Monday, July 30, 2012

Alienation, Willets Point and the Ghost of Robert Moses

In City Limits Patrick Arden has a tour de force article on the city's efforts to allow the Mets to build a shopping mall on designated parkland next to CitiField-and his piece raises some really interesting questions about the city's ability to avoid the mandated alienation process to build a shopping mall. The city is relying on an old Robert Moses inspired law to justify proceeding:

"The proposed shopping mall west of the stadium may face a larger hurdle: The parking lot is part of Flushing Meadows Corona Park. State law requires the alienation of parkland before it can be used for non-park purposes.To meet that requirement, Bloomberg has reached back to a law passed 51 years ago, summoning an uncertain ally in the ghost of Robert Moses. But questions surround this curious piece of legislation, setting up the latest in a string of disputes over city-sponsored developments on public parkland."

The city explains its tenuous position: "Yes, this area is parkland," says Benjamin Branham, a spokesman for the city's Economic Development Corporation, "but development is permitted under the 1961 law that authorized the construction of Shea Stadium—known asAdministrative Code 18-118—which also allowed for additional uses to be built on the parking lot. It's important to be clear the authorization comes from this law as opposed to a contract or other agreement of some kind."

But going back to the future may not be so easy it seems: "Yet, as recently as 2001, New York's highest court ruled parkland can't be taken, even for temporary use, without an explicit act of alienation passed by the state Legislature and approved by the Governor: "[O]ur courts have time and again reaffirmed the principle that parkland is impressed with a public trust, requiring legislative approval before it can be alienated or used for an extended period for non-park purposes."

City Limits goes on to delve into the 1961 legislative process and sees the devious hand of Robert Moses at work-a deviousness that may not be as effective today:

"The state Legislature approved his building of Shea Stadium in the park, but its 1961 legislation was primarily aimed at granting the city authority to issue bonds to finance construction. It loosely laid out the permitted uses for the stadium and grounds, listing "recreation, entertainment, amusement, education, enlightenment, cultural development or betterment, and improvement of trade and commerce." The law even allowed the city to use the site for "any business or commercial purpose," so long as this activity "aids in the financing of the construction and operation of [the] stadium, grounds, parking areas and facilities" and "does not interfere with the accomplishment of the purposes referred to" above."
Parks' advocate Geoffrey Croft isn't buying this-and is contemplating a lawsuit in response:

"The bill reads like a Robert Moses special," says Geoffrey Croft of the watchdog group NYC Park Advocates. The broad powers it conferred were a hallmark of the Power Broker, who was so well-practiced in the black art of political legislating that Al Smith once called him "the best bill-drafter I know." The Parks Commissioner could enter into agreements to use part or all of the stadium grounds, but any agreements lasting for more than a year had to be approved by the Board of Estimate, which included the mayor, the comptroller, the City Council president, and all of the borough presidents."

This is where it gets really interesting because now that the old Board of Estimate is kaput, the city is arguing that the disposition of the property is exclusively in the mayor's hands-as if the city council hadn't been designated to replace the Board's functions, particularly in regards to land use: "With the elimination of the Board of Estimate, the city's Law Department says, the power of site approval under the 1961 Shea Stadium law now rests solely with the mayor. A shopping mall may not offer the "enlightenment" referenced in the text, but a Bloomberg administration spokesperson describes the new project as a "retail/entertainment complex" benefiting “trade and commerce.”

It seems to us that the mayor is laying down the gauntlet to two legislatures-trying to make an end run around both the state assembly and senate as well as the city council. But its major problem involves the overriding authority of the alienation law: "The city cites the law in apparently contradictory ways. On one hand, it argues the 1961 legislation authorizes alienation of the parkland, thereby dismissing all of the public’s claims to the land or for compensation. But the law never mentions alienation. Indeed, it describes the land as "being a part of Flushing Meadow park."

Let's go right to the law now: "Parkland alienation legislation must be explicit, according to state Assembly guidelines. Alienation bills should specify the number of acres and require that land be sold at fair market value, "with proceeds from the sale dedicated for the purchase of replacement parkland of equal or greater fair market value or for capital improvement of existing parkland."

That brings us to the Croft threat: "Croft says his group is considering a lawsuit: "Bloomberg and [Related Companies'] Steven Ross won't be shopping at that mall unless the state and City Council say so. Clearly the law's intention was not to alienate the parkland, because no restitution was provided, which is required under state law. You can alienate parkland, but you have to replace it." (And there is no statute of limitation on the reclaiming of a park!)

And WPU's own attorneys weigh in on this as well: "Another attorney for Willets Point property owners agrees. The 1961 law “authorizes the Parks Commissioner to enter into a lease transaction with the owners of the Mets,” says lawyer Michael Rikon, “but it has nothing to do with the new plan. The law is very clear on this—they can't use parkland for a retail mall unless they obtain specific approval from the state Legislature and agree to provide some kind of compensation for taking it.”

But the park issue isn't the only hurdle the city faces-and City Limits outlines the possibility that property owners at Willets Point may be able to get reimbursed for the over $1 million of legal fees it shelled out. The city had pulled the plug on condemnation-out of a fear of losing-and that's a trigger for restitution: "Rikon says his two-dozen clients are now due $1.1 million from the city, which, under state law, should be obligated to reimburse all expenses incurred by property owners after it abandons an eminent domain proceeding."
Then there's the fact that the city doesn't all of the Phase I property-a "Swiss cheese parcel according to Rikon: "The city says it owns 95 percent of the land needed for the new project, but Rikon claims it has not yet secured 17 properties from nine different owners. “The city has a Swiss cheese parcel,” he says."
City Should Start Over
City Limits also discusses our contention that the city should be forced to start over because of the illegal lobbying tactics initiated by EDC and chastized by the NYS Attoney General:
"Both Gerrard and Rikon believe the new plan, as well as the illegal lobbying, should require the city to start from scratch and put the proposed redevelopment once again before the City Council as part of the official approval process, known as the Uniform Land Use Review Procedure. But the new project will not go through ULURP. The existing environmental impact statement will be "updated," explains a spokesman for the city’s Economic Development Corporation, and the City Council will consider only a new zoning amendment to permit the shopping mall. The local Council member, Julissa Ferreras, had said she's undecided on the project, but she lent a supporting quote to the city's press release."
Ferrras needs to step up here because the city has established a horrible precedent on this-permitting the violation of the law as the foundation of a legislative approval-and the idea that this will not be subject to a new ULURP is, we believe contradicted by a stipulation entered into with us by the city. As WPU's Michael Gerrard has said about the stipulation, "It confirms that the City won’t go forward with anything at Willets Point based on Tech Memo 4, but instead will do further environmental review and seek any necessary new approvals."
The Mets Mall is a hugely traffic intensive affair and the idea that the current road infrastructure can handle it remains to be seen-especially since the Van Wyck ramps will not be built until 2025, if then. In our view the city council should not let anything go forward until the ramps are up and running-anything less is an unmitigated traffic nightmare.
The city's fiasco at Willets Point-and we haven't even discussed the gifting of $200 million worth of property to the Mets, an entity that was intimately involved in the illegal lobbying as Arden's article points out-demands a complete and thorough re-evaluation and a new process untainted by illegality. That should be up to the next mayor, the current one deserves the SNAFU* medal of all time.

