard Bonds into a real garbage truck, where the real bonds belong.

The demonstrators, led by Develop Don't Destroy Brooklyn (DDDB), called on Attorney General Andrew Cuomo and State Comptroller Thomas DiNapoli to investigate both the bond structure and bad faith acts committed by the Empire State Development Corporation in its advocacy for Forest City Ratner's Atlantic Yards project and Columbia University's expansion, particularly in pursuit of eminent domain for these two entities.

"We are in the midst of a fiscal crisis in New York, yet Governor Paterson is allowing the State to issue an un-vetted, tax-diverting bond for a money-losing arena to go on the market, from which New York's credit rating will suffer should there be a default. He is allowing this while cutting everything in sight to fill enormous budget gaps, including education and health care," said DDDB spokesman Daniel Goldstein. "He also approved a sweetheart deal with Ratner which has cost the MTA dearly. We call on the Governor, again, to follow through, in a meaningful way, on his public statement that he will conduct an objective review of the Atlantic Yards project."

The following was distributed to the press and public at the demonstration, as well as a letter [PDF] (which follows below) to Attorney General Cuomo.

Last week, Governor Paterson signed the Public Authorities Reform bill. The Times reported:

[Paterson] said that passing the law this year was crucial because of the state’s perilous fiscal condition, which the public authorities have added to with the enormous amount of debt they have taken on. "…for a very long period of time, [Public Authorities] have operated really without any oversight and operated very much in the dark, and often have amassed crippling back-door financing that has threatened the stability of our economy." Assemblyman Richard Brodsky, one of the bill’s sponsors, referred to the Yankee Stadium bond, structured the same as Ratner’s bond, to illustrate the need for such legislation: "Three billion dollars in taxpayer-backed debt was issued by 12 anonymous people who were essentially doing the bidding of the mayor."

The Brooklyn Arena Local Development Corporation (BALDC) is a public authority subsidiary, operating "in the dark" and "without any oversight." BALDC, comprised of six anonymous people, is poised to sell $500 million in triple tax-exempt, bonds for Forest City Ratner’s (FCR) Nets basketball arena—the most expensive arena in the world. The bonds would be paid for with diverted tax money—Payments In Lieu of Taxes (PILOTS). As with previous actions by the Empire State Development Corporation (ESDC), there are simply too many unanswered questions, putting the State at high risk.

Here are just some of those questions:

Questions for Empire State Development Corporation/Job Development Authority and its bond-issuing subsidiary the Brooklyn Arena Local Development Corporation.
• Why are bonds being issued for an arena that NYC’s Independent Budget Office said will be a $220 million net loss for NYC?

• How much of a net loss will the rest of the Atlantic Yards (AY) project be now that it has been converted to a mutli-decade option on a no-bid monopoly for Forest City Ratner? What happens if it is never built?

• FCR just defaulted & renegotiated a loan for land in the AY site, so how will they raise the equity they need for the arena?

Questions for Rating Agencies (Moody’s and S&P, which gave ratings just above junk):
• Why can’t Moody’s answer why they envision 225 annual arena events when Ratner projects 200 events?

• Basketball hosts 41 games without playoffs. How will the arena meet 220 events? Where is the independent analysis backing Ratner’s projections?

• Why does the Preliminary Official Statement (POS) for the bonds claim that all that is necessary for professional hockey in the arena is ice-making equipment, when it appears the arena isn’t large enough to accommodate an NHL hockey rink?

• How does the team with the worst record in the NBA, a pitiful NJ fan base, no Brooklyn fan base and an untested facility get the same exact bond rating as the leading sports franchise in the world—the NY Yankees—particularly when recent experience has shown that even a great team like the Yankees has been unable to sell their luxury seats?

• 12/10/2009 was the sixth anniversary since the project was announced with an arena completion date of 2006: How is it reasonable to say in the Preliminary Official Statement that the arena will be completed by June 2012?

• Why is the POS litigation risk assessment—MTA’s violation of the Public Authorities Accountability Act, two lawsuits against the ESDC’s September approvals—reliant only on FCR, ESDC & MTA, rather than independent legal opinion?

• Why doesn’t the POS include the renewed eminent domain challenge to AY after the ruling against Columbia University?

• What if Mikhail Prokhorov is not approved by the NBA, or walks away from his Letter of Intent – How does that affect the viability of the Project, and thus, the ability to repay the bond buyers?

• Why didn’t Fitch rate the arena bond?

Questions for Public Officials (Particularly Paterson, Cuomo, DiNapoli):
• Why isn’t this $500 million triple tax-exempt bond being reviewed and considered by the Public Authorities Control Board (PACB) and State Comptroller? Why has the BALDC been created under the JDA, rather than as a subsidiary of the ESDC, the lead agency on the Atlantic Yards Project—particularly when PACB approval was necessary in 2006 for a substantially less risky and different transaction?
>> 20% smaller arena that costs 70% more than approved in December 2006 ($637million then, $1.1 billion now).
>> Less functional arena (appears to be unsuitable for hockey).
>> Proposed new team owner and new partial owner of the arena—Mikhail Prokhorov.

• When will Comptroller DiNapoli and Attorney General Cuomo investigate this financing structure and its evolution?

• The bonds reportedly will not be insured. If the bonds default, won’t the state cover them to avoid a bad credit rating?

• Why are PILOTs being misused and the land value being inflated? What is the tax assessment & what is the PILOT amount?

• Why are bonds being issued when ESDC board didn’t approve the new smaller arena and did not do a review or background check of the new proposed Nets owner Russian investor Mikhail Prokhorov?

• Why has Gov. Paterson told the Legislature to make cuts in healthcare & education but he won’t cut this pork that he controls?

The following is the text of the letter sent on Friday, December 11 [PDF], to Attorney General Cuomo:

December 11, 2009
Via Hand Delivery and First Class Mail
Andrew M. Cuomo, Attorney General
Office of the Attorney General
Department of Law
The Capitol
Albany, New York 12224-0341

Dear Attorney General Cuomo:


I represent Develop Don’t Destroy Brooklyn, Inc. ("DDDB"). As you may know, for the past six years, DDDB has led the community in opposing the proposed Atlantic Yards project, a 22 acre high rise development slated to be erected in the heart of brownstone Brooklyn. I am writing to bring to your attention important developments concerning the legal underpinnings of the eminent domain proceeding for the project and the project financing.


On December 3rd, The Appellate Division, First Department ruled in favor of property owners challenging the Empire State Development Corporation’s (ESDC) use of eminent domain on behalf of Columbia University (Kaur v. NY Urban Development Corp.).


The majority opinion, by Judge Catterson, is a scathing indictment of ESDC’s actions overall and specifically when it comes to utilizing its condemnation powers. Catterson’s opinion calls the agency’s findings "sophistry" and "idiotic." He calls their efforts to trump up "blight" claim to take properties for Columbia’s benefit a "scheme." A concurrence says that they acted in "bad faith" to take plaintiffs’ properties.


In a decision on an appeal of an environmental action brought by DDDB and 22 other community organizations, Judge Catterson wrote also of the ESDC, "I believe that the New York Urban Development Corporation Act…is ultimately being used as a tool of the developer to displace and destroy neighborhoods that are ‘underutilized.’" Develop Don’t Destroy Brooklyn v. Urban Development Corporation, 59 A.D.3d 312, 326 (1st Dept. 2009)


The ESDC is also the condemnor on behalf of Forest City Ratner’s Atlantic Yards project in Brooklyn. In November the Court of Appeals ruled that ESDC could take plaintiff’s homes and businesses in the Goldstein et al. v. NY Urban Development Corp. case, ruling that the Court should defer to the agency’s determinations, specifically its "blight" finding, rather than make an independent determination of the constitutionality of the agency’s actions.


It is clear from the Columbia and Atlantic Yards cases that the ESDC has acted in bad faith. It is clear that when the most powerful public corporation in the State is found by a court to violate due process and act in bad faith to benefit large, wealthy and powerful corporations and institutions, that that agency no longer deserves any deference.


To the contrary it is time to investigate that agency and its actions.


In Brooklyn we have had to observe the ESDC act in bad faith over the past six years of the Atlantic Yards controversy. Identical to the actions of Columbia University, Forest City Ratner identified the property it wanted, and the ESDC, with the help of its retained "expert", AKRF, found blight based on underutilization, the existence of boiler violations, and cracked sidewalks. Nothing the Kaur majority wrote about the agency is a surprise to us.


It is clear from the Columbia and Atlantic Yards cases that the ESDC has acted in bad faith. It is clear that when the most powerful public corporation in the State is found by a court to violate due process and act in bad faith to benefit large, wealthy and powerful corporations and institutions, that that agency no longer deserves any deference.


We call on you to investigate ESDC with the full force of your office. They have done too much damage to individuals and neighborhoods, and to the good will of the citizens of New York, and to the people’s faith in government. They cannot be allowed to continue acting in the way described by Judge Catterson.


We also want to bring to your attention disturbing and potentially illegal aspects of the financing of Atlantic Yards. In 2006 the ESDC approved bonds for $100 million in financing for infrastructure related to the project. In accordance with Public Authorities Law € 51, the Public Authorities Control Board (PACB) approved that financing.


In 2008, the Job Development Authority (JDA), created a subsidiary local development corporation, the Brooklyn Arena Local Development Corporation (BALDC) which in November 2009, approved over $500 million in bond financing for the Arena which is the core of the Atlantic Yards project. That decision to approve the issuance of bonds, characterized as non-recourse bonds, presents at least two significant problems.


First, the BALDC is a subsidiary of the JDA. We do not understand why the BALDC is a subsidiary of the JDA and not the ESDC. However, we do not see how the BALDC and the financing of the arena fit within the statutory purposes of the JDA to promote job growth, training and development.


Second, and more disturbing is that the decision to issue over $500 million in debt is apparently completely exempt from review by the PACB or the State Comptroller. Under PAL €51, the PACB must review and approve all financing by ESDC and the JDA after an opportunity by the Comptroller to review the proposed action. The PACB’s review extends to the financing by any subsidiary of the ESDC and JDA. However, only subsidiaries which have the same members or directors as the ESDC or JDA are subject to PACB and Comptroller review. PAL € 51(1). BALDC has different directors than the JDA and thus not subject to PACB review.


This is an absurd and incongruous result. By taking advantage of this loophole, ESDC has manipulated the process to allow $500 million of bond financing to avoid third-party scrutiny and the protections established by the legislature when the PACB was established in 1976. While the BALDC bonds are ostensibly non-recourse bonds for which the State has no obligation, in reality it has long been recognized that the State has a moral obligation for such bonds. It was exactly this kind of reckless financing by the Urban Development Corporation in the 1970’s that lead to State’s fiscal crises when it was forced to meet those moral obligations of the UDC and then lead to the PACB to oversee the financing decisions of supposedly independent authorities.


Keep in mind that in 2006 the PACB resolution for Atlantic Yards did not approve these bonds and the cost of the arena has nearly doubled since that time, while the viability of the rest of the 8 million square foot project has been extremely diminished. Additionally there is an entirely new arena and Nets ownership structure, yet to be approved, since Forest City Ratner sold 80% of the team and 45% of the arena to Russian investor Mikhail Prokhorov.


Thus, we call on you to investigate the decision to create the BALDC in a manner clearly designed to avoid financial oversight and take action to protect New Yorkers from an increased debt burden that has not been subject to review by the Comptroller or the PACB.


Thank you.

Sincerely,
Jeffrey S. Baker
for Develop Don’t Destroy Brooklyn, Inc.

cc via fax and mail:
Governor David A. Paterson (Fax No. 473-7619)
Comptroller Thomas P. DiNapoli (Fax No. 473-3004)
Senator Bill Perkins (Fax No. 212-678-0001)
Assemblyman Richard L. Brodsky (Fax No. 914-345-0436)

Posted by eric at 1:32 PM

F, C and R YES! W and Z NO!!

While the MTA is giving Atlantic Yards developer Forest City Ratner a deep, deep discount and sweetheart payment terms on the Vanderbilt Yard, it's planning draconian service cuts, including the total elimination of the W and Z lines.

The New York Times, Drastic Cuts Are Expected as M.T.A. Unveils Budget

Fewer subway trains will run in the middle of the day, late at night and on weekends. Two lines will stop running altogether. And New York City’s students may soon be expected to pay a full fare to ride on the city’s public transit system.

These are among the drastic recommendations expected to be revealed on Monday by the Metropolitan Transportation Authority, as the beleaguered agency unveils a newly austere budget meant to address a sudden financial shortfall of more than $400 million.
...

Under the plan, service on dozens of bus routes will be cut back or eliminated, off-peak trains will run less frequently, and the W and Z subway lines will disappear, a move that includes the overnight closing of several stations along Broadway in Lower Manhattan.

Those cuts were approved late last year when the authority first faced serious financial problems. The package of service reductions seemed to be off the table after a last-minute bailout from state legislators in May, but officials expect to revive nearly all of them in the new budget being presented on Monday.

In addition, Access-a-Ride services for disabled riders would be scaled back, and free bus and subway rides for the city’s students could disappear, officials said. State and city contributions to the program have flat-lined since the 1990s, and the authority may no longer be able to afford the difference.

“To have this situation in the most transit-dependent city in the country is a complete failure of government,” said Andrew Albert, chairman of the New York City Transit Riders Council and a member of the authority’s board.

NoLandGrab: Andrew Albert is right, but where was his outrage when the MTA board (he's a non-voting member) voted to sell the Vanderbilt Yard to Bruce Ratner for a fraction of its value, and then voted to radically sweeten Ratner's payment terms? The best Albert could muster was "I am torn" at the outrageous giveaway of public assets.

Posted by eric at 11:29 AM

Today 12/14: Demonstration and Trashing of Ratner's Junk Yard Bonds

Today, December 14. Noon.

Demonstration to Protest, Expose and Trash Ratner's JUNK YARD BONDS For His Atlantic Yards Arena

Develop Don't Destroy Brooklyn

At noon today, December 14th there will be a demonstration protesting the Junk Yard Bonds New York State is about to sell for Forest City Ratner's junk arena, at great risk for New York State.

We will be selling Junk Yards Bonds.

The demonstration will conclude with a ritual dumping of the Junk Yard Bonds into a Garbage Truck—the best place for these bonds—from Willets Point, Queens (where they are also fighting eminent domain abuse).

Questions will be raised. Investigations will be asked for.

link

Posted by eric at 10:49 AM

First Person: Standing Up to Eminent Theft

The Indypendent
by Daniel Goldstein

The Empire State Development Corporation (ESDC) must commence a number of legal procedures to take title to the properties and revoke leases. The plaintiffs and DDDB will litigate these procedures every step of the way to thwart the theft of homes and businesses.

Only nine days after the Atlantic Yards decision, the Manhattan Appellate Division ruled in favor of plaintiffs in West Harlem in their challenge to Columbia University’s eminent domain abuse. This case also involves the ESDC as the condemning authority.

While a great victory for New Yorkers and the fight against eminent domain abuse, that court’s ruling contradicts the higher court’s ruling. So, the Atlantic Yards plaintiffs will ask the Court of Appeals to reconsider their case when they hear the Columbia appeal.
...

Politically there is an effort to get Gov. Paterson to follow through on a promise he made on Dec. 1 to convene an “objective” review of the project. What he should be reviewing is the labyrinthine financing structure for the project, which is a great risk to New York and its future credit rating. Should there be a default on the tax-exempt arena bond, New York State will be on the hook.

With a state debt of $57 billion, this is a risk Paterson should not take.

article

Posted by eric at 10:45 AM

Demonstration today against Ratner's bonds targets not the underwriter but the ratings agencies (which need reform)

Atlantic Yard Report

From a DDDB press release:

Join Develop Don’t Destroy Brooklyn in a Demonstration to Protest the extremely risky tax-exempt bonds New York State is preparing to sell for Ratner's arena. We will highlight S&P and Moody’s questionable bond ratings. Lacking in normal due diligence, the bond ratings were set just a “notch above junk.’ These “Junk Yards Bonds” create enormous risks for New York State, its taxpayers and the investment community, at a time when the State's budget gap is in crisis. While the Governor is making huge cuts in crucial sectors such as health and education, the State continues to back Atlantic Yards—a financial house of cards.

So, why exactly are the bonds "lacking in normal due diligence"? DDDB says to stay tuned.

And how do they "create enormous risks for New York State"? Well, maybe they do and maybe they don't.

The demonstration will take place at noon, not outside the office of underwriter Goldman Sachs but outside the ratings agency Standard & Poor's. Interestingly, S&P was somewhat more cautious than rival Moody's regarding the tax-exempt bonds; the latter took the projected 225 arena events a year as gospel, while S&P considered 220 events "aggressive."

article

Posted by eric at 10:39 AM

Times editorial on eminent domain: ESDC's determination of blight in Columbia case "thoroughly defensible"

Atlantic Yards Report

The key thing to understand about today's New York Times editorial, Eminent Domain in New York, is that, as editorial writer Carolyn Curiel has stated, "We are reasoned, in how we come to opinion. But no, it's not a democracy; it's reflective of the spirit of the Times."

So "the spirit of the Times" means that the newspaper--without acknowledging its parent company's business relationship with Forest City Ratner (in building the Times Tower) and without acknowledging how eminent domain was crucial to the construction of that building--endorses, without question, the Empire State Development Corporation's highly questionable assessments of eminent domain in the cases of Atlantic Yards and the Columbia University expansion.
...

Blight defensible?

Here's the key line:

The Empire State Development Corporation also made a thoroughly defensible decision that eminent domain was appropriate given the blighted condition of the land at issue, between 125th and 133rd Streets near the Hudson River.

That's it? No recognition of the three blight studies? The use of underutilization? The lower court's conclusion that the blight designation in the instant case is mere sophistry?

This conclusion?

ESDC failed to demonstrate any significant health or safety issues other than minor code violations that exist throughout the city, but more particularly in the buildings controlled by Columbia.

link

Posted by eric at 10:30 AM

Brooklyn Arena to Lead Tax-Exempt Sales as Similar Bond Gets 7%

Bloomberg.com
by Jeremy R. Cooke

The Barclays Center in Brooklyn, New York, leads projects seeking municipal financing this week, as developer Forest City Ratner Cos. aims to meet a year-end deadline to sell tax-exempt bonds for the new basketball arena.

Brooklyn Arena Local Development Corp., a state arm created to help finance the anchor of a commercial and residential development known as Atlantic Yards, intends to issue $500 million of tax-exempt bonds rated at the lowest investment grades. The New Jersey Nets of the National Basketball Association plan to move into the new facility in 2012.

A toll-road project in Texas that also involves public financing and private investors found buyers last week for $400 million in similarly rated tax-exempt bonds at a top yield of 7 percent. The ability of the arena developer, led by Bruce Ratner, to sell bonds exempt from federal taxes expires in less than three weeks under Internal Revenue Service rule changes.

“If it’s structured right and priced right, there’s definitely demand,” said Dan Solender, who oversees about $12.5 billion as director of municipal bond management at Lord Abbett & Co. in Jersey City, New Jersey. “I think we saw that with the deal down in Texas.”
...

The pending deal has required “a lot of analysis” by potential investors, Solender said.

article

NoLandGrab: Presumably, the Texas toll-road deal didn't involve significant overstatement of the number of vehicles that would be using the road, nor the notion that the road could potentially be retrofitted to accommodate Zamboni traffic.


Related coverage...

Field of Schemes, Nets bonds inch closer to sale

With 17 shopping days to go, the Atlantic Yards Nets arena bonds still haven't been sold, as bond issuers and buyers continue to haggle over the price. Bloomberg News speculates that $500 million in tax-free bonds could go for an interest rate of 7%, based on similarly rated bonds recently issued in Texas — this would qualify as worse than Bruce Ratner hoped, but better than he feared.

Meanwhile, the $147 million in taxable bonds that will accompany the tax-free bonds — trust me, you don't want to know why, but if you really need to, start here — have been assigned junk-bond status, which, Atlantic Yards Report notes, could carry interest rates as high as 14%. The interesting twist here is that the rumored buyer for these bonds is Nets soon-to-be co-owner Mikhail Prokhorov. Because Prokhorov would own 45% of the arena corporation that would be paying off the bonds to himself, he'd effectively be earning a 7.7% rate on his money — though given that, according to his deal with Ratner, he gets to take title to the whole arena if it defaults on the bonds, you could argue that he's effectively covered his risk in other ways.

I can't tell if this is brilliantly creative finance or a scam — but given the players involved here, that's probably about right.

Atlantic Yards Report, Municipal bond buyer on arena bonds: "there’s definitely demand" but "a lot of analysis" is required

A Bloomberg News article about the planned sale of $500 million in tax-exempt bonds for the Barclays Center arena suggests the interest rate would be 7%, the same as the interest rate for the second (and much smaller) phase of Yankee Stadium bonds and slightly above the 6.45% interest rate for the second phase of Mets stadium bonds.

(By contrast, the main bonds for both stadiums were sold in 2006 at interest rates of 4.57% and 4.7%.)

Noticing New York, To Attorney General Andrew Cuomo and State Comptroller Thomas DiNapoli: Investigate and Halt Issuance of Arena Bonds

Michael D.D. White enumerates the risky risks inherent in Bruce Ratner's arena bonds. Will the AG and the Comptroller open their mail?

The following an open letter from Noticing New York to Attorney General Andrew Cuomo and State Comptroller Thomas DiNapoli calling for an investigation and halt to the proposed issuance of ESDC’s Brooklyn Local Development Corporation PILOT Revenue Bonds for Forest City Ratner’s proposed Nets basketball arena.

Posted by eric at 10:06 AM

Limited seating capacity, spoken-for suite revenue, Goldman Sachs statement all cast doubt on major league hockey in Brooklyn

Atlantic Yards Report

With Atlantic Yards arena bond issuers hinting at the possibility of retrofitting the planned arena at Atlantic Yards for hockey, Norman Oder explores the possibility.

Perhaps the Brooklyn arena (capacity 18,282 for basketball, according to the POS) could be designed to seat a number larger than 14,000 for hockey, but that's something the Atlantic Yards developer and public parties should tell us.
...
Actually, there's no minimum capacity for NHL arenas--the key is revenue--there are reasons to doubt a 14,000-seat arena for hockey could work in Brooklyn.

Most NHL arenas seat more than 18,282, according to the Edmonton Journal. The smallest NHL arena is on Long Island, at the Veterans Memorial Coliseum, with a capacity of 16,234.

Then again, the Islanders have averaged only 10,774 fans per game over the last three seasons, according to the market study attached to the POS. And those Islanders, which have been losing a lot of money, would be the obvious candidate to move to Brooklyn.

There's more market analysis and detail in the full article.

NoLandGrab: If the issuers of arena bonds are trying to make them more attractive to prospective buyers, why aren't the developer and issuers explaining specifically how this would work? Could it be more smoke and mirrors?

Posted by lumi at 5:11 AM

Eminent Domain in New York

The NY Times
Editorial

A New York State appellate court has misguidedly put a roadblock in the way of Columbia University’s expansion plans, ruling that the state misused eminent domain to help Columbia assemble the land it needs. This decision conflicts with the relevant law and will make it much harder for the university to move ahead with a project that would benefit the surrounding neighborhood and the entire city.
...
The decision is completely out of step with eminent domain law, including a recent 6-to-1 decision from the New York State Court of Appeals, the state’s highest court. That court ruled that Brooklyn’s Atlantic Yards, a commercial development, can use eminent domain to secure land to build new housing and a basketball arena for the Nets. That was the right decision, and the case for Columbia is even stronger.

link

NoLandGrab: We'd hardly expect a newspaper whose new headquarters was built on land acquired by eminent domain to think otherwise; however, there was no mention that their building was developed and co-owned by Forest City Ratner, the developer of the "Brooklyn Atlantic Yards" project, for which the paper supports the use of eminent domain. Hmmm...

Additional...
DDDB.net, The House Organ of the Eminent Domain Abusers Opens Its Mouth Wide

Ignoring extremley damning details of the opinion against the Empire State Development Corporation's use of eminent domain for Columbia University (such as acting in bad faith, subverting due process, the production of a blight study described as "idiocy" and "sophistry"), the New York Times editorial board has produced this piece of editorial drivel below.

Never mind that New York State is not just the biggest abuser of eminent domain, but it also clearly has the worst and most developer friendly process of stealing people's properties in the entire country.

blogs.columbiaspectator.com, The New York Times criticizes recent court ruling

Posted by lumi at 4:57 AM

December 13, 2009

Atlantic Yards Reports Sunday Observations

Crain's, unsurprisingly, calls for Columbia eminent domain decision to be reversed"

Here is a reaction to this morning's Crain's editorial endorsing eminent domain abuse.

Crain's is right that the two rulings seem in conflict--though it would be possible for the Court of Appeals to uphold the Columbia decision on narrow grounds.

What Crain's doesn't grapple with is the bad faith found by the court in the Columbia case, or its finding that underutilization--a factor in the dubious blight finding for Atlantic Yards, as well--was deemed illegitimate.

Apparently Crain's thinks there's no need to reform eminent domain, especially the definition of blight, in New York State.

Brutally weird Schumer flashback: "But you know what really enervates me abut this? 10,000 jobs."

Perhaps the most brutally weird moment in the trailer (below) for the documentary-in-progress Battle of Brooklyn comes at about 2:48.

"This is a great project," declares Sen. Chuck Schumer, at the 2004 State of the Borough address, which, as the Brooklyn Paper reported, focused on Atlantic Yards. "But you know what really enervates me abut this? 10,000 jobs."

...

But the Schumer segment deserves its own footnotes. Let's put aside the fact that the Harvard-educated lawmaker doesn't know the difference between enervate and energize.

More importantly, the figure of 10,000 jobs was bogus from the start. There was no market for that many office jobs. Forest City Ratner overstated the number of jobs that could fit in the four towers planned around the arena. And it neglected to explain that most of the jobs would not be new but transferred from Manhattan.

Now only one office tower is planned. But even Bruce Ratner told Crain's last month: “Can you tell me when we are going to need a new office tower?”

NoLandGrab: What really enervates Brooklyn are the massive public subsidies for a basketball arena that will return little or no public economic benefit.

Yards foes "real land-grabbers" (back in 1967)

From the notorious Stephen Witt, in the Courier-Life, May 2008:

Anthony Taylor sat on a metal folding chair in the St. Bartholomew's Church cafeteria, 1227 Pacific Street, and recalled the days when several buildings in the Atlantic Yards footprint held jobs, "We lost 40,000 jobs back there. We lost the Daily News building. We lost the bakery, the Chunky factory, the soap factory, the box company."

The Chunky factory at 603 Dean Street, it turns out, was sold in 1967. It later housed a machine works and, most recently, a homeless shelter, now apparently doomed.

Posted by steve at 6:59 AM

A Million Little Cultural Pieces - A smattering of moments that changed the way we entertain ourselves.

This item was found in a listing of moments from the past decade.

June 4: Frank Gehry is off the Atlantic Yards development, six years after his plan was unveiled. Widely hated project now even more widely hated.

link

Posted by steve at 6:47 AM

Law should be eminently clear - The public benefit issue especially needs rethinking

Crain's

This editorial notes conflicting eminent domain rulings and calls on the New York State Court of Appeals to resolve the conflict - in favor of eminent domain.

Last month, the state's highest court ruled that eminent domain was eminently justified to remove the holdouts at the controversial Atlantic Yards project in Brooklyn. The following week, an appeals court in Manhattan ruled against the use of that doctrine in Harlem, where Columbia University is about to build a major new campus.

These two rulings are completely at odds on appropriate use of eminent domain. The Court of Appeals should take up the Columbia ruling expeditiously to clarify the law and prevent this vital project from being harmed by months of uncertainty.

Consider the two decisions, both of which center on whether eminent domain can be used to aid private developments, how the public benefit of such a project should be evaluated, and how the courts should consider disputes about whether an area is blighted, which is the legal standard in New York when someone's property is to be forcibly purchased.

This analysis of the Court of Appeals decision allowing the use of eminent domain for the proposed Atlantic Yards project leaves out the court opinion that states, that, for eminent domain: "It may be that the bar has now been set too low..."

In the Atlantic Yards case, the Court of Appeals ruled that long-established precedents allowed the use of eminent domain to aid a private development, that the public benefit required of such a project should be regarded in a broad way, and, most important, that the courts should not second-guess a state agency's decision to declare an area blighted, except in the most extreme cases.

The majority in the Manhattan appellate court seemed to ignore the direction of the state's highest court. The majority in the 3-2 decision disparaged the public benefit of the Columbia project and clearly second-guessed the blight finding in a way that would seem to directly contravene the instructions of the higher court.

Here is the kind of argument heard often from those favoring eminent domain abuse. Columbia University's need for eminent domain is supported in general, but the specific public benefits for doing so are somehow not mentioned.

The public benefit issue especially needs rethinking. Higher education represents one of the sectors that can diversify the city's economy and produce the middle-class jobs politicians are constantly saying the city needs. It now employs as many people as manufacturing. Columbia can't compete with its rivals, because it needs more space. A vibrant Columbia is crucial to the city's future.

link

Posted by steve at 6:16 AM

Public authorities reform bill signed; why is Assemblyman Brodsky not mentioning the BALDC?

Atlantic Yards Report

Assemblyman Richard Brodsky has sponsored legislation to rein in New York's Public Authorities. Although he has been critical of public financing of the new Yankees and Mets stadiums, he has held back in his criticism of the proposed Atlantic Yards project and its associated Nets arena.

From a New York Times article headlined Paterson Signs Bill to Rein in State’s Free-Spending Public Authorities:

Mr. Brodsky, who spent months battling New York City officials over the legality of public financing for the new Yankee Stadium, said that if the law had been in effect, it would have forced far more transparency on city officials as they negotiated the Yankees deal.

“Three billion dollars in taxpayer-backed debt was issued by 12 anonymous people who were essentially doing the bidding of the mayor,” Mr. Brodsky said, referring to the board of the New York City Industrial Development Agency, which issued the bonds on behalf of the Yankees, the wealthiest team in baseball.

Well, it might have forced more transparency, but it's a questionable whether it's taxpayer-backed debt. Formally, it's not; the bonds for Yankee Stadium are non-recourse bonds, backed only by the revenue or property behind it.

What about the BALDC?

So too are the $500 million in tax-exempt bonds issued--and being sold right now--by the Brooklyn Arena Local Development Corporation (BALDC).

Except BALDC officials wouldn't rule out a state bailout, only saying that it was speculation. Nicole Gelinas of the Manhattan Institute has written:

Ahead of any bond sale, Gov. Paterson and Mayor Bloomberg should make it crystal-clear, publicly and to potential investors, that no New York State or City entity will step in to make up for any shortfall in Atlantic Yards’s revenues, even if it means a bond default.

Brodsky, however, has remained far more quiet about Atlantic Yards.

link

Posted by steve at 6:05 AM

December 12, 2009

Atlantic Yards YES! Transit-riding city school kids NO!!

While the MTA is giving Atlantic Yards developer Bruce Ratner a deep discount on the Vanderbilt Yard, it's considering taking away free and discounted passes from the half-million-plus students who use transit to get to school.

NY Daily News, MTA bigwigs may cut free passes for students to ride subway and busses

The cash-squeezed MTA is considering eliminating free MetroCards for the hundreds of thousands of students who use the passes to get to school, the Daily News has learned.

Under a possible budget-saving measure, the Metropolitan Transportation Authority would charge students half-price fares next year - and full fares starting in 2011, sources told The News.

About 550,000 schoolkids get free or discounted bus and subway passes under a program the state and city once fully funded.

Meanwhile, the MTA, which had already agreed to sell the Vanderbilt Yard to Ratner for less than half its appraised value, is also allowing Ratner to defer 80% of that payment over 22 years at a sweetheart interest rate.

Here's the pot calling the kettle black:

Last night, a member of the Bloomberg administration said City Hall is upset about the student MetroCard proposal and blamed state government officials for cutting transit funding.

"We're extremely concerned about this and have serious problems," the City Hall staffer said. "We very angry with the MTA and furious with Albany for creating a situation where this option is a possibility."

The duplicitous Bloomberg, as Atlantic Yards watchers know, is one of the project's biggest backers, and his appointees to the MTA board (he has four) have approved both the lowball price and the sweetened payment terms.

And then there's the Governor:

Gov. Paterson, asked in general about MTA funding Friday in Albany, said the state has no more money to provide.

"We had to cut the budgets of all agencies and entities and still wind up ... short of our goal," Paterson said. "New York is running out of money."

There is, of course, one pile of state money that's in a lock-box — the hundreds of millions in state welfare for the Atlantic Yards project.

The Mayor and the Governor should be deeply ashamed, but all we get is business as usual. Get angry, people.

Photo: Florescu/Daily News

Posted by eric at 12:20 PM

Learning from Willets Point, Parts 1 and 2

Atlantic Yards Report

Learning from Willets Point, Part 1: an open market for "coveted" land deemed "blighted" (and what about that MTA deal?)

On Thursday night, Bob McNamara, an attorney for the libertarian Institute for Justice, suggested that, in New York, loose blight standards foster the state's use of eminent domain: "The proper word for what these properties are is not blighted. The proper word is coveted."

So it seems is the case in Willets Point, where the New York City Economic Development Corporation (NYCEDC) today announced that it has received 29 responses to its Request for Qualifications for developers or teams of developers interested in redeveloping the 62-acre Willets Point District. Next up: a Request for Proposals (RFP) some time next year.

And if 29 companies want to redevelop Willets Point, how could it be that there was no market for the Vanderbilt Yard, as Metropolitan Transportation Authority officials insist in a pending lawsuit over the agency's decision to renegotiate the deal with Forest City Ratner?

