Tuesday, October 30, 2012

WPU/South Bronx Unite Press Advisory for Thursday

                    Press Advisory

A press conference on the steps of city hall on Thursday, November, 1st, will bring together good government, community and business leaders from all over the city to object to the proposed restructuring of the NYC Economic development Corporation-a move prompted by the finding that the quasi-governmental agency had broken the law while lobbying in favor of the Willets Point development. The press conference, led by Willets Point United and South Bronx Unite will focus on the illegal lobbying and the outrageous decision of EDC to grant tens of millions of dollars in tax payer funds to FreshDirect. The presser will precede a city council hearing on the merits of the EDC reorganization. The hearing will be held at 250 Broadway at 1:00 pm.

Where: City Hall Steps

When: Noon

Date: November, 1, 2012

Subject: Protesting the Restructuring of NYC EDC

           On July, 3, 2012 the Attorney general of the State of New York issued a finding-pursuant to a three year investigation-that the NYC EDC, and its partner the Flushing Willets Point Corona Local Development Corporation, had violated the law in the lobbying effort to get city council approval of the 62 acre redevelopment of Willets Point. The AG found that the EDC had used the local development corporation led by former Queens Borough President Claire Shulman as an illegitimate front group, masquerading as a community based organization.
           In this illegal lobbying scheme, EDC had funneled $450,000 in tax payer generated  funds to the LDC to conduct the campaign to get the project approval-money that has yet to be restituted back to the tax payers. Even more ominously, EDC then proceeded earlier this year to award the development rights to a newly constituted Willets Point plan to a partnership composed of the Related Company and Sterling Equities. The latter firm was a founding member of the local development corporation that illegally colluded with EDC in the lobbying for the Willets Point development.
          In awarding the rights EDC also gifted $200 million worth of property that the city had bought from panicked Willets point landowners back in 2008-land that then Deputy Mayor Lieber had assured the city council would be fully paid for by any developer that was selected for the Willets Point project. So in essence, Sterling Equities participated in an illegal scheme that corrupted the land use review process and mislead the city council and has now been awarded, by its co-conspirator EDC, development rights and $200 million worth of property.
          This is how EDC operates, unethically and illegally, outside of any system of checks and balances. Now, having been cited for illegal lobbying, EDC wants to restructure itself into two separate entities so that it can make an end run of state law and continue to lobby!-and to do so by creating a sham corporation that makes a mockery of the alleged separation.
          The restructuring would allow the agency to accrue to itself even greater power than it currently exercises, and given the way that EDC has operated over the past ten years, this bodes ill for communities and small businesses that have suffered while mega real estate deals have been promoted with little regard for the collateral economic and environmental damage that they generate. Characteristically, these deals have been sweetened by huge tax payer subsidies that are given to well-connected real estate developers-inducements that are unavailable to the unconnected small businesses.
          Willets Point United will be joined by South Bronx Unite, a community based organization that is fighting EDC’s outrageous use of taxpayer money to subsidize FreshDirect’s proposed move from Long Island City to the South Bronx. The FreshDirect deal is characteristic of how EDC operates against the public interest by excluding local community voices from development decisions, disregarding environmental impacts on already overburdened neighborhoods and subsidizing the son of a billionaire hedge fund operator to unfairly compete against local brick and mortar grocery stores.
          Given the manner in which EDC has operated, it should behoove the city council to examine the ways in which the agency’s scope of activity and overall unfettered power can be reined in-and not expanded as the agency is proposing. From the eviction of wholesalers at the old Bronx Terminal Market and the outrageous subsidizing of FreshDirect to the illegal lobbying over at Willets Point, EDC has not operated in a transparent manner or in the overall public interest. It is time that the city council devised ways to make it more accountable.
  Policy Background
        All local development corporations are incorporated pursuant to the New York State Not-For-Profit Corporation Law, § 1411 ("N-PCL § 1411"), which absolutely forbids any such corporation from engaging in any attempt to influence legislation. The New York City Economic Development Corporation ("NYCEDC") has operated since 1961 as a local development corporation. The NYS legislature deliberately restricted the activities of economic development entities, which it intended to incorporate pursuant to N-PCL § 1411; and it obviously did so in the public interest.
          N-PCL § 1411, which pertains to local development corporations, was established by the legislature with the plain intent of capturing entities such as NYCEDC that engage in economic development activities. N-PCL § 1411 lists the "exclusively charitable or public purposes" for which a local development corporation may be operated. Those purposes are those of the present NYCEDC. The post-merger NYCEDC intends to carry out substantially the same purposes, while adding a lobbying capability that is unlawful under the NYCEDC's present structure pursuant to N-PCL § 1411.