Sunday, July 29, 2012

Greg Meeks, the Port Authority and Willets Point

At first glance the title of this post sounds confusing. After all, how is the congressman related to both the Port Authority and to Willets Point? An item in today's NY Post helps us to begin to unravel the mystery-and it relates to Meeks' role in steering money to the Greater Jamaica Chamber of Commerce, an effort that began when the Port Authority was fighting to get approvals for the AirTrain in 1999. (

There was a great deal of community opposition to the Port's train down the Van Wyck and in order to overcome it the agency began to dangle hundreds of millions of dollars of goodies to local pols like Meeks in exchange for their support. Keep in mind that there was a group of over 500 African-American homeowners who were actively opposed to the project-along with civic groups all along the proposed train's corridor.

None of this seemed to bother the acquisitive Meeks who famously told the homeowners at a meeting in his office that, "You know, I can't get elected just from contributions from the district." Nice. Meeks, aside from garnering huge campaign money from the likes of Skanska and Bombadier, also negotiated millions of dollars to be delivered by the PA to the Greater Jamaica Chamber-and that's the beginning of what the Feds are likely to be examining because those millions, let's say, got nicely spread around and the government is looking to see if any spare change went into the pockets of Meeks, or his family and circle of friends.

That gets us to the case of Willets Point-and our own letter to the PA last year where we pointed out (as Crain's Insider cited): "Opponents of the Willets Point redevelopment plan say the Port Authority may have funded a study of the area that will pave the way for increased travel delays to La Guardia and Kennedy airports, which the Port operates. Part of $100 million that the agency allocated for the city in 2004 may have been used to prepare an environmental impact statement “for a project that can only lead to the compromise of efficient airport access,” the letter said. The Port says it has not reviewed the letter."

So the city took the Port's money-an agency that sponsored the AirTrain in order to improve airport access-and used in the preparation of traffic reports that will promote a project that will bring the Van Wyck to a crawl! As we pointed out in our post:

"The irony here is that the Port's money may have been part of a deal on the Airtrain, whereby the money was allocated in a quid pro quo for the city's support of the project-whose sole rationale was and is to ease airport access. The PA's Chris Ward signed off on the $100 million deal in 2009, a year after the Willets Point EIS had determined that 46% of the 80,000 car trips a day generated from the project would be diverted to the Van Wyck. Don't suppose the city alerted Ward to this."

The Port engaged in a series of questionable deals over a decade ago in the promotion of the AirTrain boondoggle. Now we find that some of that questionable activity may end up with Meeks walking the plank for abandoning his constituents. Now if only someone will intervene in similar fashion to cashier the shady Willets Point ramp fraud-if that happens we could say, Greg Meeks and Willets Point: Perfect together!

Saturday, July 28, 2012

Lawless EDC Continues its Bad Behavior

It is becoming quite clear that AG Schneiderman's mild response to the culture of lawlessness at EDC has simply encouraged the gang to continue its illegal actions-the latest example being the blatantly illegal denial of WPU's Freedom of Information requests. We had asked the agency to give us all records pertaining to:

(1.) federal funding for Van Wyck ramps;

(2.) Phase One RFP responses;

(3.) "Site Information File" that was made available to
developer firms responding to the RFP.

In each case our requests were denied because NYCEDC claims that disclosure will impair a present or imminent contract award. This is pure bee ess since the contract on the bogus Phase I has already been awarded but EDC doesn't want to let the public in on the bidding process-something that was supposed to be part of an open Willets Point Advisory Committee procedure that has been ignored as far as we can determine.

But claiming that giving up information on the ramps will impair a present or imminent contract award is beyond bizarre and dramatizes the extent to which EDC and Slick Seth Pinsky believe that they are beyond the law and public accountability-and in this case, given Comptroller Liu's lax oversight, they're probably correct.

This is, however, some pretty serious business-and no amount of reorganization will do much to alter the culture of lawlessness that Liu observed at the agency, but so far has done little to address. The refusal to honor these FOIA requests should activate concerned elected officials who understand that this off the rails agency needs to be reined in.

Thursday, July 26, 2012

Pinsky on Why Crime Pays

The Queens Chronicle has an interview with EDC head-Why does this guy still have his job?-Seth Pinsky, and the young gun has a number of remarkable observations, beginning with the following:

"Earlier this month, the state attorney general issued what was widely seen as a slap on the wrist to the EDC and the Flushing-Willets Point-Corona Local Development Corp. for illegally lobbying for the Willets Point project. Pinsky said his group accepted responsibility for what the attorney general found but downplayed it, calling the violation a loophole and a grey area of the law that was never previously enforced."

Pinsky, of course, has decided to overlook the fact that his partner in crime-the erstwhile Dame of Queens County, Claire Shulman-engaged in a series of illegal actions that include the violation of a series of contractual requirements that is built into EDC's master contract with the city. And, Seth, how about lying to the Federal government, is that a minor loophole too?

Clearly Pinsky is an unrepentant lawbreaker who wants the city to proceed as if nothing untoward has occurred in this entire corrupt process: "The WPU is claiming that the illegal lobbying should nullify the 2008 council approval. Pinsky disagrees: “There is no legal merit. The project is moving forward and we’ve addressed the remedies of the Attorney General’s Office. I am confident the 2008 land use review process will stand.”

We'll see about that, but Slick Seth is full of insights-and his spinning of the 1961 agreement surrounding the land next to CitiField is one of them:

"Then, if all goes as planned, developers will build Willets West on 2,500 parking spaces in the Citi Field parking lot and turn it into a one million square-foot mall with a parking structure and additional surface parking. But many in the Flushing community question the legality of erecting a commercial entity on public parkland since the stadium and parking lot are in Flushing Meadows Park.Pinsky said a 1961 agreement with the Mets, called Administrative Code 18-118, has been carefully studied by the city’s Law Department. “We are confident it’s legal,” he said."

Confidence fitting for a confidence man-and don't be fooled, the city is scared sh*tless about the legality of the 1961 agreement, an agreement that was not pursuant to the parkland alienation laws. But that's not all. Pinsky misrepresents the problems the city faces with the land it doesn't own on the bogus Phase I site: "He said the city has reached agreements with about 95 percent of the Willets Point landowners, with four still left. “We are in discussions with several of them and hope we won’t have to use eminent domain,” Pinsky added."

Hope? Gee, there are actually 9 property owners and 17 parcels that are not in Pinsky's greedy little hands-and the city has withdrawn its eminent domain application so we're sure he hopes that condemnation doesn't have to be used. That brings us to those pesky Van Wyck ramps. Here's what Pinsky has to say:

"Also, an environmental impact and traffic study will need to be made, with Pinsky estimating the project can begin construction in one and one-half years. He indicated that egress from the planned parking garage will be onto Roosevelt Avenue or Northern Boulevard and that proposed ramps on the Van Wyck Expressway, expected to be built in 2020 or 2021, will help ease traffic. “It’s up to the developers to analyze the situation,” he added."

In our view the new development will be even more traffic intensive than the original scheme that the city has now temporarily discarded-and remember that that plan saw the ramps as essential to making the traffic problems somewhat livable. The ramps were seen then as the linchpin of the entire process. So to envision the ramps being built ten years or so after the shopping mall is completed is simply a non-starter-and the city council should not approve any plan that comes before the ramps are actually built.