As Eric McClure of No Land Grab suggests:

Maybe it's just us, but something is not quite adding up. And it certainly would seem to add some traction to the lawsuit claiming that the MTA failed to properly carry out its fiduciary duty in its agreement to sell the Vanderbilt Yard to Forest City.

In fact, as McClure notes, the robust open market response to Willets Point, in a lousy economy, puts in perspective the recruitment of only one developer beyond Forest City Ratner, in the hot real estate economy of 2005, to bid for the Vanderbilt Yard. Hint: it was a done deal.

Learning from Willets Point, Part 2: is the Attorney General still investigating lobbying by the Downtown Brooklyn Partnership?

Just this past week we were reminded of an investigation by Attorney General Andrew Cuomo into the questionable lobbying by the Flushing-Willets Point-Corona Local Development Corporation (FWPCLDC), paid by the city to lobby for the Willets Point urban renewal plan before the City Council.

Willets Point United, a group of business owners fighting the plan and the prospect of eminent domain, noted that, despite the investigation, the LDC, led by former Queens Borough President Claire Shulman, "has not only continued its unlawful operations with impunity, but has been awarded an additional state grant in excess of $1.5 million."

The New York Times reported that the Bloomberg administration was not merely resistant to the investigation, it was downright hostile, threatening Cuomo's likely run for governor. Willets Point United warned:

If the Mayor's administration has resorted to using such tactics against AG Cuomo, there should be no doubt that it has used similarly despicable tactics against the people of Willets Point throughout the attempt to acquire their property.

The Downtown Brooklyn Partnership

In August, after a Times story on the FWPCLDC, I suggested that the Downtown Brooklyn Partnership (DBP), also funded in part by the city, had similarly tried to "influence legislation by propaganda or otherwise." I cited testimony by DBP representatives before the Metropolitan Transportation Authority and the Empire State Development Corporation.

I have no reason to think my post alerted the Attorney General's office, but, on 10/29/09, the Times reported that the investigation had in fact gone beyond the FWPCLDC:

That investigation has expanded into the activities of the Downtown Brooklyn Partnership, which the city helped create in 2006 to help push through development plans following a broad rezoning of the area.

So, is that investigation still going on? Has it been dismissed? To what extent does/did it involve the Partnership's work lobbying for Atlantic Yards?

Posted by steve at 7:55 AM

Media Alert: Demonstration Against Ratner's Junk Yard Bonds

Develop Don't Destroy Brooklyn

Save the Date
Monday, December 14. Noon.


Demonstration to Protest, Expose and Trash
Ratner's JUNK YARD BONDS
for Atlantic Yards Arena

NEW YORK, NY— At noon on Monday, December 14th there will be a demonstration protesting the Junk Yard Bonds New York State is about to sell for Forest City Ratner's junk arena, at great risk for New York State.

We will be selling Junk Yards Bonds. The demonstration will conclude with a ritual dumping of the Junk Yard Bonds into a Garbage Truck—the best place for these bonds—from Willets Point, Queens (where they are also fighting eminent domain abuse).

Questions will be raised.

It will be videogenic and photogenic.

WHAT:
Demonstration to Protest and Watchdog Ratner's Arena Junk Yard Bonds and the credit rating agencies that gave these bonds, barely, an "investment grade" rating. Call for Attorney General Cuomo and Comptroller DiNapoli to investigate the bond structure, rating and issuance.

We will be selling Junk Yards Bonds.

WHEN:
MONDAY, DECEMBER 14
12 NOON
Dumping the JUNK BONDS into the GARBAGE TRUCK about 12:45
(Garbage Truck from Crown Container, fighting the taking of Willets Point by eminent domain)

WHERE:
Standard & Poor's Offices
55 Water Street
Manhattan
[ Map ]
(2/3 to Wall St., R/W to Whitehall/South Ferry, 4/5 to Bowling Green)

WHO:
Develop Don't Destroy Brooklyn
Good Jobs New York
Citizen Watchdogs

link

Posted by steve at 7:33 AM

Paterson Signs Bill to Rein in State’s Free-Spending Public Authorities

The New York Times
By Nicholas Confessore

Governor David Paterson signs into law legislation to force public authorities, like the ESDC and the MTA, to act more responsibly. The sponsors of the bill were Assemblyman Richard Brodsky and State Senator Bill Perkins.

For the first time, board members of those authorities will have a legal obligation, known as a fiduciary duty, to protect the interests and mission of the authorities they supervise, rather than being beholden to the mayors, governors and legislative leaders who appoint them. The new law will require authorities to seek approval from the state comptroller for most contracts of over $1 million that are not competitively bid.

The Governor notes the incredible amount of debt being run up by authorities. Will he step up and do the promised review of the proposed Atlantic Yards project before it becomes an albatross for Brooklyn and the rest of New York State?

Mr. Paterson said that passing the law this year was crucial because of the state’s perilous fiscal condition, which the public authorities have added to with the enormous amount of debt they have taken on. Taxpayers have almost no say over that debt, but are ultimately responsible for it. Public authorities have between $140 billion and $150 billion in debt — significantly more than the state’s entire annual budget.

“Public authorities play a tremendous role in government,” Mr. Paterson said. “But for a very long period of time, they have operated really without any oversight and operated very much in the dark, and often have amassed crippling back-door financing that has threatened the stability of our economy.”

The MTA's part in delivering a sweetheart deal to developer Bruce Ratner is shown as an example of reckless behavior.

Under the new law, authorities, some of which have acquired significant and, in some cases, secret real estate holdings, will also face limits on the sale of real property. With some exceptions, authorities will no longer be allowed to sell real estate for below-market value, as the Metropolitan Transportation Authority did when it sold rights to build over railyards in Brooklyn to the developers of the Atlantic Yards project.

link

Posted by steve at 6:43 AM

Atlantic Yards Takes the Court

The Indypendent
By Steven Wishnia

This article begins with a review of the ruling by the New York State Court of Appeals on the eminent domain case brought against the Empire State Development Corporation, tool of developer Bruce Ratner.

Chief Judge Jonathan Lippman, writing the majority opinion, rejected both of those claims. “It is indisputable that the removal of urban blight is a proper, and, indeed, constitutionally sanctioned, predicate for the exercise of the power of eminent domain,” he held.

The suit also questioned the Empire State Development Corporation’s designation of the area as blighted, “substandard and insanitary” — a prerequisite for its redevelopment to be considered a public purpose.

Judge Lippman had somewhat more sympathy for that claim. “It may be that the bar has now been set too low — that what will now pass as ‘blight,’ as that expression has come to be understood and used by political appointees to public corporations relying upon studies paid for by developers, should not be permitted to constitute a predicate for the invasion of property rights and the razing of homes and businesses,” he wrote.

But ultimately, he concluded, economic underdevelopment and stagnation could legitimately qualify as “blight.” Whether that could justify the use of eminent domain, he ruled, “is a matter for the Legislature, not the courts.”

In dissent, Judge Robert S. Smith wrote that building offices and apartments for a private developer to rent was not a public purpose, and that “blight” meant a danger to public health and safety, not that “property may be condemned and turned over to a private developer every time a state agency thinks that doing so would improve the neighborhood.”

The article then mentions a contradictory eminent domain ruling as well as moves to begin selling bonds for the proposed Nets arena.

The eminent domain issue may still be unresolved. On Dec. 3, the state’s mid-level court, the Appellate Division in Manhattan, ruled that Columbia University could not use eminent domain to claim property in West Harlem for its Manhattanville development. The court said the neighborhood was wrongly defined as blighted.

Forest City Ratner still has to sell bonds to finance the project by end of the year in order to keep its tax exemption for them. On Dec. 1, the two major credit-rating services listed $500 million in tax-exempt bonds for the proposed arena as “investment grade” — but just barely. Moody’s Investor Services rated them as Baa3 and Standard and Poor’s as BBB -. Both ratings — the same given to bonds for the new Yankee Stadium and the Mets’ Citi Field — are the lowest a bond can get without being considered junk.

link

Posted by steve at 6:25 AM

December 11, 2009

So, the other arena bonds really are junk: $146.8 million issuance rated "B" by S&P, interest rate could hit 14%

Atlantic Yards Report

Note to Bruce: we find if you spell it J-u-n-q-u-e, it sounds classier.

After $500 million in tax-exempt arena bonds earned a Baa3/BBB- rating, one notch above junk, from the ratings agencies Moody's and Standard & Poor's, the latter has rated the $146.8 million in taxable bonds B, which is considered "very speculative."

The interest rate can go up to 14%.

From the report, which suggests caveat emptor:

Standard & Poor's Ratings Services assigned its preliminary 'B' rating to BAHC's $146.8 million senior secured notes that mature in 2017. We assigned a recovery rating of '6', indicating that lenders will realize between 0% and 10% recovery of their principal in a default scenario. The outlook is stable. The notes are secured by distribution payments from [Brooklyn Events Center].

(Emphasis added)
...

The bonds will be issued by the Brooklyn Arena Holding Company, which is a subsidiary of Brooklyn Arena LLC and owned by an investor group headed by Bruce Ratner of Forest City Ratner.

Prokhorov the buyer?

These taxable bonds may be bought by Mikhail Prokhorov, slated to own 80% of the Nets and 45% of the arena company, according to Project Finance magazine; if so, and there's not enough revenue from the project to make the bond payments, he'd fully control the arena.

link

Posted by eric at 4:42 PM

Vanderbilt Yard NO?! Willets Point YES??!!

OK, so let us get this straight.

In 2005, with New York City riding the crest of the real estate boom, the Vanderbilt Yard, which Forest City Enterprises CEO Chuck Ratner has called "a great piece of real estate," was put up for bid by the MTA — and it drew exactly two bids, one from pre-ordained developer Forest City Ratner Companies and the other, after an exhaustive effort by Develop Don't Destroy Brooklyn, from Extell Development.

Fast forward to 2009, smack in the depths of the worst commercial real estate slump in years, and NYC's request for expressions of interest in the 62-acre Willets Point site draws... 29 responses!!!

But didn't MTA Chief Financial Officer Gary Dellaverson just recently assert in an affidavit that "it is remarkable that MTA was able to negotiate a revised proposal" for the Vanderbilt Yard with Forest City Ratner, whereby it reduced Forest City's closing payment from $100 million to $20 million, with the balance payable over 22 years at a generous interest ratewithout conducting a new appraisal or seeking alternate bids???!!!

Maybe it's just us, but something is not quite adding up. And it certainly would seem to add some traction to the lawsuit claiming that the MTA failed to properly carry out its fiduciary duty in its agreement to sell the Vanderbilt Yard to Forest City.

Crain's NY Business, Developers line up for Willets Point project

Twenty-nine groups express interest in reviving the 62-acre area, in what the city says is a positive sign amid difficult economic conditions.

Twenty-nine groups responded to the city's request for qualification expressing their interest in reviving the 62-acre area, the city's Economic Development Corp. announced Friday. The identity of the respondents was not disclosed, however, responses came from “a variety of commercial, residential and mixed-use developers across the U.S.,” the EDC said.

“The quantity and quality of these responses are strong indicators that the development community has confidence in the successful redevelopment of Willets Point despite current economic conditions,” said EDC President Seth Pinsky, in a statement.

The request for qualification was issued in October. The EDC will evaluate the respondents and narrow down the list of potential developers for the site before releasing a request for proposal some time next year, according to a spokeswoman. No time frame has been set. “We will try to move as quickly as possible, but we will do our due diligence,” she added.

Additional coverage...

The Real Deal, Willets Point draws developers' bids

The New York City Economic Development Corporation received 29 preliminary proposals from developers for the potential 62-acre Willets Point District redevelopment project in Queens, according to an announcement released today. Seth Pinsky, president of the EDC, said that the panel is enthusiastic about the proposals received for the project, which will include 5,500 residential units and will create 18,000 construction jobs.

Posted by eric at 4:13 PM

Nets still on track for Brooklyn

NYPost.com
by Peter Vecsey

What in the good name of Sharpe James is going on here?

Seems a truce is in the works between New Jersey's two major sports arenas -- the Izod and Prudential centers -- in an effort to keep the Nets from exiting the Garden State.

The two venues would form a ven ture called Jersey Presents, with the Nets and Devils playing in Newark, and concerts, circuses, etc., playing exclusively in East Rutherford.

Sounds good except for one nitpickin' nuisance -- the Nets are Brooklyn-bound.

article

NoLandGrab: Vecsey goes on to opine that the Nets' move to Brooklyn is a foregone conclusion, which it still ain't, of course, but one does have to wonder — what does New Jersey Devils owner and Prudential Center principal Jeff Vanderbeek know that we don't? He's trading concerts and family events for the Nets, which could be a short-term proposition — or maybe not?

Posted by eric at 3:56 PM

Battle of Brooklyn film prompts discussion of fighting eminent domain, New York's unfair laws, and "strange bedfellows" in the struggle

Atlantic Yards Report

AYR film critic Norman Oder was at last night's screening of Battle of Brooklyn.

If last night was an example, the Atlantic Yards documentary Battle of Brooklyn is sure to spark a lot of discussion. A screening of just a half-hour of the film-in-progress was held last night at New York University’s Cantor Center, and the audience—a mix of those interested in Atlantic Yards, eminent domain, and film—had a lot of questions for the panel set up afterwards.

Among the issues:
--why Daniel Goldstein, a protagonist in the film and the spokesman for Develop Don’t Destroy Brooklyn (DDDB), chose to stay in his apartment rather than take a seemingly generous buyout (short answer: principle)
--why it’s tough to win eminent domain challenges in New York state and how it might change (short answer: structural bias in favor of condemnors, but a spotlight on bad practices has emerged)
--how people on the left feel about alliances with the libertarians of the Institute for Justice (IJ), leader of the national fight against eminent domain (short answer: fine, and maybe liberals who support eminent domain should think again)

Click through for video clips and photos of the discussion that followed the screening, highlights from the film and the panelists, and to find out how many thumbs — up or down — Oder gives Battle of Brooklyn.

article

Posted by eric at 11:50 AM

VICTORY DEMONSTRATION AND MARCH ON PRESIDENT BOLLINGER’S 116TH ST. MANSION

Coalition to Preserve Community

Saturday, December 12th at 12 Noon
Rally starts in front of Floridita Restaurant (125th St. & Broadway).
March to Bollinger’s Mansion 12:30 PM.

New York State Supreme Court (Appellate Division) Rules in Favor of West Harlem Against Columbia University’s use of Eminent Domain! The court determined the approval of eminent domain to benefit a “private elite educational institution” violates the U.S. and N.Y. State Constitutions.

COMMUNITY TO BOLLINGER: DON’T APPEAL THIS DECISION, DROP EMINENT DOMAIN, RESPECT THE COMMUNITY PLANNING PROCESS

Posted by eric at 11:42 AM

EMINENT DOMAINIA

Columbia Spectator, The illusion of competing interests

In an opinion piece, two members of Columbia University's Student Coalition on Expansion and Gentrification argue that even by NY State's high court's narrow standard upholding the findings of blight in the Atlantic Yards case, the recent decision, finding for the property owners in West Harlem, should still stand, due to corruption on behalf of the university.

AntonNews.com, Eye on the Island

An opinion piece gets something right and something wrong:

Should the NBA’s New Jersey Nets relocate to Brooklyn, history will record their first victory of the 2009-2010 season came in a courtroom, rather than on a court.
...
The property-owning holdouts within a two-plus block area that is narrowly defined within the Court’s decision will now be required to sell their land to the ESDC, at rates reflecting current market value.

NoLandGrab: It's been widely reported that property owners have been offered wa-a-ay less than market rate.

Posted by lumi at 6:12 AM

Tax-Exempt Muni Bond Sales Rise 64%, Led by More Refinancing

Bloomberg.com
By Jeremy Cooke

The following, which originally ran on December 9, is from an article under a list of upcoming bond issues:

BROOKLYN ARENA LOCAL DEVELOPMENT CORP. intends to issue $500 million of tax-exempt bonds to help finance construction of a new facility in New York City for the New Jersey Nets, which set a National Basketball Association record this month for the worst start to a season. The debt, rated at the lowest investment grades by Moody’s and Standard & Poor’s, will be backed by payments in lieu of property taxes, known as Pilots, derived from arena revenue. Forest City Ratner Cos. is developing the arena, Barclays Center, as part of the Atlantic Yards project in the city’s most populous borough. Underwriters led by Goldman Sachs and Barclays Plc are marketing the bonds, which need to be sold by year-end to meet a deadline for tax- exemption rules. (Updated Dec. 9)

article

NoLandGrab: Unmentioned in all of the bond documentation is the fact that developer Forest City Ratner just delayed a $5 million mortgage payment while the loan is being renegotiated.

Posted by lumi at 5:59 AM

Congratulations Bruce

Courier-Life Publications, Condo critics not ready to welcome city control of park By Joe Maniscalco

Congratulations Bruce Ratner, your Atlantic Yards mega-disaster is now the gold standard for projects lacking public input.

This recent update on the Mayor's move to take over the muddled and misguided Brooklyn Bridge Park project features NYC Parks Commissioner Adrian Benepe on crack:

Benepe elicited audible moans and groans when he suggested “Many parks are boarded by very tall housing.”

“That’s just the nature of parks,” the commissioner offered. “The housing is at the edge of the site and it’s always been intended that way. That’s just the way it is.”
...
On Monday night, Benepe dismissed the creation of a Brooklyn Bridge Park conservancy as another possible source of funding for the fledgling project saying the area “lacks a concentration of wealth” needed to sustain the park.

Critics, who say they have advocated for a new public park on the waterfront for years but now feel they are being cut out of the official government planning process, also expressed displeasure with a new governance model for the park that envisions the formation of a community advisory committee made up of appointees by local elected officials to help steward the park’s further development.

They point to Atlantic Yards as an example of a major development project proceeding without any meaningful input from the public.

NoLandGrab: Emphasis ours, the delusional comments from Benepe were all his.

Though we're not in the Brooklyn Bridge Park blogging business, it's worth noting that Benepe didn't give any examples of tall buildings actually IN THE PARK and that if there is enough concentration of wealth to fund the local advocacy for the park (i.e. public information campaigns, lawsuits, etc.), surely is enough money floating around to fund a "concervancy."

Posted by lumi at 5:35 AM

December 10, 2009

Atlantic Yards YES! Brooklyn's 237 stalled building projects NO!!

New York State has one set of rules for Bruce Ratner and another set of rules for everybody else.

Crain's NY Business, Stalled construction site total hits 515

Brooklyn is hardest hit borough, followed by Queens; further stalled projects are unlikely as work has to start in order to be halted.

Construction work has halted on 515—mostly residential—properties across the five boroughs according to the latest analysis of the city's Department of Buildings inspection records. Hardest hit is Brooklyn.

Nearly half, 46%, of the stalled projects citywide are in Brooklyn according the New York Building Congress, which conducted the analysis. Northern Brooklyn neighborhoods such as Williamsburg and Greenpoint, which had seen a housing boom in the years leading up to the market collapse, have the most stalled projects, making up 30% of the 237 sites in the entire borough.
...

Since the city DOB began tracking stalled construction sites weekly in July, the total has increased by 30% as of Nov. 29. The good news is the numbers aren't expected to worsen because there aren't too many new projects in the ground, said Mr. Anderson. “You need them to get started before they can be stalled,” he noted.
...

“To have all these sites just sit there is not encouraging. They do not generate jobs and tax revenues,” said Mr. Anderson. “There is a great deal of construction activity throughout the city that can hopefully be unleashed with the right kind of programs.”

NoLandGrab: That's right, folks. With literally hundreds of residential development projects — many of which could be converted to affordable housing — sitting idle and incomplete, the Empire State Developerment Corporation is pouring all its efforts into breaking ground for a basketball arena. And no, that's not a typo.

Posted by eric at 9:21 PM

Plaintiffs in Atlantic Yards eminent domain lawsuit ask Court of Appeals to reopen case given appeal in similar Columbia case

Atlantic Yards Report

Like a kindly teacher who gives a failing student an opportunity to re-take a test, the plaintiffs in the Atlantic Yards eminent domain case are willing to give the New York State Court of Appeals a second chance to get things right.

In an unusual, long-shot effort to reopen a case seemingly closed, attorneys for the plaintiffs--nine residential and commercial property owners and tenants--in the Atlantic Yards eminent domain litigation are asking the Court of Appeals to take a second look.

Why? A lower court's ruling against the use of eminent domain case for the Columbia University expansion will force the Court of Appeals to revisit the Empire State Development Corporation's (ESDC) application of allegedly arbitrary blight standards.

"We do not bring this motion for reargument lightly," said attorney Matthew Brinckerhoff in a press release from Develop Don't Destroy Brooklyn, which has organized and funded the lawsuit. "But this is an extraordinary situation. It's not every day that a court rules that the ESDC has conspired with an influential private party to violate the constitutional right to property."

"Given the Columbia and Atlantic Yards rulings, no one knows whether their property is now vulnerable to the ESDC engaging in the same pattern," he said. "We need clarity concerning the ESDC's fraudulent abuse of the ‘blight' issue. The ESDC has been unmasked as a serial eminent domain abuser. We've reached a tipping point where that agency's actions regarding condemnation have lost all legitimacy."
...

Potential results

1) The motion could simply be rejected.

2) It could be accepted, and the 3-2 decision in the Columbia case--known as Kaur--could be overturned, based on the decision in the Atlantic Yards case, which gave seemingly unlimited authority to the ESDC to decide on blight. (That's what Greg David of Crain's thinks.)

3) It could be accepted, and the Columbia case could be upheld, but on narrow grounds, such as bad faith--the ESDC's use of three separate blight studies--not available on the AY case. That would leave the ESDC to proceed with condemnation.

4) Or it could be accepted, and the Court of Appeals could uphold the Columbia case on broad grounds, declaring the blight standard to be vague and its application improper. That's what the Atlantic Yards plaintiffs are hoping for.

article


Additional coverage...

NY Observer, After Columbia Decision, An Atlantic Yards Appeal to Top Court, Again

As promised, opponents of Bruce Ratner's planned $4.9 billion Atlantic Yards project are litigating once again.

Following a surprise court decision last week that ruled as unconstitutional the use of eminent domain for Columbia University's West Harlem expansion, opponents of the giant Brooklyn development today appealed again to the state's top court.

Click through to see the motion.

Brooklyn Daily Eagle, Eminent Domain Issue Not Dead?

Posted by eric at 9:09 PM

FCE executives say Atlantic Yards is on schedule, bond details, sale next week

Atlantic Yards Report

Norman Oder listened in on today's Forest City Enterprises earnings call.

In a conference call today (webcast) with investment analysts, Chuck Ratner, CEO of Forest City Enterprises, parent of Forest City Ratner, expressed optimism about the Atlantic Yards project and said more details on the terms for the arena bonds would emerge “by the end of next week.” Another executive said bonds would be sold by early next week.

“In summary, we have several things yet to accomplish, and we fully expect to close this project by the end of the year,” Ratner said. “We are in a position to close because we have achieved some major milestones. The first was a letter of intent with an affiliate of Onexim Group, an affiliate of an international private investment fund, to create a strategic partnership for the ownership of the Nets and the development of the Barclays Center arena. This influx of new global capital is strong sign that others also see a value creation opportunity that we see in this great project.”

Other might say that Russian tycoon Mikhail Prokhorov—a big basketball fan--got a very good deal.
...

Capital investment

FCE CFO Bob O’Brien at one point acknowledged that there is a significant investment that needs to go into Atlantic Yards as it goes forward.

An analyst asked, "Can you give an update on the arena... and expectations of capital investment in the project?"

Forest City Ratner President Joanne Minieri responded, “As Chuck mentioned, we are anticipating to close on the Atlantic Yards and the Brooklyn arena by the end of this year. We had always anticipated the necessary equity, which would in the neighborhood of around 200 million dollars, primarily in connection of the land and infrastructure… I think, overall, all of our targets are being met, and we continue to proceed accordingly for the year-end close. We’re out in the market, as you probably heard, on the bonds… and we expect to have them sold early next week. So, with that, I think, overall, the project is pretty much moving as we planned.”

Click through for some Forest City obfuscation on its missed Atlantic Yards mortgage payment and the big arena-naming-rights price cut.

article

NoLandGrab: Yup, the "project is pretty much moving" as Forest City planned, with the arena on target to open in 2006 2007 2008 2009 2010 2011 2012(?).


Additional coverage...

Crain's Cleveland Business, Forest City Enterprises CEO says market's worst 'may be behind us'

While noting challenges aplenty face real estate companies, Charles Ratner, president and CEO of Forest City Enterprises Inc. (NYSE: FCEA, FCEB) said today in a conference call with analysts that “the most difficult stretch may be behind us” in adapting to the recession and real estate credit crunch.
...

While some economic reports show the recession ebbing, Mr. Ratner said that is “difficult to see” in the real estate business. He noted the company was unable to sell a portfolio of properties it was marketing to increase its cash position.
...

The company also is pursuing federal stimulus funds for energy projects; allocations of federal New Market Tax Credits, which give investors a tax credit for investing in low-income areas; and public infrastructure projects that benefit its properties, such as a new interchange at its Stapleton mixed-use project in Denver.

Posted by eric at 6:59 PM

Eminent Domain: The Taking of Private Property for Public Use – An Examination of Recent New York State Decisions in Light of Kelo v. City of New London

Stroock.com
by Ross F. Moskowitz and Joon H. Kim

In the last month, New York courts have issued two important decisions regarding the use of eminent domain/condemnation powers. The first was the November 24, 2009 decision by the Court of Appeals of the State of New York in In the Matter of Daniel Goldstein v. N.Y.S. Urban Development Corp., in which the court upheld the exercise of eminent domain powers in the Atlantic Yards area of Brooklyn, New York to acquire private property for future development by a private developer. In the second, In re Parminder Kaur v. N.Y.S. Urban Development Corp., the First Department held on December 3, 2009 that the taking of private property in the Manhattanville area of West Harlem, New York for use by Columbia University was improper.

This Stroock Real Estate Practice Group Special Bulletin looks at these two decisions in light of Kelo v. City of New London, a landmark decision in which the U.S. Supreme Court upheld the taking of private property to effectuate an economic development plan.
...

Perhaps the most significant difference is that in In re Parminder Kaur, the finding of blight was made after the selection of the private party receiving majority of the benefit of the condemnation, whereas in both Kelo and In the Matter of Daniel Goldstein, the finding that the area was blighted and in need of economic redevelopment was made before the private developer was selected.

link

Download article in PDF

NoLandGrab: That analysis of the differences in the cases is just plain wrong. No part of the Atlantic Yards footprint south of the railyard was ever declared blighted prior to Ratner's ID'ing the land he wanted, and blight was never put forth as a justification for the Atlantic Yards project until after the Kelo verdict was rendered. The problem is that Ratner's arena wouldn't fit in the portion of the site that was previously designated part of the Atlantic Terminal Urban Renewal Area.

And as far as ATURA is concerned, the fact that nearly four decades elapsed between its designation and the hatching of Ratner's Atlantic Yards scheme should just maybe call the whole thing into question, no?

Posted by eric at 6:37 PM

It came from the Blogosphere...

Reason Hit & Run, Will New York's Highest Court Re-Hear the Atlantic Yards Case?

As I discussed last week and as Jacob Sullum discussed yesterday, last week’s appellate court ruling against Columbia University’s eminent domain abuse stands in stark contrast to last month’s decision by New York’s highest court upholding a very similar eminent domain taking on behalf of the Atlantic Yards stadium project in Brooklyn. But if it was illegal for the Empire State Development Corporation (ESDC) to condemn private property on Columbia’s behalf based on a highly spurious designation of “blight” (which the court rightly denounced as “sophistry” and “idiocy”), why is it acceptable for the same state agency to use the same idiotic “blight” standards to condemn private property on behalf of real estate tycoon (and ACORN sugar daddy) Bruce Ratner?

That’s precisely what the Atlantic Yards plaintiffs would like to know. So they’ve filed a motion today asking for a rehearing in light of the lower court’s harsh judgment against Columbia and ESDC.

The Brooklyn Blog [NY Post], Atlantic Yards opponents hoping Columbia case blocks state land grab

It might be a long shot, but for opponents of Brooklyn’s Atlantic Yards project it’s at least, um, a shot.

Project opponents today asked the state Court of Appeals to reconsider its Nov. 24 ruling that allows the state to use eminent domain to seize private land for developer Bruce Ratner’s $4.9 billion development in Brooklyn that would include a new arena for the Nets.

Opponents are looking to piggyback off a Dec. 3 appellate panel ruling that shot down another Empire State Development Corp. eminent domain plan – one to seize private land for a Columbia University expansion. They also want the Court of Appeals to delay ruling on the new motion and appeal until it rules on the Columbia eminent domain case, which it will hear in 2010.
...

ESDC spokeswoman Elizabeth Mitchell said, "We have not yet seen the Atlantic Yards motion for reconsideration and therefore cannot comment upon it. We don’t comment on pending court matters, but ESDC is confident that we will move forward with development as planned and will accomplish the goals of this important project."

Reason Hit & Run, Daniel Goldstein on Blurry Blight Lines

Over at The Huffington Post, Daniel Goldstein, co-founder of Develop Don't Destroy Brooklyn, mocks the "blight" definition used by the Empire State Development Corporation to condemn property coveted by developers like Bruce Ratner....

WyBlog, Government steps in to prevent lower sports and entertainment ticket prices

We suggested earlier today that, if built, the Bruce Ratner's Barclays Center arena would likely enter into cutthroat competition with Madison Square Garden, the Prudential Center and the Izod Center, but New Jersey blogger Chris Wysocki points out that politicians are on hand to protect consumers from the benefits of competitive market forces.

There are two competing sports arenas in North Jersey. The old Izod Center at the Meadowlands is home to the hapless NJ Nets (at least until Bruce Ratner moves them to Brooklyn) and the new Pru Center in Newark is home to the NJ Devils hockey team. Both arenas compete for concerts and other entertainment events. For example, I recently took Sophie to see Miley Cyrus at the Pru Center and we had a great time.

Outgoing Governor Jon Corzine has now brokered a "deal" to end the competition between the two arenas. In this "deal" all sports would move to the Pru Center and all concerts and entertainment would be hosted at Izod Center. Why? Because the competition for events was driving down ticket prices!
...

So let me get this straight. We have 2 venues, each working to bring the best events to our area. They compete based on price, and presumably that means lower ticket prices for the fans.

Government bureaucrats see this as a bad thing. And their "solution" is to have both arenas collude to fix the prices — no more competition — and add a new surcharge to the mix! Everybody wins! Well, except of course, those of us who actually buy the tickets. We get hosed.

Rocky Sullivan's Pub Quiz via Only the Blog Knows Brooklyn, Greetings from Scott Turner: Curmudgeonly Perspectives

Rocky Sullivan's Quizmaster Scott M.X. Turner anoints some holiday weasels.

Weasel Time, it is, then...

Kiki Weaselweghe
The new coach of Bruce Ratner's 2-19 New Jersey Nets took over for his hapless predecessor, Lawrence Frank, when the team was 0-16 -- one game shy of tying the NBA record for most-consecutive losses to start a season. A really dubious record that melds perfectly in Ratner's malfeasant professional acumen.

Except Weaselweghe didn't take over immediately. Claiming he wasn't ready -- and that his Cyrano assistant coach Del Harris (who, unlike Weaselweghe, has NBA head-coaching experience) wasn't either -- Weaselweghe let sad-sack assistant Tom Barrise coach the Nets to their record-tying 17th loss and record-breaking 18th loss. It's Barrise's name, not Weaselweghe's, on the record now. Weaselweghe and Harris took over the following game.
...

WeaselESDC
Even though court cases remain, even though Bruce Ratner doesn't have the funding or the properties, even though the Atlantic Yards' flimsiness makes a house of cards look like Fort Knox, even though there are no plans for affordable housing or real numbers of jobs except for "hey, we'll get around to it, back off!," the WeaselESDC is forging ahead with evictions of residents and property owners in the Atlantic Yards footprint. Indications are that eviction letters will be posted on Christmas Eve.

Posted by eric at 5:57 PM

Questioning Manhattanville

The Eye [Columbia Spectator]
by Amanda Cormier

Columbia Real Estate Law Professor Michael Heller weighs in Columbia eminent domain vs. Atlantic Yards eminent domain.

How will the recent Atlantic Yards decision affect the appeal?

The Atlantic Yards decision was by this higher court. It came out just recently and was essentially the same issue, and it went the other way, in a 6-1 vote. What that suggests to me—the intermediate decision going the other way, although it has very similar facts and very similar legal issues—is that it doesn’t have the deepest legal grounding. It seems to run against New York law, which is the Atlantic Yards decision, and federal law, which is the Kilo [sic] case of a few years ago.

What are the odds the Supreme Court would rule on this case?

You can never know the odds of the outcome of a particular case. If you look at the Atlantic Yards decision, it suggests that the highest New York court reads New York law consistent with federal law in this area, which would tend toward allowing use of eminent domain in this very ordinary example of it. But that said, you never know if they’ll want to change their understanding of the law. All eminent-domain cases are very fact-specific.

article

NoLandGrab: Except sometimes those facts are made up, as in the "facts" put forth by the Empire State Development Corporation.

Posted by eric at 5:37 PM

DDDB PRESS RELEASE: Atlantic Yards Eminent Domain Plaintiffs Request Reargument in Court of Appeals

Ask Court to Hold Decision on Request Until It Decides Columbia Case

Eminent Domain Ruling Against ESDC/Columbia Gives New Life to Brooklyn Owners and Tenants Fighting to Save Their Homes and Businesses

BROOKLYN, NY — The Atlantic Yards eminent domain issue will not go away. The legal fight against the Empire State Development Corporation's use of eminent domain to seize Brooklyn homes and businesses so developer Forest City Ratner can build a private arena and luxury condominiums continues.