          If the proposed re-structuring proceeds, it will result in a perverse circumstance in which the future NYCEDC performs functions of a local development corporation (including functions of NYCLDC, which is incorporated as a local development corporation), while not being incorporated itself as a local development corporation. And it will do so, in order to add a lobbying capability that is prohibited to local development corporations. Such corporate gymnastics deserve very close scrutiny.
        In establishing N-PCL § 1411 to capture entities engaged in economic development activities, the legislature deliberately separated such entities from other Type C not-for-profit corporations. A very significant distinction which the legislature deliberately imposed, is that economic development entities incorporated pursuant to § 1411 are absolutely prohibited from engaging in any attempt to influence legislation.
         The fact that the legislature included this restriction for local development corporations but not for other Type-C corporations indicates that the legislature thought it important to separate political and legislative activity from the kind of activities undertaken by local development corporations. This conclusion is supported by the quasi-governmental status of local development corporations. (Local development corporations, unlike other Type-C corporations, are initiated by the government.)
         Given such a privileged quasi-governmental status, it is plain that a restriction on lobbying is in the public interest. The local development corporation occupies a privileged "insider" status that gives it a political advantage. The legislature clearly intended that this privileged insider status not overwhelm alternative opinions regarding development initiatives; and so, the legislature imposed the prohibition on lobbying as a reasonable counterweight to the local development corporation's privileged insider status.
          Now NYCEDC prefers to throw off that counterweight, which was deliberately established by the legislature and intended to apply to economic development entities such as NYCEDC. NYCEDC may prefer to lobby, but doing so would be contrary to the intent of the legislature. Arguments advanced by NYCEDC – that being able to lobby will somehow increase the efficiency and effectiveness of NYCEDC as it pursues development projects – discount the fact that the inability to lobby is intended by the legislature as a deliberate counterweight to NYCEDC's privileged insider status, and therefore serves the public interest.
          Given that the activities and purposes of the pre-merger NYCEDC and the post-merger NYCEDC are virtually identical, it is clear that the public interest would be adversely affected and the spirit of N-PCL § 1411 contravened, by enabling the post-merger NYCEDC to conduct privileged activity while also engaging in lobbying.
          It is unnecessary for NYCEDC to lobby. Development projects and land deals are routinely approved under the present structure, without NYCEDC lobbying. To the extent that any lobbying is appropriate, it can be carried out by staff of the Mayor's Office without contravening N-PCL § 1411 and without circumventing the intent of the legislature.
          Although the alleged purpose of the restructuring is to "separate" the functions of the post-merger NYCEDC from those to be performed by a local development corporation, there is no intention on the part of the people responsible for the restructuring to actually implement any such "separation". In fact, they intend to unify – not separate – the functions of the post-merger NYCEDC and the newly formed NYCLDC.
          NYCEDC is pretending to re-structure in order to "separate" itself from activities of any local development corporation (and therefore, be able to lobbying without violating state law), but the contract between the two “new” entities makes clear that there will be no actual "separation", and that the "separation" is illusory – a charade, to justify circumventing the lobbying prohibition
          To the contrary, the contract states that the staff of the post-merger NYCEDC will interact with the staff, "if any", of NYC Land Development Corporation– thus allowing for the possibility that NYCLDC will have no staff of its own, and that the post-merger NYCEDC will be the NYCLDC staff; and the contract states that the post-merger NYCEDC and NYCLDC will jointly own all work product. Such terms shatter the notion of any purported "separation" between the post-merger NYCEDC and NYCLDC, as they essentially unify the operations of the post-merger NYCEDC and NYCLDC.
        What EDC proposes to do is to create a shell corporation-fully beholden to the parent EDC. The proposed restructuring of NYC EDC not only doesn’t serve any public purpose, it effectively does the opposite: allowing the agency to obtain even greater power than was envisioned under NYS law will subvert the public good and allow the agency to continue unfettered in its seemingly endless effort to aggrandize the interests of the most powerful real estate firms in NYC.




EDC Hearing Still on for Thursday

It appears that the EDC restructuring hearing scheduled for Thursday is still on in spite of all the efforts by Sandy to prevent business as usual. As you may recall the hearing is designed to address the decision by EDC to divide itself into two separate entities-apparently ignoring Abe Lincoln's sage advice that a house divided against itself cannot stand. But we digress.