What the Pinsky interview dramatizes is the arrogance of the current outgoing administration-a culture of lawlessness and a lack of concern for the impact of their megadevelopments on surrounding communities and small businesses. What he dismisses as a, "loophole" was actually an elaborate illegal scheme that encompassed a series of illegal actions done by the Shulman gang in collusion with Pinsky's EDC.

What we are now seeing is the after effects of a weak law enforcement effort by AG Schneiderman, whose failure to sanction the wrongdoers has allowed them to continue to proceed in their scheme with total impunity. This failure demands an intervention-both political and legal.

Monday, July 23, 2012

Shulman Must Be Investigated-Further!

In a letter to the Times Ledger long time Queens activist Joyce Shephard demands an investigation into the Claire Shulman masquerade-and in doing so exposes the former BP's M.O., creating phony grass roots groups to front for developers in the name of the community. As she points out (letter isn't online unfortunately) Shulman did this in the effort to develop the Fort Totten area:

"Shulman started the Fort Totten Redevelopment Authority when President Clinton sold the 168 waterfront acres to the city for $1. One of the honest members of the Authority sent me a list to me of the people Shulman appointed to represent the community. Many were developers while others were receiving monies for their non profit organizations from Shulman"

Absent from the roster was, of course, any genuine community leader: "She named the group an authority in order to keep the community it was representing out of the meetings."

This, as the kids might say, is how Shulman rolls: "We the people living around the fort had to protest just to listen to what was being discussed for our community. When we arrived to go into the meeting, Shulman called in 8 policemen in riot gear to stop us from walking down the hallway..."

Shulman inherited the borough president's position when the late Donald Manes killed himself because he couldn't face the federal prosecutors who were digging into his corrupt schemes-and for twelve years she fronted for every developer who wanted to build in Queens even if the community was dead set against it. In 1995 the entire Laurelton neighborhood rose up in opposition to a Pathmark Supercenter in their neighborhood but Shulman was right in their face supporting Norse Realty and mocking the community's protests.

And in 1991 Shulman commissioned a Willets Point study from PDC that eventually championed the industrial use of the area; but she threw that out and instead came out with her own in-house study in favor of commercial and retail uses that mirrored the real estate dream of the Wilpons who she has now joined forces with.

The more things change, the more they stay the same. However, this time, she isn't the BP but a private sector actor engaged in an illegal lobbying scheme that has so far benefited her to the tune of at least $675,000 in salaries-a figure that will mushroom if she is allowed to continue to front the new development of the Flushing waterfront.

Shephard concludes with the following cry for justice: "In fact, we should demand that she resign from the $3 billion project and an investigation ensue. Including her bank statements. Enough is enough!..It is time that Attorney General Schneiderman stop playing politics and dig deeper into Shulman and the Economic development Corp. and local development corporation run by her."

Shulman used to posture that she represented Queens and parlayed that posture into a lucrative sinecure on behalf of the developers that she always promoted. She did so, however, illegality and for her own financial gain. Shephard is right that this demands greater sanctions than a simple slap on the wrist.

Sunday, July 22, 2012

Rethinking the Times Ledger's Thought Process

The Times Ledger editorializes against the use of Willets Point as a site for a NYC convention center-and we agree. The plan makes no sense-but the paper's concern here misses so much more of significance that deserves editorial focus:

"There has been much talk about building convention centers at Resorts World Casino at Aqueduct Racetrack and Willets Point. But where is the proof that the city needs another convention center, and where is the proof that Queens will be an attractive destination for organizers?Queens cannot compete with Manhattan, one of the best known tourist destinations in the world. And why should it? We are happy to hear and not at all surprised that the Aqueduct casino is doing well, but that doesn’t mean a convention center will also do well."

The paper closes its editorial with the following bromide: "Before money is poured down the drain, borough leaders and city economic development officials should discuss what is in the best interest of Queens and the city."

This is quite astonishing from our perspective. The Times Ledger opines on Willets Point a couple of weeks after the NYS AG has chastised the NYC EDC for an illegal lobbying scheme-and roughly a month after the city has turned over $200 million worth of property to the real estate arm of the Mets-for not even 24 dollars that the Indians were paid for Manhattan-and all the TL can do is opine about the absurdity of another convention center?

Earth to the editors. The city has reneged on all of its promised goodies for Willets Point-jettisoning affordable housing and living wage so the Wilpons can build a mall next to CitiField on land zoned parkland. In May the city's application for the right to condemn the properties owned by the members of WPU was withdrawn because of fears that it would expose the current administration to the scorn of the courts as a result of all the underhanded tactics the city has employed-including breaking the law to lobby on behalf of the project.

So much to comment on-and all the editors of the TL can think to editorialize on is a convention center? Talk about irrelevancy. In the context of all that has gone on in the past two months the idea of a Willets Point convention center is as close to a non sequitor as you can get.

Friday, July 20, 2012

Choking College Point

In what to us is emblematic of the Bloomberg schizophrenia when it comes to cars and development, comes the following story from the WSJ about College Point in Queens:

"For decades, residents of College Point in northeastern Queens enjoyed its suburban feel—a quiet, waterfront enclave that sits on Flushing Bay and the East River.

But the addition of several big-box retailers in the 1990s, followed by new condo and co-op construction, brought in more residents and shoppers—creating traffic bottlenecks in an area dotted with several narrow, one-way streets.And now, two new projects slated to make College Point home are further sparking congestion concerns

The mayor is working feverishly to limit car access into Manhattan, in order we surmise to keep the streets open for limousine access; but is choking the crap out of Queens. State Senator Avella comments: "You can go on a weekend and the traffic is unbelievable—backed up to the service road of the Whitestone Expressway," said state Sen. Tony Avella, a Queens native who lives in neighboring Whitestone."

All of this new development is on top of the Police Academy-and it threatens to destroy the quality of life in College Point, something that most elected officials aside from Avella seem to disregard:

"But critics say the accommodations are insufficient and that College Point has been smothered with more development than its infrastructure can handle, changing the character of the neighborhood in a fundamental way.

"Historically, College Point was a quiet, residential neighborhood with a small-town atmosphere, where families lived for generations," said Mr. Avella. "I'm not against development, but the city has failed to match developments with infrastructure, and now they [residents] deal with traffic on a daily basis, sometimes like Manhattan

Which brings us to the debacle at neighboring Willets Point-where a lack of road and mass transit infrastructure will make any of the city's grandiose plans turn into the ultimate traffic nightmare. And this traffic will spillover into all of the already congested local roads-not to mention the Van Wyck, the Whitestone and the LIE, roads that have garnered national recognition for their impassibility.

But, hey, it's not in Manhattan so who cares? Maybe College Pointers will have no choice but to ride bikes-something that Commissioner Sadik-Khan may have intended all along.

Thursday, July 19, 2012

Commemorating-The Decline of Honest Government

The Queens Courier has what to us appears to be a tongue in cheek article about the possibility that the new proposed development to the west of CitiField will be a chance to "commemorate" Shea Stadium:

"To the left of Citi Field’s main entrance is a parking lot where Shea Stadium once stood.In this parking lot, amid the white lines that now outline parking spaces, are four bronze plaques that mark the bases that made Shea’s diamond. A first base where Keith Hernandez and Ed Kranepool stood; second where Wally Backman darted back and forth; third base, where more than 120 have played the position, from Don Zimmer in 1962 to current all-star David Wright.Then a home plate 90 feet away from a bronze rectangle to outline where Tom Seaver, Dwight Gooden and many others would set team and MLB records.This site will soon, however, become home to Willets West, a one-million-square-foot shopping area that promises to bring thousands of jobs and billions of dollars to the area.While there are no set plans how the bases, or Shea’s 44-year legacy, will be remembered, fans and developers agree there should be some sort of tribute to the ballpark."