Today plaintiffs in the Atlantic Yards case (Goldstein et al v. NY Urban Development Corp.) are asking the Court of Appeals to reconsider its November 24 decision, and specifically requesting that the Court hold any final decision on today's motion and appeal until the Court rules on the Columbia eminent domain case, which it will hear early next year.

The Appellate Division, First Department's, December 3rd ruling (Kaur v. NY Urban Development Corp.) in favor of property owners found that the Empire State Development Corporation engaged in a scheme to seize their properties by eminent domain for Columbia University's expansion plan. The ruling is the first to date that has exposed the ESDC's illegal activity and it has created confusion in New York's courts regarding eminent domain and "blight."

"We do not bring this motion for reargument lightly. But this is an extraordinary situation. It's not every day that a court rules that the ESDC has conspired with an influential private party to violate the constitutional right to property" said Matthew Brinckerhoff, an attorney representing the Brooklyn plaintiffs. "Given the Columbia and Atlantic Yards rulings, no one knows whether their property is now vulnerable to the ESDC engaging in the same pattern. We need clarity concerning the ESDC's fraudulent abuse of the ‘blight' issue. . The ESDC has been unmasked as a serial eminent domain abuser. We've reached a tipping point where that agency's actions regarding condemnation have lost all legitimacy."

The Columbia ruling, in stark contrast to the Atlantic Yards ruling only nine days prior, presents an extraordinary and compelling situation warranting reargument in the State's high Court. The ESDC's blight determination in the Columbia case was thrown out in a 3-2 decision that deemed it to be nothing more than "sophistry" and "idiocy." The post-hoc justification of blight to allow for what is an impermissible private taking of private property by ESDC, is the same in both cases. There is no common understanding or standard criteria used by ESDC and its blight consultant AKRF—in each case paid by the developers—to determine what "blight" is.

The ESDC in furtherance of Columbia's scheme and Forest City Ratner's scheme, found so-called "blight" precisely where the university and Ratner asked them to, and found it years after each had introduced their plans to remove neighborhoods for their benefit.

The situation now is that "blight" means whatever the agency and its consultant, on behalf of private developers, says it means.

The motion papers can be found at: http://www.dddb.net/eminentdomain
They will be posted in the early afternoon.

Posted by eric at 12:33 PM

Not a slam dunk

Knicks lose most valuable NBA team title

NY Post
by Paul Tharp

Billionaires aren't getting the bang they once did from owning a basketball team -- particularly the Knicks and the Nets.

The Dolan family's pride got hit hard yesterday, as their beloved basketball team toppled from its long-held position as the NBA's most valuable and highest-grossing team, according to Forbes magazine's annual rankings.

Hey, at least they had a high place from which to tumble.

Across the Hudson River, Bruce Ratner's New Jersey Nets languished near the bottom of the rankings for the second year in a row.
...

Generally speaking, it wasn't a good year for team owners. The average value of an NBA team fell for the first time in 11 years of Forbes' rankings, sliding 4 percent to $367 million.

Forbes blamed the recession and high ticket prices -- averaging $50 a seat -- for declining sales and attendance. Twenty-one teams saw their values decrease since last year.

article

Posted by eric at 11:50 AM

Possible Truce Between New Jersey Arenas Could Come at a Cost to Fans

The New York Times
by Ken Belson and David M. Halbfinger

New Jersey sports and music fans could soon have to pay a surcharge to see Devils and Nets games and concerts. A complex deal is being brokered to end a landlord-tenant dispute as well as a price war between the arenas at the Meadowlands and in Newark, according to multiple people involved in the negotiations.

The two arenas, the aging Izod Center at the Meadowlands and the Prudential Center in downtown Newark, have been undercutting each other to attract bands and other acts since the Prudential Center opened in 2007, state officials say.

But don't worry, prospective buyers of Brooklyn arena bonds — surely the Barclays Center and Madison Square Garden wouldn't undercut each other to attract bands and other events. Those revenue projections (which overstate the potential number of events) are as rock-solid as all of Bruce Ratner's other promises.

To end the fight, Jerold L. Zaro, Gov. Jon S. Corzine’s economics czar, has brokered a deal to move the Nets to the Prudential Center, cementing the privately run building as the dominant indoor sports venue in New Jersey. It would in turn cede many of its nonsports events — rock concerts and family shows like the Ice Capades — to the Izod Center, which would become an entertainment hub.

article

NoLandGrab: And what happens if the Nets really do move to Brooklyn? The Prudential Center is left holding the bag, a new deal with the Izod Center likely gets struck, and both arenas will discount even more to lure acts away from MSG and Brooklyn.

Additional coverage...

Atlantic Yards Report, Temporary (at least) move of Nets to Newark gets closer, as Izod-Rock deal emerges

What about the Nets?

But it's the Rock that would have the iffy tenant:

The Nets, who have been losing tens of millions of dollars a year, would avoid paying a $7.5 million penalty to the Izod Center for breaking their lease to move to Newark. They would also pay a significantly lower per-game rental fee, and earn a share of suite revenue they generate at the Prudential Center. The Devils and the Nets would also sell ticket packages together. New Jersey officials, who hold out hope that the move to Newark’s gleaming arena could help keep the Nets from moving to Brooklyn in 2012, said a performance clause in the proposed deal would require that the team spend minimum amounts on player salaries and marketing as long as they remain at the Prudential Center.

Nets officials said they wouldn't comment on a possible Newark move until bonds for the Brooklyn arena are sold--expected this month.

Posted by eric at 11:06 AM

ESDC responds to Perkins letter on eminent domain: Appellate Division was wrong on Columbia, appeal will continue, AY not impacted

Atlantic Yards Report

Governor David Paterson's office says that it defers to the Empire State Development Corporation (ESDC) to respond to state Senator Bill Perkins' call for a moratorium on the use of eminent domain, and the ESDC says its response remains the same as last week:

ESDC believes the decision of the Appellate Division, First Department in the matter of the Columbia University Manhattanville Campus to be wrong and inconsistent with established law, as consistently articulated by the New York State Court of Appeals, most recently with respect to ESDC's Atlantic Yards project.

ESDC continues to fully support this project. The expansion of one of New York’s oldest educational institutions will enhance the vitality of both the University and its neighboring West Harlem community, while meeting the long-term needs of its residents.

This recent ruling does not impact Atlantic Yards, and ESDC intends to appeal the decision.

link

Posted by eric at 11:02 AM

A minimum of 10 community events vs. a maximum of 10 events; how FCR frames the same arena pledge differently for community groups and bond buyers

Atlantic Yards Report

Norman Oder catches Bruce Ratner talking out of both sides of his mouth, as the Atlantic Yards developer and NJ Nets owner signs off on one promise to supporters in the Community Benefits Agreement (CBA) and but seeks to reassure potential bondholders otherwise.

When it comes to making the Atlantic Yards arena available to community groups, Forest City Ratner has promised those groups at least ten events a year, but it has told potential bond buyers that ten times is a maximum.

Also, in a seeming contradiction, it has told community groups the arena would be made available at a discount, but it told bond buyers it wouldn't.

The Empire State Development Corporation's (ESDC) Final Environmental Impact Statement (FEIS) for the Atlantic Yards project states in Chapter 1, Project Description:

The arena is expected to host approximately 225 events per year. Of these, a minimum of 10 events would be made available for use by community groups at a reasonable cost (generally the cost of operation) with any net proceeds to the sponsor from these events to be donated to not-for-profit organizations.

That's pretty much the same as what's in the Community Benefits Agreement (CBA), which states:

(1) Events. The Arena will be available to Community groups for at least ten (10) events per year, at a reasonable rate, with net proceeds from such events to be used to support non-profit community organizations.

However, there's something else in the Barclays Center Project Preliminary Official Statement prepared by Goldman Sachs, (G-4, or p. 298 of the PDF) :

Tenant shall make the Arena available to ESDC or its designee for use as a venue for civic, cultural, social or other events as requested by ESDC, not to exceed ten (10) events in any lease year, which access shall be on the same terms, including cost, as the Arena is generally made available to other Persons for use.

article

NoLandGrab: So to fulfill his obligation to his CBA supporters and to stay on track with bondholders, Bruce Ratner would have to rent out the arena for exactly 10 events at the "reasonable rate" of exactly what everyone else has to pay.

You'd think that CBA signatories would be peeved, but since they're funded by Ratner, they seem to have little recourse other than continue their unwaivering support to the end.

Posted by lumi at 6:25 AM

NBA Valuations: The Business Of Basketball

Forbes
By Kurt Badenhausen, Michael K. Ozanian and Christina Settimi

Teams like the Indiana Pacers, Minnesota Timberwolves and New Jersey Nets were forced to slash ticket prices to lure fans to games in the midst of a recession.

Leading the pack of "franchises... reeling from bad management more than a sour economy" are:

...the New Jersey Nets, whose owner, Bruce Ratner, made the brilliant announcement after he bought the team in 2004 that he wanted to move them to Brooklyn as soon as he got a new arena. Talk about losing fans in a hurry. The Nets handed out 5,200 comp tickets per game last season to try and get fans to show up at their current home, the Izod Center. The Nets set an NBA record by losing their first 18 games this season and will not get a new arena in Brooklyn until at least 2011, if they ever do. The Nets are now worth $269 million, $31 million less than what Ratner paid.

article [Click graphic to enlarge.]

Atlantic Yards Report Forbes: Nets value keeps declining, 5200 free tickets a game distributed

The value of the Nets keeps declining, and an astonishing number of free tickets are being distributed.
...
Last year, according to Forbes, the team was worth $295 million, down from $325 million the previous year. The Nets are again ranked 26th out of 30 in value.

The Nets' debt/value ratio, last year a league-leading 71%, is now up to 77%.

If they are distributing 5200 free tickets a game--a number new to me--that's more than one-quarter of the house. (Ticket revenue last year went down 29%.)

Maybe that's part of why the team could give only 15% of total tickets away in the planned Brooklyn arena without incurring a license fee.

NoLandGrab: Remember that Nets CEO Brett Yormark touted, last July, that the Nets were "having one of the best off-seasons that we've had in years," which leaves us to wonder how things might look if the off-season had gone poorly.

Posted by lumi at 5:49 AM

December 9, 2009

Pol says Columbia case should halt Atlantic Yards

The Brooklyn Blog [NY Post]
by Rich Calder

Is this the last hope for Atlantic Yards opponents?

State Sen. Bill Perkins (D-Manhattan) is asking Gov. Paterson not to appeal a recent court ruling blocking the use of eminent domain for Columbia University’s expansion and to order "a statewide moratorium" on the use of the controversial land-grabbing procedure.

Such a move would obviously affect developer Bruce Ratner’s Atlantic Yards project in Brooklyn, which the Paterson-controlled Empire State Development Corp. is expected to begin seizing private land for through eminent domain in the coming weeks.

But the ESDC isn’t caving in. A spokeswoman said the ESDC plans to appeal the Columbia ruling, which it believes "doesn’t impact" Atlantic Yards.

article

Additional coverage...

Atlantic Yards Report, Perkins asks Paterson for moratorium on eminent domain, not to appeal Columbia case

State Senator Bill Perkins, who represents West Harlem and in September 2008 held a hearing on reform of emiment domain, has asked Governor David Paterson "to forego an appeal" of the Appellate Division decision blocking the use of eminent domain for the Columbia University expansion, "and to order a statewide moratorium on the use of eminent domain within the State of New York pending legislative action."

That would include eminent domain for the Atlantic Yards project.
...

It would be more difficult for Paterson to reverse course on Atlantic Yards; for example, the MTA, which he controls, argues that the Atlantic Yards deal was too far along to consider seeking another bidder for the Vanderbilt Yard.

Perkins' letter draws significantly on the decision in the Columbia case, known in shorthand as Kaur. It says little about the Court of Appeals' decision in the Atlantic Yards case, but does make a fundamental point: For one, no one knows what 'blight' is—the crucial and fundamental issue in both the Columbia and Atlantic Yards cases.

NY Observer, Perkins to Paterson: Don’t Appeal Columbia Decision, Reform Eminent Domain

In a letter to the governor dated Tuesday, Mr. Perkins called for "a statewide moratorium on the use of eminent domain," and said he was preparing "a bill to reform how eminent domain is exercised."

He also tries to invoke the issue on a more personal level with the governor, bringing up a 2005 rally the two of them attended, protesting the use of eminent domain:

You may recall that back in 2005 you and I stood on the steps of City Hall together with several members of the City Council to protest the United States Supreme Court decision in Kelo v. City of New London which affirmed the use of eminent domain for private development that entails a so-called "public use." That decision contained language encouraging states to review their own eminent domain statutes. Some states have done just that. It is now New York's turn.

Mr. Perkins has established himself as one of few loud voices in the Legislature to protest eminent domain.

Posted by eric at 8:38 PM

Atlantic Yards YES! New York State's school kids NO!!

New York State has one set of rules for Bruce Ratner and another set of rules for everybody else.

Crain's NY Business, Citing $1B shortfall, Gov. warns schools

Gov. David Paterson warned the state will begin withholding payments to localities and school districts in light of an expected $1 billion shortfall in the state operating fund.

New York state's main operating fund will have a negative balance of $1 billion by the end of this month, even if the state exhausts its reserves, officials announced Wednesday.

State Budget Director Robert Megna revealed the shortfall as he introduced Gov. David Paterson, who delivered a speech renewing his call for the Legislature to make additional spending cuts. Mr. Megna said even if the state empties its $1.5 billion rainy day fund and delays a $1 billion payment to the state pension fund, its general fund would still end the month $1 billion short.

Addressing a Wall Street audience at the Museum of American Finance, Mr. Paterson said that to avoid the shortfall, he would delay payments to localities and school districts that were promised funds in the state budget he and the Legislature agreed to last spring. “I will probably be sued for this, but I will not let Bruce Ratner New York state run out of money on my watch,” the governor said.

NoLandGrab: The "Museum of American Finance?" Perhaps they can open a wing for the Brooklyn Arena Local Development Corporation should Bruce Ratner fail to sell his bonds by December 31st.

Additional coverage...

Huffington Post, Paterson: 'New York Has Run Out Of Cash'

"I am directing the Division of the Budget to limit payments so that we will have the cash to pay our debts at the end of December," Paterson said. "I will continue to withhold payments until this economy is leveled off."

"Now New York has run out of cash," he said. "You can't spend money that you don't have."

NLG: Unless you're spending it on a basketball arena that nobody — except Bruce Ratner — needs.

Posted by eric at 6:06 PM

DDDB PRESS RELEASE: Sen Perkins: Gov, Stop Eminent Domain for Atlantic Yards

New York/December 9, 2009—Senator Bill Perkins (30th Senate District, D-Harlem, Manhattanville) has sent a letter to Governor Paterson calling on the Empire State Development Corporation not to appeal the court ruling barring it from using eminent domain for Columbia University's expansion.

The letter also supports the Governor in his recent public comments that he would convene an objective review of the Atlantic Yards project.

In light of the confusion in the courts regarding eminent domain and blight, Senator Perkins calls on the Governor to stop the Empire State Development Corporation from proceeding with taking properties by eminent domain for the Atlantic Yards project and reminds the Governor of his 2005 call for a moratorium on eminent domain, even more urgent now.

Excerpted from letter:

...At the time of the Kelo decision, as a State Senator and Minority Leader you understood that the current process is flawed and called for a blanket moratorium on the use of eminent domain. The same reasons for instituting a moratorium back then still exist. In fact they are even more urgent given the Kaur decision, and the recent decision by the Court of Appeals affirming the taking in the case involving Atlantic Yards. It is my understanding you recently and publicly committed to a full objective review of that project and its financing.

...The Columbia decision has intolerably heightened the confusion and uncertainty over what, if anything, constrains the ESDC from taking anyone’s property whenever it suits its fancy. For one, no one knows what “blight” is—the crucial and fundamental issue in both the Columbia and Atlantic Yards cases....

[The full text of Perkins's letter can be found after the jump, as well as at http://www.nysenate.gov/report/letter-governor-paterson-eminent-domain.

December 8, 2009

Hon. David A. Paterson
Governor, State of New York
State Capitol
Albany, New York 12224

Dear Governor Paterson:

I write with a great sense of urgency in respectfully calling upon you to forego an appeal of last week’s decision in Kaur v. New York State Urban Development Corporation, and to order a statewide moratorium on the use of eminent domain within the State of New York pending legislative action.

As you are aware, last week’s court decision struck down as unconstitutional the taking of property by the Urban Development Corporation d/b/a“ESDC” for the benefit of Columbia University.

The court found ESDC violated both state and federal due process clauses in an effort to prevent affected property owners from obtaining information, and that ESDC’s finding of blight was “bereft of facts which established the neighborhood in question was blighted.” Furthermore, ESDC’s determination that the project even has a public use, benefit or civic purpose is wholly unsupported by the record. The court also noted the glaring conflict of interest, which reeks of bad faith, that existed as a result of ESDC and Columbia using the exact same consultant to review the project and determine blight.

You may recall that back in 2005 you and I stood on the steps of City Hall together with several members of the City Council to protest the United States Supreme Court decision in Kelo v. City of New London which affirmed the use of eminent domain for private development that entails a so-called “public use.” That decision contained language encouraging states to review their own eminent domain statutes. Some states have done just that. It is now New York’s turn.

At the time of the Kelo decision, as a State Senator and Minority Leader you understood that the current process is flawed and called for a blanket moratorium on the use of eminent domain. The same reasons for instituting a moratorium back then still exist. In fact they are even more urgent given the Kaur decision, and the recent decision by the Court of Appeals affirming the taking in the case involving Atlantic Yards. It is my understanding you recently and publicly committed to a full objective review of that project and its financing.

As Chair of the Senate’s Corporations, Authorities and Commissions Committee, I held hearings involving the topic of eminent domain. I have gone on record on numerous occasions against what I perceive to be the abuse of eminent domain in this state, particularly as it relates to private development projects. I have often described that abuse as a “mugging”, and one equal to “placing a gun to the community’s head”.

The Columbia decision has intolerably heightened the confusion and uncertainty over what, if anything, constrains the ESDC from taking anyone’s property whenever it suits its fancy. For one, no one knows what “blight” is—the crucial and fundamental issue in both the Columbia and Atlantic Yards cases. What is clear, however, are the signals that the ESDC was not acting in good faith. This I would suggest, is evidenced by the court’s statement that “the record before ESDC contains no evidence whatsoever that Manhattanville was blighted prior to Columbia gaining control over the vast majority of property therein.” The opinion also makes a strong case that the blight determination in that case was severely flawed, and in large part the product of the ESDC’s desire to transfer property to a “private elite education institution”. As a result, I am left with my own opinion, and that of others in my community, that these type of actions on the part of the ESDC are part of an insidious form of discrimination and civil rights violations that must not stand. As the Kaur decision reads, “‘few policies have done more to destroy community and opportunity for minorities than eminent domain.’” In fact, the Court found that the ESDC’s actions in the Columbia expansion is, “clear evidence of that reality. The unbridled use of eminent domain not only disproportionately affects minority communities, but threatens basic principles of property contained in the Fifth Amendment.”

For these and other reasons I request that you urge the ESDC not to appeal the Kaur decision. Please impose a statewide moratorium on further eminent domain actions and then let us work together on a legislative solution. I am currently working on a bill to reform how eminent domain is exercised in the State of New York. The purpose is not to hamper development, but to make the process more transparent and provide stakeholders with substantive due process. This will result in development that reflects community input and serves community needs. Your participation will be critical. An enlightened eminent domain procedure will be a significant victory for all involved.

I respectfully request your support on these issues and am ready to stand with you publicly again, this time for the purpose of announcing actions that will lead to genuine reform. Please feel free to contact me for any further discussion at 212-222-7315, or in my Albany office at 518-455-2441. I look forward to hearing from you at the earliest convenience, and I thank you in advance for your attention to this very important matter.

Very truly yours,

Senator Bill Perkins
30th District

cc: Dennis M. Mullen, President & CEO, Empire State Development Corp.

Posted by eric at 3:55 PM

Bloomberg Remark Excludes Self from MTA Mess

Develop Don't Destroy Brooklyn

The Mayor never fails to entertain with his (choose one): a) duplicity, b) total lack of self-awareness or c) both of the above.

The Daily News captured this comment from Mayor Bloomberg on Albany's "sudden" failure to deliver more than $350 million to New York's transit system:

"I don't know why anybody is surprised at what is happening to the MTA," [Bloomberg] said. "It's a piggy bank that keeps getting raided."

Yes, the out-of-touch Mayor is correct: raided under the direction of the Mayor and his developer cronies.

link

Posted by eric at 3:40 PM

As challenge to MTA deal awaits a judge, did Forest City Ratner really have the MTA over a barrel, or was it the other way around?

Atlantic Yards Report

Here's a must-read piece from Norman Oder on the lawsuit challenging the giveaway sale of the Vanderbilt Yard to Forest City Ratner.

All the legal papers have been filed in the case challenging the Metropolitan Transportation Authority's revision of the Vanderbilt Yard deal with Forest City Ratner. As we await a decision by the judge--no oral argument is expected, and a decision could take weeks--two things must be kept in mind.

First, as the MTA reminds state Supreme Court Justice Michael Stallman, the standards of review in such an Article 78 proceeding is "highly deferential to agency action."

So, no matter the facts, it's an uphill climb for the plaintiffs, AY opponent Develop Don't Destroy Brooklyn, joined by four elected officials and the Straphangers Campaign, in charging that a state law (the Public Authorities Accountability Act, or PAAA) passed in 2005 requires an independent appraisal of the property and that a seller seek out competitive offers.

If successful, the lawsuit (which also names Forest City Ratner as a defendant) could force the MTA to seek a new bid for the railyard. But the lawsuit is not seen by state officials as stopping either the bond sale or the pursuit of eminent domain.
...

Who's over a barrel?

In the MTA's eyes, Forest City Ratner had the agency over a barrel. That's why the MTA didn't get a new appraisal of the railyard, figuring a new valuation—due to the decline in real estate values and the increased cost of building a platform--would inevitably be less than in 2005, exposing it to a worse deal.

But maybe it was the other way around. Didn't the MTA have Forest City over a barrel?

The developer--well, its principal and its parent--has a major stake in the money-losing Nets basketball team that it wants desperately to move. The developer faces a December 31, 2009 deadline to get tax-exempt bonds issued for the Atlantic Yards arena. In April, in fact, a FCR executive privately confessed to being "a freaked out developer with an arena that must start this year."

As the suit noted, Dellaverson acknowledged that the transaction had to be approved quickly--the board had 48 hours--because, as he said at a June 22 MTA Finance Committee meeting, "it really relates to Forest City's desire to market their bonds as a tax-exempt issuance [by a December 31 deadline]."

article

Posted by eric at 11:22 AM

Big Blighters

Townhall.com
by Jacob Sullum

After Kelo v. City of New London, the 2005 decision in which the U.S. Supreme Court approved the forcible transfer of property from one private owner to another in the name of "economic development," 43 states passed reforms that were supposed to curb eminent domain abuses. But most states still allow condemnation of property deemed to be "blighted," and many of them define that condition so broadly that it has become a synonym for "coveted," as illustrated by two recent New York cases.

In 1954, when the Supreme Court declared that eliminating blight counts as a "public use" under the Fifth Amendment and that property may be transferred to other private owners for that purpose, the case involved a Washington, D.C., neighborhood where two-thirds of the dwellings were considered "beyond repair"; most lacked central heating, indoor toilets and bathrooms; and some were located in alleys. As part of "a comprehensive plan" aimed at alleviating these "miserable and disreputable housing conditions," the Court ruled, it was acceptable to condemn a department store that was itself in good condition.
...

Last week a lower appeals court reached the same conclusion in a case involving Columbia University's expansion into the Manhattanville section of Harlem. As in the Atlantic Yards case, the Empire State Development Corp., the authority empowered to use eminent domain, went looking for "characteristics that demonstrate blight conditions" so it could reach a predetermined conclusion that condemnation was justified.

The result, said the court, was "a preposterous summary of building and sidewalk defects" that could be found in "virtually every neighborhood in the five boroughs."

article

Posted by eric at 11:05 AM

Home, Blighted Home

The Huffington Post
by Daniel Goldstein

The man at the center of the Atlantic Yards eminent domain fight recounts his search for a substandard and insanitary home.

New York's Empire State Development Corporation is empowered, under the Urban Development Corporation Act, to acquire property by eminent domain for a "land use improvement project" if it finds that "the area in which the project is to be located is a substandard or insanitary area, or is in danger of becoming a substandard or insanitary area and tends to impair or arrest the sound growth and development of the municipality."

...

When I was renting on 7th Street in Gowanus I started getting the idea in my head that I should pursue the American dream and own a home. Not a bad idea.

So I set about finding a real estate agent and I found one at Brooklyn Properties. We spent some time discussing what I was looking for, and I was open to compromising my needs and desires, as nothing is perfect.

But there was one thing I would not budge on. The apartment I wanted to buy, make my home, and start a family in had to be substandard or insanitary and it had to be in a substandard and insanitary neighborhood.

I wouldn't have it any other way. I could give up outdoor space, good views, good light, good transportation -- all of that I could give up.

But substandard and insanitary? That was a must!

article

Posted by eric at 10:51 AM

The Latest from Ratner: 'Challenges Remain' for Arena, Nets Revenues Down

NY Observer
by Eliot Brown

Some highlights (and lowlights) from Forest City's most recent earnings report:

-The company's efforts to start construction on the Nets arena faces another previously unreported hurdle: Forest City stopped sending in required payments on a $162 million loan--the mortgage on its property for the $4.9 billion Atlantic Yards project, of which the Nets arena is a part. While Forest City didn't provide immediate explanation, the move appears to be another display of the penny-scrounging that's been going on over the project (the company is negotiating sped-up subsidy payments from the city, along with payment of infrastructure money). The company said it missed a $5 million payment on the loan, and had been granted an extension until Dec. 10, which it was negotiating. (The Atlantic Yards Report has more on the risks, which Forest City is required to report.)

-Through Oct. 31, well before the Nets achieved their current 1-19 record, revenue for the team was down $10 million for the same nine-month period from the year before (expenses dropped by $10 million as well). Last year, Forest City reported $59 million in revenue at the time, which itself was down slightly from $62.8 million in 2006. Pre-tax losses were mostly stable at $53.6 million (compared with $54 million last year), of which Forest City's share is $33.1 million.

-Should the Atlantic Yards project collapse, according to the filing, Forest City estimates its costs would be $580 million, including repaying subsidies, writing off investment, and restoring the M.T.A.'s rail yard.

-A press release notes that "challenges remain" for the project, though its overall tone is optimistic. After all, the number of barriers for the development are indeed falling, and Forest City has been on a "road show" in recent days in an attempt to find buyers for $500 million in tax-free bonds, one of the last major hurdles remaining.

article

Posted by eric at 10:32 AM

Top-Rated Maryland Revives Refinancing as Muni Bond Yields Fall

Bloomberg.com
by Jeremy R. Cooke

BROOKLYN ARENA LOCAL DEVELOPMENT CORP. intends to issue $500 million of tax-exempt bonds to help finance construction of a new facility in New York City for the New Jersey Nets, which set a National Basketball Association record this month for the worst start to a season. The debt, rated at the lowest investment grades by Moody’s and S&P, will be backed by payments in lieu of property taxes, known as Pilots, derived from arena revenue. Forest City Ratner Cos. is developing the arena, Barclays Center, as part of the Atlantic Yards project in the city’s most populous borough. Underwriters led by Goldman Sachs and Barclays Plc are marketing the bonds, which need to be sold by year-end to meet a deadline for tax-exemption rules.

One of Forest City Ratner's biggest benefactors, the City of New York, is also issuing new debt — and it's better-rated than Bruce's.

NEW YORK CITY, the largest borrower among U.S. municipalities, plans to sell $700 million of taxable securities to fund public works, after offering $900 million in tax-exempts this week. The city will take competitive interest-cost bids tomorrow for underwriters seeking to market $83.9 million of notes. Banks led by JPMorgan Chase & Co. were selected to negotiate the sale of $616.2 million in federally subsidized Build America Bonds. New York is rated AA by S&P, Aa3 by Moody’s and AA- by Fitch.

link

NoLandGrab: What's a little competition between friends?

Posted by eric at 10:27 AM

Goodbye blue Monday — Ratner’s tax-free bonds may go on sale within days

The Brooklyn Paper
by Stephen Brown

Earlier this month, Moody’s and Standard and Poor’s rated the state’s tax-free bonds as Baa3 and BBB, respectively — meaning that the $500 million in bonds are as risky an investment as those used to finance previous sports projects like Yankee Stadium and Citi Field.

Still, the fact that the rating is just above junk-bond status — a term all too familiar from the economic crisis — provided ample fodder to those opposed to the project because it reflects a current economic climate that’s inhospitable to projects like an arena that relies so heavily on revenue sources like naming rights deals, luxury boxes and advertising.

Indeed, several years ago, Ratner and his partners at the Empire State Development Corporation believed they could issue $900 million in bonds because the project appeared more likely turn a handsome profit, and thus pay back investors with less risk.

article

Posted by eric at 10:21 AM

Pro hockey at the Atlantic Yards arena? It looks doubtful

Atlantic Yards Report

In a long post on his Noticing New York blog, Michael D. D. White makes a strong case that the Ellerbe Becket arena design could not accommodate professional hockey and that any intimation in the bond offering that the Atlantic Yards arena could host the New York Islanders is a feint.

"Feint" is a more pleasant euphemism for "lie" or "fraud" or "Tiger Woods."

Note that White is working with an arena schematic from several months ago, so it's possible the design has been revised. But the onus is on developer Forest City Ratner and the public parties to come clean.

link

NoLandGrab: Norman Oder himself wrote just last Friday that "the basic orientation and design of the arena was not changed; the main change concerned the skin."

If these arena bonds are such a great investment, why won't Goldman Sachs just be honest about them?

Posted by eric at 9:52 AM

The Ten Most Positive Architectural Events of 2009

The New Yorker
By Paul Goldberger

No, Atlantic Yards and its megaproject bretheren didn't make architectural critic Paul Goldberger's list, unless you consider dodging a bullet "most positive."

We now live in a different world, more inclined to celebrate the fact that these dismal economic times mean that the biggest projects on the drawing boards, the mega-developments of Hudson Yards on the site of the West Side Railyards and Atlantic Yards on the Brooklyn rail yard, are not happening. Nobody thinks Bruce Ratner can afford to turn Atlantic Yards into his very own stimulus package, the way Rockefeller did with his project, and we are generally glad of it. In fact, it has seemed to many New Yorkers as if the economic downturn has allowed us to dodge some major bullets.

article

Posted by lumi at 6:57 AM

Can’t tell a Baa3 from an Aaa? Let the Explainer explain it all to you

The Brooklyn Paper just published their version of "Atlantic Yards PILOTS and Bond Ratings for Dummies."

Click here for answers to scintillating questions such as:

Posted by lumi at 6:48 AM

Congratulations Bruce

Huffington Post
By Paul Sonn

Congratulations Bruce Ratner, your subsidy-sucking Atlantic Yards scheme is now the poster-project for financial houses of cards.

From an opinion piece about the fight for a living-wage guarantee for the Kingsbridge Armory:

In fact, if slight upward pressure on the wages for the very lowest-paid employees would jeopardize the Kingsbridge project's profitability, the city should be asking whether the project as a whole is financially viable. The financial vicissitudes of Brooklyn's Atlantic Yards project stand as a recent cautionary tale in this regard. If a living wage requirement would sink the Kingsbridge Armory project despite a large public subsidy, elected leaders should question whether the project is sufficiently sound to merit public resources in the first place.

article

Posted by lumi at 6:37 AM

December 8, 2009

screening thurs dec 10 - cantor center 7pm

Battle of Brooklyn via Kickstarter

REMINDER- SCREENING- FIRST 30 MINUTES OF THE FILM

December 10, 2009 at 7 P.M.
Cantor Center at New York University
36 East 8th Street
New York, New York 10003
Doors Open at 6:45 P.M.

Followed by panel discussion on eminent domain in New York City.

The screening--a sneak peak at the first portion of the film--will be followed by a panel discussion about the use and abuse of eminent domain in New York, featuring:

Mindy Fullilove, PhD, professor at Columbia University and author of Root Shock
William Stern, former CEO of New York State's Urban Development Corp.
Daniel Goldstein, lead plaintiff, Goldstein v. Empire State Development Corp.
Michael Galinsky, producer, Battle of Brooklyn
Norman Siegel, civil rights attorney
Robert McNamara, attorney, Institute for Justice

link

RSVP to LKurcab@ij.org.

Posted by eric at 10:58 PM

FCE anticipates "groundbreaking in the fourth quarter" (could be January); AY mortgage delayed (hard bargain or cash-flow problem?)

Atlantic Yards Report

OK, would you want to buy one-notch-above-junk bonds from a company that can't — or won't — pay its mortgage?

Forest City Enterprises (FCE), parent of Forest City Ratner, today announced third quarter earnings--up 24% from the same period of time last year--and decreased losses--$0.03 per share, compared with $0.19 per share in the third quarter last year.

There were two statements asserting that Atlantic Yards was on track, citing significant milestones, "while challenges remain."

Indeed, there are signs the company still faces cash flow difficulties or, perhaps, is just a hard bargainer. FCE delayed an 11/30/09 payment of $5 million on a $162 million mortgage secured by all land owned in the Atlantic Yards footprint and was granted an extension until December 10, with negotiations continuing about modifying the mortgage. (See highlighted text below.)

A groundbreaking on Atlantic Yards is "anticipated" for the fourth quarter; note that FCE's fiscal year ends January 31.