In anticipation of the hearing WPU has reached out to the folks at South Bronx Unite who are fighting the EDC-led effort to funnel tens of millions of tax payer dollars to the online grocer FreshDirect-another example of how EDC and crony capitalism are perfect together. As it stands today we are planning a joint press conference with South Bronx Unite on the steps of City hall at Noon on Thursday-and we plan to have Norman Siegel keynote the event in order to reprise his court appearance on September 28th when he lambasted EDC's ill-conceived reorganization.

In actuality the proposed restructuring will not divide EDC at all since they are creating a sham or shell corporation whose power and resources will be controlled by the EDC mother ship-a transparent sleight of hand to avoid the state law that prohibits local development corporations from lobbying (the only glimpse of transparency we've ever seen from these folks).

There is a surreal quality to this hearing and it begins with the title that talks about “going forward.” How can the city council be talking about EDC and going forward without examining how and why we got to this point. Why is the council erasing history-something that totalitarian regimes have always done.
In this vein shouldn’t the council be demanding that EDC make sure that the Shulman-led LDC give back all of the tax payer money that it used for an illegal activity? Shouldn’t the council be demanding that the City of New York rescind the original tainted approvals of the Willets Point development-approvals that were garnered by subterfuge committed right before this body? And finally, shouldn’t a legislature interested in the rights of due process and the upholding of the law be calling for the resignation of those officials at EDC who violated the law and the due process rights of small property owners like me?
As the NYC comptroller implored in a letter to the mayor, soon after OAG announced its findings of illegal activity (via letter dated July 9, 2012) it is past time to "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" (emphasis added).
Instead of going forward with a whitewash we need to go back and properly sanction EDC and its co-conspirators at the Shulman LDC for their egregious disregard for the law. The council’s role here is to hold a hearing in order to get to the bottom of the illegal scheme and to subsequently recommend reforms to insure that the illegal and unethical behavior will never be repeated.

What the council needs to do is to examine how to rein in the activities of NYC EDC and to look for ways to strengthen its oversight role over this rogue agency. Any quasi-governmental entity that can take $200 million of tax payer bought property and hand it over to a partnership made up of Sterling Equities; while at the same time gifting tens of millions more to FreshDirect so it can unfairly compete with the city's brick and mortar supermarkets is a rogue outfit-and going forward we should be examining how to prevent the squandering of tax payer monies for those few favored capitalists that EDC deigns to smile on.

Monday, October 29, 2012

WPU members interviewed on WHCR radio

Photographs of Willets Point United members Irene Prestigiacomo and Joseph Ardizzone during the live community affairs radio program on 90.3FM, hosted by Leroy Baylor; Sunday, October 28, 2012.
Prestigiacomo and Ardizzone, together with documentary video producer Robert LoScalzo, recounted the City's illegal tactics in attempting to implement Mayor Bloomberg's plan to take over Willets Point and give it to the Wilpons and Related Companies -- including lobbying by NYCEDC and Claire Shulman's LDC in violation of state law which the NYS Attorney General has confirmed. The wide-ranging conversation lasted nearly one hour, and included topics such as the shameful refusals of many area elected officials to do anything to help end the City's withholding of municipal services and purposeful neglect of Willets Point; the abuse of eminent domain for the aggrandizement of private interests; the failures of AG Schneiderman and the state Inspector General to hold anyone to account; and other topics raised by listeners who called in.

Friday, October 26, 2012

Barry Grodenchik for What?

The Queens Tribune is reporting that Deputy Queens BP, Barry Grodenchik, is stepping down in preparation for a run for the borough's top job: "Deputy Borough President Barry Grodenchik is stepping down from his position to launch a bid for borough president."

We could not conceive of a more frightening idea-or an individual less qualified to represent the interests of the citizens of Queens. Grodenchik, after all, is a long time sidekick to Claire Shulman and was the go-to lobbyist for the Parkside Group when the proverbial stuff hit the fan about the illegal lobbying done by Shulman-aided and abetted by Grodenchik's firm. In what was a fascinating coincidence, Grodenchik took a powder from Parkside right when the controversy began in the summer of 2009.

What has never been told publicly is that the Shulman LDC listed the payments to Parkside as "marketing money," and not the lobbying expenditures that the money was used for. So in essence Grodenchik and Parkside were right in the middle of the illegal scheme-co conspiritors, as it were.