What a nice touch! A deft way to elide the fact that the new mall-should it ever be built, and that's no grand slam-could better be used to commemorate the decline of honesty in government because the Mets and their real estate arm Sterling Equities engaged in an illegal lobbying scheme to obtain the development rights to all of this phony nostalgia.

And while we're at it, can we get a little journalistic ethics here? The Courier piece reads like a Sterling press release with no recognition of the fact that there are some serious obstacles to the success of this scam-not the least of which is the illegal methods employed by the city and the Mets' front group headed by their pal Claire Shulman. As the Ridgewood Times reports:

"The investigation also found that EDC, which serves as the economic development arm of the City of New York, played a behind-the-scenes role in the lobbying activities of the other LDCs.“These local development corporations flouted the law by lobbying elected officials, both directly and through third parties, to win approval of their favored projects. As a result of today’s agreement, these organizations will reform their practices to comply with the law and end lobbying through proxies in the communities they serve,” said Schneiderman. “This agreement will bring greater transparency, and ensure accountability for these and other local development corporations operating in New York State.”

But lawlessness aside, the project faces problems surrounding the question of whether the land slated for this lachrymose commemoration is actually parkland that has never been "alienated" as it must according to the Public trust doctrine. Under the public trust doctrine, State legislative approval is required before parkland can be alienated or used for an extended period for non-park purposes (Friends of Van Cortlandt Park v City of New York, 95 NY2d 623, 630 [2001]). We suspect that someone neglected to do this in 1961 when Robert Moses was the park czar.

Another minor point is the fact that the land east of 126th Street at the edge of Willets Point (fronting the CitiField entrance) is not fully under the control of the city even though it is slated to be used to replace the parking that the Mets Mall will sit on. 17 separate parcels are still privately owned, and with the city having given up its eminent domain push we wonder how these proprieties will be acquired.

So it's a little early for the Mets to go into a home run trot on this development-an early celebration may be spoiled by events spinning out of their control.

Queens, King of Gridlock

We have been commenting for the past three years about the traffic nightmare that the original Willets Point development will generate-80,00 car and truck trips a day according to EDC's own house consultants. But Willets Point 2.0 has the capacity to be even worse since it is so heavily laden with auto-dependent box stores. Adding the new traffic to the old-and it's fair to do since the city plans to eventually develop all 62 acres of the Iron Triangle-will create absolutely unmanageable conditions on local roads and highways.

This prognosis deserves some context-and such context is supplied by the Queens Tribune's story about how horrendous the traffic is in the borough:

"Any Queens resident with access to an automobile probably knows that driving vertically through the borough in a timely fashion is almost impossible. The most striking aspect of the dreaded Van Wyck Expressway, spanning south from John F. Kennedy Airport up to Northern Boulevard in Flushing, is not necessarily the perpetual gridlock that makes it the only highway to show up twice in INRIX’s latest list of the country’s top 10 most congested highway corridors. Most startling, perhaps, is the lack of bleating car horns. Automobiles crawling down the Van Wyck’s 9.3 miles understand that honking a horn is completely pointless. There is simply nowhere to go."

But it is directly to the Van Wyck that the city wants to go to relieve local traffic congestion coming from any new development at Willets Point-and it is the Federal Highway Authority-responding we can only surmise to political pressure-that approved the proposed ramps, ignoring all of its criteria about the degradation of the Van Wyck that would inevitably result.

The Tribune cites our own Brian Ketcham concerning the follow that will follow:

"Brian Ketcham, a transportation engineer known for defeating the Koch-era Westway, saw a ticking traffic bomb in the potential development of Willets Point. A traffic interchange built for the proposed shopping malls, along with other attractions, could dump between 1,000 and 3,000 additional vehicles an hour on the Van Wyck, lowering average vehicular speeds to as little as 5 mph, according to Ketcham’s calculations. With lanes a foot narrower than the standard 12 feet, the Van Wyck is especially vulnerable to any uptick in traffic."

Another thought to ponder is that the EDC consultants actually low balled the number of vehicular trips that the development would generate-assigning incredibly high percentages of trips to mass transit. But mass transit is, as the Tribune reports, totally insufficient-especially if you want to travel north to south:

"Any traffic salvation comes at a cost that the cash-strapped MTA likely cannot pay. All traffic experts agree a vastly improved subway system could save Queens from its gridlock woes, but with the MTA committed to finishing the Second Avenue subway line and building a LIRR extension to Grand Central Station, Queens’ roadways will likely remain clogged. When the MTA approved its latest budget in 2011, it had a $68 million deficit."

So while our befuddled transportation commissioner-with the mayor's blessing-seeks to make Manhattan an auto-free zone, she and Hizzoner are doing all that they can to make Queens roads impassable. This is another compelling reason why the Willets Point Mets Mall is simply not good public policy.

Wednesday, July 18, 2012

Turn Back the Clock!

Crain's Insider is reporting today (subsc. only) on a letter sent to the city by Michael Gerrard, WPU's attorney. demanding that the city rescind its 2008 approvals for the development of Willets Point-approvals that AG Schneiderman has determined were the result of illegal lobbying. Here is the Insider note:

Willets Foes Ask to Turn Back Clock

On the heels of the city acknowledging illegal lobbying for the Willets Point redevelopment, a lawyer for opponents last week requested that it withdraw the project’s 2008 approvals, calling them “the fruit of a tainted process.” Said Michael Gerrard, the lawyer for Willets Point United: “Citizens deserve fresh decisions without that poisonous taint.” The city has no plans to answer until his argument is made in court, which is likely. “The reasoning behind the request that the city void the approvals … is wrong,” said Christopher Reo, senior counsel for the Law Department’s environmental unit

Wrong on what basis? Did the Shulman group act as an illegal designee of the city for the purpose of the promotion of the Willets Point project? Did the Shulman group lobby effectively and play a prominent role in the approval process? We know that the answer to both those questions is, Yes!

The city enters into an illegal agreement and it is faulty reasoning to assume that the process should be started over? The city's response, while disappointing, is not surprising. Arrogance and a disrespect for the law underlay the city's scheme from the very beginning so it is quite expected that it would continue to exhibit the same disrespect and arrogance when asked to simply clean up the illegal mess it has made.

But let's not lose sight of the bigger picture here. By setting up and implementing an illegal scheme for the promotion of development of Willets Point, the city acted as a co-conspiritor with the Shulman LDC-a group that was masquerading as a charity in order to hide its real purpose to promote the self-interests of its real estate members.

At the end of this process the city awarded to a key stakeholder in the Shulman LDC, Sterling Equities, $200 million worth of property (for no money in exchange) that was directly purchased by the city because the sellers were intimidated by an illegal scheme whose purpose was to use eminent domain to take away their property-property, once it is fully developed, that will be worth billions.

No reason to void the approvals? Why, there are billions of reasons to do so-aside from simply doing the right thing by rectifying wrongdoing.

Quinn's Relations

The NY Post is reporting on the immense generosity being shown to Speaker Chris Quinn by those well known philanthropists at the Related Company:

"Mayoral hopeful and City Council Speaker Christine Quinn took in more than $17,000 in campaign donations connected to Hudson Yards developer Related Cos. since the start of 2012, according to newly released campaign-finance reports.