A conference call with investment analysts is scheduled for 11 am Thursday.

From the press release

The Company achieved the following additional milestones either during the third quarter or subsequent to the end of the quarter:

--In late September, Forest City Ratner Companies, the Company's New York-based subsidiary, and Nets Sports and Entertainment signed a letter of intent with an affiliate of Onexim Group, an international private investment fund, to create a strategic partnership for the development of the Atlantic Yards project in Brooklyn, and the Barclays Center arena, the planned home of the NBA's Nets. As part of the agreement, entities to be formed by Onexim Group will invest $200 million and make certain contingent funding commitments to acquire 45 percent of the arena project and 80 percent of the NBA team, and the right to purchase up to 20 percent of the Atlantic Yards Development Company, which will develop the non-arena real estate.

--On November 24, the New York State Court of Appeals issued a key favorable ruling in a lawsuit related to the Company's Atlantic Yards development project in Brooklyn. The suit challenged the State's use of eminent domain related to the project. The court rejected the challenge in a 6-1 ruling, clearing a significant legal hurdle for the project. Subsequently, during the week of December 1, the major bond rating agencies issued investment-grade ratings for $500 million in tax-exempt bonds to finance a portion of the construction of the Barclays Center arena. Both of these events are major positive milestones for the overall project, and while challenges remain, they enable the project to move forward with an anticipated ground-breaking in the fourth quarter.

(Emphasis added)

Warning from the 10-Q

A 10-Q form filed with the Securities and Exchange Commission stated:
...

Subsequent to October 31, 2009, we have elected to delay a November 30, 2009 scheduled amortization payment of $5,000,000 on our $162,000,000 nonrecourse mortgage secured by all land owned in the Atlantic Yards footprint and were granted an extension until December 10, 2009. We have commenced negotiations with the lender to modify the terms of the mortgage but can give no assurance that these negotiations will be successful. If no agreement is reached under the nonrecourse loan between the parties, we can relinquish the land to the lender in lieu of payment of the mortgage.

(Emphasis added)

article

Additional coverage...

The Wall Street Journal, Forest City Enterprises Loss Narrows, But Company Cautious

The owner of commercial and residential properties reported a loss of $4.4 million, or 3 cents a share, for the quarter ended Oct. 31, compared with a year-earlier loss of $19.1 million, or 19 cents a share. On a continuing basis, the company swung to earnings of 1 cent a share from a loss of 15 cents.

Total revenue fell 7.3% to $306.1 million.

Analysts polled by Thomson Reuters projected a loss of 1 cent a share on revenue of $351 million.

Cleveland Plain Dealer, Losses narrow, EBDT up at Forest City Enterprises in the third quarter

Forest City, based in Cleveland, expects the rest of this year and 2010 to be challenging for the real estate industry, which has been battered by the recession, falling property values and a pullback on lending.
...

The company announced quarterly earnings after markets closed today. Shares of Forest City's stock (NYSE: FCE-A) closed trading today at $11.50, down 45 cents or 3.8 percent.

Posted by eric at 9:59 PM

PRESS RELEASE: Forest City Reports Fiscal 2009 Third-Quarter and Year-to-Date Results

CLEVELAND, Dec. 8 /PRNewswire-FirstCall/ -- Forest City Enterprises, Inc. (NYSE: FCEA and FCEB), today announced EBDT, net earnings and revenues for the three and nine months ended October 31, 2009.

EBDT

Third-quarter EBDT (earnings before depreciation, amortization and deferred taxes) was $85.6 million, a 94.0 percent increase compared with 2008 third-quarter EBDT of $44.1 million. Year-to-date EBDT was $222.7 million, a 50.0 percent increase compared with $148.4 million for the first nine months of fiscal 2008.

On a per share basis, third-quarter 2009 EBDT was $0.52, a 23.8 percent increase compared with 2008 third quarter EBDT of $0.42. Year-to-date per share EBDT was $1.59, a 14.4 percent increase compared with $1.39 per share for the first nine months of 2008. Per-share data for both the third quarter and nine months of 2009 reflect the dilutive effect of new Class A common shares issued by the Company during the second quarter of 2009, and the "if-converted" effect of two convertible debt transactions executed during the third quarter.

For an explanation of EBDT variances, see the section titled "Review of Results" in this news release. EBDT and EBDT per share are non-Generally Accepted Accounting Principle (GAAP) measures. A reconciliation of net earnings (the most directly comparable GAAP measure to EBDT) to EBDT is provided in the Financial Highlights table in this news release.

Net Loss

The third-quarter net loss attributable to Forest City Enterprises, Inc. was $4.4 million, or $0.03 per share, compared with a net loss of $19.1 million, or $0.19 per share, in the third quarter of 2008. Net loss for the nine months ended October 31, 2009, was $36.9 million, or $0.27 per share, compared with $67.9 million, or $0.66 per share for the same period in 2008. In addition to the items discussed below that impacted EBDT and net loss, the net loss was also negatively impacted by increased impairment charges of $14.4 million for the third quarter (primarily related to the write-down of certain land holdings and to the impairment, prior to sale, of two assisted-living residential properties) and $25.4 million for the first nine months of 2009.

Revenues

Third-quarter 2009 consolidated revenues were $306.1 million compared with $330.4 million last year. Revenues for the nine months ended October 31, 2009, were $932.9 million compared with $960.0 million for the comparable period in 2008. The year-over-year revenue variance was impacted primarily by lower land sales and by reduced construction and development fee income from military housing, as early development phases were completed.

Liquidity

"For more than a year now, nearly every major action we've taken as a Company has been focused on improving liquidity and strengthening our balance sheet," said Charles A Ratner, Forest City president and chief executive officer. "Today, liquidity remains our highest priority. Since the beginning of the third quarter, we have executed a successful private debt exchange, issued and closed a new convertible debt offering, and reached agreement with our bank group on the principal terms of a new, two-year $500 million credit facility. These achievements, together with the equity offering we executed in the second quarter, have contributed to significantly increasing liquidity and managing near-term debt maturities."

Click through for more detail than anybody (except Norman Oder) would care to know.

link

Posted by eric at 9:49 PM

It came from the Blogosphere...

Develop Don't Destroy Brooklyn, MTA Shocked at Shortfall Despite Leaving at Least $100 Million on Ratner's Table

The culmination of the "negotiation" with Ratner this past year was at the MTA Board meeting to approve the new lowball deal. The MTA did not seek any other bidders when they understood that Ratner was no longer willing to fulfill his financial commitments.

So why did they rush to screw transit riders? They had to help Ratner. MTA CFO Gary Dellaverson explained: "It relates to Forest City Ratner's desire to market the tax-exempt bonds. That's the primary driver of the timing."

Now, in the article below, Dellaverson says he is "shocked." Shocked!

And that is the primary driver of the bulk of this shortfall. The math is simple.

dotCommonweal, Eminent Domain

Far from weakening the Constitution’s protection against eminent domain where it had previously existed, my reading of the [Kelo]case is that it broke no new ground in its interpretation of the “public use” limitation on the eminent domain power and that, if anything, it actually increased protection from eminent domain abuse by introducing the idea that eminent domain undertaken for pretextual reasons violates the Fifth Amendment.

411mania.com, Misunderstood Masterpieces 12.08.09: Street Fighter: The Legend of Chun-Li

Guess which phony-blight-eliminating mega-project makes a cameo appearance in this so-bad-it's-good movie review.

Over at his headquarters, Bison builds a model of Bangkok because he's planning a bit of EVIL urban renewal. I wonder if he later consulted with the Borough of Brooklyn on the Atlantic Yards project. While Bison dreams of moving the New Jersey Nets to Thailand – or something like that, Michael Clarke Duncan interrupts with news of a mysterious message from Murmansk. Dum-dum-DUM!

The Architect's Newspaper Blog, NOLA Lights Up

For the last three years, AIA New Orleans has invited teams of architects and artists to takeover “hidden” spaces within the city, transforming them with the latest design tech and hopefully testing the boundaries of this at-times-ephemeral place in the process. One of installations at this year’s DesCours comes from the Chicago team of Marshall Brown and Dana Carter. (Brooklynites may know Brown from his work on the anti-Ratner UNITY plan for the Atlantic Yards.)

david has issues, Let's Talk About E.D.

Have you talked to your city councilperson or state legislator about E.D.?

No, not that E.D., although we will bring up Viagra maker Pfizer.

Posted by eric at 7:30 PM

Brooklyn Broadside: Two Decisions Will Change Downtown; One Still Awaited

Brooklyn Daily Eagle
by Dennis Holt

Like Vladimir and Estragon, Dennis Holt is waiting, always waiting.

A while back, I noted that there would be two major decisions made in November that would impact development in Brooklyn. These happened, but one of them was a decision not to make a decision. And there was a third decision that few knew was coming.

One of the decisions was made by the state’s highest court. It said, briefly, that Forest City Ratner could use eminent domain to acquire a few properties to build a basketball arena for the Nets.

This pretty much winds up that major legal issue, and other decisions about this part of Atlantic Yards have been made. The state approved the issuance of both tax-exempt and taxable bonds to help build the arena. Rating agencies have subsequently given an investment-grade score for the issuance of those bonds, and they are expected to be sold this week.

It has also been announced that Barclay’s Bank has decreased by $200 million its contribution to the signing aspects of the entire property around the arena. The court’s decision will help Forest City to put together an appropriate financing package.

article

NoLandGrab: "An appropriate financing package?" We'll see.

Posted by eric at 7:13 PM

99 Cent robbery

The Brooklyn Paper, Police Blotter
by Sabrina Jaszi

Et tu, Bruce Ratner? If the presence of crime is a strong indicator of blight, your mall is guilty as charged.

Department steal

A thief ripped off a woman at the Marshall’s department store on Dec. 3.

The victim was shopping inside the discounter inside the Atlantic Center Mall at around 4:30 pm when the sneak took her purse off her cart while her back was turned. He got away with credit cards and a Blackberry.

Immature four

Four teenage thugs did more than pick on a younger teen after school on Dec. 4.

The 14-year-old victim said he was walking to the Atlantic Center Mall mall at around 3:40 pm, but when he was at the corner of Ashland and Hanson places, the older kids walked up and grabbed his digital musical player.

article

Related coverage...

The Local [Fort Greene/Clinton Hill], The Week in Crime: Stay Alert

The Local wants a cut of the action, too.

12/5: Woman, 19, reports Old Navy clutch with $17 stolen on the escalator at Atlantic Mall.

Posted by eric at 8:30 AM

The Barclays naming right deal may not be a record, after all; will the revised agreement get noticed by the Times, which puffed it?

Atlantic Yards Report

The most important issue regarding naming rights for the Atlantic Yards arena is why the state simply gave them away--because they were part of arena financing, an Empire State Development Corporation official said not-so-convincingly last July.

That deserves coverage. But also deserving of coverage. especially in the New York Times, is the revelation that the Barclays Center deal, once touted as record-setting, may not be a record, after all. Or, if it remains a record, it's by a fraction.
...

Now, however, we know the revised deal is $10 million a year for the arena plus other unspecified payments to the Nets. The total that is hardly double the deal in Atlanta and, given adjustment for inflation, may not even be any larger.
...

The New York Times and the New York Daily News, however, haven't reported on the revised deal, though they--especially the Times--has treated the previous deal as fact multiple times. Given the parent New York Times Company's business relationship with Forest City Ratner, some more skeptical coverage is in order.

article

Posted by eric at 8:18 AM

Pacific Street tank

Cue up the Empire Strikes Back theme: dum, dum, dum, dum-ta-dum, dum-ta-dum...

Photos, by Tracy Collins, via flickr Atlantic Yards Photo Pool.

Pacific Street near 5th Avenue
Prospect Heights
Brooklyn, New York

This remote-controlled machine is some sort of boring tool, I think. It's being used for infrastructure upgrades for Atlantic Yards.

The vacant lot used to be 644 Pacific Street. It was demolished for Atlantic Yards, as would the buildings in the background.

Posted by lumi at 7:14 AM

According to bond deal, Nets in Brooklyn could only give 15% of the tickets away (without paying a larger license fee)

Atlantic Yards Report

According to the documents outlining the arena bond deal, the Nets would only be allowed to give up to 15% of game tickets away because:

...the team (New Jersey Basketball) would be obligated to make payments each year to the arena operator (ArenaCo) for the use and occupancy of the Arena, and one formulation of that license payment involves 10% of Net Ticket Revenue.

article

NoLandGrab: The deal doesn't preclude the Nets from selling tickets for a dollar, which is the amount the State is charging Bruce Ratner to lease the arena.

Posted by lumi at 7:08 AM

603 Dean

Photo, by Tracy Collins, via flickr Atlantic Yards Photo Pool.

603 Dean Street near Carlton Avenue
Prospect Heights
Brooklyn, New York

This building, currently a homeless shelter, would be demolished for Atlantic Yards.

The building behind 603 Dean, 750-754 Pacific Street, would also be demolished.

The vacant lot next to it used to be the Ward Bread Bakery.

As reported yesterday, by Atlantic Yards Report:

Residents in a two-building shelter for homeless families in the Atlantic Yards footprint just got some not-so-sunny holiday greetings, as the facility is slated to be closed by January 15.

A mandatory meeting at Pacific Dean will be held tonight "to provide details and help you through the transition," according to a message distributed to residents.

The buildings typically house more than 90 families. Some will be moved to permanent housing, others to another shelter.

Posted by lumi at 7:01 AM

December 7, 2009

Atlantic Yards YES! Transit riders NO!!

The New York Times, M.T.A. Revenue Is $200 Million Short

Why, we never could've seen this one coming.

The Metropolitan Transportation Authority’s revenue projections are suddenly running $200 million below what was expected, while the agency is coping with $143 million in cuts in state financing, agency officials said on Monday.

It was unclear what the darkening financial picture would mean for subway and bus passengers. A spokesman for the authority said that the chairman, Jay H. Walder, was not contemplating a fare increase for 2010.

The $200 million was to have come from a payroll tax for transit that was part of the authority’s rescue package, which the Legislature approved in May. On Monday, the agency’s chief financial officer, Gary Dellaverson, called the transit tax situation “a shocking development, both because of the magnitude of the underrun (about 20 percent) and the late date of its discovery.”

The authority’s board is scheduled to approve the final version of its 2010 budget next week. The authority is required to have a balanced budget.

NoLandGrab: Hmm, let's see. The MTA's own appraiser set the value of the Vanderbilt Yard at $214.5 million. When rival Extell Development outbid Forest City Ratner for the land, the MTA chose Forest City's bid, eventually settling for $100 million. When that was still too rich for Ratner, the MTA lowered the down payment to $20 million. $214.5 million less $20 million is $194.5 million.

We bet even the MTA could make up the other $5.5 million without too much trouble.

Posted by eric at 11:33 PM

The Craftily Negative Promise Offered For Bonds Being Sold For Nets Arena: It’s Not “Assumed” Islanders Hockey Team Is Coming to Basketball Arena

Noticing New York

Michael D.D. White puts on ice any fantasies of the Islanders some day playing in the Barclays Center.

In a marketing analysis commissioned by Forest City Ratner that has been made part of the Barclays Center Arena Preliminary Official Statement prepared by Goldman Sachs to market bonds for Forest City Ratner’s Nets arena bonds it says:

For purposes of this analysis, it has not been assumed that the New York Islanders would relocate to the Barclays Center.

This we-mentioned-but-we-can't-promise language is official statement language intended to keep people off the hook legally, but it does serve to introduce a definite (positive) possibility that, “Gee, just maybe, the Islanders will relocate to the Barclay’s Center.”
...

Would a hockey rink fit? We think schematics posted by Atlantic Yards Report today probably answer that question in the negative. Evaluate the information and images we have to offer on this score. When you’re done you may also conclude that statements put into Goldman’s Preliminary Official Statement to help market the bonds are a joke (as well as misleading).

First, let's compare. How big is a basketball court in yards? An NBA basketball court is 94 feet x 50 feet. (31.33 yards x 16.67 yards) How big is a hockey rink? More than twice as long and 70% wider. The official size of a hockey rink is 200 ft long and 85 ft wide.

link

Posted by eric at 10:42 PM

Brooklyn Finding It Hard to Get Excited About Nets

Gothamist
by Ben Yakas

Pity the Nets, they play for our sins. They started the season a record-breaking 0-18, finally won a game last week under new head coach/GM Kiki Vandeweghe, then dropped a stinker to the slightly-less-worse Knicks last night at the Garden. The Knicks and Nets are both playing the salary cap game right now, waving a white flag this season while trying to free up space to lure some of the superstars available in next years free agent bonanza to come over and revitalize each franchise.

But as much flack as the Knicks have gotten (and deserved) this year, the Nets really are hitting new lows. As the Daily News pondered, "Who scores only 36 points in a half against the Knicks? Who makes only 14 baskets in the final 24 minutes against a Mike D'Antoni-coached defense?"

The Nets are putting all their cards on the table by promising a flourishing future in the mythical Atlantic Yards (which could be anytime between 2011 and 2013), but even potential fans are restless already.

article

Posted by eric at 10:28 PM

ATLANTIC YARDS RATNERVILLE CONSTRUCTION UPDATE

ATLANTIC YARDS CONSTRUCTION UPDATE
Weeks beginning December 7, 2009 and December 14, 2009

In an effort to keep the Atlantic Yards Community aware of upcoming construction activities, ESD and Forest City Ratner provide the following outline of anticipated upcoming construction activities.

Please note: the scope and nature of activities are subject to change based upon field conditions. All work has been approved by appropriate City and State agencies where required. In addition to the activities described below noise attenuation and vibration monitoring measures are underway in connection with the Memorandum of Environmental Commitments dated 12/08/06.

If you have any questions please feel free to contact our project Ombudsperson at: 212-803-3233 or AtlanticYards@empire.state.ny.us

Long Island Rail Road/Vanderbilt Yard Work

  • Installation of Lighting

  • Completion of Temp Yard Punch list

  • Removal of old Track in BL1119 and BL1120

  • Relocation of the MG Set from BL1119 to BL 1120

  • Installation of a new Access Road in BL1120

  • Work is anticipated to continue through the end of the year.

Environmental Remediation

  • The environmental consultant will begin shallow excavation and drilling to test and classify soils in blocks 1127 and 1119. Work will continue on these blocks and 1118 for 3 months. This is prep work required in advance of any actual removal of soil from the site.

Infrastructure

  • Infrastructure work related to installation of new sewer chambers at the intersection of 6th Avenue at Pacific Street is complete. Infrastructure work related to the installation of new a water main along the east side of Flatbush Avenue is complete.

  • The traffic and pedestrian safety barriers along the north side of Flatbush Avenue and Block 1118 for sewer installation is complete for the current phase of the work. Additional protection will be installed to modify traffic in 5th Avenue upon approval from the Department of Transportation.

  • The contractor continues to conduct pile drilling, excavation work, and pipe and chamber installation on Blocks 1127 and 1118 in connection with sewer installation. Work will continue for 5 to 6 months.

  • During the course of this work, the contractor may encounter unforeseen contaminants, underground storage tanks or other structures. In the event that this happens and where appropriate, notification will be given to the DEC and remediation steps were implemented.

Demolition

  • The Abatement contractor began installation of scaffolding in preparation for the removal of asbestos at the roof at 475 Dean Street.

  • The Abatement and Demolition contractor will install sidewalk protection as required by the Department of Buildings in preparation for the removal of asbestos and demolition of 648 Pacific Street. The start of this work is dependent upon approvals by the Department of Buildings.

  • The Abatement contractor will install sidewalk protection as required by the Department of Buildings in preparation for the removal of asbestos and demolition of 467 Dean Street. The start of this work is dependent upon approvals by the Department of Buildings.

Posted by eric at 10:10 PM

When can't New York take your land

NY Post
by Steven Malanga

A New York appellate court last week harshly rejected the state's effort to take property from businesses in upper Manhattan and give it to Columbia University for its campus expansion, calling it a "scheme" hatched by the university and the state and labeling their arguments in favor of invoking eminent domain, the government power to seize private property, as "mere sophistry."

Yet for decades the state has confiscated private property on the slimmest of pretexts, often vastly underpaying, and in the process ruined businesses and lives. The Institute for Justice, an Arlington, Va.-based, public-interest group, recently called New York one of the worst eminent-domain abusers in the country.

Only the state Legislature can fix this problem with a new law to rein in these abuses.
...

Little has changed, especially in the case of businesses that don't own their own locations. For them, eminent domain is often a death knell because the state pays little in takings cases. To take one recent example, many of the estimated 55 businesses the city displaced to make way for the New York Times tower on Eighth Avenue between 40th and 41st streets either never reopened or relocated and have since succumbed.
...

New York's is one of the few legislatures that hasn't acted, but the need is clear. Reform would include:

  • A stricter definition of "blight" land so that officials can't declare even a thriving neighborhood to be devastated just so they can seize property in it.
  • A ban on government taking property from one private citizen to transfer to another private citizen for redevelopment merely to enhance the value of the land.

We should all shudder at the notion that state or local officials could one day seize our property simply because they think someone else could make it more valuable.

article

Related coverage...

Atlantic Yards Report, Manhattan Institute's Malanga: two basic reforms needed in state eminent domain laws

Let me add some details, since Malanga barely mentioned Atlantic Yards.

Surely the designation of cracked sidewalks as blight (right, in Brooklyn) by consultants for the Empire State Development Corporation in both the Columbia and Atlantic Yards cases deserves a rethink.

And a lawyer for the Empire State Development Corporation was asked in the Atlantic Yards oral argument October 14, “is it the law of New York that if I own a house in an area that the government thinks could be improved, a perfectly nice house, it’s a clean house, nothing particularly wrong with the area, but it could be better, more vibrant, more dynamic businesses, is that enough for the government to [condemn and seize] the house?”

His response: “Under New York State constitutional law, yes, it is."

The Manhattan Institute, which has a libertarian bent, is alarmed. So are others of a different philosophical bent, like state Senator Bill Perkins. The issue won't go away.

Posted by eric at 9:55 PM

Isn't It Time For ACORN to Stop Shilling for Ratner and Atlantic Yards?

Develop Don't Destroy Brooklyn

In the wake of the ACORN scandals, ACORN commissioned and internal review of its practices. A report on the findings from that review was released today [pdf]. Executive Director Bertha Lewis said, "The report is part vindication, part constructive criticism and 100% road map to the future."

The report inluded nine recommendations for ACORN as a "roadmap to reform and renewal, if implemented in their entirety in concert with other measures to regain the public’s trust."

Here is recommendation number one from the report:

  1. ACORN should return its organizational focus to its core competency – community organizing and citizen engagement empowerment, with related services – and transition away from the provision of services that may be provided more effectively and efficiently by others.

Taking this to heart should mean that the organization—which has received a $500,000 gift and a $1 mllion low interest loan as a bailout from developer Forest City Enteprises and is contractually obliged to support and promote the Atlantic Yards project—should stop shilling for a developer and a project that is abusing eminent domain to displace low-income tenants, spending hundreds of millions of scarce public dollars on a money-losing arena, shutting down a long-term homeless shelter to make a parking lot, and yet, does not guarantee any "affordable" housing.

link

Posted by eric at 9:49 PM

Willets Point United's fight against eminent domain again causes its lobbyist to gyrate

Atlantic Yards Report

From a press release from Willets Point United:

Willets Point United, Inc. – a group of more than 20 property owners in Queens, NY, fighting to keep their land despite the city’s desire to condemn it and turn it over to a yet-to-be-named private developer – believes the NYC Economic Development Corporation’s (EDC) approach to improving Willets Point is inappropriate, and we will oppose it in every way. Today we have notified the EDC via letter of the very disturbing track records of certain developer firms likely to respond to the EDC’s Request for Qualifications (RFQ) by today’s deadline and asks that these firms be disqualified from future consideration for receipt of a Request for Proposals (RFP).

(Emphasis added)

One contact on the press release was lobbyist Richard Lipsky, the same guy who declared Atlantic Yards opponents should get "a well-deserved delay of game penalty" and sneered "Enough already! It's high time that the DDDers, took their settlement monies, and went back to their lattes."

Lipsky is having to gyrate on eminent domain. He supports eminent domain for his client, Forest City Ratner, but opposes it for his client, Willets Point United, as well as for his client Nick Sprayregen of Tuck-It-Away, who has so far successfully challenged eminent domain for the Columbia University expansion.

article

Commenter Daniel Goldstein writes:

Wouldn't Lipsky help his Queens and Manhattan clients more if he dropped ranks with his Cleveland-based client and joined ranks with the eminent domain plaintiffs in Brooklyn who are fighting the same exact thing he and his clients are fighting in Queens and Manhattan?

Wouldn't he sleep better at night? A few thousand bucks really can't be worth all the agita from that much cognitive dissonance.

Posted by eric at 9:44 PM

Coney Island site attracts 50 interested bidders; how was the Vanderbilt Yard different?

Atlantic Yards Report

From a New York Daily News article today headlined Coney Island redevelopment plan attracts 50 amusement park companies from seven countries:

The competition to build a new amusement park at the faded seaside mecca has reached a fever pitch as a who's who of amusement operators work to put together proposals by a Dec. 18 deadline.

...It was standing room only when city officials presented their request for proposals at the Las Vegas IAAPA convention last month, after sealing a deal to buy 6.9 crucial acres from developer Thor Equities for $95.6 million.

Some 50 companies from at least seven countries showed up for the information session.

Yet when it came to a "great piece of real estate" (in the words of Forest City Enterprises CEO Chuck Ratner) like the Vanderbilt Yard, only one bidder besides Atlantic Yards developer Forest City Ratner responded to the Metropolitan Transportation Authority's July 2005 Request for Proposals.

Could that have been because city and state officials had already been backing FCR's plan for the past 18 months?

link

NoLandGrab: Nah, 'cause if the city had been backing the FCR plan already, that would mean there was a pre-textual situation, like with Columbia. And the courts have said that wasn't the case, right?

Posted by eric at 9:37 PM

NYPD, 2007: no bollards around arena; Goldman Sachs, 2009: bollards needed

Atlantic Yards Report

In November 2007, faced with public concerns about security procedures at the Atlantic Yards arena, just 20 feet from the street (the same distance that led to the closing of streets in Newark), a New York Police Department spokesman said the department doesn’t foresee any street or land closures, sidewalk widening around the arena, or the installation of bollards.

Now, as noted in the the Barclays Center Arena Preliminary Official Statement (prepared by Goldman Sachs), the "Urban Experience" (aka urban plaza) would include bollards.

Eric McClure of NoLandGrab puts it all together, noting that models of the Barclays Center include no such security measures and showing photos of the adjacent Atlantic Terminal entrance, newly constructed, with--yes--bollards.

It's another example of the lack of transparency so frequently part of the Atlantic Yards story.

link

Additional coverage...

Brit in Brooklyn, "Egyptian starchitect used at the Atlantic Terminal?"

AtlanticTerminalSarcophagi5.jpg

Click here for more photos.

Posted by eric at 11:47 AM

It came from the Blogosphere...

Willets Point United, Call Governor Paterson today!

This week, New York Governor David Paterson committed to ordering an impartial and thorough review of the Atlantic Yards project. As we e-mailed you about last week, New York’s highest court upheld the condemnations of privately owned homes and small businesses to make way for developer Bruce Ratner’s massive Atlantic Yards project.

It is critical that the governor intervene to stop these condemnations immediately.

Please call Governor Paterson right now at 518-474-8390 and thank him for his commitment to ordering a review of the Atlantic Yards project. Ask him that he stop the entire process while the review goes forward, particularly the condemnation of private property. Stress that in the middle of the state’s fiscal crisis, it doesn’t make sense to give a private developer $100 million for a wildly unpopular, pie-in-the-sky project. Remind him of the barren fields in Fort Trumbull – that could be the future of Brooklyn.

Next American City, Eminent Domain: Can We Define Blighted?

It is a rare moment when I agree with Clarence Thomas. And 43 states have now taken measures to protect private-property rights.

But I don’t believe that New York State is one of them. And just around the holidays, New York’s Court of Appeals announced that the state could exercise eminent domain in claiming land for the Atlantic Yards project. And thus it ruled that the neighborhood in questions was “blighted.”

I used to live half a block from Atlantic Yards and I take issue with the notion that it is a blighted neighborhood. It’s not a pretty area, but there is a pretty successful shopping mall, independent stores, bars, and restaurants all in the vicinity.

Commenter Norman Oder posts:

Regarding that Atlantic Yards photo, keep in mind that only the foreground/right is part of the Atlantic Yards site, Vanderbilt Avenue between Pacific and Dean streets, and that some buildings already have been demolished.

The left (east) side of Vanderbilt Avenue is not part of the site. Nor is the background/right, which includes thriving businesses along Vanderbilt Avenue.

Should the project continue, Vanderbilt between Pacific and Dean will become part of a surface parking lot for more than 1000 cars.

Hub and Spokes, Is Blight the New Eminent Domain

I deal with this issue a lot in my day to day work, but this really gets to the issue of who is defining blight and for who? Usually projects that are initiated in the community, or have strong community support, never tread down this path because they don't have to. Atlantic Yards in Brooklyn is a great example of not getting community buy in or input early on and had resulted in law suits. When the word blight is used, nine out of ten times it is because someone from the outside is moving in.

Gideon's Trumpet, An Afterthought on the New York Kaur Case

It now remains to be seen whether the New York Court of Appeals (that state’s highest court) will take the Kaur case. If it does, that may provide yet another opportunity for that court to redeem itself by retreating from its extremist position of rubber-stamping anything and everything that New York condemnors come up with. This is not hyperbole. How bad can it get? Pretty bad. Recall the infamous Rosenthal & Rosenthal case in which a federal court in New York ruled that even if, as alleged by the property owner, the redevelopment project was tainted by corruption taking the form of favoritism intended to confer a windfall on politically well-connected folks, whereby project boundaries were drawn so as to include a taking of the subject property for their benefit, that would not affect the “public use” nature of the taking and would not be a proper reason to interdict the taking.

But in the Kaur case, the New York Appellate Division did examine the unseemly facts underlying the decision to condemn and found them to give rise to a miasma of favoritism, conflict of interest, procedural mistreatment of the condemnees, and deliberate blighting of the area. What now? Can New York’s highest court now ignore these revelations, and pretend that it’s businss as usual? We hope not.

DimeMag.com, SUMMER OF 2010 WATCH: NETS A MUCH BETTER OPTION THAN THE KNICKS

But if I were one of those free agents trying to choose between the two New York area squads, I’d have to go with the Nets. Though they’re struggling now, Jersey arguably has a better young core that has more potential.

NoLandGrab: Struggling? That's a really kind way to describe a team that has lost 95% of its games.

Posted by eric at 11:23 AM

Which court ruling is better for NYC: Atlantic Yards or Columbia?

Crain's NY Business

A New York state appeals court ruled Thursday that the state cannot use eminent domain on behalf of Columbia University to condemn land the school wants for its $6 billion expansion plan. It called the use of eminent domain unconstitutional and questioned the state and university's claims that the West Harlem area is blighted. The decision comes less than a month after another court ruled in favor of developer Forest City Ratner using eminent domain to complete its $4.9 billion Atlantic Yards project. That Brooklyn project includes a 22-acre residential development and a basketball arena.

Which ruling was better for New York City?

→ Columbia. The university and state failed to prove that the area in question is blighted, a requirement for eminent domain.

→ Atlantic Yards. The Brooklyn project will boost the local economy.

→ Neither. Until it becomes more transparent, the eminent domain process is bad for the city, no matter what project it affects.

Click here to cast your vote.

Posted by eric at 10:47 AM

Tomb of the Unknown Ratner, or a sneak peek at the future Barclays Center security perimeter?

NoLandGrab

For seemingly as long as some people can remember, what will be the main street-level entrance to the Long Island Railroad's Flatbush Avenue terminal has been under construction, and, more often than not, hidden behind scaffolding. Not long ago, however, the scaffolding came down, revealing a curved, windowed façade, framed in pale stone and fronting an atrium.

AtlanticTerminalSarcophagi2.jpg

Then, more recently, some scaffolding went back up, and crews began some work on the small plaza at the corner of Atlantic Avenue and Hanson Place. In the past few days, the nature of this work was revealed: a closely spaced series of enormous, intrusive, Sarcophagus-like — and butt-ugly — blocks.

AtlanticTerminalSarcophagi4.jpg

Our first thought was that the Brooklyn Museum was preparing an outdoor installation from its Egyptian collection, or that perhaps Green-Wood Cemetery had finally reached capacity. But then reality intruded, and we realized that we were looking at the Atlantic Terminal's new security perimeter — and perhaps, a test run for perimeter security at Bruce Ratner's planned Barclays Center basketball arena.

When several elected officials in November, 2007 called for an independent review of security plans for the arena, after Newark police required the closing of a busy street adjacent to that city's Prudential Center before and during events (and after Forest City Ratner misled journalists about the proximity of the arena to Flatbush and Atlantic Avenues), they were rebuffed by Forest City and city and state officials, and police spokesman John Kelly pointedly told the Brooklyn Daily Eagle that the NYPD didn't "foresee any street or land closures, sidewalk widening around the arena or the installation of bollards [emphasis, ours].

OK, but what about massive concrete and granite boxes the size of small cars, likely to frustrate pedestrians as much, or more, than terrorists?

AtlanticTerminalSarcophagi3.jpg

If the MTA and Forest City believe it's necessary to place Gaza-sized security outside the Flatbush Avenue terminal, which is occupied by perhaps a couple thousand people in transit at any one time, what might they have planned for the space surrounding the Barclays Center, which, assuming significant improvement in the play of the Nets, would hold 18,000+ seated patrons for two or three hours at a time?