What's clear is that Grodenchik is a perfect continuation of the longstanding Queens tradition of anointing hacks to the BP position. Were he ever to win a race, the lobbyists and special interests will be salivating while the citizens of the borough will be left holding the bag.

Parks for the People

Ben Haber is up to his usual tricks-debunking hypocrisy and holding elected officials up to a good government standard. His latest is a letter on the absurd idea to put a soccer stadium inside Flushing Meadows Park:

"The issue is not whether the proposed soccer stadium in Flushing Meadows Corona Park will not result in the loss of fields as claimed by Mark Abbot, the president of Major League Soccer (“No loss of fields,” Letters, Oct. 18). The issue is not, as claimed by Mr. Abbot, that the MLS will maintain current soccer fields in the park.

The issue is not Mr. Abbot’s purported philanthropy. The issue is yet another prostitution of FMCP by giving — not to a nonprofit organization or one engaged in charitable public works but to a private, for-profit business — up to 13 acres of urban parkland. Professional soccer, like all other professional sports clubs, is owned by immensely wealthy people, and, like all private for-profit businesses, exists solely to make money, as much money as possible."

Haber's not against making money-just not at the expense of the city's second most utilized park. He ridicules the idea that this portion of the park is 'underutilized': "I do object to the claim the stadium will be in an unused part of the park. If it is unused, grass it over and place benches and picnic tables in the area. Urban parkland should not be kept in an unused condition so as to then be argued by myopic politicians to not even sell it, but give it away."

Next Haber sets his laser-like attention on the myopic elected officials who should be jumping up and down in protest of the idea that this park should be despoiled in this manner: "Suffice it to say in the case of FMCP, the second most used park in the city — mostly by the underprivileged — the fault lies with far too many city officials, particularly those in Queens who should know better, who consider their constituents to be real estate and private interest groups. They have intentionally shortchanged and ignored FMCP, and the little people be damned."

Haber makes short work of the claims of MLS that the stadium will restore civic pride, or some other such nonsense: "MLS Commissioner Don Garber has said this a godsend that will raise a sense of pride in the community and benefit Queens. Hogwash. It will benefit the rich owner of a private for-profit business. Mr. Garber’s further claim that a soccer stadium will make FMCP better is Madison Avenue nonsense and absurd on its face. The only thing that will make FMCP better is to prevent politicians and private special interest groups from having any say in its management."

Where are the elected officials on this? Either hiding under their desks or supporting the stadium because of a jock-sniffing tendency. Haber gets the last word on this substandard group of self servers: "The lack of a hue and cry in opposition by elected officials is testament to their intellectual bankruptcy and low caliber."

Tuesday, October 23, 2012

Lost in Translation

As Capitol New York is reporting, the scoping session for the bastardized Phase1 of the Willets Point development has come under fire because of the lack of adequate translations for the multi-ethnic community:

"The meeting was held in Corona, a heavily immigrant neighborhood that borders Flushing Meadows Corona Park to the west. Not surprisingly, at least half the attendees did not speak English, according to Make the Road New York lead organizer Hilary Klein, who attended the meeting. 

The city wasn't entirely unaware of the language issue. It advertised the event in El Diario la Prensa, and dispatched three translators who could speak Spanish, Bengali, and Cantonese. But those translators did not translate the presentation, the one outlining the scope of the mall about whose impact the city was supposed to be soliciting input, according to two letters of complaint subsequently sent to Mayor Michael Bloomberg.

Nor did the city provide simultaneous translation technology of the sort typically associated with U.N. meetings (or Star Trek). The city says it has to rent such technology, and so that technology has to be requested ahead of time and no request for that, or any other language accommodation, was made."

After WPU and others complained, the city extended the deadline for commenting until October, 26th. Assemblyman Moya voiced his displeasure with this affront to the multi-lingual residents:

"The lack of translation did not allow the vast majority of community residents to understand adequately the scope of work that [the Economic Development Corporation] was presenting, therefore creating more confusion and frustration," wrote Assemblyman Francisco Moya, in one of the letters of complaint. Since the meeting was required to solicit community input, and much of that community had no idea what was happening, Moya requested the city do the meeting all over again."

The oversight is symbolic of the overall disdain that the city has shown to low income immigrant communities and businesses. One thing should be clear, however. This is a project that can't be satisfactorily explained in any language-and the paucity of interpreters doesn't alter the fact that this theft of private property and parkland is inexplicable unless we factor in greed and crony capitalism into the equation.

The community knows what's going down here and it doesn't like it, not one little bit. They know that this boondoggle deal for the Mets translates into a gold mine for the billionaires and a shaft for the powerless residents of Jackson Heights and Corona.