During the same six-month period, Quinn privately negotiated a deal that gave the firm a break from the recently passed law that raises to $10 an hour the pay for lower-income employees who work for companies that receive major subsidies from City Hall.

Quinn denied any quid pro quo in the exemption."

Of course she did. This is the same Quinn, we think, we fought Related tooth and nail over a decade ago when the company wanted to put Costco in her neighborhood-but, as Chuck Schumer might say, she has evolved. The open question is how will she treat the Related partnership with Sterling Equities on the Willets Point development should it come before the council next year?

This project-with Wal-Mart hanging in the balance-will be her test case-a colossal opportunity to fail if she doesn't do the right thing.

WPU to DOI: Do Your Job!

WPU has written a strong letter to Commissioner Gil Hearn at DOI exhorting her to do her job: recover the $450,000 that Claire Shulman's phony charity fraudulently received from NYC EDC. Her actions are imperative because of AG Schneiderman's failure to sanction the wrongdoers in his investigation and insist, at the very least, that the ill gotten gains be returned to the tax payers. Here is the full text of the letter:

July 17, 2012

Commissioner Rose Gill Hearn
City of New York Department of Investigation
Complaint Bureau
80 Maiden Lane, 17th Floor
New York, NY 10038

Dear Commissioner Gill Hearn:

We read with great interest in the latest edition of the Queens Chronicle* about your department’s yeoman-like work in combating fraud and corruption in the City of New York. Towards the end of the article Robert Holden, a Queens civic leader, made the following point:

But Queens, he said, always seems to be ground zero for corruption in the city. He cited the recent finding of an investigation into the Willets Point development plan by the state attorney general that found local groups, including one headed by former Borough President Claire Shulman, engaged in illegal lobbying practices.”

What Attorney General Schneiderman determined was that NYCEDC funneled$450,000.00 to the Flushing Willets Point Corona Local Development Corporation (the “LDC”) for lobbying – something that both NYCEDC and the LDC were barred from doing by New York State law. This illegal activity is of great significance to us, since the aim of NYCEDC was to utilize this illegal method to advance the cause of removing us from the property that we own at Willets Point.

We were buoyed by the Attorney General’s enforcement action but, at the same time, disappointed by the fact that he failed to actually sanction the illegal activity that put our property in jeopardy – failing even to insist that the LDC return the illegally advanced city taxpayer funds from NYCEDC. As a consequence of the AG’s limited enforcement effort, we believe it is incumbent on you and your agency to commence an action to recover these funds from the LDC and return them to the people of New York.

If you have any questions we would, of course, be delighted to meet with you in order to detail further evidence of corruption in the relationship between NYCEDC and the LDC. But at the very least, the ill-gotten lobbying money needs to be recovered immediately since the entities involved have both admitted their culpability in this scheme.

Thank you in advance for your cooperation.


Gerald Antonacci, On behalf of Willets Point United Inc.

Monday, July 16, 2012

The Economic Deception Corporation

We have touched on the slight of hand that is going on with the reorganization of NYC EDC-but this entire scam cries out for elected officials to weigh in and expose the phoniness and waste of money that this entails.Put very simply, there is absolutely no need for EDC to reorganize so that it can engage in direct lobbying.

As one smart political veteran has told us:

"Legally I can’t see how this bifurcating resolves anything because these entities will continue to be taxpayer funded entities under a master contract with DBS/the City.From an IRS perspective you can set one up as a C(4) and that can do lobbying but how does that take away the public interest/public policy problem of an arm of a public benefit corp that is a ©3 lobbying through an affiliated third party? If the C4 is still going to use staff and public funds from EDC (like the IDA does) this solves nothing."

Or, as we said this morning, it's still baloney no matter how you slice it. But as our friend points out: "To be clear a free standing privately funded c3 can set of a c4 and do this but once you involve public funds and public control it starts looking like a shell game. No other city agencies lobby the council or legislature. Instead The Mayors’ office working through City/State legislative affairs does this."

So why then does EDC need to do this? In our view, only if there is an expectation that the newly constructed lobbying arm will be construction Potemkin Village grass roots front groups to create the impression of local support for questionable projects. As our friend says:

"The Mayor and City Legislative Affairs Office were always empowered to lobby the Council for the Mayor’s land use and economic development priorities. Setting up and funding and directing another local LDC to create the veneer of a grass roots independent entity was obviously overreach. Trying to preserve the right to do so suggests that after 10 years Mayor Bloomberg still doesn’t get:

1)the historical purpose, powers and mission of EDC and 2) the limits to mayoral power."

When the mayor wanted to promote his education agenda he added at least two dozen new staffers to the DOE's press office-and that doesn't scratch the surface of the new hires. If more effective lobbying is Bloomberg's concerns he can do the same with his legislative office-bulk up staff. As our smart friend tells us:

"The legal way to do this is (and was) for the Deputy Mayor of Economic Development to advise the Mayor’s Office of City (and/or State) Legislative Affairs of its legislative agenda. City Leg “lobbies” all the time for the Mayor’s prerogatives and preferences tying these to the Budget and other benefits. In the case of the City Council no one can tell the Executive branch it can’t horse trade with the municipal legislative branch."

What this means is that the City Council needs to exert a modicum of oversight over the EDC reorganization-a lot of funny business is going on-and has gone on-and the council should do its job and get to the bottom of all of this.

EDC's Splitting Headache

Crain's is reporting on the reorganization efforts of NYC EDC-efforts that were forced upon it because of its lawless actions regarding the development of Willets Point:

"After its illegal lobbying led to a settlement earlier this month with the state attorney general, the city's Economic Development Corp. is not giving up trying to influence legislative decisions surrounding land use. Quite the opposite: It is restructuring so that its lobbying activities will no longer be against the law.

It has formed two new entities: the New York City Economic Growth Corp. and the New York City Land Development Corp. As early as Aug. 1, the EDC will merge with the EGC, assuming the EDC's name. The organization will be able to lobby, giving the EDC an advocacy ability it has lacked since the attorney general's investigation began several years ago."

All of this three card monte is simply a sham-and the idea that the new entity designed for lobbying will be independent of the parent is simply unbelievable: "Whenever the EDC is involved in land disposition, the land will first be transferred to the LDC, which will in turn hand it to over to EDC to do with it as it sees fit."

There was a good reason why the legislature separated these LDCs from lobbying: "They are not allowed to lobby as a result of a decades-old law designed to make sure their unique power to receive land while bypassing traditional bidding rules does not lead to corruption."

So, the organization that broke the law against lobbying-and initiated a corrupt scheme to deprive our property owners of their land-is now going to set up a lobbying beard that will be separate and apart from the EDC powers that be. What a laugh-and an indication why the AG's failure to sanction the entity was poor law enforcement.

What did get our funny bone tickled, however, was the allegation that this impediment to lobbying was the reason why EDC failed in its effort to redevelop the Kingsbridge Armory:

"The EDC agreed to suspend its lobbying while the investigation played out, which hamstrung its ability to fight for key projects, including the redevelopment of the Kingsbridge Armory in the Bronx. While the EDC could provide information to elected officials about its plan to turn the landmarked armory into a shopping mall and the potential impact of the project, it could not lobby for it. The City Council rejected the plan in December 2009 over concerns that the jobs would not pay high-enough wages."