As the photo below (taken by Michael D.D. White) of the model of the latest iteration of the Barclays Center indicates, the arena would nearly overhang Atlantic Avenue (at right in photo; that's Sixth Avenue in the foreground). Would the sidewalk along Atlantic be lined with barriers similar to the ones being installed at the Atlantic Terminal? Would other "publicly accessible" space be cordoned in the same manner?

It's also worth noting that while NYPD spokesman Kelly didn't foresee the installation of bollards, the Barclays Center Arena Preliminary Official Statement anticipates the installation of "sidewalks, bollards and street trees" in the main entry plaza, or, as Bruce Ratner likes to call it, the "Urban Experience" outside the arena. So which is it?

The public has a right to know how allegedly public space will be configured. An independent security review need not reveal blast resistance and composition of materials, but it should certainly reveal whether or not sidewalks will be able to handle the flow of crowds, and, crucially, whether or not traffic would be restricted in any way. Because protecting a 21st century arena shouldn't depend on technology from Egypt's Fourth Dynasty. When Bruce Ratner promised "world-class design," we didn't think he meant the world circa 2500 B.C.

AtlanticTerminalSarcophagi1.jpg

Posted by eric at 10:06 AM

How Low Can They Go? Winless Nets Set New Standard for Worst NBA Start Ever

Brooklyn Daily Eagle
by John Torenli

We missed this one on Friday, and while the headline no longer applies (the Nets won!? Friday night), this still does:

Are 2010 free agents like Dwyane Wade, Chris Bosh, Joe Johnson and King James supposed to be lured to the Nets simply by the prospect of playing in Brooklyn someday?

Maximum contracts will be available for all of these players by next summer, and the Nets will more than likely have a very high pick in the NBA Draft.

But the mounting losses and lack of star power is leaving a poor impression not only on the high-priced free agents in waiting, but the current Nets as well.

article

Posted by eric at 10:05 AM

Total condemnation: State botched eminent domain for new Columbia campus

NY Daily News, Editorial

What, no vitriol about a "small band" of "selfish holdouts?" Errol Louis must be on vacation.

New York State's supposed economic development geniuses have only themselves to blame for the scathing court ruling that barred the use of eminent domain to spur Columbia University's $6.3 billion expansion plan.

The Manhattan Appellate Division cited persuasive evidence in declaring that the Empire State Development Corp. essentially concocted a determination that the neighborhood where Columbia wants to build was blighted.
...

The ruling was stunning. While it may slow construction of Columbia's hugely important campus in West Harlem, the decision was nonetheless welcome for putting public authorities on notice that they must meet minimal standards before trying to seize private property.

link

NoLandGrab: Of course, those "minimal standards" haven't been met with Atlantic Yards, either, but neither the News, nor the Appellate Division, seem to have made that connection.

Related coverage...

Atlantic Yards Report, Daily News editorial endorses court decision in Columbia case, doesn't grapple with AY similarities

While the editorial noted that the Court of Appeals ruled in favor of the state two weeks ago in the AY case--subject of a wrongheaded Daily News editorial--it fails to acknowledge that the dissent in the Columbia case cited the AY case, while the court opinion ignored it.

Yes, there are some differences in the underlying facts of the Columbia and AY cases. And the state's highest court might in fact uphold the challenge to the state's use of eminent domain for Columbia on narrow grounds, without revisiting the Atlantic Yards case.

But the court should confront the essential similarities between the two decisions: the use of underutilization to determine blight and the Empire State Development Corporation's vague blight standards.

Moreover, the majority opinion in the Columbia case pointed to the evidence of pretext--that blight was not identified as a justification until after the project was announced. In his dissent in the Atlantic Yards case, Judge Robert Smith cited similar evidence in the Atlantic Yards case, but the majority ignored it.

Posted by eric at 5:47 AM

Families in homeless shelter in AY footprint told they'll have to leave by January 15

Atlantic Yards Report

Forest City Ratner and the Empire State Development Corporation would have you believe that property condemnations for Atlantic Yards are only going to affect rich yuppie condo owners, who'll get even richer thanks to generous buyouts. Wrong.

Residents in a two-building shelter for homeless families in the Atlantic Yards footprint just got some not-so-sunny holiday greetings, as the facility is slated to be closed by January 15.

A mandatory meeting at Pacific Dean will be held tonight "to provide details and help you through the transition," according to a message distributed to residents.

The buildings typically house more than 90 families. Some will be moved to permanent housing, others to another shelter.
...

The shelter has not been sold, at least according to city property records for 603 Dean Street and the adjacent 768 Pacific Street, which are Block 1129, Lots 76 and 21, but they are subject to eminent domain. I don't know if any transaction is in process.

The block, at the southeastern section of the Atlantic Yards footprint between Dean and Pacific streets and Carlton and Vanderbilt avenues, is slated to become a massive interim surface parking lot, with 1044 spaces.

article

NoLandGrab: Suffice it to say, Bruce Ratner is not offering these families "generous relocation packages."

Posted by eric at 5:30 AM

Comparing the Gehry arena outline/orientation with its successor, thanks to an Ellerbe Becket interior design

Atlantic Yards Report

So, how has the planned Atlantic Yards arena changed?

No rendering of the interior of Frank Gehry's Atlantic Yards arena design was ever released, to my knowledge, but we did get a schematic of the arena block, via the Design Guidelines attached to the 2006 Modified General Project Plan. (Click on graphics to enlarge.)

Nor has a rendering of the interior of the new Ellerbe Becket design (now with a facade by SHoP) been officially released, but I did get one, thanks to a Freedom of Information Law request to the New York City Department of City Planning.
...

link

Posted by eric at 5:20 AM

Did Planning Commissioner Burden leak the "hangar" rendering? FOIL request stymied

Atlantic Yards Report

So, was it really Amanda Burden, chairperson of the New York City Planning Commission, who leaked images of the Ellerbe Becket arena design (aka "hangar") of the Brooklyn arena to the New York Times?

The leak led to a scathing review by architecture critic Nicolai Ouroussoff and the subsequent hiring of trendy architecture firm SHoP to put a facade on the same building, generating two cheers from Ourossoff.

In June, Crain's blamed Burden, citing anonymous sources. But my Freedom of Information Law (FOIL) request to the Department of City Planning (DCP) couldn't confirm it.
...

From the DCP letter to me (click on graphic to enlarge):

Responsive records which are being withheld... consist of intra-agency emails reflecting staff opinions or deliberations.

article

Posted by eric at 5:10 AM

December 6, 2009

CitizeNYC Podcast #1

Citizen NYC

Greg & I are hosting a weekly Friday podcast for CitizeNYC, called Two Beers In. In our first episode, playable below, we talk about the NY state Senate, the Atlantic Yards decision, and we both forget the name of the show. We'll be on iTunes soon!

Play Podcast

link

Posted by eric at 9:45 PM

Definition of public good

Crain's NY Business, Letters

Crain's is wrong on key points in its Nov. 30 editorial, “Affirming Atlantic Yards.” As Norman Oder puts it in his thorough, in-depth blog, Atlantic Yards Report: “The Court of Appeals did not endorse the public good. It chose not to substitute its judgment for the Empire State Development Corp.'s questionable—but still "rational'—determination of the public good. Nor have "elected officials' implemented development plans.”

This deal is backdoor in so many ways, and that is why this “holdout” is joining 4,700 others in supporting Develop Don't Destroy Brooklyn in its legal fight.

—Carol Wierzbicki

link [Subscription/trial registration required]

Posted by eric at 7:59 PM

Yassky's waterfront lesson: make sure neighborhood commitments in development plans are done up front

Atlantic Yards Report

From an 11/23/09 New York Observer article headlined Yassky's Bargain: A Departing Councilman in Search of a Quo for His Quid, concerning "the parks the city promised Yassky in exchange for a sweeping 2005 rezoning of the Williamsburg and Greenpoint waterfront."

The Observer reports:

There wasn't much else to see and as we got back into the minivan, I asked Yassky about making deals with the city.

"Certainly one lesson," he said. "One lesson of that is: whatever neighborhood improvements are supposed to go with a big development plan should be done up front--should be done before it's passed. The commitment should be made enforceable in some way. And if not, then don't bank on it."

...

Of course, the same questions have long been raised about the promised "publicly accessible open space" in the Atlantic Yards project.

And we know that all of it--except for interim open space occuping land promised for towers--wouldn't come until the distant (and perhaps never) Phase 2 of the project.

By contrast, the open space came first with Battery Park City. That lesson has been long learned. It just hasn't been followed.

link

Posted by steve at 8:31 AM

The Brooklyn Paper's curious choices when it comes to front-page treatment of Atlantic Yards

Atlantic Yards Report

It's unlikely that a Brooklyn news story comparable to the Atlantic Yards fight will come around again any time soon. So how have local newspapers been doing in their coverage of this important story?

Let's compare. This week's front-page news concerns the newspaper's effort, via the Freedom of Information Law (FOIL), to find out how the Empire State Development Corporation (ESDC) determined its low-ball market value of Atlantic Yards opponent Daniel Goldstein's apartment.

It's legitimate news, but why is it on the front page? Likely because the editors want to play up their exclusive.

Last week's Brooklyn Paper coverage of the Court of Appeals' eminent domain decision didn't make the front page. It should have.

However, the editors apparently thought that coverage of Jonathan Lethem's effort to read his new novel aloud and a drug bust in Williamsburg constituted more important news.

This week's print issue of the Brooklyn Paper does not contain the newspaper's online coverage of the bond rating for the Atlantic Yards arena.

Maybe that was a space issue, but the newspaper's coverage also was two days late. The Courier-Life's notorious Stephen Witt does have a fawning article on the bond rating, which begins:

It’s all systems go for the Brooklyn Nets arena, and perhaps an NBA championship banner hanging from the rafters following the 2011-12 playoffs in the borough. The idea did not seem that far-fetched to current Nets owner Bruce Ratner...

...

The front pages of the other two Brooklyn weeklies last week straightforwardly highlighted the eminent domain decision. In fact, the Courier-Life, using tabloid shorthand, even called the Court of Appeals' ruling a "land grab." Did that have anything to do with the fact that Witt didn't write the article?

link

Posted by steve at 8:20 AM

Eminent Domain: Let the Public Beware!

NBC New York
By Gabe Pressman

New York City broadcast television news outlets have shown little interest in the eminent domain battles going on in their area. Late in the game, we have this item.

The Appellate Division of State Supreme court ruled that the condemnation procedure, in which Columbia tried to take Manhattanville property for the expansion project, was unconstitutional.

The appeals court spoke out angrily, referring to how the "scheme was hatched," calling the effort “sophistry” and “idiocy.”

The ruling denounced the state for declaring the neighborhood involved blighted. The university controls most of the land needed for its planned $6.3 billion expansion --and says it will appeal the decision.

But, at least for now, it’s a great victory for the owner of several self-storage warehouses and other possessors of properties who have refused to sell to Columbia. The court even charged that the Empire State Development Corporation tried to stack the deck in Columbia’s favor.

The idea of stacking the deck should offend taxpayers, and make us thankful we have courts standing in the way of plundering landlords -- even if they say they’re acting in the cause of higher education

It’s likely that Columbia will appeal now to the highest court in the state, the Court of Appeals. That body recently ruled in favor of the Atlantic Yards project, in which a new Brooklyn home is being built for the New Jersey Nets.

Eminent domain -- when government takes over private property allegedly to promote the "public good" -- is a most controversial procedure. In recent years, government has used it more and more.

In the Columbia case, Norman Siegel, a lawyer for the owners who held out against the university, says the decision “sets forth a road map for how private property owners can fight back when government tries to seize your property in the name of eminent domain.”

But a spokesman for the state said the court decision was “wrong and inconsistent with established law.”

...

So, in plain language, can eminent domain be used, not to promote the public good, but to cause public harm? Most assuredly, yes. This concept can be manipulated to hurt people, in the name of helping them!

That’s why the courts must act as a brake on arrogant government officials. As one writer noted in the NYTimes Magazine; “One man’s urban improvement is another man’s urban debacle.”

link

Posted by steve at 7:53 AM

December 5, 2009

Atlantic Yards Report Super Saturday

It's a rainy day today in Brooklyn. A perfect excuse to relax and take in the Atlantic Yards report.

Abatement: the simple way to remove blight

Sometimes, the simplest answer is the best.

Urban design expert David Sucher, commenting on the Appellate Division decision blocking the state's use of eminent domain for the Columbia University expansion, observes:

If you are really concerned with blight, “abate” it

There is another tool which government has to control “blight.” It doesn’t cost nearly as much as purchasing the land and so far as I understand, it can be very very effective. It’s called abatement. There is little doubt that a local government can use abatement if it wants to.

Of course the standard for forcing someone to abate the nuisance they are creating requires some real facts and not merely hand-waving claims. So it is not as useful for institutions and organizations which wish to get land cheap or without having to bother with capitalism.

Manifest destiny, in West Harlem and Prospect Heights

From a New York Times profile today of Nick Sprayregen, the winning (so far) main plaintiff in the challenge to eminent domain for the Columbia University expansion:

He pulled out a copy of the inaugural address by Columbia’s president, Lee C. Bollinger, in 2002, and read several passages. In one, Mr. Bollinger described the university’s need to expand and said, “I will do everything in my power to build this new Columbia.”

“That almost sounds like it’s coming from a religious figure,” Mr. Sprayregen said. “Do they think this is fallow land with no one on it, and they’re settlers and there are a bunch of illiterate Indians here and it’s their God-given responsibility to tame us and take control?”

It also sounds a lot like Atlantic Yards developer Bruce Ratner's statement, upon the December 2003 announcement of the AY plan: "We are going to get the Nets to Brooklyn if it’s the last thing I do."

Law professor Salkin: "messy situation" on eminent domain may lead to new legislation clarifying blight (cracked sidewalks!)

So, how to sort out the tension between an Appellate Division decision denying the Empire State Development Corporation's (ESDC) use of eminent domain for the Columbia University expansion and a Court of Appeals decision enabling the ESDC's use of eminent domain for Atlantic Yards?

"We have a little bit of a messy situation right now," observed Patricia (Patty) Salkin, Director of the Government Law Center of Albany Law School and author of the Law of the Land blog, on yesterday's Capitol Pressroom, a daily one-hour public radio news magazine broadcast from Albany. (The segment begins at about 14:33 of the show.)

While she wasn't ready to say that the Columbia decision would be reversed on appeal, she did suggest that loose standards to determine blight, allowing the inclusion of cracked sidewalks--which, I'd pointed out, were also cited in the Atlantic Yards Blight Study (right)--would prompt a new legislative look at eminent domain.

There have been periodic bills and hearings, including a state Senate hearing in September 2008, but no action. In fact, a New York State Bar Association Task Force in 2007 called for a state commission on eminent domain, but there was no follow-up.

Read the rest of this post for a discussion on what the New York State Court of Appeals may do when the ESDC appeals this week's decision against the use of eminent domain on behalf of Columbia University. Also covered are public opinion on eminent domain and what state legislation might be forthcoming to tighten up the standards for declaring blight.

Has FCR "refuted" the claim that the naming-rights deal was cut in half?

According to Sports Business Daily, the Nets Refute Claim That Barclays Naming-Rights Deal Cut In Half, as I and others reported yesterday.

The rest of the story is subscription-only, but yesterday Forest City Ratner spokesman Joe DePlasco claimed that the agreement includes "the arena, team and hospitality assets."

Maybe it hasn't been cut in half, but there's no reason to think it adds up to $20 million a year. In other words, they may be saying that recent reports are imprecise, but they're changing the subject by not answering the more important question: what the deal is worth.

NoLandGrab: < sarcasm > We always depend on Ratner flack DePlasco to tell us the real story < /sarcasm >.

Bloomberg: the public has a right to know about public monies (when it comes to the DA's office)

Take each instance of "DA" from this quote from Mayor Mike Bloomberg and replace it with "Bruce Ratner".

"The DA comes to us every year for his budget," Bloomberg continued. "How are we supposed to know what his budgets needs are when they're sitting on tens of millions of dollars. Monies we give to the DA are monies we could use for other things if they're not needed.... This is the public's monies, and nobody--no agency--has a right to hide what they do."

When Norman Oder tries to find out how much money is being handed over to the developer here's what happens:

But when I last year asked via a Freedom of Information Law (FOIL) request why the city had added $105 million in subsidies for Atlantic Yards, I was stonewalled.

Posted by steve at 11:59 AM

Atlantic Yards Report Friday Hangovers

It's hard to keep up with Norman Oder. Here are some Friday items from him presented on Saturday by NLG.

Updated: Is the city kicking in an extra $31 million for property acquisition? No, it's for infrastructure

Update: "The $131 million referenced is part of the total original commitment (not new money) and will go to FCR for site acquisition and infrastructure work," says New York City Economic Development Corporation spokesman David Lombino.

The below was written earlier today.

Has New York City contributed an additional $31 million subsidy for Atlantic Yards land? While I haven't been able to get an answer from city or state officials, language in bond documents is ambiguous but suggests that conclusion.

Uninformed Bloomberg, defending eminent domain for Columbia plan, claims city pursued eminent domain for Atlantic Yards

Brutally weird. Mayor Mike Bloomberg in a radio interview today, asserted erroneously that, while the state pursued eminent domain for the Columbia University expansion, the city was overseeing eminent domain for Atlantic Yards.

Actually, in both cases, it's the work of the Empire State Development Corporation, whose dubious findings of blight raise questions about the practice of eminent domain in the state.

...

On today's Live from City Hall with Mayor Mike and John Gambling (at about 26:48), the host asked the mayor about the Columbia case, noting last week's Court of Appeals decision on the AY case.

"Atlantic Yards was the city using eminent domain," Bloomberg stated. "This is the state, in all fairness. We're not a party to the ligitation."

Paterson publicly endorsed Columbia expansion (and thus eminent domain), but was quiet about AY; what about that "objective and fair hearing"?

Will Governor David Paterson make good on his pledge to review the proposed Atlantic Yards project to see if it is in the state's interest?

I haven't met too many people who think that Gov. David Paterson's pledge this week to provide Atlantic Yards opponents with "an objective and fair hearing" would amount to much.

Then again, Paterson basically had been silent regarding the project, with no quotes from him in official press releases issued by the Empire State Development Corporation (ESDC) on 6/23/09 and 9/17/09.

However, he publicly endorsed the Columbia University expansion, stating on 5/20/09:

"I am delighted that the work and cooperation of our partners at Columbia, the Mayor’s Office, and Empire State Development, as well as local elected officials and members of the community will help ensure that Columbia maintains its role as one of the foremost educational and cultural institutions in the world and a major New York employer.”

Now that a judicial panel has put a wrench in the state's plan for eminent domain, raising significant questions about the use of blight in this state, will Paterson take step back and deem the ESDC's questionable procedures in both the Columbia and AY cases is worth a look?

He's got a lot on his plate, like a serious state deficit. But the Columbia decision was front-page news.

Posted by steve at 11:35 AM

As Atlantic Yards Gets Pricier, How Much Red Ink Can Ratner Absorb?

Village Voice
By Neil deMause

This item shows that the finances for an arena in Prospect Heights indicate an iffy chance of success.

Uberdeveloper-turned-Nets-owner Bruce Ratner better have some good meds, because this is rapidly shaping up to be a month of rapid mood swings for him and his Atlantic Yards project. While Tuesday's granting of a desperately needed investment-grade rating for the Nets arena bonds must have been a sigh of relief for Ratner, since then he's been pelted by less-good news that promises to take chunks out of his wallet:

  • The record-setting $20 million a year naming-rights deal agreed to by Barclays back in 2007 turns out to be worth only $10 million a year and change.
  • A state judge overturned the seizure of land by eminent domain for Columbia University's Harlem expansion — a case with many similarities to Atlantic Yards — writing in his ruling that designating the land as "blighted" was "mere sophistry" for the benefit of a development that is "nothing more than economic development wearing a different face."
  • As a condition of not consigning the arena bonds to a junk rating, Moody's and Standard & Poor's forced Ratner to cut the amount of tax-free bonds from $650 million to $500 million — which means more money that must be raised either by more expensive taxable bonds, or via cash from Ratner or his new Russian pal.

...

So, Ratner and partner Mikhail Prokhorov are looking at getting less naming-rights money, and paying through the nose for the arena debt. At what point, then, does Atlantic Yards stop being a viable investment, and instead turn into a sea of red ink?

For a glimpse at that, we must turn to page 89 of the 772-page bond offering document released yesterday by Goldman Sachs that was the source of the naming-rights revelations. (Posted here by Eliot Brown of the Observer, who dug through it in the first place; annoying registration required.) This lists all of the revenue streams — from suite sales to concessions revenue to a $1-per-ticket "green building fee" — that are getting assigned to ArenaCo, the new Ratner-and-Prokhorov-owned company that will actually operate the arena. After bond payments and operating expenses, the arena is projected to turn a profit of around $46 million its first year of operation, rising slightly in subsequent years.

While that would seem like a decent cushion, there are reasons for the dynamic duo's bean counters to be at least a bit concerned. First off, the Goldman Sachs doc lists the bond payments (listed here as "PILOTs," for the fake "payments in lieu of taxes" that will be used to service the bonds) as "preliminary, subject to change" — and as we've seen this week, those figures are only going up. Secondly, it doesn't account for the fact that Ratner and Prokhorov will presumably want to be repaid for their cash outlay on the arena, currently estimated at $293 million. Not to mention the $300 million Ratner spent to buy the Nets originally, or the tens of millions he's lost since then while running the team into the ground.

And what could be more interesting is what's not on the chart: the projected finances of the Brooklyn Nets once they land in the borough of overpriced Asian fusion cuisine. With all those other arena revenues dedicated to paying off the arena, that would leave the Nets to survive mostly just on ticket sales — which, while no doubt higher than they're getting in the Meadowlands, could amount to a pretty thin gruel compared to their NBA brethren, especially if the team never wins another game.

Related...

Atlantic Yards Report, Neil deMause: gaps in bond offering statement add skepticism regarding returns for arena project and Nets

link

Posted by steve at 10:10 AM

NJ Nets snap record-setting losing streak at 18 with 97-91 victory over Charlotte Bobcats

The Star-Ledger
By Dave D'Alessandro

The New Jersey Nets complete their record-breaking losing streak.

Our long national nightmare is over.

After 38 days, 18 excruciating defeats, one coaching change, a thousand jokes on radio talk shows, and incalculable angst among the few fans they have left, the Nets finally won a game Friday night.

They followed new coach Kiki Vandeweghe’s command to play with freedom and an open joy, and it translated into 48 minutes of intense effort and a devastating offensive combination in Brook Lopez and Courtney Lee, who both had special nights to lead the Nets to a 97-91 triumph over the Charlotte Bobcats.

And judging by the noise they evoked from 12,131 witnesses at a delirious Izod Center, they wouldn’t mind making this a habit.

link

Posted by steve at 9:40 AM

Pro Bono Barrister Verrazano Span Impact Worse Than Atlantic Yards

The Brooklyn Eagle
By Charles F. Otey, Esq.

This article compares the Atlantic Yards fight to attempts to keep construction of the Verrazano Bridge from decimating Bay Ridge. A mixed message results.

Here, opponents are encouraged to oppose the proposed Atlantic Yards project even as it is echoes empty job promises.

The DDDB people promise to carry on. And they should. Yet, in this troubled economy leaders such as Mayor Mike Bloomberg and Borough Marty President Markowitz have reiterated their support for the Atlantic Yards, which will bring thousands of jobs and hundreds of millions of dollars in construction.

Where is the evidence for the statement that "Housing and business there will dramatically improve"?

And this is where any parallels between DDDB and the “Save Bay Ridge Committee” that opposed Moses in the 1950s must fail. Greater Bay Ridge — also identified as southwest Brooklyn — lost almost 15 per cent of its largely residential territory with construction of bridge approaches. In exchange, the remaining residents received only a massive polluting series of highways!

In sharp contrast, Downtown Brooklyn will see a healthier economy. Housing and business there will dramatically improve.

The following paragraphs indicate that it is "sensible" to oppose developer Bruce Ratner's plans, but the opposition still receives a scolding.

This is not to say that Ratner and his plans are valid and final. Solid and sensible opposition remains such as that voiced by Assemblyman Jim Brennan, who correctly complained to one newspaper that the Empire State Development Corporation, the overseeing agency. “has handed over to Forest City Ratner control of 22 acres of Brooklyn, no strings attached.”

Unlike the emperor-like authority granted to Robert Moses more than half a century ago, there are a myriad of legal and regulatory hurdles Forest City Ratner must yet deal with. If Ratner’s opponents are truly interested in developing Brooklyn, they’ll switch gears and direct their considerable energy and talent to making sure the final project serves the borough’s best interests.

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NoLandGrab: When the proposed Atlantic Yards project is stopped, opponents will be more than happy to switch their gears and support the UNITY Plan.

Posted by steve at 9:14 AM

Court Nixes University’s Harlem Expansion

Globe Street
By Daniel Wise

This article on this week's decision by the Apellate Court against Columbia University's use of eminent domain connects with the ongoing Atlantic Yards fight.

On the subject of Atlantic Yards, lead counsel Matthew Brickerhoff of the group Develop Don’t Destroy Brooklyn issued a statement following Thursday’s Columbia decision saying that, "The timing of the ruling is certainly propitious. In the next few days, we will file a motion asking the Court of Appeals to reconsider its ruling in our case, based on this new indictment of the agency’s standard operating procedure. We know that the Court of Appeals will now review the Columbia University ruling, and we are optimistic that the abuse of power detailed in Justice Catterson’s powerful opinion, combined with the agency’s similar conduct in the Atlantic Yards case will cause a few of the judges who already expressed skepticism to reconsider their decision."

link

Posted by steve at 9:05 AM

Nets arena go-ahead gets more good news

Courier-Life
By Steven Witt

Here's reporting that displays more of the Courier-Life's fawning coverage of all things Bruce Ratner.

It’s all systems go for the Brooklyn Nets arena, and perhaps an NBA championship banner hanging from the rafters following the 2011-12 playoffs in the borough.

The idea did not seem that far-fetched to current Nets owner Bruce Ratner after both Moody’s Investor Service and Standard & Poor’s gave investor grade ratings for the proposed issuance of $500 million in tax-free bonds.

The ratings, which were just above a junk bond rating, should help pave the way in financing the $1.06 billion Barclays Center arena at the Flatbush/Atlantic avenues intersection.

This following unquestioned information fails to indicate that an arena could not open before 2012 and also indicates there is now a new definition of the phrase "good team".

While the Nets have started off winless in their first 17 games at press time and are on the verge of breaking an NBA record for losses starting a season, Ratner said it’s all part of a plan to bring a championship contender team to the borough by the end of the 2011-12 season.

“This was really just a year we were rebuilding. We’ve had a lot of injuries. I think long term we have a very good team,” said Ratner.

link

Posted by steve at 8:39 AM

Property Rights Are No Slam-Dunk

Investor's Business Daily

Eminent Domain: Four years after the Supreme Court told a Connecticut homeowner that no one's house is safe from developers, Brooklyn homeowners may lose their homes to a pro basketball team.

...

The latest victims of the Kelo decision may well be the residents of an area of Brooklyn known as Atlantic Yards, dominated by a rail yard and with homes and businesses that the state of New York, if not the residents, considers blighted.

Many states after Kelo took legislative action to protect private property and homeowners from seizure without a legitimate public use, but not New York. Its plans for the 22-acre site include an 18,000-seat basketball arena for the New Jersey Nets. That will certainly produce more tax revenue than small businesses and homeowners who don't want to move.

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NoLandGrab: Missed entirely here is that, according to the New York City Independent Budget Office a Nets arena would be a money loser for New York City.

Posted by steve at 8:28 AM

Nets naming-rights deal at Brooklyn arena pays half of original figure

The Star-Ledger

Barclays has proclaimed it is committed to the proposed Nets arena. Perhaps the fact that they're paying half of what was originally announced for naming rights could be a factor.

The British-based Barclays Bank is paying half of what it originally agreed to for naming rights on a planned Brooklyn arena for the NBA's Nets team, a report in NorthJersey.com said.

The newspaper said the once-record $400 million naming rights deal was chopped to $200 million, according to a statement prepared by Goldman Sachs sent out to investors for the $900 million arena. The original $400 million deal would have shattered the record for the most lucrative deal for an indoor arena in the United States, according to the New York Post. Still, at $10 million a year, the renegotiated deal would be double what Prudential paid for naming rights on the Devils’ hockey arena in Newark, the report said. And the document indicates the New York Islanders could be another potential tenant.

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NoLandGrab: Yet to be rationally explained is how a hockey team will play in an arena that cannot accommodate a hockey rink.

Posted by steve at 8:13 AM

Perkins Percolates on Eminent Domain

The Neighborhood Retail Alliance

Bruce Ratner lobbyist, Richard Lipsky, continues to condemn eminent domain in general, but not for Atlantic Yards in particular. He concludes this blog entry where he opines on the recent Kaur decision where Columbia University's use of eminent domain has been turned back:

All of which makes the case for legislative remedies all that much more compelling. But, as we have pointed out, the Willets Point situation is fraught with any number of extra-legal difficulties-cost traffic mitigation and feasibility leading the way. Still, the courts just may, hopefully, be moving towards a different view on the use of eminent domain for "public benefit," and not public use.

Unfortunately, Lipsky's financial arrangements keep him squarely behind Atlantic Yards, the eminent domain abuse poster child.

link

Posted by steve at 7:54 AM

Which court ruling is better for NYC: Atlantic Yards or Columbia?

Crain's

Crain's offers an on-line poll.

A New York state appeals court ruled Thursday that the state cannot use eminent domain on behalf of Columbia University to condemn land the school wants for its $6 billion expansion plan. It called the use of eminent domain unconstitutional and questioned the state and university's claims that the West Harlem area is blighted. The decision comes less than a month after another court ruled in favor of developer Forest City Ratner using eminent domain to complete its $4.9 billion Atlantic Yards project. That Brooklyn project includes a 22-acre residential development and a basketball arena.

Which ruling was better for New York City?

  • Columbia. The university and state failed to prove that the area in question is blighted, a requirement for eminent domain.
  • Atlantic Yards. The Brooklyn project will boost the local economy.
  • Neither. Until it becomes more transparent, the eminent domain process is bad for the city, no matter what project it affects.

link

Posted by steve at 7:48 AM

December 4, 2009

Happy Holidays from the New Jersey Nets

Photo: AP/Bill Kostroun

Posted by eric at 11:51 AM

THANK YOU

Battle of Brooklyn via Kickstarter

Excited and overwhelmed. That's how we feel right now. Your enthusiasm has inspired us, and we are extremely grateful that you chose to support this project.

373 of you stepped forward with $25,507 and pledged to help us finish Battle of Brooklyn. Getting to meet so many interesting and like-minded backers has made this Kickstarter campaign priceless. It was nail-bitting to the very end, and like the story at the heart of this film proves anything is possible with the help of communities who care about each other.

December 10th we're holding a private preview screening of the first thirty minutes and we hope those of you in New York can attend.

http://www.kickstarter.com/projects/rumur/battle-of-brooklyn/posts/3891

In the next few days we'll update you on our next steps with the project and will send out your respective rewards.

Thank you from the bottom of our hearts.

Stay tuned...

Mike, Suki, David

link

Posted by eric at 11:49 AM

What Would It Take to Get You to a Nets Game?

Off the Dribble [NY Times NBA Blog]
by Jay Schreiber

Several weeks ago, the Nets’ marketing department tried to have some fun with the team’s losing streak. It was right after the Nets fell to 0-10 on the season, and the marketing department came up with a “10 Is Enough” promotion, offering $10 tickets to Game 11, which, naturally, the Nets lost, too.

But now that the Nets have descended to 0-18, setting an N.B.A. record for futility at the start of a season, the marketing department has backed off. No more clever promotions, at least for the moment. This leaves a vacuum that Off the Dribble will try to fill, with some help from you.

How would you promote the Nets’ next game, which will take place Friday night, at home, against the Charlotte Hornets?
...

Have an idea? Go ahead and post it. The Nets, with no victories and many empty seats, need all the help they can get.

link

NoLandGrab: We have a few choice suggestions, but they're unprintable here due to FCC decency regulations.

Posted by eric at 11:44 AM

When the Home Team Stinks, So Does the Scalping Business

The New York Times
by Patrick McGeehan

To the list of world's toughest jobs, add this one: scalper of Nets' tickets.

On the spectrum of public esteem, ticket scalpers have seldom stood far from three-card monte dealers. But if ever there were a scalper who deserved pity, the white-haired man in the parking lot outside the Izod Center in New Jersey might just have been the one.

He was the only scalper brave or foolish enough to be hawking tickets Wednesday night to see the New Jersey Nets, a team that was about to redefine early season ineptitude in the National Basketball Association. Of course, he was not asking much, just half or a fourth of what the Nets claimed the seats were worth.

Still, few of the fans trickling by broke stride as he said, “Anybody need tickets?” Of the people who approached him, as many were selling unwanted tickets of their own as were looking to buy.

Some wanted to bargain him down to $8 or even $7 — less than they had just paid to park their cars.

Such is the plight of the men trying to make a living dealing basketball tickets in a season of despair.
...

In contrast to the extraordinarily high asking prices that can be found on StubHub for tickets to hot concerts or World Series games, the market for Nets and Knicks tickets has nearly hit bottom. Mr. Piacenti pointed out that on Tuesday, seats for that night’s Knicks game were available for as little as $4.99, plus fees. Somebody was offering nine tickets to the Nets’ game against Golden State on Wednesday for $1 each, before fees.

Deals like that have left the white-haired scalper in the Izod Center lot lonely and dejected.

He said he was not surprised that he had no competitors.

article

NoLandGrab: "No competitors?" Au contraire, mon frere. You have a huge competitor — the Nets Chief Ticket Giveaway Officer, Brett Yormark. When plenty of tickets can be had for $0, it's kinda hard to sell them for $10. But better an out-of-work scalper than the guy who paid $125 a game for his season ticket, sitting next to a bunch of folks who paid zilch.

Oh, and one note to the reporter: "the Nets’ expected move to Brooklyn in 2011" won't happen until the fall of 2012 — at the soonest.

Posted by eric at 11:32 AM

Lawyer who won Columbia case "cautiously optimistic" about surviving appeal, says creation of record key to win

Atlantic Yards Report

So, can yesterday's surprising 3-2 Appellate Division decision blocking the Empire State Development Corporation's (ESDC) pursuit of eminent domain for the Columbia University expansion plan be upheld at the Court of Appeals?

"I'm cautiously optimistic," plaintiffs' attorney Norman Siegel said in an interview last night, mindful that Justice James Catterson's opinion ignored the Court of Appeals decision last week upholding the ESDC's use of eminent domain in the Atlantic Yards case. "We really have to change the law of New York, and Catterson's decision could be a catalyst."

"We have huge challenges facing us," he acknowledged, given that the Court of Appeals would have to essentially change course. "I'm aware, as a litigator, that this is a win for December 3, and we have to go to Albany, but I know how to get to Albany."

He argued just a few weeks ago at the Court of Appeals on an ancillary case regarding the ESDC's appeal of a ruling regarding the Freedom of Information Law (FOIL).

The appeal in this case could be heard as early as March, with a decision coming six weeks later.

"Significant win"

"This is a significant win for property owners and community activists who oppose eminent domain," Siegel said. "The road map is that no longer can we allow just the government to do the Blight Study, we need to find the resources and find the experts who can work with us and put our own study in."

(I pointed out similarities and differences between the Columbia and AY cases, while the attorney in the AY case cited fundamental similarities. Siegel, who represented Develop Don't Destroy Brooklyn after its formation, agreed that, in both cases, blight was used as a pretext, given that the projects were announced well before blight was cited as a justification for eminent domain.)

article

NoLandGrab: And New Yorkers didn't elect Siegel Public Advocate why?

Posted by eric at 11:23 AM

Crime Beat: NBA's Crooked Ref Won't Stop Blowing Whistle, Cites Iverson Fix

Runnin' Scared
by Ward Harkavy

Maybe it would be better for the league to re-hire [crooked ref Tim] Donaghy and have him fix one of the New Jersey Nets' games so they could finally win one. Brooklyn still loves the Bums, but not these bums and is warning Bruce Ratner not to bring them to the borough.

link

Posted by eric at 11:11 AM

Can decision in Columbia eminent domain case reopen AY case? DDDB is trying, but there are both similarities and contrasts (and also precedent)

Atlantic Yards Report

Based on the surprising 3-2 Appellate Division decision yesterday blocking the the Empire State Development Corporation's use of eminent domain for the Columbia University expansion, Develop Don't Destroy Brooklyn, organizer and funder of the Atlantic Yards eminent domain case, hopes that it can succeed in the rare step of reopening the latter.

It's not easy. First, the Court of Appeals has to agree to such a rare step.

Then the plaintiffs have to win. And that wouldn't be easy, either, because the decision in the Columbia case was in significant tension with the Court of Appeals' decision just last week in the Atlantic Yards eminent domain case.

And even if the Columbia decision is not overturned, it is possible--depending on which frame the court uses--to make a distinction between the Columbia case and the Atlantic Yards case. Then again, there are some fundamental similarities.

Fundamental flaw

The fundamental flaw in Justice James Catterson's opinion yesterday is that he completely ignored the Court of Appeals decision in the Atlantic Yards case, an opinion cited in Justice Peter Tom's Columbia dissent as compelling the Court of Appeals to defer to the ESDC's designation of blight.
...

Reopening the case

Brinckerhoff told me that, in most circumstances, a motion for reconsideration is futile. He said he was "cautiously hopeful" that the Court of Appeals, recognizing that the two rulings appear inconsistent, would accept the motion.

Then it could, at minimum, hold the case in abeyance until the appeal in the Columbia case is decided. That appeal could be heard in March, with a decision coming within six weeks after that.
...

"If I was involved in the bond sale, I would be looking at this decision and it would concern me, in a way that is very unexpected," Brinckerhoff said. The case is going to go to the Court of Appeals, he noted, "and judges ruled one way that seems rather inconsistent, in an opinion that doesn't cite [the AY case]."

article

Posted by eric at 10:54 AM

THESE BOOS ARE FOR YOU BRUCE RATNER

NetsAreScorching
by Mark Ginocchio

Unlike The New York Times, some media outlets aren't avoiding assigning proper blame for the demise of the New Jersey Nets.

The boos that filled an otherwise empty Izod Center as the Nets set a record in futility against the Dallas Mavericks last night should be meant for one person, and one person only.

Bruce Ratner.
...

At some point, he needs to own up to the fact that as the owner of this franchise, he’s been the ultimate failure where it matters most – on the basketball court, not in the courtroom pushing people out of their homes. The hypothetical day Russian billionaire Mikhail Prokhorov takes the reins of this organization can’t come soon enough. One can only hope that afterwards, Ratner crawls back in a hole somewhere, never to torture a sports team, a fanbase and a community, like Prospect Heights in Brooklyn, ever again.

article

Thank you, sir. May we have another?

AP, Bottom-dwelling Nets take their cues from the top

Everyone insists the New Jersey Nets can't get much worse.

In that case, we'll take the under.

Team president Rod Thorn blames "a perfect storm" for his team's record-setting 0-18 start to the NBA season, but that's just the short-term forecast. Actually, it's the lack of interest and effort from owner Bruce Ratner that's swamping the franchise, steadily drip-drip-dripping down the organizational chart like a five-years-long-and-counting version of water torture.
...

The team is losing an estimated $30 million to $40 million a year, and the Nets arena is barely half-filled most nights, largely owing to Ratner's half-baked plan to move the franchise to a new stadium he planned to build in Brooklyn. Why NBA commissioner David Stern went along with the scheme is anyone's guess, but it has already cost his league plenty in credibility.

Thank you, sir. May we have another?

NBA FanHouse, Nets Are Committing Consumer Fraud

The Nets aren't just bad, folks. They aren't even trying. I am not kidding when I suggest the NBA commissioner, David Stern, apologize to their diminishing fan base and either issue ticket refunds or offer free concessions and parking in the Meadowlands. If not, we're talking about a legitimate case of consumer fraud.
...

What owner Bruce Ratner didn't calculate was the team sinking to such wretched depths that no superstar -- including LeBron James, even if he's Jay-Z's close pal -- wants any part of this operation. Worse, the Nets are plotting a move to a new arena in Brooklyn in June 2012, meaning the poor fans of Jersey are being asked to support a lame-duck franchise that is moving across the Holland Tunnel, the entire expanse of Manhattan and the Brooklyn Bridge. As it is, entire sections of the arena are empty, forcing the team to take desperate marketing measures and send players into the community, such as Harris' appearance at a South Orange grocery store. What happens the next two seasons when they're playing either in the Meadowlands or in downtown Newark? And, for that matter, what happens in Brooklyn if no major free agent signs?

Click through for some stand-up talk from the Nets' Chris Douglas-Roberts, a good guy who deserves much better than Bruce Ratner's special brand of misery.

Posted by eric at 10:22 AM

Authorities in state need a lot of reform

Queens Village Times, Letters to the Editor

The Queens Civic Congress, an umbrella organization for more than 110 community and neighborhood-based groups representing tenants, co-op and condo owners and homeowners in Queens, welcomes the agreement in Albany on legislation that introduces needed oversight and sunlight into the administration of public authorities that operate in the state.
...

Projects like Atlantic Yards, which the MTA made possible by selling development rights to public property below market value, actually demonstrated the need for this important and much-required reform.

Corey Bearak
President
Queens Civic Congress

link

Posted by eric at 10:16 AM

Jay-Z, The Black Branch Rickey, Brings The Nets, And Gentrification

RaceWire
by Jamilah King

The fact that Brooklyn’s prodigal son is leading the charge to displace some of its most vulnerable residents underscores the fact that despite rap’s proletariat beginnings, Black popular culture, specifically hip-hop and pro sports, has become a major vehicle for gentrification in the past twenty years.

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NoLandGrab: Keepin' it real, Jay?

Posted by eric at 10:08 AM

Brooklynites says Nets in Brooklyn must win; guess who are the two most positive

Atlantic Yards Report

The New York Daily News today, in an article headlined Brooklyn basketball fans warn New Jersey Nets owner Bruce Ratner not to bring losing team to borough, queries a not-so-random selection of basketball fans, several of whom say they don't want a losing Nets team coming to Brooklyn.

But a team rep is positive, as are a couple of fans:

Other would-be Brooklyn Nets fans were disappointed by the record-breaking loss but held out hope the fortunes of the team will turn around.

Kelly Burwell, 40, of Crown Heights, said the losing streak was "heartbreaking," but added, "It's all going to change ...Everyone will want to play for the Brooklyn Nets."

That's what the Nets are banking on, too. "We're going to have an exciting and winning team in Brooklyn," said spokesman Barry Baum, adding the team would look to pick up key free agents over the summer and benefit from several first-round draft picks in the next few years.

"We'll probably get LeBron James, we'll probably get all the good players," said Greg (Jocko) Jackson, a former Knick and now director of the Brownsville Recreation Center.

"When (the team) gets to Brooklyn it's going to be 18 and 0."

Neither of those two seeming civilians are new to the Atlantic Yards dispute.

Burwell was quoted in an October 2006 New York Times article as one of those welcoming the team. And Jackson was quoted in a May 2006 Daily News ITeam blog as one of those receiving program support from the Nets.

link

Related...

NY Daily News, Brooklyn basketball fans warn New Jersey Nets owner Bruce Ratner not to bring losing team to borough

Posted by eric at 9:55 AM

EMINENT DOMAINIA: Columbia University Edition

NY Daily News, No eminent domain for Columbia University expansion: court

In a blistering ruling, an appeals court Thursday blocked the state from seizing private properties for the $6.3 billion expansion of Columbia University.

The Appellate Division's 3-to-2 ruling upheld charges by several commercial property owners that the Empire State Development Corp. stacked the deck in favor of Columbia University in allowing the use of eminent domain.

"The process employed by ESDC predetermined the unconstitutional outcome," the judges ruled.

The appeals court said the ESDC's finding that the Manhattanville neighborhood was blighted and underused "was bereft of facts."
...

The narrow Columbia decision is bound to be appealed to the state's highest court, the Court of Appeals.

Recently, the top court ruled in favor of eminent domain in the much-litigated Atlantic Yards project to build a new home for the Nets in Brooklyn.

The Wall Street Journal Law Blog, Eminent Domain Month Continues: Kelo No Help For Columbia’s Plans

The last few weeks have been hot and heavy on the Eminent Domain front. We had news about the fallout from the Supreme Court’s 2005 Kelo decision; a big ruling for private developers in the Brooklyn Atlantic Yards case; and arguments at the U.S. Supreme Court over whether Florida’s beach renourishment program constitutes a “taking.”

But wait, there’s more. Earlier today, the appellate division of the New York state Supreme Court found Columbia University’s expansion plans, which propose condemnation of parts of a 17-acre lot in West Harlem, unconstitutional.

The New York Times, Court Bars New York’s Takeover of Land for Columbia Campus

The majority opinion was scathing in its appraisal of how the “scheme was hatched,” using terms like “sophistry” and “idiocy” in describing how the state went about declaring the neighborhood blighted, the main prerequisite for eminent domain.

The $6.3 billion expansion plan is not dead; an appeal has been promised, and Columbia still controls most of the land. But at a time when the government’s use of eminent domain on behalf of private interests has become increasingly controversial, the ruling was a boon for opponents.

“I feel unbelievable,” said Nicholas Sprayregen, the owner of several self-storage warehouses in the Manhattanville expansion area and one of two property owners who have refused to sell to the university. “I was always cautiously optimistic. But I was aware we were going against 50 years of unfair cases against property owners.”
...

The court’s decision, if it is upheld, is not fatal to the plan. Columbia already owns or controls 61 of 67 buildings in the 17-acre project area. Presumably, it can build around the holdout owners, or come to agreement with them. But the state and the university have sought the entire site.

Which begs the question: why not just build around them in the first place?

AKRF, the firm that did the Environmental Impact study for the project, as well as the Atlantic Yards EIS, and just about every other EIS in New York State, and which seems to have never found an impact it didn't like, defended itself after being admonished by the court for a lack of objectivity:

A spokesman for the firm said in response to the court’s ruling: “As a firm of planners and analysts, AKRF’s responsibility is the collection and assessment of data in an objective and thorough manner. Our analyses help inform a public decision-making process. They are not advocacy documents.”

NoLandGrab: Yeah, right — it's just coincidence that every damned one of them ends up reaching the conclusions that the state and the developers want them to reach.

The Volokh Conspiracy, New York Intermediate Appellate Court Invalidates Taking of “Blighted” Property for Transfer to Columbia University, but Contradicts Recent State Supreme Court in the Process

There is, however, one major problem with the Kaur decision: it seems to contradict the New York Court of Appeals’ (the state supreme court) recent decision in the Atlantic Yards case, Goldstein v. New York Urban Development Corporation, which specifically ruled that a property can be declared blighted and condemned if there was “economic underdevelopment” or “stagnation” in the area. As I explained in this post, Goldstein allows state officials to designate almost any area as blighted and then condemn property within it. As an intermediate appellate court, the Kaur court is required to follow state supreme court rulings. Unfortunately, the Kaur majority barely even mentions Goldstein, except for noting that the same private consultant conducted the study allegedly proving the existence of “blight” in both cases. Perhaps this neglect is explained by the fact that the Atlantic Yards opinion was only issued last week. If so, the Kaur court should have taken more time to fully consider it. The contradiction with Goldstein is in fact noted by the Kaur dissenters, who point out that the state supreme court ruling requires broad deference to administrative blight determinations, even if there is considerable evidence that the determination was flawed.

It might still be possible to invalidate the Manhattanville takings in a way consistent with Goldstein. For example, the Kaur majority based its ruling in part on the fact that the government failed to follow some of the procedural requirements of New York’s blight statute.

However, the central holding of Kaur - that “underutilization” isn’t enough to prove blight — is in clear tension with the Atlantic Yards decision. The fact that the same consultant conducted both blight studies and used similar arguments to justify his findings only accentuates the tension. Indeed, “underutilization” was the main evidence for the existence of blight in the Atlantic Yards project area, as well as in the part of Manhattanville condemned for transfer to Columbia.

NY1, Court Decision Halts Columbia Expansion

In a statement, the agency said, "ESDC believes the decision to be wrong and inconsistent with established law, as consistently articulated by the New York State Court of Appeals, most recently with respect to ESDC's Atlantic Yards project."

Curbed, State's Land Seizure for Columbia Expansion Ruled Unconstitutional!

The ESDC plans to appeal the surprising decision. Why surprising? Because eminent domain decisions, like at Atlantic Yards recently, have a way of going the government's way.

Click here to download a PDF of the court's 65-page decision.

Posted by eric at 8:55 AM

From Kelo to Columbia: What Eminent Domain means now

The Capitol Pressroom

Bad news for Columbia.

The University had plans to expand its campus into west Harlem with the use of newly broadened eminent domain rules, but those plans were thwarted yesterday by the Appellate Division of the NYS Supreme Court which ruled AGAINST Columbia.

This flies in the face of expectations, which were strengthened by a ruling LAST week from a different court which gave Ratner, the private company developing Atlantic Yards in Brooklyn, its stamp of approval on eminent domain. That ruling no doubt angered people who live in the Brooklyn neighborhood that Bruce Ratner & the City of NY are “taking” by ED.

Not only is this being watched by constitutional scholars all over the country – it is opening up a huge can of worms for business interests here in New York State: Not only for private companies that want to take over public land for expansion, but for the Empire State Development Corporation, Industrial Development Agencies, and City planners.

One of the foremost experts on eminent domain, Patricia Salkin will be joining us to figure it all out, plus I am working on getting reaction from the Empire State Development Corporation....

link

Listen live this morning at 11 a.m.

Posted by eric at 8:28 AM

Atlantic Yards Report: fact finding in a 772-page document hole

Norman Oder has been on a five-plus-year-long search for scarce facts about Bruce Ratner's highly-subsidized Atlantic Yards megaproject, which explains why he's been mining the 772-page document, released as a prelude to the arena bond offering.

Is the city kicking in an extra $31 million for property acquisition? It may look like that, but no confirmation is available

Yes, it really may be possible that, despite the fiscal straits our City is in, Mayor Bloomberg is planning on kicking in another $31 MILLION to bail out Bruce Ratner's Atlantic Yards megaproject. According to Norman Oder, it's a developing story:

Has New York City contributed an additional $31 million subsidy for Atlantic Yards land? While I haven't been able to get an answer from city or state officials, language in bond documents is ambiguous but suggests that conclusion.

Arena_pricetagA.jpg Why the arena would cost about $900 million--and why the Carlton Avenue Bridge job hasn't been paid for yet

The cost of the arena, plus "related infrastructure" "required in order to open the Arena," will add up to $1.1 BILLION. The money for replacing the Carlton Avenue Bridge "is supposed to be coming."

If the arena is built as a green building, it'll cost every visitor a buck

As the headline says, though Bruce Ratner touts his plans for achieving the environmental imprimatur of LEED certification for his Atlantic Yards plan, he intends to slap a $1 surcharge on every ticket sold at the arena (for basketball or not) to pay for it.

The plans for arena transactions and PILOTs; see if they make sense to you

They're not Rube Goldberg contraptions — they're the schematic plans that illustrate how the arena bonds are structured and get paid pack.

ArenaBondFlowCharts.gif

Just to be clear: Ellerbe Becket is the arena architect; SHoP is merely the façade architect

Though SHoP has been brought on board to satisfy local tastemakers, the documents indicate that the hot NYC-based architectural firm is only working on making the facade more palatable.

SHoPTurkey.gif

A lot of people have casually referred to the arena as a collaborative effort. But the Barclays Center Arena Preliminary Official Statement (prepared by Goldman Sachs) makes it clear that Ellerbe Becket is the arena architect, while SHoP is merely working on the façade.

In other words, the basic orientation and design of the arena was not changed; the main change concerned the skin.

[Current rendering (not included in Atlantic Yards Report's post), by John Bauman.]

Market analysis (commissioned by Ratner) suggests arena would have no trouble attracting events, might even host hockey

We admit, we get confused when Bruce Ratner's crack team talks out of both sides of their mouths. First the arena is downsized to the point it can't accommodate a professional hockey team, but now a marketing study commissioned by the developer says, "If built as planned, the arena would need to be retrofitted to accommodate the ice-making abilities the NHL requires for its franchises."

Check out the rest of the post for highlights and soft spots from the study.

Posted by lumi at 5:25 AM

Derogatory

Here's a shot of 14-year-old Evan Juliano holding the sign that he was told to put down at Wednesday night's game, because it was "derogatory," as reported by Star-Ledger reporter Steve Politi.

Seeing as how owner and Atlantic Yards developer Bruce Ratner has dismantled a championship contender in less than five years, we're impressed that resignation and wit on the part of fans haven't already given way to chants of "Ratner sucks."

Posted by lumi at 5:05 AM

The temporary Vanderbilt Yard is already in operation

Atlantic Yards Report is reporting that, according to an official statement, dated Decebmer 2, 2009, the Temporary Railyard at Vanderbilt Yards is already under operation.

As of the date of this Official Statement, LIRR has moved operations into the completed Temporary Yard, has de-energized the existing tracks within the Arena premises, and has signed an agreement with RailCo which allows for the cutting and removal of such track by RailCo. Of the budgeted hard-cost amount of $65.7 million, $55.8 million has been expended as of October 31, 2009, with approximately $9.9 million remaining to be expended, of which amount approximately $8.3 million consists mainly of so-called “dead-heading” costs of LIRR.

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Photographer Tracy Collins posted this photo on November 23, 2009, along with this comment, "It appears that the MTA is at least testing the new "temporary" railyard that's being constructed for the proposed Atlantic Yards development."

Posted by lumi at 5:04 AM

Atlantic Yards Report: Midnight Madness

Norman Oder got an early Christmas present from Goldman Sachs: the 772-page Barclays Center Arena Preliminary Official Statement.

At entrance to the arena, "Urban Room" becomes "urban plaza" becomes (interim) "Urban Experience"

Once there was supposed to be a soaring Urban Room serving as entrance to the Atlantic Yards arena. With the absence of Building 1, in which the Urban Room was to be incorporated, Forest City Ratner representatives started talking about an "urban plaza."

No more. Now it's an "Urban Experience," not to be confused--presumably--with an actual urban experience. It's another one for the Atlantic Yards Lexicon.

NoLandGrab: [Sound of NLG barfing].

Nah, the Nets won't play in Brooklyn in the 2011-12 season

I wrote earlier today that the arena might open in April 2012, giving the Nets just a few games in Brooklyn.

Nah.

A market study attached to the Barclays Center Arena Preliminary Official Statement (prepared by Goldman Sachs) states, "It is assumed that the arena will open in May of 2012. As such, the year ending June 30, 2012 only reflects two months of operations."

And there is no sum under the column "Guaranteed Rental Payments (Nets' Ticket Sales)" for the 2012 fiscal year. (See p. 553 of the PDF.)

NLG: We wonder if Oder made it to page 553 in the time it took us to post this entry.

Posted by eric at 12:09 AM

December 3, 2009

It’s half-off at Brooklyn arena, but Islanders 'could' join Nets

The Brooklyn Blog [NYPost.com]

Barclays Bank could be getting two horrendous teams for half off what it originally agreed to pay for naming rights to the planned Brooklyn arena.

New arena financing documents released yesterday leave the door open to the NHL’s Islanders joining the NBA’s Nets at the planned Barclays Center in Prospect Heights, and they also indicate that a once-record $400 million naming-rights deal the British bank agreed to pay over 20 years has been chopped to $200 million.

Barclays would now pay $10 million a year to the arena’s owner over the 20-year deal as part of a renegotiated agreement, according to a 772-page statement prepared by Goldman Sachs for the $900 million arena project sent out to potential investors.
...

A source close to the deal said it is a far cry from the $20 million a year over 20 years that Barclays was once set to pay.

The Nets will "definitely be getting much closer to $10 million a year than $20 million,” the source said.
...

The Goldman Sachs document says the Nets – who set an NBA futility record Wednesday by starting a season 0-18 -- are expected to be in the new arena by the middle of 2012, and for the first time indicates the Islanders could be leaving Long Island to join them.

“The New York Islanders could potentially become a tenant” at the Barclays Center, the document says.

But there’s one problem: When Ratner spiked Gehry’s original arena plan for a cheaper design, the size of the arena’s playing area was a casualty, and, as planned, it’s no longer wide enough to host pro hockey games.

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NoLandGrab: Sure, the "Islanders could potentially become a tenant" if they quit playing hockey for a sport that would actually fit in the arena, like roller derby or a dog show. Is there anything they won't claim in trying to buck up Ratner's high-risk arena bonds?

Posted by eric at 11:55 PM

PRESS RELEASE, DEVELOP DON'T DESTROY BROOKLYN: Not So Fast, It’s Not Over

Court’s Decision in Columbia Case Breaths New Life Into Case Against Eminent Domain for Brooklyn Atlantic Yards Project
Victory Against Eminent Domain Abuse Looks Like Tipping Point In Statewide Fight

BROOKLYN, NY — The Atlantic Yards project suffers a blow.

In an important decision with far-reaching ramifications, New York’s Supreme Court Appellate Division (First Department) http://www.courts.state.ny.us/reporter/3dseries/2009/2009_08976.htmruled today that the Empire State Development Corporation cannot seize private properties by eminent domain to give to Columbia University.

The property owners and tenants in the Atlantic Yards eminent domain case, http://www.dddb.net/eminentdomainGoldstein et al. v NY Urban Development Corp., were thrown a lifeline today by a Manhattan state appellate court. In a 3-2 decision the Appellate Division ruled that the state agency violated the Constitution when it found that the Manhattanville area near Columbia University was blighted and thus subject to seizure and transfer to the private university.

“The timing of the ruling is certainly propitious,” said Matthew Brinckerhoff, lead counsel for the home and business owners who just nine days ago had lost the first stage of their legal challenge to the confiscation of their properties. “As Justice Catterson rightly observed the Empire State Development Corporation’s abusive practices are the height of ‘idiocy.’ In the next few days, we will file a motion asking the Court of Appeals to reconsider its ruling in our case, based on this new indictment of the agency’s standard operating procedure. We know that the Court of Appeals will now review the Columbia University ruling, and we are optimistic that the abuse of power detailed in Justice Catterson’s powerful opinion, combined with the agency’s similar conduct in the Atlantic Yards case will cause a few of the Judges who already expressed skepticism to reconsider their decision. This will give us a rare second bite at the apple. We will not waste it.”

“My co-plaintiffs and I will fight every way possible to keep our homes and businesses from being seized. It is clear to me that the Catterson opinion speaks directly to the very same abuses perpetrated by the ESDC in its attempts to push Ratner’s project forward. Today's Columbia ruling gives us good reason for hope that our rights to enjoy our properties will be restored by the Court,” said Daniel Goldstein lead plaintiff on the Atlantic Yards eminent domain case.

Posted by lumi at 9:02 PM

Ratner Math: Nets Are Now 0-41

Develop Don't Destroy Brooklyn

According to Ratner math the Nets are not actually a record breaking 0-18, but a record smashing 0-41.

What's Ratner math: Count each quarter the Nets' opponents won and don't count any quarters the Nets won.

It's simple and fun!

link

Posted by eric at 3:35 PM

Appellate Division overturns ESDC's use of eminent domain for Columbia expansion; how different is it from AY?

Atlantic Yards Report

A big development in New York City eminent domain news — the Appellate Division has ruled against the ESDC's planned use of eminent domain for Columbia University's Manhattanville land grab.

From the majority opinion in the Appellate Division's 3-2 overturning of the Empire State Development Corporation's (ESDC) planned use of eminent domain for the Columbia University expansion:

It is recognized that Kelo, as described below, did not concern an area characterized as "blighted." However, the blight designation in the instant case is mere sophistry. It was utilized by ESDC years after the scheme was hatched to justify the employment of eminent domain but this project has always primarily concerned a massive capital project for Columbia. Indeed, it is nothing more than economic redevelopment wearing a different face.

So too did the Atlantic Yards petitioners argue that blight was a pretext because it wasn't mentioned as a justification for the project for more than a year after it was announced--an issue ignored by the majority in the Court of Appeals decision last week.

Underutilization

Wrote Justice James Catterson (who also filed a fiery concurrence in the case challenging the AY environmental review):

The most egregious conclusion offered in support of the finding of blight is that of underutilization. AKRF and Earth Tech allege the existence of blight from, inter alia, the degree of utilization, or percentage of maximum permitted floor area ratio ("FAR") to which lots are built. The theoretical justification for using the degree of utilization of development rights as an indicator of blight is the inference that it reflects owners' inability to make profitable use of full development rights due to lack of demand. Lack of demand can only be determined in relation to the FAR when combined with the zoning for the area in question. Manhattanville, for the relevant period, was zoned to allow maximum FAR of two, leaving owners essentially with a choice between a one or two-story structure. No rationale was presented by the respondents for the wholly arbitrary standard of counting any lot built to 60% or less of maximum FAR as constituting a blighted condition.

This is the exact same ratio used in the Atlantic Yards Blight Study.

Norman Oder has more details on the other side of the link.

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NoLandGrab: This is great news for the business owners who steadfastly refused to cave in under the threat of eminent domain, but it does leave Atlantic Yards opponents scratching their heads and asking, "how is Columbia U. so different from Bruce Ratner?"

Posted by eric at 3:18 PM

Did Barclays Get a Discount on Nets Naming Rights?

NY Observer
by Eliot Brown

Are the naming rights for Bruce Ratner's planned Nets arena worth what they used to be?

In January 2007, Mr. Ratner, Nets owner and developer of the planned $4.9 billion Atlantic Yards project in Brooklyn, trumpeted a record-setting naming rights deal for the new $900 million basketball arena that would be the centerpiece of the project.

While Mr. Ratner's firm never released an exact number, it was widely reported that British bank Barclays would pay nearly $400 million over a 20-year deal to slap its name on the venue, which, at the time, was to be designed by stararchitect Frank Gehry. The move was a huge win for Mr. Ratner, a record price that would bring in a big injection of funds with a well-respected name.

But now, after a historic economic crash, lengthy project delays, and the dropping of Mr. Gehry as project architect, there's reason to think the deal is less than it once was.

According to documents related to the arena's financing that were released Thursday, Barclays will pay $10 million a year to the arena's owner for the 20-year deal. Looking solely at this, it would seem to make it a half-off discount, but there are a number of other untold fees paid directly to the Nets as part of the naming rights, according to the documents. Forest City Ratner declined to provide those numbers, and a spokesman for Barclays declined to comment.

Click through for more.

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Additional coverage...

Atlantic Yards Report, After two renegotiations, Barclays naming rights agreement is $10 million a year (not $20 million, never formally confirmed)

Well, the Barclays Center Project Preliminary Official Statement (see p. 38 and 78-79) indicates that the 20-year Barclays Center Naming Rights Agreement was renegotiated twice and is worth $10 million a year.

(The document was acquired by Eliot Brown of the New York Observer, who quotes Forest City Ratner spokesman Joe DePlasco, spinning as always, as asserting the value is more because it includes "the arena, team and hospitality assets." Sure. But they're not saying $20 million a year.)

Other previous evidence of sweeteners: the addition of Barclays to the bond deal and the naming rights agreement for the Atlantic Avenue/Pacific Street station.

By the way, the New York Times just this week asserted the agreement was for $20 million a year.

NoLandGrab: A pie-in-the-sky estimate for the number of annual arena events. An incredible-shrinking-naming-rights deal. These one-notch-above-junk bonds are looking junkier by the day.

Posted by eric at 3:02 PM

The mysteries of the $131 million in New York City equity and the number of arena events

Atlantic Yards Report

As I wrote yesterday, the bond ratings agency Moody's counts $131 million from New York City as an substantial equity component, but that doesn't make sense.

If Moody's is counting city funding for land and infrastructure--and considering the "project" the arena plus infrastructure--it should also count at least some portion of the state's $100 million for infrastructure.

That $131 million figure, nor any other component of equity, is not mentioned in the other ratings agency report on the project, from Standard & Poor's.

Arena events

According to the Standard & Poor's report:

Of the 220 expected annual events at the arena, 41 will be basketball (excluding playoffs) and the remainder will be concerts, family shows, etc. We believe this expectation to be aggressive.

Indeed, they should. After all, the arena sponsors most recently predicted "over 200" events, and the one-time prediction of 225 events a year depended on no competing arenas in either the Meadowlands or Newark.

link

NoLandGrab: And, unfortunately, there are competing arenas in the Meadowlands and Newark. Is there going to be some magical spike in demand for Sesame Street Live and $300 concert tickets? Not likely, which is just one more reason that the projected revenue stream supporting the arena bonds are as shaky as Jello. Caveat emptor.

Posted by eric at 2:53 PM

If all goes well, the Nets might play in Brooklyn for the last games in 2012

Atlantic Yards Report

A tidbit in the Standard & Poor's report rating tax-exempt bonds for the planned Brooklyn arena: "construction is expected to be completed by April 1, 2012."

If the Nets aim to play ball, as Bruce Ratner asserts, "in the 2011-2012 NBA Season," that would mean--extrapolating from the current schedule--that the team would play its last three home games in Brooklyn.

Don't count on it. (The Times reported June 2012.)

link

Posted by eric at 2:50 PM

Prokhorov May Be Cleared, Could Get Control of Barclays Center

NetsDaily

Adrian Wojnarowski reports Mikhail Prokhorov’s bid for the Nets should be approved sometime after Jan. 1, quoting an NBA official saying, “He’s already checked out with the league through the FBI”. But Mark Cuban says he has “no idea” when it’ll happen. Meanwhile, a finance magazine reports Prokhorov will back some of the arena bonds and if they default, he’d gain control of Barclays Center as well as the team.

link

Posted by eric at 2:46 PM

Worst Start to a Season? Envelope Goes to the Nets

The New York Times
by Howard Beck

The Times once again manages to report on the woes of the New Jersey Nets while avoiding any mention of the root cause of the problems — the ownership regime of its business partner, Bruce C. Ratner. At least Yormarketing Genius makes an appearance.

There are a variety of ways to cope with humiliating, mystifying, record-setting infamy. Some choose angry words, some choose apathy and some choose disguises.

With the Nets on the verge of making the worst kind of history Wednesday night, two fans sitting courtside chose paper. They pulled brown shopping bags (curiously adorned with festive red Santa hats) over their heads. Above the eye holes, scrawled in black ink, was their mark of shame: 0-18.

Moments later, the Dallas Mavericks made it official, sending the Nets to a 117-101 defeat, their 18th in a row, the longest streak of futility to start an N.B.A. season.

Boos echoed across the Izod Center, which was perhaps half full. Mostly, the fans sat silently fidgeting, resigned to their team’s ugly fate.
...

When the losing streak hit 10 games, the Nets’ famously creative marketing department took note, with a “10 is Enough” promotion and $10 tickets. There was an opportunity, however perverse, to sell history Wednesday. That discussion took place, though it was very brief.

“This is a basketball team,” said Brett Yormark, the president and chief executive of Nets Sports and Entertainment. “And I think there comes a point where, you know what, let’s hold back on the marketing.”

Yep, that's Yormark. Mr. Restraint.