What a load of crap. The City of New York is founded on a mayoral form of government that gives the chief executive inordinate powers-and there are good reasons why the city council has been seen as a rubber stamp. Almost all land use projects are approved by the council after some bickering over the crumbs that the city deems fit to hand out to placate the wavering council members.

The idea that there is the need to add another lobbying entity to enhance mayoral power is ridiculous-and camouflages the extent to which EDC is-and has always been-a mayoral agency. But this splitting of the agency into two fictitious parts should be rejected-challenged by the council because of its clear intent to end run the law.

As for the Kingsbridge Armory debacle that occurred not because EDC was hamstrung by a lobbying ban-but was instead stymied by the stone stupidity of Deputy Mayor Lieber-another refugee from Wall Street-and by the absence of the mayor who was global warming in Copenhagen at the crucial run up to the council vote. Of course, the stupidity of the plan and the intrasigence of the mayor's folks on the living wage contributed to the defeat as well.

What this tells us is that the AG erred in not sanctioning the miscreants at EDC for their illegal shenanigans-because the illegal lobbying was just the tip of the iceberg of the illegal activities engaged by the EDC in violation of its master agreement with the city. Let's not forget that EDC set up the Shulman LDC to not only advance its own interests, but those of the Shulman-led real estate developers as well-and did so by allowing a phny not for profit masquerade as a grass roots organization.

EDC did so because it wanted to create the appearance of strong community support-something that the Willets Point project lacks to this very day. What will the new lobbying entity be doing in the future, creating bogus community groups to pretend there's more local support for a developmment than actually exists?

Our comments to Crain's sums this charade up pretty well:

"The Willets Point opponents whose complaint launched the lobbying investigation called the reorganization a cosmetic move that changes little. "This latest sleight of hand reminds us of what former New York Gov. Al Smith once said: 'No matter how thin you slice it, it's still baloney,' " said a spokesman for Willets Point United."

Sunday, July 15, 2012

NYC DOI: Dumb or Ignorant?

The NYC Department of Investigation is going about town crowing about its work recovering tax payer monies from rampant fraud and abuse. As the Queens Chronicle reports:

"By definition, the city’s Department of Investigation tends to keep a low profile in its day-to-day operations. So it was uncharacteristic last week when the department touted a record year for investigations and enforcement in the fiscal year ending June 30. And DOI Commissioner Rose Gill Hearn, now in her 10th year in the post, was in a mood to brag about her staff in a statement issued by her office.

“This fiscal year the DOI closed more cases, made more arrests and recovered more funds than last fiscal year, all of which is a testament to the tenacious work of DOI’s team of investigators, rooting out fraud, protecting taxpayer funds and ensuring that corruption is exposed and stopped,” Gill Hearn said

A number of thoughts here. In the first place if there are a record number of arrests and recovered funds it just might mean that fraud and theft are rampant in the Bloomberg administration. But one of the cases that Gill Hearn cites, CitiTime, is in truth an exemplar of the cluelessness of her boss, no?

As the paper tells us: "The largest financial recovery by far was the $506 million settlement reached with the CityTime payroll contractor." But here was a case where the vaunted Bloomberg acumen on technology was absent as these techno-thieves kept on running up the billing-but, hey, congrats for closing the door after the horses have left the barn.

Juan Gonzales highlights the incompetency that led to the DOI's involvement:

"Federal prosecutors have finally begun to unravel one of the biggest scandals of the Bloomberg era. But one major question remains: Where were city officials all those years that computer consultant Mark Mazer and his cronies allegedly stole more than $80 million in taxpayer money from the CityTime project?"

All of this crowing also masks the fact that the DOI has been asleep at the switch when it comes to corruption in Queens-as Juniper Park's Robert Holden helpfully points out:

“Do higher numbers mean they are doing their jobs better or that there is just more corruption?” Holden asked. “If they are doing their jobs — and this is their job, what they get paid to do, root out corruption — great. If arrests are up in record numbers, if they are out there encouraging and protecting whistleblowers, great.”

But Queens, he said, always seems to be ground zero for corruption in the city. He cited the recent finding of an investigation into the Willets Point development plan by the state attorney general that found local groups, including one headed by former Borough President Claire Schulman, engaged in illegal lobbying practices. “This could just be the tip of the iceberg,” Holden said. “You can just look at those numbers in so many ways.”

And Commissioner Gill Hearn needs to answer why she has allowed the EDC corruption to go unpunished-with almost half a million tax payer dollars still in the hands of the Shulman LDC. That would be getting too close to the powers that be, however, and the commissioner will not likely bite the hand that feeds her.

Friday, July 13, 2012


The NY Times is reporting that the city council will hold an oversight hearing into the snafus over at the NYC Board of Elections:

"In the wake of a protracted and contentious vote count in last month’s Democratic Congressional primary in northern Manhattan and the Bronx, the City Council on Thursday announced it will hold an oversight hearing in an effort to determine what went wrong in the ballot-counting process."

And the ever vigilant council speaker is all over it-not wanting to allow anything to taint the democratic process:

"The Board of Elections’ inability to accurately tally and report the results of last month’s Congressional primary in a timely manner threatens the credibility of the democratic process,” Christine C. Quinn, the City Council speaker, said in a statement. “New Yorkers must be able to trust that when they cast a valid ballot, their vote will be counted accurately.”

Here, here-let's all raise a glass to Quinn for her vigilance-but isn't it strange that the speaker has remained mute over an even worse scandal, one that isn't hypothetical? We're talking, of course, about the city's illegal lobbying campaign-the one that tarnished the entire ULURP process over the development at Willets Point.

We know for certain that Claire Shulman lied directly to the city council when she was asked about the amount of city funds that EDC had given her group to lobby-illegally, as it turned out. Perhaps the speaker's muteness is a result of her longstanding friendship with the dowager borough president?

Whatever it is it speaks once again to the fact that for the last eight years-at least when it comes to economic development-Christine Quinn has been little more than a water carrier. And the only time she went against the mayor was over the Kingsbridge Armory when the Bronx delegation dragged her kicking and screaming into the opposition-all because her speakership was hanging in the balance.

What this means for us-and for all New Yorkers-is that Quinn, should she somehow manage to get elected mayor, will not be a voice for the small businesses and neighborhoods that stand in the path of mega-development. She has come a long way from the days when she was a stalwart community organizer in Chelsea fighting box stores. Perhaps, as Chuck Schumer has said about NY's junior senator, she has, "evolved."

Thursday, July 12, 2012

Vallone Clueless on Willets Point Illegalities

In this week's Times Ledger CM Peter Vallone demonstrates legendary cluelessness with his perspective of the illegal lobbying campaign conducted by EDC and Claire Shulman's LDC. In doing so, he makes his former council collegue, Joe Addabbo look like Diogenes:

"State Sen. Joseph Addabbo (D-Howard Beach) was on the City Council when it voted in favor of the project. In light of Schneiderman’s ruling and other revelations surrounding the Willets Point project, he believes the Council should at least hold a public hearing to determine if the project needs to go back to the drawing board.

“There are a lot of pieces here,” he said. “Maybe that’s an issue for the City Council to at least have a hearing.”

Indeed, but Vallone misses the entire legal point: "City Councilman Peter Vallone Jr. (D-Astoria) was also in the Council at the time and voted in favor of the project. He supported Schneiderman’s investigation, but said the group did not have any influence over his decision at the time and that the project should not be derailed for that reason."