The next promotion will be aimed at life after the streak. Yormark is calling it “the second season,” the one that begins when the team is finally, mercifully healthy. Keyon Dooling, Tony Battie and Yi are expected back soon.

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NoLandGrab: Yeah, with bench-warmers Dooling, Battie and Yi back in the lineup, the Nets ought to turn things around in no time.

Unlike The Times, most news outlets aren't shy in assigning proper blame for the demise of a franchise that only a few short years ago contended for a title.

Fox Sports on MSN, Nets go from bad to worst with 0-18 start

By all rights, team president Rod Thorn should be on the hot seat departed by Frank. However, Thorn's roster changes were done with the explicit aim of reducing the team's payroll. He was just following orders.

Accordingly, the man who issued those instructions should be the individual condemned to coach the Nets. It would indeed be perfect justice if the season-long public humiliations resulting from his presidential decisions would be directed on a game-to-game basis at none other than owner Bruce Ratner.

Yahoo! Sports!, Streak sends Nets careening into history

They had come out of morbid curiosity, a perverse loyalty to the decades of embarrassment and humiliation here. They had come to see the fruition of how a despicable owner and a mismanaged Brooklyn arena bid transformed the New Jersey Nets back into a sinkhole of a franchise, a punch line for the sport. Families had come to wear paper bags, and a father and son had come to be threatened with expulsion by security for holding up a sign that said, “End Ratner’s Reign of Error.”

They had come because, well, they practically give tickets away here now.
...

Before a half-empty Meadowlands they lost 117-101 to the Dallas Mavericks, and the Nets had so much pride, so much resolve to fight and keep themselves from a biblical basketball embarrassment, they let the Mavs shoot 80 percent for a half and 90 percent for a quarter. It shouldn’t be that easy to shoot that well in the layup line, but the Nets quit on this game, this streak, the way the owner, Bruce Ratner, quit a long time ago. Ratner has little money left for this franchise, and less character.

Uncle Mike's Musings,

I will not be paying to watch the Nets again, unless the Russian trying to buy the team from Ratner tells him to take his Atlantic Yards and shove them up his ass, and moves the team to the Prudential Center in Newark where they should have been from the day that place opened in October 2007.

Bloomberg News, New Jersey Nets Fall to 0-18, Set Season-Opening Loss Record

Even Mike Bloomberg's news outlet can dance around the Ratner issue.

The team pared costs as Bruce Ratner, who purchased the franchise in 2004, worked to gain approval for a new arena -- the Barclays Center -- as part of a residential and commercial project in Brooklyn, New York.

Posted by eric at 10:26 AM

Nets only have 1,500 season ticket holders?

Yahoo! Sports
by Mark J. Miller

The New Jersey Nets better hope that sale goes through to the richest man in Russia soon. They need the dough. And instead of moving to Brooklyn, a place whose residents aren't exactly excited to have them or their horrendous-looking arena setting up shop, they might want to consider Newark, where the city seems to want them and the arena is already built. Seems like that would save them a ton of cash, which they seem to need these days.

An executive of the team is saying that the team only has sold 1,500 season tickets and partial season tickets combined, according to the Newark Star-Ledger.

link

NoLandGrab: Wait a second, didn't Nets CEO Brett Yormark brag to ESPN Radio's Seth Everett back in July that the Nets were "having one of the best off-seasons that we've had in years?" Guess they had set the bar pretty low.

And to think they followed up "one of the best off-seasons that we've had in years" with the worst start to a real NBA season ever.

Posted by eric at 10:15 AM

It came from the BONDosphere...

Atlantic Yards Report, Could Prokhorov become majority owner of the arena, too? If he buys the subordinated bonds and they fail, so it seems

Could Russian billionaire Mikhail Prokhorov control not just the majority of the Nets (of which he would buy 80%) but also the Atlantic Yards arena (of which he's slated to own a 45% stake)?

Maybe, but two not-at-all assured things have to happen: 1) he buys the riskier subordinated bonds and 2) there's not enough revenue from the project to make the bond payments.

(Remember, there would be $500 million in tax-exempt bonds, which were rated by the ratings agencies, and $146.8 million in unrated taxable bonds, likely at junk bond interest rates.)
...

The upshot, though, is that the enormous state effort to get the project going--the Blight Study, the use of eminent domain, the tax-exempt bonds, etc.--could turn out to provide the most significant benefits to Russia's richest man.

Atlantic Yards Report, When it comes to tax-exempt bonds (for BALDC and WTC), the ESDC shows inconsistent transparency

The New York Liberty Development Corporation, another special-purpose subsidiary (more or less) of the Empire State Development Corporation (ESDC), is having a meeting today at 9 am (webcast) regarding $2.6 billion in tax-free bonds for the use of World Trade Center (WTC) developer Larry Silverstein.

Except the bonds were already approved yesterday. Reuters reports:

Following its "common practice," the board approved Silverstein's Liberty bonds one day before holding a public hearing on the offering, she said.

"In case there is a large amount of public testimony, then the board is asked to meet again to review the testimony and the board will deny or affirm the sale," the spokeswoman said.

Bettina Damiani, project director for Good Jobs New York, an advocacy group, criticized the state agency for not waiting until after the public had a chance to comment.

"For the corporation to approve the bonds before a public hearing is the height of hypocrisy," she said.

Compared with BALDC

That seems both worse--and better--than the process last week by which the Brooklyn Arena Local Development Corporation (BALDC) approved tax-exempt and taxable bonds for the Atlantic Yards arena.

However much the decision was preordained, the BALDC did not meet a day ahead of time. On the other hand, no testimony was allowed; it was a public meeting, not a public hearing.

The Brooklyn Paper, Bonds away! Bruce’s bond rating means sale of notes is imminent

Attention investors! Now that the key bond-rating agencies have signed off on the financing for Bruce Ratner’s Atlantic Yards arena, $500 million in tax-free notes are poised to go on the market any day now.

Yes, the bonds will be on sale any day now; whether they do sell remains to be seen.

The state must sell all the bonds before the end of the year, when new IRS rules go into effect that would bar the use of such tax-free bonds for projects such as Ratner’s.

If the developer misses the deadline, the costs to finance his project would be prohibitively expensive.

Experts said that bonds of this type will easily sell out before that deadline.

"Experts" who are not named, apparently.

Posted by eric at 9:50 AM

Politi: Negative signs are everywhere for downtrodden NJ Nets

The Star-Ledger
by Steve Politi

Here's a must-read piece from Steve Politi: not only are the New Jersey Nets the worst out-of-the-gate NBA team ever, but apparently, "Ratner" is considered offensive language at the IZOD Center.

RatnerReignofError.jpg

The sign was a simple protest, scrawled on a white poster board in black Magic Marker. It did not contain any naughty words. It was, as these things go at sporting events, rather tame.

“End Ratner’s Reign of Error!” the sign read, and 14-year-old Evan Juliano held it up twice from his seats a few rows behind the Nets bench.

He held it up because he and his father, Dave, are season-ticket holders for what is fast becoming the worst team in NBA history, an 0-18 train wreck that didn’t even bother to show up for its date with infamy Wednesday night.

But somewhere in the second quarter, as the Mavericks impossibly scored on 22 of 24 possessions en route to a 117-101 victory, the Julianos were told to put their sign down. They were told it was derogatory.

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Related coverage...

Atlantic Yards Report, At the Izod Center, an "End Ratner’s Reign of Error!” sign is squelched

Develop Don't Destroy Brooklyn, "End Ratner's Reign of Error!" In NJ and BK.

Nets fans, sports fans—heck, all humans—should now understand why Brooklynites (sports fans many), have been in an uproar for six years. If Ratner can do this to something he owns, just think what he does to things that are not his.

Posted by eric at 9:14 AM

New Bill Requires More MTA Oversight

WNYC Radio
by Matthew Schuerman

The Metropolitan Transportation Authority and other public authorities in New York will have to operate differently now that the legislature has passed a bill requiring more oversight.

The measure makes many wide-ranging changes to reign in the state's semi-autonomous authorities. It also seeks to discourage those entities from selling their property for below-market value. That provision arose after former Gov. George Pataki and Mayor Michael Bloomberg prompted the MTA to sell its rail yards on Manhattan's West Side in 2005 to make way for a new football stadium. And critics say the same thing is happening in Brooklyn with Atlantic Yards now.

A version of the bill that passed this summer would have prohibited those deals. But after Mayor Bloomberg objected, arguing the provision would hamper economic development, the state legislature agreed to rework the bill. The revised legislation still allows authorities to sell property below market value, though it gives the governor, the assembly, or the state senate veto power.

link

Additional coverage...

Atlantic Yards Report, Revised public authority reform legislation passes Senate, should be signed by Paterson

But the language regarding selling assets at less than fair market value was tweaked to allow more flexibility. While such transfers are still allowed, the governor, the Senate, or the Assembly can veto such a proposed transfer.

Should a below fair market value asset transfer be proposed, not only is an appraisal required, but also a description of the expected benefits of the transfer and the names of the private parties participating in the transfer and the private parties who made an offer for the asset.

Also, the board must determine, in writing, that "there is no reasonable alternative to the proposed below-market transfer that would achieve the same purpose of such transfer."

Posted by eric at 9:03 AM

December 2, 2009

Nets (Never Ending Terrible Season) lose to Mavericks, set record for futility

Atlantic Yards Report

Congratulations, Bruce Ratner, you own the worst start in NBA history, which makes you the worst... oh, never mind.

Blown out tonight, 117-101, by the hot-shooting Dallas Mavericks, the Nets are now 0-18 to start the season, setting a National Basketball Association record for futility (at the start of a season) and validating the sign in the audience reading Never Ending Terrible Season.

The arena, reports the Times, was "perhaps half full." The official attendance was 11,689, about 58% of capacity.

It is no small irony that the record was set against the Mavericks, led by point guard Jason Kidd, whom the Nets traded away for Devin Harris. Last year, it looked like the Nets had gotten the better of the deal, but, with Harris's injuries and Kidd's resurgence, sportswriters aren't so sure.

And, of course, it is no small irony that the record was set as the long-delayed move of the Nets to Brooklyn comes closer and closer, with arena bonds rated at (barely) investment grade and the salary cap flexibility to upgrade the team.

link

NoLandGrab: And it's also no small irony that the game's radio broadcast tonight was aired on Bloomberg 1130 in the New York metro area, since Bruce Ratner's team-wrecking land-grab has been ably aided and abetted by the Mayor of New York City.

Posted by eric at 11:57 PM

Forest City Enterprises Notice of Third-Quarter 2009 Earnings and Conference Call

PR Newswire

Forest City Enterprises, Inc., (NYSE: FCEA and FCEB) will release its third-quarter 2009 financial results on Tuesday, December 8, 2009, after the NYSE close, and will hold a conference call with investors on Thursday, December 10, 2009 at 11:00 a.m. ET, to discuss these results. Investors are invited to dial into the conference call hosted by Charles A. Ratner, president and chief executive officer.

The conference call is scheduled for 11:00 A.M. ET, Thursday, December 10, 2009. A live webcast of the call will be available online at www.forestcity.net.

Use the following link to pre-register for this conference call. Callers who pre-register will be given a unique PIN to gain immediate access to the call and bypass the live operator. You may pre-register at any time, including up to and after the call start time.

To pre-register, go to:

https://www.theconferencingservice.com/prereg/key.process?key=PF4CEXKHN

To participate on the day of the call, dial 888-680-0860 and use access code 68778777, approximately five minutes before the call. Callers without a pre-registration PIN can press *1 to bypass the instructions and speak to a live operator. Tell the operator you wish to join the Forest City Third-Quarter Earnings Conference Call. (International callers, please dial 617-213-4852)

The call will be replayed from December 10, 2009, 2:00 P.M. ET to January 10, 2010, 11:59 P.M. ET. The replay number is 888-286-8010, access code 43038561. (International callers, please dial 617-801-6888) The webcast replay will be available at www.forestcity.net .

Posted by eric at 5:04 PM

Tish James and Dana Berliner on WBAI, Thursday, 5 p.m.

Prospect Heights City Council member Letitia James and Institute for Justice litigator Dana Berliner will join Behind the News host Doug Henwood tomorrow (Thursday, December 3rd) to discuss the Atlantic Yards project.

The program will air live on WBAI between 5:00 and 5:30 p.m., at 99.5 FM in New York City. Archived shows are available at www.leftbusinessobserver.com/Radio.html or at WBAI.org.

Posted by eric at 4:53 PM

Opposition to government-designated CBA coalition in Santa Rosa

COMMUNITY BENEFITS AGREEMENTS

Here's a reminder that some people have profited from the Atlantic Yards project without Bruce Ratner having sold a single bond.

The Accountable Development Coalition (ADC), which negotiated the recent Sonoma Mountain Village CBA, is coming under more fire. It seems that the SMART rail district, a quasi-public entity, is requiring developers of the New Railroad Square project to negotiate a CBA, specifically with the ADC. Attention has also been brought to the fact that the Sonoma Mountain Village CBA provides funding for the ADC: $5,000 upfront and $6,000 per year after that.

This has some people upset. As an editorial in the Press Democrat explained: "The coalition represents many important interests, but we don't believe it speaks for the entire community and, as a private organization that potentially could stand to benefit financially from such an agreement, it should not be allowed to dictate terms on a public project like this."
...

So the ADC may want to revise its policies somewhat. But critics should also acknowledge that the ADC is a mostly volunteer organization and that $6,000 a year isn't all that much. In other words, this doesn't seem like the type of case where coalition groups are getting bought off. The Atlantic Yards project, in contrast, involves much larger grants to all of the organizations that signed the CBA.

article

Posted by eric at 4:42 PM

Eminent domain approval in Brooklyn revives questions about Manhattanville

University officials see the Atlantic Yards ruling as a possible bellwether for the Manhattanville cases, while plaintiffs disagree.

Columbia Spectator
by Maggie Astor

A recent New York State Court of Appeals ruling upholding the use of eminent domain for the Atlantic Yards development in Brooklyn has sparked renewed interest in two similar cases concerning Columbia’s planned Manhattanville campus.

But the plaintiffs who challenge the use of eminent domain in Manhattanville say their cases are different, and do not see the pro-eminent domain decision as indicative of their chances.

Tuck-It-Away Self-Storage owner Nick Sprayregen and gas station owners Gurnam Singh and Parminder Kaur filed lawsuits in January with the Appellate Division of the New York State Supreme Court, one level below the Court of Appeals. Both suits challenge the Empire State Development Corporation’s December 2008 approval of the state’s invocation of eminent domain for Manhattanville.

ESDC would seize private properties in the 17-acre expansion zone and transfer ownership to the University, which would pay the current owners market-rate value. Columbia controls over 90 percent of land in the area, and Sprayregen and the Singhs are the only landowners who refuse to sell.

article

NoLandGrab: While Sprayregen and his attorney, Norman Siegel, profess confidence (and we hope they're right), the State Court of Appeals appears to have rendered "private" a very tenuous adjective when it comes to property in New York.

Posted by eric at 2:28 PM

Ratner's Yards Bonds Rated 'Barely' Investment Grade

Brownstoner

On the heels of last week's eminent domain ruling, Forest City Ratner took another step towards realizing its vision for a basketball arena in Brooklyn when Moody's Investor Service gave the $500 million in tax free bonds being used to finance the Barclays Center a crucial investment-grade rating. According to a largely positive story in Crain's yesterday afternoon, "the “Baa3” rating reflects several factors, including the strength of New York City as a media market, existing sponsorship support for the team, the large amount of equity the developer and its partner are putting in the project and strong reserve funds." And check out this quote in The Times from a vice president at Moody's: “The lawsuits are not an issue as far as the rating is concerned. The rating assumes that the lawsuits will be settled and that the project will move forward." A more skeptical article in the New York Observer noted that while technically investement-grade, the bond rating was only one step above junk level, reflecting significant risk factors like relocation, weak team finances and "uncertain demand for premium seating."

link

Posted by eric at 2:24 PM

Nets' problems of their own making

SI.com

But if you were to jot down a quick list of the Nets' problems, Frank would be nowhere near the top.

Sitting alone in that position is Bruce Ratner, New Jersey's cost-conscious owner who has overseen the dismantling of a franchise less than a decade removed from back-to-back Finals appearances. With the Atlantic Yards project in Brooklyn bleeding him for millions, Ratner's team paid the ultimate price.
...

The Nets will try to avoid setting the NBA's record for futility to open a season when they face Kidd (one of Frank's staunchest supporters) and the Mavericks Thursday in the Meadowlands. They will likely lose, and lose badly. Interim coach Tom Barrise, who will coach the team until GM Kiki Vandeweghe takes over on Friday, will face the media and shoulder the blame. A few players might do the same. But the real culprit in this Titanic-sized season is Ratner. This ignominious record will be all on him.

article

Posted by eric at 1:30 PM

As Nets Shoot for History, Brett Yormark Turns It Up 18 Notches!

Develop Don't Destroy Brooklyn

link

Posted by eric at 10:50 AM

How the BALDC seemingly flouts the state Open Meetings Law, and why it probably doesn't scotch the AY bond deal

Atlantic Yards Report

When the Brooklyn Arena Local Development Corporation (BALDC) adopted several resolutions in September--including a predicate to the issuance of tax-exempt arena bonds--without a public meeting, it seemingly violated the state's Open Meetings Law.

However, that seeming violation likely had no impact on the issuance of those bonds because another clause in the law says its provisions won't affect the validity of bond issues.

Official concerns

The issue was first raised in a report on WNYC radio, quoting Robert Freeman, executive director of the state Committee on Open Government (COOG):

REPORTER: Robert Freeman, a state official overseeing freedom of information law, says the September decision was apparently invalid anyway, given that it took place not in an open meeting, but by written consent.

(This report concerned only the now-abandoned plan to issue $400 million in tax-exempt bonds for infrastructure.)
...

Freeman, in an interview, said that the BALDC, which he called a "dummy not-for-profit corporation," should not be allowed to avoid meeting in public. However, he backed off from assertions that decisions made by the BALDC regarding bonds were thus invalid.

Read on for the fine print.

article

Posted by eric at 10:41 AM

Ex-Net Jason Kidd 'fesses up: AY is "about a real estate play" (not "doing the right thing")

Atlantic Yards Report

Nets point guard Jason Kidd, at an 8/23/06 press conference event before the Empire State Development Corporation's public hearing on the Atlantic Yards Draft Environmental Impact Statement:

"Getting to know Brooklyn and getting to know the community has proven to me that [Nets principal owner] Bruce [Ratner] is doing the right thing."

Kidd, now with the Dallas Mavericks, had a different message for today's New York Daily News:

"It's just one after another. It (the Nets' downfall) was something that was going to eventually happen. It reminded me of when I was with Dallas the first time (in the early '90s) and (H. Ross Perot Jr.) bought the team and it wasn't about basketball. It was about a real estate play. That is what happened with the Nets."

link

Posted by eric at 10:34 AM

Atlantic Yards report: Arena financing doesn't all add up

The slippery, risky Atlantic Yards bond deal

Did you notice that the Atlantic Yards financing deal keeps changing and has some very unclear numbers?

No infrastructure bonds

In September, the Brooklyn Arena Local Development Corporation (BALDC) agreed that it was willing to authorize up to $400 million in tax-exempt bonds for Atlantic Yards infrastructure. Now that plan is off the table.

PILOT bonds lowered in a week

Last week, the BALDC contemplated issuing up to $825 million in tax-exempt and taxable bonds for the arena. Yesterday, the amount of tax-exempt bonds had declined from $600-$650 million to just $500 million, in order to reassure investors.

Risky tactics denied but not ruled out

Officials of the BALDC say they won't do the following things, but won't definitively rule them out:

  • issue additional bonds
  • bail out investors who lose on arena bonds
  • issue tax-exempt bonds for infrastructure

And that ain't all of it.

Ratings agency Moody's says its estimates are based on 225 events a year at the Brooklyn arena, but that total's overblown

An updated article in the Bond Buyer, headlined Atlantic Yards Debt Gets Rated, quotes a ratings agency analyst explaining why the PILOT bonds for the planned Barclays Center got an investment grade.

But the number of arena events is inflated:

Out of the 225 days a year the arena is expected to hold events, only 40 to 45 of those will be Nets games, [Moody’s analyst Richard Donner] said.

“While the Nets are important as an anchor tenant, the arena is reliant upon other revenues,” Donner said. “We view that as a positive.”

However, a 9/16/09 Barclays Center press release stated, "Overall, the arena will host over 200 events annually."

And, as we've known for years, the original projection of 225 events a year depended on the closing of the Meadowlands Arena (now the Izod Center) and no construction of an arena in Newark.

But there's an arena in Newark.

So, does Moody's know what it's doing?

Funny, but Moody's won't say...

Ratings agency Moody's, asked why it assumes 225 events a year at the AY arena, won't discuss it

Given that a Moody's analyst told the Bond Buyer that its just-above-junk rating for $500 million in Barclays Center PILOT bonds depended in part on 225 events a year, I thought it was worth following up.

Noting that the arena sponsors most recently predicted 200 events a year (an 11% difference), I asked if Moody's was confident of the stated total of 225 events and, if there were 200 events, how might that change the rating.

Moody's spokesman John Cline responded, "I'm going to have to direct you back to the release. That is our comment."

The ratings agency release said nothing about the number of events; that was elicited in an interview.

My take: Moody's made a mistake.

NoLandGrab: Did these guys learn anything from events last year that damned near brought down the world's economy? Apparently not.

Posted by eric at 10:22 AM

Atlantic Yards Debt Gets Rated

The Bond Buyer
by Ted Phillips

Moody’s Investors Service and Standard & Poor’s gave the bonds for New York City’s controversial Atlantic Yards basketball arena their lowest investment-grade ratings yesterday.

Moody’s assigned a Baa3 with a stable outlook to the Brooklyn Arena Local Development Corp.’s $500 million of senior tax-exempt bonds, and Standard & Poor’s assigned them a preliminary BBB-minus.

The issuer plans to sell the bonds, which are backed by payments in lieu of taxes, to partially finance the construction of the Barclays Center, a $1.06 billion, 18,000-seat complex that will be the future home of the National Basketball Association’s New Jersey Nets franchise.

In assigning the barely investment-grade rating, Moody’s compared the arena’s projected revenue streams to comparable sports centers, including the new stadiums for Major League Baseball’s New York Yankees and Mets and an arena in Louisville, said Moody’s analyst Richard Donner.
...

Projections vary over the years, but in the first year the biggest revenues are expected to come from sponsorships, at 30%, premium seating at 24%, and the naming rights agreement with Barclay’s Capital at 10%, Donner said. Rental payments from the Nets will generate a projected 8%.

Click through for many more details about the bonds.

article

Posted by eric at 10:16 AM

Tax-exempt bonds rated just above junk, down to $500 million; arena cost confirmed at more than $1 billion

Atlantic Yards Report

In another crucial advance for the Brooklyn arena, the tax-exempt bonds for the planned Barclays Center--the cost of which is now estimated at $1.06 billion--have been rated investment-grade, though just above junk.

It should be enough to get the bonds sold to major institutional investors, though, as the Bond Buyer notes, bond insurance--which reassures investors but makes it more expensive for those paying back the bonds--remains in question. (The Times notes that bonds for the new Yankees and Mets stadiums got the same grade.)

Also, the amount has been reduced from $600-$650 million to $500 million, plus another $146 million in riskier "subordinated bonds," according to a report issued by Moody's Investors Service. (Those bonds are "likely to be sold to one of the project company's sponsors," reports Project Finance magazine, which says the split is indicative of the difficulty in getting an investment-grade rating.)

The Moody's report concerned the proposed issuance of $500 million of PILOT [payments in lieu of taxes] Revenue Bonds, Series 2009 (Barclays Center Project) by the Brooklyn Arena Local Development Corporation. The bonds must be sold by the end of the year to qualify for a tax exemption, which would save the developer well over $100 million.
...

Bond primer

Moody's primer: Baa Obligations rated Baa are subject to moderate credit risk. They are considered medium-grade and as such may possess certain speculative characteristics...the modifier 3 indicates a ranking in the lower end of that generic rating category.

A key giveaway and a key to the rating

One thing clear from the report: if the state hadn't given away naming rights to developer Forest City Ratner, the arena would not be built.

Also, key to the credit rating is an on-time construction schedule--not the safest bet, given the history of Atlantic Yards.

link

Posted by eric at 10:02 AM

Unfair Substitution of Fiction For Fact in the Atlantic Yards Dialogue

Noticing New York

A prevailing hallmark of the promotion for Forest City Ratner’s proposed Atlantic Yards Brooklyn real estate mega-monopoly is the extremely unfair way that fiction has been routinely substituted for and intermingled with what are theoretically the actual facts. Not only have the fictions enlisted to support this abusive eminent domain taking been patently false factwise; they have for the most part not even been believable.

Things That Are Not True About Atlantic Yards

One supreme work of fiction in the mix has been the AKRF “blight” study. With high-end condominiums recently developed and built within and immediately outside of the megadevelopment’s footprint it is clear that there was no blight. Another unfortunate way that the intrusion of fiction has been amplified is that for the Court of Appeals decision its official “record” of non-facts was closed as of late 2006 by which choice the court ignored all sorts of conspicuous subsequent events that contradicted the fictions on the record.

Here is a list of other significant fictions that Forest City Ratner and the state officials servicing that firm have unfairly intruded into the public discussion. The list is not exhaustive. To make it so would be a difficult challenge.

Click through for the lengthy list of fictions, and for a very interesting tale of overheard dialogue at the meeting approving the issuance of tax-exempt bonds for Baron Bruce's basketball barn.

article

Also...

Atlantic Yards Report, AY facts and fiction, from Noticing New York

Some of the fictions are more debatable than others--after all, the Atlantic Yards site likely would have an arena, thus different from the infamous site in New London.

But White and other critics/opponents have a lot of ammo, starting with incontrovertible deceptions like the crime analysis in the Blight Study.

Posted by eric at 9:53 AM

Paterson meets with Atlantic Yards opponents, promises "objective and fair hearing" (but what does that mean now?)

Atlantic Yards Report

So, as the Empire State Development Corporation (ESDC) moves forward with Atlantic Yards, can the man in charge of the agency, Governor David Paterson--once a public opponent of eminent domain (as DDDB's Daniel Goldstein reminds us), now a tacit supporter of Atlantic Yards--do anything?

Well, at least he's listening. Last night, before a "community conversation" at the First A.M.E. Zion Church in Bedford-Stuyvesant, organized by local elected officials. Paterson held a hastily-called meeting with a small group of Atlantic Yards opponents.

He promised them "an objective and fair hearing"--seemingly meaningless (and too late) boilerplate given that state agencies like the ESDC and Metropolitan Transportation Authority have already been charged to do so and have vigorously defended their actions in court after being sued.

Also, with a bond sale in the works, surely others in the administration would tell Paterson that the horse is about to leave the barn and stopping the project would lead to a huge legal mess. Then again, there's a serious argument--as per Nicole Gelinas--that the bond sale is risky, thus giving Paterson some cover, should he invoke his maverick streak.

(What could he do? Tell the ESDC not to pursue eminent domain? Stall the bond sale?)

article

Posted by lumi at 7:50 AM

The Ratnerification of a neighborhood

Photographer and blogger Tracy Collins provides a snapshot of Bruce Ratner's demolition of the neighborhood by taking satellite images from 2005, from "bing maps," then color-coding the buildings.

west end

mid-section

east end

The red buildings have since been "Ratnerfied" by demolition. Yellow means that the buildings are still occupied or are awaiting demolition. If you surf on over to flickr, Collins identifies each building, using the "mouseover" function.

Posted by lumi at 7:38 AM

Court of Appeals denies appeal in EIS case; no effort to engage Justice Catterson's fiery concurrence criticizing ESDC's Blight Study

Atlantic Yards Report

In a decision announced today, the state Court of Appeals denied without comment a motion to appeal the challenge to the Atlantic Yards environmental review. It was another blow to Atlantic Yards opponents, who nonetheless cited new pending suits challenging the project.

The challenge to the environmental impact statement (EIS) was dismissed first at the trial court level and then by the Appellate Division, with Justice James Catterson writing a concurrence that had the tone of a dissent, slamming the Empire State Development Corporation (ESDC) "for being used as a tool of the developer to displace and destroy neighborhoods that are ‘underutilized'."

While Catterson said his hands were tied, the petitioners hoped to leverage his dismay at the limits of the law to get the state's highest court to look at the "ESDC’s obligations under SEQRA [State Environmental Quality Review Act], the standard of review of a blight determination and legal ability of ESDC to lease a civic project to a for-profit entity under the UDCA [Urban Development Corporation Act]."
...
In choosing not to accept the case, the Court of Appeals chose not to engage with claims regarding consultant AKRF's misrepresentations of crime data and the failure to analyze real estate rents and values, as was requested in the original contract with AKRF.

article

NoLandGrab: The court's denial effectively means that the State of NY can take people's homes and businesses simply based upon a "blight study," which need only identify blight conditions — regardless of whether they are actually in a project's footprint, as in the case of the "crime study" — and which may disregard any inconvenient facts.

New York has been described as one of the worst abusers of eminent domain. After yesterday's denial by the courts, any doubts to that statement have surely been laid to rest.

Posted by lumi at 7:15 AM

New Nets Arena Wins Another Court Challenge

The NY Times
By Charles V. Bagli

The developer Bruce C. Ratner won another court challenge to his $1 billion basketball arena in Brooklyn on Tuesday, just as he began the sale of the bonds for the long-delayed project.

article

Atlantic Yards Report, Times roundup on bonds, court case adds some important context but gets basic issues wrong

A roundup story in the New York Times on arena bonds and more, headlined online New Nets Arena Wins Another Court Challenge, adds some important context--the bond ratings issued yesterday are no different from those assigned to bonds for the Yankees and Mets stadiums this year and in 2006. And rating agency Moody's says it's not worried about lawsuits.

But the article also contains some major errors.

The Times reports:

The financial underpinnings of the project, the cornerstone of the 22-acre Atlantic Yards development, also emerged on Tuesday when two rating agencies assigned an investment grade rating for $646 million in bonds for the project. In addition, the developer and his partners will use a $131 million subsidy from the Bloomberg administration and invest $293.4 million of their own to build the 18,282-seat arena at the intersection of Atlantic and Flatbush Avenues.

The investment grade rating was assigned only to the $500 million in PILOT bonds, not the riskier $146 million in subordinated bonds.

And that $131 million subsidy, stated in the Moody's report, doesn't make sense. If Moody's is counting city funding for land and infrastructure, it should also count at least some portion of the state's $100 million for infrastructure.

The Times reports:

At the same time, the Court of Appeals declined to hear an appeal from some property owners who said the state’s decision to condemn their land would benefit a private developer, rather than the general public, as required by the New York Constitution. Last week, the Court of Appeals ruled six to one that the state could exercise eminent domain in claiming businesses, public property and private homes for economic development projects like Atlantic Yards.

Actually, those two sentences describe the same eminent domain case. The appeal denied Tuesday challenged the environmental impact statement (EIS) and the petitioners were community groups, not property owners.

Also...
The Star-Ledger, Hapless NJ Nets' move to Brooklyn gets double boost

Posted by lumi at 7:07 AM

Nets arena gambles on subordinated tranche

Project Finance

Goldman Sachs and Barclays Capital have split the proposed bond financing for the Nets basketball arena into senior and subordinated tranches, in a bid to win an investment grade rating for some of the bonds and sell them before a 31 December tax-exempt treatment deadline. The debt will break down into a $500 million senior tranche due 2047, to be serviced by payments-in-lieu-of-taxes (PILOTs) and a $146 million holding company tranche.

This subordinated tranche, which is taxable, does not cross-default with the senior bonds, is described as "equity-like", and is likely to be sold to one of the project company's sponsors. The split into senior and subordinated tranches is indicative of the struggle that the developer of the project, Forest City Ratner, has faced in gaining an investment grade rating on the debt. The subordinated tranche has not been rated, and while the agencies have not produced a consolidated rating for...

article [subscription only]

Posted by lumi at 7:02 AM

Gotta Laugh at This One

Develop Don't Destroy Brooklyn thought that this little bit from Moody's rating of the Atlantic Yards arena bonds passed the laugh test, but does it pass the smell test?

Moody's assigns Baa3 to Barclays Center Project Bonds
[no link]

...The stable outlook [for the arena bond deal] is based upon the expectation that the Arena will be completed on time and within budget and the expectation that the ArenaCo will achieve projected revenues.

Right, which happens all the time with embattled megaprojects with no proven revenue model.

link

Posted by lumi at 6:56 AM

So, are tax-exempt bonds for infrastructure ruled out forever? Where would infrastructure funds come from?

Atlantic Yards Report

Norman Oder ponders the Atlantic Yards financing mystery.

Though the Empire State Development Corporation (ESDC) does not "foresee" having to issue tax-exempt infrastructure bonds to make up the current project funding gap, that doesn't preclude them from doing so in the future.

"ESDC does not foresee a scenario in which the abandoned financing structure would be taken up again," responded spokeswoman Elizabeth Mitchell.

So how will the funding gap be made up?

"The funding for the entire project will be a combination of tax-exempt bonds, New York State funds, and New York City funds," Mitchell responded. "Any additional funding required will be made available by Forest City Ratner Companies."

She left out taxable bonds--unless that's subsumed under FCR funding. Still, there's a gap. Will the developer go back to the city and state for "extraordinary infrastructure" funding? Stay tuned.

article

NoLandGrab: The State of NY is on the brink of issuing tax-exempt arena bonds, but there is no public information on how developer Bruce Ratner expects to finance the entire project. Obviously Ratner knows how he expects to fund the project.

Shouldn't prospective bond holders and the public be in on the secret?

Posted by lumi at 6:34 AM

Star of Real Estate Boom Is Confronting Hard Times

The NY Times
By Christine Haughney

This story of developer Shaya Boymelgreen's declining fortunes includes a bit about his deal with Atlantic Yards developer Bruce Ratner to double-cross footprint property owner Henry Weinstein and the lingering issues with the Newswalk building, which is located in the curious cutout of the megaproject's outline:

Residents of the 173-unit Newswalk building, a former Daily News printing plant in Prospect Heights, Brooklyn, that Mr. Boymelgreen finished converting into condos in 2002, have spent $5 million in repairs and legal fees to address structural problems, said Michael Rogers, a member of Newswalk’s condo board. He said the building had so many leaks that some of its original concrete beams had started to fall apart.

“This was a really solid building,” Mr. Rogers said. “The construction is so poor. It’s construction that could have hurt people.”
...
Then there is the convoluted eviction battle: Henry Weinstein, who owns a Prospect Heights building that Mr. Boymelgreen leases, and where he has his office, sued Mr. Boymelgreen in 2003 for selling the lease on the building to Forest City Ratner, the developer of the Atlantic Yards project. The office is located within the Atlantic Yards site.

But hours before Mr. Weinstein was to evict Mr. Boymelgreen, Henry Herbst — whose company installed telecommunication systems in Mr. Boymelgreen’s projects and who also had his offices in the building — filed bankruptcy proceedings against Mr. Boymelgreen, according to public records and interviews with Mr. Herbst and Mr. Weinstein’s lawyer, David Brody. Mr. Herbst said he feared losing his office and the offices he sublet to others.

“He refused to go into bankruptcy,” Mr. Herbst said. “So we put him into bankruptcy.”

article

Posted by lumi at 6:08 AM

Quick fix for Nets: Move 'em to LI

Newsday

Bruce Ratner's NBA franchise is officially "woebegone:"

Mark Herrmann's temporary solution for fixing the Nets is to move the woebegone franchise to Long Island.

article

NoLandGrab: Moving the team to Long Island won't fix the team, buoy attendance, or do Long Islanders any favors.

Posted by lumi at 5:48 AM

FUNDING SUCCESSFUL

Rarely do we consider notification that our credit card has been charged good news, but the message that just hit our in box is an exception.

Thanks to you, Battle of Brooklyn by Rumur has been successfully funded!

Congrats! Amazon will now charge your credit card and transfer the money directly to Rumur.

Thanks to the 373 of you (us) who pledged a total of $25,507 toward the completion of the film.

The filmmakers will be screening a sneak peak of the opening portion of the movie a week from Thursday. Click here for more info, and be sure to RSVP.

Posted by eric at 12:04 AM

December 1, 2009

Atlantic Yards Report- No Land Grab- DDDB.net and the story

Battle of Brooklyn via Kickstarter

I know that many of the people pledging to our film have done so without a lot of background information on the Atlantic Yards Project.

It's kind of hard to believe, but when we started shooting, blogs were just beginning to become a part of mainstream culture. However, blogs grew to have a major impact on the story and the project. I wanted to point you to three of them as they can quickly bring you up to speed if interested.
...

With a 2 hour movie it is going to be impossible for us to cover the complexities of the story- including the imapct of the blogs. We'll be working on a very dense website that will work to include these aspects of the story.

article

Posted by eric at 6:48 PM

Old Open

Battle of Brooklyn via Kickstarter

We have been editing pretty much full time for over a year- and for the previous five years we logged tapes- and did minor editing. It's hard to put together a story when you don't have the end.

The following is one version of the opening of the film that we put together. When working on a film, one of the things you have do often is "kill your darlings." One has to be able to take out some of the best scenes if they don't serve the larger goal of telling the best overall story. My partner Suki just pointed out that one way to deal with doing this is to avoid looking back. It's difficult to let things go - but it's nice to be able to share them in this way.

Click through to see the discarded opening sequence — a pretty compelling opening, we might add.

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NoLandGrab: Do you want to be the one to secure the $25,000 matching grant for "Battle of Brooklyn?" They're just $156 dollars short of the triggering threshold with a little more than five hours to go.

Posted by eric at 6:27 PM

Better than Junk — barely

Here's a round-up of news stories reporting on Moody's assigning of a Baa3 rating to Bruce Ratner's arena debt, including some must-read explanations from Field of Schemes, NY Fiscal Watch, and others. Eliot Brown of the New York Observer is also reporting that Standard & Poor's has assigned the arena debt a BBB- rating, its proprietary shorthand for one step above junk.

Field of Schemes, Nets arena bonds squeak through

Another shoe drops for the Atlantic Yards arena project: Bond rating agency Moody's has given an investment-grade rating to the bonds for the Nets' planned Brooklyn arena. It looks like Nets owner Bruce Ratner paid a high price for the rating, though, cutting the amount of tax-free bonds from $600 million to $500 million, and accepting a rating of Baa3, Moody's lowest level below junk bonds.

The next question is what this means for the bonds' interest rate, and the team's bottom line — each added percentage point of new interest will cost the Nets owners $5 million a year — something that could be answered when the Empire State Development Corporation makes its initial bond offering, as soon as tomorrow. The lowered amount of bonds also means a growing funding gap that must be filled by Ratner and his soon-to-be partner Mikhail Prokhorov: already at $100 million or so, it's now looking closer to $300 million. Prokhorov is a pretty rich guy, and clearly he stands to get lots of intangible publicity benefits from entering the NBA owner's club, but you still have to wonder how much cash he (or Ratner) will be willing to throw at this deal before the investment starts to look like a money pit.

If nothing else, this could get interesting once the inevitable cost overruns show up. The ESDC has said it has "no expectation" of issuing additional public bonds for the project, but admitted it's possible. Paging Richard Brodsky!

NY Observer, The Ratings Are In for Atlantic Yards

Atlantic Yards slipped in just above junk bond status today, when Moody's gave the project an Baa3 rating, the lowest rung of investment-grade bonds.

That's probably not as high as Bruce Ratner had hoped, but given the uncertainty surrounding the long-stalled development, it's better than it could have been. Mr. Ratner now has exactly one month to sell $500 million dollars in bonds if he wants to qualify for an I.R.S. deadline on the tax-free debt, which has long been seen as the last significant hurdle facing the project--though there are at least three outstanding lawsuits that could still derail it.

NorthJersey.com, N.J. Nets arena bonds rated 'investment grade' -- barely

Backers of the Atlantic Yards project scored victories in court and on the bond market on Tuesday, further improving the chances of the New Jersey Nets moving to Brooklyn as soon as 2012.

The site of the proposed Atlantic Yards mega-development project in Brooklyn. The New York Court of Appeals — which last week affirmed the right of the state to seize land on the project footprint via eminent domain — on Tuesday denied Develop Don’t Destroy Brooklyn’s request that the court review whether developers prepared a proper environmental impact statement.

Moody’s Investors Service, meanwhile, rated $500 million worth of bonds for Atlantic Yards at Baa3, according to the Bond Buyer. That grade is just high enough to avoid “junk” status, making them instead “investment grade.” The distinction is expected to make the bonds far more appealing to institutional investors.

NY Observer, Nets Arena Wins Needed Bond Rating, Mostly

This does not appear to be all of what Mr. Ratner had hoped. Last week, a state development agency said it expected $600 million in tax-free bonds, which itself was lower than executives had initially said they wanted (the arena's costs have been estimated between $800 million and $900 million). The less there is in tax-free bonds used to finance the project, the more expensive it gets for the development firm, Forest City Ratner, which has been scrambling to cut costs on the project for over a year.

The next (and most important) step is to actually sell the bonds to investors in the next couple of weeks. The bonds must be sold and a set of other loose ends tied up before the end of the month in order to qualify for an Internal Revenue Service deadline on the tax-free debt.

In its report on the bonds, Moody's laid out a number of notable risks with the project: the fact that the team is relocating to a new location, that the finances of the team are poor (more than $70 million in pre-tax losses a year, according to SEC filings made by Forest City), "uncertain demand for premium seating," and uncertainties over sponsorships, other events and ticket sales. Sports facilities traditionally take in the bulk of their revenue from a small percentage of seats and luxury boxes, meaning that the ability to sign up corporations to fill the luxury seats will be integral to making the arena a financial success.
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Standard & Poor's is out with their rating, which, like Moody's, is the lowest investment grade rating: BBB-. This is the rating that Forest City's underwriter, Goldman Sachs, had been shooting to hit, as the junk bond market would presumably be much more expensive.

The S&P analysis highlights similar positives (a strong structure given the PILOT payments; expectation of on-budget construction, as the contractor is apparently responsible for cost overruns; strong liquidity) and negatives (uncertain demand; potential overcapacity; and "potential reduction in the annual PILOT payments.")

NY Fiscal Watch, Atlantic Yards scrapes by, with a little (OK, a lot of) help from Gotham

The rating for the arena, called the Barclays Center, is Baa3, the lowest investment-grade rating available.

And Atlantic Yards largely got the rating on the strength of New York City taxpayers taking a big risk.

The mechanics of the financing aren’t that difficult. A subsidiary of Albany’s Empire State Development Corporation, the Brooklyn Arena Local Development Corporation (BALDC), will own the arena.

ArenaCo, a company owned in turn by developer Bruce Ratner and his partner, Russian billionaire Mikhail Prohkorov, will make payments in lieu of taxes (PILOTs) to BALDC in return for the long-term right to use the arena.

In turn, BALDC will turn those PILOTs over to the PILOT trustee, which will then use the funds to pay off the debt.

The PILOTS, and thus the bonds, depend on revenues from the arena for payment: “premium seating licenses and sales, sponsorship agreements, … concession revenues,” and the like, note Moody’s.

While ArenaCo does have a contractual obligation to pay debt service, it is a special-purpose company without recourse to any if its owners’ other companies or assets. Mikhail Prohkorov, Ratner’s equity partner, has agreed to keep the Nets themselves solvent, for example, but not to keep the arena solvent, according to Bond Buyer.
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On these senior bonds, Atlantic Yards is keeping debt way down. Raters have required a 40 percent equity component for this part of the deal.

This is important: It’s likely only because of this huge equity component that Atlantic Yards could attain even this low investment-grade rating.

Crain's NY Business, Moody's gives $500M in Nets bonds thumbs up

Not so much of a must-read here. While Crain's reporter Theresa Agovino has been covering the Atlantic Yards story for some time, she seems to be struggling with the facts.

For one thing, while getting even the lowest investment-grade rating from Moody's, just a whisker above junk status, is a win for Ratner, it's not "the last major hurdle." Someone still has to buy those bonds, which is still not a sure thing.

And Ratner did not sell "80% of the Nets and 45% of the arena to the Russian mogul for $200 million earlier this year" — they reached an agreement on a deal, but that deal has yet to be consummated.

Lastly, Crain's fails to mention that a Baa3 rating is the lowest non-junk rating the bonds could have received — a not-so-ringing endorsement that the pro-Atlantic Yards Crain's chose to ignore.

Posted by eric at 5:22 PM

Moody’s Rates Atlantic Yards PILOT Deal at Baa3

The Bond Buyer
by Ted Phillips

Bruce Ratner's Atlantic Yards arena bonds have been rated "a touch above junk" by Moody's.

Moody’s Investors Service rated the bonds for New York City’s controversial Atlantic Yards basketball arena at a notch above junk, according to a rating report released today. Moody’s assigned its Baa3 rating with stable outlook to the Brooklyn Arena Local Development Corp.’s offering of $500 million of bonds.

The issuer plans to sell the bonds, which are backed by payments in lieu of taxes, to partially finance the construction of the Barclays Center, a $1.06 billion, 18,000-seat complex that will be the future home of the New Jersey Nets National Basketball Association franchise.

The Moody’s report cited as credit positives the security of the PILOT bond structure, the strength of New York City as a media market, the non-relocation agreement with the Nets, an operating support agreement with Russian billionaire Mikhail Prokhorov, sponsorship agreements, and an equity structure that has $424.4 million invested in the arena.

Credit challenges include the weak financial position of the Nets, construction risks, and uncertain demand for the venue and sponsorships.

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Posted by eric at 3:23 PM

Andrea Peyser Versus Property Rights

Future of Capitali$m

In the New York Post, columnist Andrea Peyser takes aim at those property owners who sued to try to stop their homes from being seized to build a new Nets arena and an associated development known as Atlantic Yards.
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The project's opponents seem to have exhausted their legal appeals, and Ms. Peyser calls them "selfish." Some of the area around Atlantic Yards is blighted, but some of it, including some of the property that the government wants to seize, is not blighted at all. To the extent that it is blighted, it is because of government ownership of the rail yards and because of Mr. Ratner's poorly designed shopping mall that already exists nearby. The announcement that Mr. Ratner is going to spend 10 years on a huge construction project that is 50% "affordable" housing served to freeze improvements that were already under way on their own organically in the surrounding blocks. If Mr. Ratner and the city and state government were to announce plans tomorrow to kick the New York Post's owner, Rupert Murdoch, out of his $44 million Fifth Avenue triplex and use the space for "affordable housing" and a basketball arena, would Mr. Murdoch be "selfish" to resist? Of course not.

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NoLandGrab: We almost feel sorry for the venom-spitting Peyser; it can't be easy waking up angry every morning — and being consistently wrong about almost everything.

Posted by eric at 1:45 PM

The Approval Matrix: Week of December 7, 2009

Our deliberately oversimplified guide to who falls where on our taste hierarchies.

ApprovalMatrixCourtofAppeal.jpg

New York Magazine

New York Magazine finds last week's Court of Appeals decision equal parts "Highbrow" and "Despicable."

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Posted by eric at 1:31 PM

Bad Seed

FOX News [The Glenn Beck Show]

Glenn Beck connects the dots between Bruce Ratner, Atlantic Yards, eminent domain — and ACORN, starting around the 1:30 mark.

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Posted by eric at 1:14 PM

25 11 hours to go: make or break

Battle of Brooklyn via Kickstarter

We've been shooting a lot the last few days due to all of the activity surrounding the project. First there was the NY court of appeals decision clearing the way for the seizure of the footprint properties. Then we had to film the fallout and the next steps.

Just as we need to reach our goal to secure our funding, Forest City Ratner needs to issue a bond by Dec 31st in order to qualify for tax exempt bonds (that will save him millions... and cost NY State millions in unpaid taxes). There is no guarantee that the bond will get issued though because there are still several lawsuits outstanding. In fact, the same court that decided that it was ok to take the properties in the footprint of the arena via eminent domain has still failed to rule on whether or not they are going to take a case that challenges the finding of blight.

In any case, we've been filming and editing like crazy and look forward to delivering the final film some time this year. In the meantime we need to reach our fund raising goal in order to continue our work. Kickstarter is a zero sum game. If we don't reach our goal, your pledges go unclaimed, and we get nothing. The good news is that we are almost there. With nearly more than 300 supporters we've gotten to within nearly 20% 10% of our goal. If even half of you can convince one other person to come on board we'll sail past our goal.

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NoLandGrab: Only $2,622 to go — help make it happen by pledging now.

Posted by eric at 12:22 PM

The "Battle of Brooklyn" funding homestretch and a December 10 screening

Atlantic Yards Report

With some 15 hours to go, the producers of the Battle of Brooklyn documentary say they need about $4500 more to gain $25,000 in matching funds.

On December 10, a screening (RSVP required) of the first portion of the film will be followed by a panel discussion about the use and abuse of eminent domain in New York, featuring:

  • Mindy Fullilove, PhD, professor at Columbia University and author of Root Shock
  • William Stern, former CEO of New York State's Urban Development Corp.
  • Daniel Goldstein, lead plaintiff, Goldstein v. Empire State Development Corp.
  • Michael Galinsky, producer, Battle of Brooklyn
  • Norman Siegel, civil rights attorney
  • Robert McNamara, attorney, Institute for Justice

It's notable that, in the eminent domain context a longtime liberal like Siegel finds himself in common cause with the libertarians of the Institute for Justice, an organization that infuriates many who consider themselves reasonable supporters of eminent domain.

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Posted by eric at 12:17 PM

NYS May Give More Aid to Atlantic Yards Project

WNYC Radio
by Matthew Schuerman

New York State's economic development agency says it recently considered giving Brooklyn's controversial Atlantic Yards project more financial help than previously announced. WNYC's Matthew Schuerman reports.

REPORTER: In 2006, the state officials voted to give $100 million to developer Forest City Ratner for infrastructure costs and then provide tax-exempt bonds to build a basketball arena. But in September, members of a state entity agreed behind the scenes to preliminarily approve another $400 million in tax exempt bonds.

It's unclear whether the state or Ratner would ultimately pay the bonds back, but critics say that either way, the taxpayer's burden would increase considerably. The Atlantic Yards Report blog reported the secret allocation first.

The Empire State Development Corporation says it's abandoned the plan, but wouldn't comment further. Last week, officials stuck to the original plan and approved only bonds slotted for the arena. For WNYC, I'm Matthew Schuerman.

REPORTER: Robert Freeman, a state official overseeing freedom of information law, says the September decision was apparently invalid anyway, given that it took place not in an open meeting, but by written consent.

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NoLandGrab: We can rest assured that the ESDC is working feverishly on a Plan B, designed to elude nosy reporters like Norman Oder and Matthew Schuerman, for conveying more public money to Forest City.

Posted by eric at 12:06 PM

Outsourcing government to Forest City Ratner: three examples

Atlantic Yards Report

  1. The Empire State Development Corporation (ESDC) lets developer Forest City Ratner supply the Atlantic Yards Construction Updates sent out under ESDC cover.

  2. The ESDC, as noted by the Court of Appeals decision in the Atlantic Yards eminent domain case, lets the developer [indirectly] pay for a Blight Study by AKRF--part of the ESDC's General Project Plan--that declares blighted the properties needed for the project.

  3. Mayor Mike Bloomberg relies on Forest City Ratner's figures regarding jobs, rather than more conservative government estimates.

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Posted by eric at 12:04 PM

Governor Paterson's New London

Senator Paterson Opposed Eminent Domain Abuse. Does Governor Paterson?

The Huffington Post
by Daniel Goldstein

Does Governor David Paterson want Prospect Heights, Brooklyn to be his New London, Connecticut?

It's up to him.

After last week's ruling by New York's high court—that the state could seize homes and businesses for Bruce Ratner's Atlantic Yards development proposal because there was a “reasonable” enough argument from unelected bureaucrats at the Empire State Development Corporation (ESDC) that the neighborhood Ratner coveted was plagued by what the majority called “mild blight”—Governor Paterson has some decisions he must make.
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For a project that has indeed been rammed down the public's throat by executive fiat, it is clearly within the rights and the powers of Governor Paterson to demand that eminent domain not be exercised despite the Court's controversial ruling.

That's what Senator Paterson said he would have done.

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Posted by eric at 11:53 AM

B'klyn Family Battles New York Over Eminent Domain

Last Family Remaining In Apartment Building On Site Of Atlantic Yards Says They Won't Budge

WCBS TV News
Lou Young reporting

The fight over property rights is getting ugly in Brooklyn. Homeowners living in the way of a new stadium projects say they'll go on fighting despite losing a major court battle. CBS 2 met the central figure in the battle who has seen almost all of his neighbors move away.
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"This'll be the largest project in the history of Brooklyn. It'll be larger than the footprint of the World Trade Center," said Dan Goldstein, a condo owner on the site. "They're stealing my property. My property is not for sale, but they're going to make me sell it to them if we lose this next round of litigation."

Six years ago all the apartments in Goldstein's building were all occupied. There were 31 units in the building, but that was before Atlantic Yards was announced and everybody wound up moving out over the course of 18 months.

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Watch the video

Related coverage...

Battle of Brooklyn via Kickstarter, the story on cbs news tonight

Here's a tv news story about the project that aired on CBS tonite. They were gracious enough to allow us to film as they put it together. We like to film as media covers a story because it allows us to both convey important information- and give viewers a sense of how these events affect the characters lives.

Posted by eric at 11:47 AM

ESDC to Paper: Drop dead! State denies our FOIL request

The Brooklyn Paper
by Stephen Brown

State officials have offered an odd excuse for not revealing how they determined the value of a critical piece of property in the Atlantic Yards footprint: They can’t talk right now because they’re probably going to be sued again.

This week, the Empire State Development Corporation used that argument in denying The Brooklyn Paper’s “Freedom of Information Law” request for details about how the agency determined that Daniel Goldstein’s three-bedroom apartment on Pacific Street is worth $510,000 — $80,000 LESS than the Atlantic Yards opponent paid for it six years ago.

“Certain responsive materials which were prepared in anticipation of litigation are exempted from disclosure,” the agency said in a formal FOIL rejection letter to The Brooklyn Paper.
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Real estate agents, as well as lawyers who handle condemnation cases, agreed that the offer was extremely low considering the apartment is in prosperous Prospect Heights. One broker said the unit is worth nearly double what the state offered, and Goldstein’s lawyer Mike Rikon suggested that the ESDC was lowballing his client because of his outspoken opposition to the project.

Goldstein said that ESDC did not make its appraisal documents available to him, either — which condemnation lawyer Bill Ward, who is not involved in this case, saw as an indication that ESDC has no intention of negotiating with Goldstein to meet the “fair market value and just compensation” — the legal standard in eminent domain cases.

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NoLandGrab: With his home and his steadfast resistance standing in the way of Bruce Ratner's giant jackpot, one could argue that Daniel Goldstein's condo is worth many millions to the Atlantic Yards developer.

Posted by eric at 11:37 AM

EMINENT DOMAINIA: Goldstein v. ESDC fallout continues

Barstow Desert Dispatch, No good news on property rights

For a while now I have been concerned with the issue of whether any argument advanced in support of violating private property rights might have something going for it. Some argue, for example, that since one’s private property isn’t always the result of one’s own work and often even stems from plain old luck — as when the price on one’s home rises because of market conditions one had no hand in — one’s property rights cannot be inviolate, let alone inalienable. Others claim that when majorities decide, after widespread public consideration and discussion that someone’s resources or wealth should be taken from them for some important project, this suffices to limit or even void the right to private property.

The second argument underlies the recent ruling of New York State’s Court of Appeals in support of the decision of the Empire State Development Corporation to condemn privately owned homes and small businesses so as to replace these with Bruce Ratner’s ”Atlantic Yards” project of 16 huge skyscrapers. The court didn’t rule exactly as did the U.S. Supreme Court back in July 2005, in the case of Kelo v. City of New London, Conn., which opened the door to take property simply to develop it better than how it is being used. The New York case backed the taking of private property because it is considered to be blighted. This is the “reasoning” of the lynch mob. And it is ominous because the very point of basic rights to one’s life, liberty, property (or whatever is involved in governing one’s own affairs — in other words, one’s sovereignty) is to bar others from being intruders, no matter what.

NewsReal, Poor People Will Soon Be Homeless — Thanks to ACORN

New York State’s highest court has cleared the way for an ambitious $5 billion taxpayer-funded development to be built in Brooklyn.

On his TV show yesterday Glenn Beck pointed out that a group that claims to protect the interests of poor people, ACORN, helped make possible the deal that will make current inhabitants of the Atlantic Yards project footprint homeless. ACORN has long prided itself on fighting the so-called gentrification of neighborhoods as rising property values force the poor to move.

But not anymore. ACORN sold out in exchange for a bailout.

CoStar Group, NY Court: $5 Bil. Atlantic Yards Project Can Proceed

According to the 6-1 ruling by the state's highest court, a finding by the Empire State Development Corp., which oversees economic development in New York, that the 22-acre area met the legal definition of blighted was sufficient to take the land. Opponents, including residents and landowners, argued that the state can legally only take land for public use, and the Atlantic Yards seizure is unconstitutional because it benefits private interests.

Posted by eric at 11:26 AM

Dubai's dilemma: a warning to NY

NY Post
by Nicole Gelinas

There's a vital lesson for New York in the travails of Dubai, the little Persian Gulf emirate with big buildings and bigger debts -- if only our politicians and taxpayers would understand.

Last week, Dubai's state-owned investment arm, Dubai World, told its banks (mostly British) that it needs a freeze on debt repayments. It also needs to cut the $60 billion that it borrowed to speculate on office towers, hotels, luxury retailers and the like.

Global bankers were shocked. The Dubai government doesn't legally back Dubai World's debts -- but investors had thought that two levels of bailout would protect them if Dubai World's projects failed. If the company's dubious investments ran into trouble, they figured, Dubai would bail them out. And if the Dubai government wouldn't or couldn't do so, then Abu Dhabi (the richest of the seven United Arab Emirates) would step in, so as not to make all the emirates look bad.
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Pay attention, New York: Albany and New York City have their own "Dubai Worlds" -- state-owned entities that borrow buckets of money to invest in oft-dubious projects without the "official" backing of taxpayers.
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The most recent example is Atlantic Yards, the $4.9 billion basketball arena and luxury-apartment project in Brooklyn. By December, developer Bruce Ratner must raise the arena's first bonds, $800 million approved by the Empire State Development Corp. The debt supposedly comes without a government guarantee: If revenues from luxury-box sales and such don't cover the debt, bondholders lose.

But if lenders believed that, Ratner probably couldn't borrow at a price he could afford for this project -- a luxury stadium for a losing team. Plus, there are no comparable deals that investors can look at to see what they should charge, and no one knows what demand for luxury boxes will be like in half a decade.

So anyone buying Ratner's bonds is likely counting on Atlantic Yards being "too big to fail." And Empire State Development Corp. officials play along. "I don't know if I'd characterize [the state] as willing [to let Atlantic Yards' bonds default]," ESDC lawyer Jonathan Beyer said last week. "It's just that the documents do not require us to make any payments."
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The best antidote for the most questionable spending would be some market discipline: Warn bondholders that they'll suffer if they put their money in a white-elephant project or in an authority that can't control its spending.

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Related coverage...

NY Fiscal Watch, Dubai dribble

By the way, Empire State Development (ESDC) absorbed the Urban Development Corp., whose February 1975 default helped precipitate the state and city fiscal crisis of the 1970s. Governor Hugh Carey and the Legislature then felt compelled to appropriate roughly $200 million (the quivalent of $800 million in today’s terms) to complete unfinished UDC projects and prop up the authority until it could re-enter the debt markets a couple of years later.

Speaking of losing, the New Jersey Nets–the team Ratner wants to put in the Brooklyn arena–just fired its coach and tied an NBA record for futility by losing its first 17 games of the season. Ratner is in the process of selling a controlling interest in the Nets, along with a large share of the Atlantic Yards arena, to a Russian tycoon known as the “bachelor billionaire,” who appears to have made his fortune in precious metals.

Luxury box, anyone?

Posted by eric at 11:15 AM

With Futility Record at Stake, Ticket Sales Are as Cold as the Nets

Off the Dribble [NY Times NBA Blog]
by Ken Belson

Yormarketing Genius appears to be running out of ideas.

In a season gone astray, the chance to see the Nets set a record, even one for futility, may be reason enough to head to East Rutherford, N.J., to cheer them on. The Dallas Mavericks and their star, Dirk Nowitzki, are potential drawing cards as well.

Yet prices for many tickets for Wednesday’s game are being sold for up to 40 percent below face value, according to Jason Berger, the president of AllShows.com, a leading ticket broker.

Tickets on FanSnap, which scans the Web sites of ticket resellers, showed even deeper discounts. Seats in the upper bowl at the Izod Center were being sold for as little as $2. Some seats in the lower bowl were being dumped for $8.

Rod Thorn, the Nets’ president, apologized to fans last week. In a letter sent to season-ticket holders, he said that “our season has certainly been frustrating so far.” He added that the players’ “inability to finish close games has put us in a tough spot.”

Thorn said the Nets’ goals remained unchanged: “Be as competitive as possible in the present, and position ourselves to make major improvements in the near future.”

Thorn did not define the near future.

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NoLandGrab: It's a pity that Rod Thorn is having to apologize to season-ticket holders, when it's Bruce Ratner and Brett Yormark who've turned the Nets into the worst team in pro sports.

Posted by eric at 10:52 AM

Let's be Frank, winless Nets are a mess

ESPN.com
by Chris Sheridan

On Sunday night, the New Jersey Nets lost 106-87 to the Los Angeles Lakers in a game in which they stayed competitive for roughly five minutes. They are now 0-17, tied for the worst start to a season in NBA history, and will have former franchise cornerstone Jason Kidd in the house when the Dallas Mavericks attempt to tag them with the unprecedented and dubious distinction that an 0-18 record would carry with it.

The Nets are a bigger mess than they've been at any time since 1976, when former owner Roy Boe had to sell Julius Erving to the Philadelphia 76ers to raise the money to pay the indemnity fee the Nets owed to the New York Knicks for infringing upon their territory when the NBA and ABA merged.
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The dismissal of Frank was described by one source close to the team as a "mercy firing," a decision that ultimately had to be approved by Bruce Ratner. The lame duck owner is in the midst of selling the team to Russian oligarch and billionaire Mikhail Prokhorov, who hopes to become the point man for the team's eventual move to Brooklyn.

But that move is still contingent on bonds being sold, property being condemned and temporary restraining orders being avoided -- all before Dec. 31, when Ratner needs to have broken ground on the Brooklyn complex to secure financing through a set of expiring tax-free bonds. If a master closing on the Brooklyn project is not completed by Jan. 1, the deal with Prokhorov, as presently constituted, would be off.

Plus, the NBA's board of governors still must sign off on the sale after an exhaustive background investigation of Prokhorov is completed.

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Related coverage...

SportsBusiness Daily, Nets Sale To Prokhorov Still Faces Months Of Uncertainty [Trial subscription/registration required]

The Nets still could "face months of ownership limbo before" the NBA BOG votes on Bruce Ratner's sale to Mikhail Prokhorov, according to Chris Sheridan of ESPN.com.

AP, On Basketball: Future hopes make Nets hopeless now

The trades gave Nets management what it wants: plenty of salary cap space for the loaded class of 2010, a chance to immediately upgrade the team into a contender by the time it hopes to make its long-planned and much-delayed move to Brooklyn.

NoLandGrab: Truth be told, cap space was a secondary consideration. Ratner's more immediate need was to reduce expenses with the team losing upwards of $30 million per year, and patience over those losses running thin at Forest City headquarters in Cleveland.

HoopsVibe.com, Chris Bosh, LeBron James, and Dwyane Wade should consider New Jersey Nets’ upside

On the surface, the Nets seem to have little chance at signing a top free agent next July. However, with a declining salary cap, Bosh, James, Johnson, or Wade should see the possibilities with a fixer-upper like New Jersey.

NLG: "Fixer-upper?" At 0-17, and counting, the Nets are a tear-down.

NetsDaily, Sheridan: Nets at All-Time Low

Now, that’s saying something...

Posted by eric at 10:41 AM

Brooklyn Broadside: Some Predictions for 2010 About Downtown Brooklyn

Brooklyn Daily Eagle
by Dennis Holt

The Eagle's Holt, who's been predicting actual construction of Bruce Ratner's Atlantic Yards project for years now, predicts it again.

With December at our throats and the New Year waiting in the wings, it is time to play with tea leaves and make some predictions about 2010, the last year in the first decade of this century.

In general, before the end of the year, the boom could return to Brooklyn, although not as frenetic as before the Great Recession.

Atlantic Yards will begin with the work on the arena at Atlantic and Flatbush avenues. If Forest City can hold to its schedule, the first residential building will start being built, and by the end of the year, there could also be news about the commercial part of the project.

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NoLandGrab: The "news about the commercial part of the project" could be that it'll never get built, due to an utter lack of demand for Brooklyn office space. No office building, no office jobs, but never mind that.

Posted by eric at 10:30 AM

If bonds won't be used to build AY infrastructure, there would still be a huge funding gap

Atlantic Yards Report

Who knows why the Empire State Development Corporation would rather blow off Norman Oder's inquiries, preferring instead to issue a statement under pressure of questions of mainstream reporters. However, true to form, Oder still has some questions:

The Empire State Development Corporation (ESDC) said yesterday, in response to my report, that, though it "was at one time considering additional tax exempt bonds for infrastructure financing," it ultimately "decided not to pursue that type of financing."

(It was the plan as recently as September, given the 9/11/09 date of the Inducement Resolution adopted by the Brooklyn Arena Local Development Corporation.)

Still, as I wrote yesterday, the 2009 Modified General Project Plan, passed by the ESDC in September, budgeted $717 million for project infrastructure, with $205 million coming from government funds but no particular source for the rest.

So, where's the money going to come from?

article

Posted by lumi at 5:22 AM

In Bloomberg statement on AY, inflated jobs figures come from FCR; by contrast, ESDC projections are more conservative

Atlantic Yards Report

If Atlantic Yards is such a great project, why do the politicians need to repeat developer Forest City Ratner's lies about the benefits?

From Mayor Bloomberg's radio address last Friday:

All told, Atlantic Yards is expected to create some 8,000 new permanent jobs in Brooklyn. More immediately, building it is also going to produce nearly 17,000 of the new union construction jobs that New Yorkers need.

Norman Oder explains:

Well, not exactly. Those figures--17,000 "construction jobs" and 8000 permanent jobs--come directly from Forest City Ratner's press release rather than a governmental source.

By constrast, the Empire State Development Corporation (ESDC), in its 2009 Modified General Project Plan, projects 12,568 new direct job-years and 21,976 total job-years (direct, indirect, and induced) for project construction and 4,538 new jobs in New York City (direct, indirect, and induced).

Keep in mind that the 17,000 jobs--overstated--would be in job-years, and that all figure presume a project buildout over a decade, which is highly doubtful. For example, a good portion of those new permanent jobs would be in an office tower, but there's no market for office space right now, as Bruce Ratner recently told Crain's.

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NoLandGrab: By the same logic, Bloomberg has been elected to "four more jobs."

Posted by lumi at 5:15 AM