Of course at the time Vallone was being lobbied by his father who represented the property owners and helped cut the sweetheart deals on the behalf of the group's heavy hitters-and as soon as that happened young Vallone was convinced. But what he is saying here is that it dosn't matter that in promoting the project EDC and the LDC broke the law - and this is from someone who wants to be the chief law enforcement officer of Queens?

And Vallone overlooks the fact that the Mets real estate arm Sterling Equities was a key stakeholder in the LDC - and came out of this holding $200 million worth of city property. We guess that in Peter Vallone's law enforcement world it's okay for someone to break the law and benefit handsomely - such is the state of good government in Queens if Vallone's view is representative.

Ben Haber has a more persuasive view of all of this - and lays it out in his letter to the Queens Chronicle. He deserves the last word, while Vallone has earned our ridicule:

"Term limits are now the law, but if Bloomberg wants to redeem himself on illegal lobbying, he should insist the City Council enact legislation withdrawing its approval of his Willets Point plan, and the process should start anew without illegal lobbying. Should he fail to do so, the City Council and Speaker Christine Quinn, who aspires to be mayor, should do so on their own.

The public is entitled to the fresh air of good and honest government and nothing less."

Wednesday, July 11, 2012

Claire Shulman and the Badge of Fraud

The Greenpoint Star editorializes on the impact of the AG's decision to chastise EDC and Claire Shulman's LDC for illegally lobbying-and in doing so unearths another example of the intrinsic dishonesty of Shulman's phony development corporation:

"At Willets Point, the corporation was formed in direct consultation with the mayor's office, and then stayed in contact with EDC throughout its lobbying efforts. At Coney Island, the corporation actually operated out of EDC's Manhattan offices and was made up of agency staff.Both portrayed themselves as grass-roots movements pushing for positive development in their respective communities, but instead were actually working at the behest and with the input of the city on huge, far-reaching projects the Bloomberg administration wanted to realize."

But Shulman at every point-and this is what prosecutors refer to as a badge of fraud-denied or hid her connection to the city. As the Greenpoint paper points out:

"In the case of Willets Point, one of the major players in the Flushing-Willets Point Corona Local Development Corporation is former borough president Claire Shulman, who made the rounds in Queens, including a stop at this paper, pushing the redevelopment of Willets Point.She presented herself and her group as independent, and that the Willets Point plan being proposed by the city was the best thing for Queens. While she may truly believe that, in the interest of full disclosure she should have noted that her group was created in conjunction with the EDC and worked closely with them, so of course supported the project.

She presented herself and her group as independent!-when in fact she was simply a puppet on a string. And she did the same thing with the New York State Authorities Budget Office, telling the agency that her LDC was not in any way a municipal entity and subject to the requirements of the freedom of information act. Shulman also played a consistent double game with her requirement to register as a lobbyist-and hid the lobbying purposes of the LDC from the IRS-and from the city clerk for as long as she could get away with it.

Claire Shulman and her group have been dishonest about who they are and what they represent-and what the Greenpoint Star misses is that, at the same time they were doing the city's bidding, they were lining up chits for their developer members. And the biggest chit-or chip in this case-was cashed in by Sterling Equities when they received $200 million in city property free of charge.

Courier Brings Bad EDC/LDC News

The Queens Courier follows up on last week's reporting of the attorney general's smack down of the illegal lobbying of EDC/Shulman's LDC:

"Three city development corporations have admitted to illegally lobbying the City Council to win approval of their favored projects, including a much-contested plan to revamp Willets Point, the state attorney general said...The projects require City Council approvals pursuant to the state’s Uniform Land Use Review Procedure (ULURP). But local development corporations (LDCs) are barred by statute from influencing legislation.

“These local development corporations flouted the law by lobbying elected officials, both directly and through third parties,” Schneiderman said."

The Courier also reports on Comptroller Liu's insistence that heads need to roll: "Meanwhile, the mild rebuke from the state is drawing heat from the city comptroller, who said the restructuring alone is insufficient and pushed for organization officials to be held accountable.“While these revelations of illegal lobbying are alarming, we cannot say that they come as a surprise,” said Comptroller John Liu. “For some time, this mayor has been using the EDC to create ‘astroturf’ groups to support his agenda, reward allies and dole out welfare to wealthy corporations.”

Astroturf indeed, since the Shulman group is the Potemkin Village of grass roots lobbying campaigns since her members were for the most part rich real estate firms hiding behind the group's not-for-profit status-and Liu's comments about "welfare" to wealthy corporations is right on since Sterling Equities has been handed $200 million worth of free land to build a mall next to CitiField.

This scam-because what else can you call it?-was at our expense-and the Courier quotes our statement:

"Willets Point United members said the investigation confirms their original suspicions that the entire land use review process was based on fraudulent and illegal behavior. They urged the city to end all recent and future actions regarding the area’s development.

“Our properties were put at risk by an illegal scheme, and we were forced to spend hundreds of thousands of dollars to protect our constitutionally protected rights against a municipality and its front group engaged in activities that were rife with fraud,” the group said in a statement."

The story was not without a bit of black humor from the LDC's attorney Bob Bishop-the same lawyer who repeatedly claimed, falsely as it turned out, that what the LDC was doing, meeting with elected officials and writing them memos of support, was not lobbying:

"Robert Bishop, a lawyer representing FWCLDC, said the group also plans to comply with the new agreement.“The LDC is a great organization that does great things, and we will continue to do great things,” he said."

Well, he sure is write about that, isn't he? That is, if your definition of great is snatching public property at no cost for the use of one of the LDC's charter members.

Tuesday, July 10, 2012

Liu Wimping Out?

In this morning's Crain's Insider (subsc. only) the newsletter reports that Comptroller Liu is reluctant to point a finger at EDC's Seth Pinsky when he says that people need to be held accountable for the agency's illegal lobbying:

Liu Won't Point Fingers at Pinsky

Comptroller John Liu had some harsh words for the city's Economic Development Corp., which admitted to illegally lobbying the City Council on Willets Point. But he stopped short of directly implicating EDC President Seth Pinsky. "We are saying the mayor needs to hold those responsible for this accountable. Who is up to the mayor," a spokesman said. "We are simply saying that there has been no accountability." In a letter, Liu also called on the mayor to make the agency's finances available on the comptroller's Checkbook NYC online database."

Come on John, man up here. As always the fish stinks from the head-as we have already pointed out:

"But undermine the law he did-and now he must be replaced because the illegal scheme at Willets Point falls on his shoulders, even though it was Dan Doctoroff that hatched the idea in the first place. Which elected official will be first to call for Pinsky's head?"

Monday, July 9, 2012

Liu Lashes Out at EDC-and Calls Out the Mayor

Today NYC Comptroller John Liu wrote a scathing letter to the mayor concerning the, “law-breaking” culture at EDC. The Observer has the story:

"City Comptroller John C. Liu today sent a letter to Mayor Mike Bloomberg to change what he called the “law-breaking” culture at the Economic Development Corporation.The missive comes as the EDC has been ordered to restructure as part of a recent settlement reached with New York attorney general Eric Schneiderman, who found that the agency illegally lobbied City Council members as part of their effort to redevelop Willets Point in Queens and Coney Island in Brooklyn."

Liu also indicated to the mayor that the so-called restructuring of EDC seemed to be a gimmick designed to continue the unlawful use of city funds to lobby: “The legal restructuring of the EDC, which appears to have been undertaken so that the impermissible lobbying can continue, is clearly insufficient. It amounts to nothing more than business as usual, notwithstanding knowingly allowing the use of taxpayer dollars for unlawful purposes,” wrote Mr. Liu."

Even more pointed was Liu's call for heads to roll: "Installing new leadership and opening the books would help change the EDC’s law-breaking culture, which, as documented in the settlement with the Attorney General, used the agency’s budget as a political slush fund for illegal lobbying.” As the Liu letter goes on to strongly say:

"The legal restructuring of the EDC, which appears to have been undertaken so that the impermissible lobbying can continue, is clearly insufficient. It amounts to nothing more than business as usual, notwithstanding knowingly allowing the use of taxpayer dollars for unlawful purposes. … I urge you to move swiftly to identify those senior officials from City Hall and the EDC responsible for the flagrant and repeated law-breaking activities, and hold them accountable."

What Liu needed to add was a call for EDC to return the $450,000 it sent to Claire Shulman's LDC for the ilegal lobbying use. Even more pointed would have been a call for the funds to be sent to Wilklets Point United because of the "pain and suffering" the property owners suffered because of the illegal EDC scheme. As we said this morning, this is far from over, so stay tuned.

Will Illegality Kill New Willets Point Deal?

Crain's is reporting on the impact of the AG's finding concerning the illegal lobbying of EDC and its Claire Shulman puppet:

"Opponents of the city's plan to redevelop Willets Point will try to take advantage of the Economic Development Corp.'s admission last week that it illegally lobbied for the project. A spokesman for a group of property owners resisting eviction said EDC's acknowledgement means the city should rescind its 2008 plan to remake Willets, which was approved by the City Council. A lawsuit is possible, the spokesman said."

Not everyone agrees that this is a deal killer: "But experts say it's unlikely that EDC's confession, made in a settlement with state Attorney General Eric Schneiderman, would be grounds for overturning the Willets decision."I don't see a court invalidating the approvals because of what may have been misconduct in the advocacy," said Kenneth Fisher, a land-use attorney and former Brooklyn councilman. "I can't think of any precedent for that."

We would agree that there was no precedent-not precedent for the city breaking the law, that is, in the pursuit of a development deal. Has former council member Fisher ever seen that? But certainly this will be another reason why the city council will examine the new configuration carefully:

"If the legal argument fails, opponents could still play the political card. The admission of illegal lobbying could bolster their argument that the project is tainted and should be killed. Because the redevelopment planned by the Related Cos. and Sterling Equities deviates from what was approved four years ago, the City Council will need to sanction a zoning change for the new version."

That and the fact that Sterling played a key role in the illegal activity-and Related is still Wal-Mart's best friend. Stay tuned to this.

Friday, July 6, 2012

Pinsky a Big Loser

In City and State's weekly Honor Roll-and Dishonor Roll-EDC's Seth Pinsky has rightly earned his place as a big loser:

"Seth Pinsky – The chief of the city’s Economic Development Corporation is now the head of an organization that has had to admit to illegal lobbying on behalf of the mayor’s economic development agenda at Willets Point, a charge that comes with no civil or criminal penalties, just ignominy. The charge is a black mark on what is supposed to be the mayor’s great economic development agenda, a far-reaching plan in all five boroughs meant to secure his legacy after 12 years in office, not undermine the law."

But undermine the law he did-and now he must be replaced because the illegal scheme at Willets Point falls on his shoulders, even though it was Dan Doctoroff that hatched the idea in the first place. Which elected official will be first to call for Pinsky's head?

Wednesday, July 4, 2012

NY Times and Daily News Weigh In on AG Smack-down of EDC

The NY Times in the person of Ray Rivera, the reporter whose stories helped to initiate the three year investigation by the NYS AG, has weighed in on the historic smack-down of a mayoral agency:

"The city’s economic development agency and two other organizations have admitted that they illegally lobbied on behalf of Mayor Michael R. Bloomberg’s plans to redevelop two long-neglected areas in Queens and Brooklyn, the state attorney general said on Tuesday."

Importantly, the groups involved acknowledged their wrongdoing-actions that played a key role in advancing the city's development schemes: "In a settlement with the attorney general late Monday, the three groups acknowledged crossing the line and agreed to several steps toward reform. “These local development corporations flouted the law by lobbying elected officials, both directly and through third parties, to win approval of their favored projects,” Mr. Schneiderman said."

Making the NYC EDC's role that much more nefarious was the fact that they hid what they were doing-and when exposed-blatantly lied about their key role in the subterfuge; a significant badge of fraud in our view: "The office of the attorney general, Eric T. Schneiderman, found that the Economic Development Corporation “played a behind-the-scenes role in the lobbying activities” of the other two groups to the City Council. The findings came with no civil or criminal penalties."

And that's the rub because the illegal scheme had real world consequences (not to mention hundreds of thousands of tax payer dollars) owing to the fact that the Shulman LDC was comprised of no real grass roots organizations-only developers who were in a position to benefit lucratively from the conspiracy. AG Schneiderman, in our view, should have gone the extra step at interdicting the development's forward progress-particularly because of the windfall that is awaiting Sterling Equities and the Mets. The Times cites our own blog on this point:

“What the attorney general has done is to tar the city’s chief economic development agency with illegal lobbying — and by doing so calls into question the legality of the entire Willets Point development scheme,” it wrote."

If the issue of fraud and conspiracy was in doubt the Times removes it with the following evidence from the EDC files: "In one example of the agency’s efforts behind the scenes, the investigation found that its officials had drafted a letter to City Council members but directed the Willets Point group to use its fax machine to send it. In the words of an employee, the agency “felt this letter coming from our fax machine would have been lobbying.”

The Daily News makes similar points-but goes further in crediting the role of WPU in the successful culmination of the AG's probe: "Two city economic development agencies have admitted to illegally lobbying the City Council to support a plan to overhaul gritty Willets Point...The agreement validates years of complaints from Willets Point business owners who charged the Flushing-Willets Point-Corona LDC and specifically its president, Claire Shulman, curried favor for a plan to take properties through eminent domain."

The News also cites WPU's complaint about the leniency of the AG's outcome: "Members of Willets Point United said sanctions should have been harsher. “There was a crime committed here,” said Willets Point United President Gerald Antonacci. “People ran for the hills when they were threatened with eminent domain. A lot of people who sold their properties would have never have sold it.”

This rather shocking outcome will add to the questions about the legitimacy of the new direction that the city is taken at Willets Point-with some observers commenting about the unfair favoritism accorded Sterling Equities. As the Times Ledger reports:

"The winners of a bid to redevelop Willets Point may have had a leg up on the competition, although the city said the selection process was completely unbiased...But there was one component of the plan that no one had seen before, not even the other developers who bid on the roughly $3 billion project.

When the city released its request for proposals in May 2011, it was seeking developers to build in a precisely defined area along 126th Street across from Citi Field.

The Sterling and Related plan calls for development within the boundaries defined in the RFP, but it also features another 1 million-square-foot retail and entertainment block to the west of the stadium."

In other words the fix was in-adding additional fuel to an already tainted project that has all the earmarks of corruption that we would have never expected to emerge from the administration of a billionaire mayor who touted himself as above tawdry politics.