Monday, October 22, 2012

EDC's Real Restructuring: Part 2

We have been offering a running commentary on the absurdity of increasing the power of EDC to do more harm to New Yorkers-the subject of a city council hearing next week. There are many numerous salient examples of how EDC has operated with impunity-and without good policy judgment. So many, that we could fill an entire book with the agency's missteps in its myriad efforts at helping the city's real estate community.

One example deserves a special shout out for is outrageous misuse of city money-the proposal to grant Fresh Direct hundreds of million dollars in bribe money so that the online grocer doesn't abandon the city that subsidized it into business (with $2 million) a number of years ago. Good Jobs New York lays out the case against this inanity-and the Daily News reports on the growing controversy and legal challenge:

"When Bloomberg first ran for mayor, he vowed to curb the time-honored practice of doling out tax breaks to firms that threaten to skip town. But the subsidy package given to FreshDirect, which was being wooed by the increasingly aggressive Garden State, has led to critical discussion of a practice that remains an important part of the city’s economic development arsenal...
But critics said the deal was structured with no recourse for the city to get the money back because specific job thresholds are not tied to the agreement. “We are always told that these subsidies are going to create jobs,” said Councilwoman Melissa Mark-Viverito, who is calling for a Council probe of the practice. “What happens when the companies don’t produce?”

Even the mayor's budget director has called this into question: "No less an authority than the city’s budget director called the FreshDirect agreement and others like it “nuts.” So, what gives? Why does the city invest tax dollars for a company to establish itself in Long Island City and then reward the very same company for an extortionist threat to move to New Jersey. What a way to say thanks to the tax payers that got you started.

As Good Jobs' Bettina Daminai told the News:

"Detractors of the process claim business executives flirt with New Jersey just to gain leverage in talks with the city’s EDC. “The New Jersey threat has become a matter of routine for companies,” said Bettina Damiani, policy director at Good Jobs New York, who argued that more transparency is needed. “The process is broken. Nobody really knows whether the New Jersey threat is valid. Nobody really knows if the promises to create jobs are valid.”

Well, we have an idea about why this has gone down the way it has. Consider the fact the the Fresh Direct CEO is a young man named Jason Ackerman:

"Ackerman’s appointment fills the top role left vacant when Richard Braddock departed in March, when the British retail chain Wm Morrison Supermarkets made a $50 million investment in FreshDirect. Before founding FreshDirect, Ackerman was an investment banker with Donaldson Lufkin & Jenrette and Crown Capital Group, where he specialized in mergers and acquisitions and corporate financings, primarily for the supermarket and specialty retail space."

An investment banker, now that's familiar indeed-part of the usual cohort of folks who seem to  always have the mayor's ear. It gets even better, however. You see Jason's daddy is Pater Ackerman, the billionaire investor who was last seen politically partnering with a fellow named Mike Bloomberg on a SuperPac on behalf of Maine gubernatorial candidate Angus King:

"What do Wall Street billionaires Michael Bloomberg, Peter Ackerman, and John Burbank III have in common with Eliot R. Cutler (pictured at left), the former Independent candidate for governor in Maine and a current State Chairman for the Maine United States Senate campaign of Independent candidate Angus King (pictured at right)?

During 2012, all four have had an affiliation with Americans Elect, an organization that has spent more than $800,000 in the past three weeks in support of King's campaign, according to recently filed Federal Election Commission reports. The money has been spent on television ad production, television ad placement on Maine television stations, direct mail, and polling services provided by FoxNews contributor Doug Schoen." (another coincidence-Schoen is the mayor's pollster))

All of this-on top of all of the special pleading EDC has done for Steve Ross and Related-is just another indication that EDC stands for Everything Done for Cronies. There was simply zero chance that Fresh Direct was gonna move across the river-and have its trucks pay the bridge tolls a sit in traffic trying to get into the city. This was extortion with a seemingly gullible and willing victim playing along for his billionaire buddy.

So EDC wants to have more power to subsidize friends of the mayor and use the subsidies to take away land from property owner, put competing retailers at risk, and plow a path of destruction through parks and neighborhoods. Yes, an oversight hearing should be very informative and entertaining.

The Real Case for Restructuring EDC

As we have been commenting, EDC has argued that it needs to restructure so it can garner more political power than it already has-and therefore be in a position to cause even more harm. The controversy surrounding Flushing Meadows Park dramatizes the insanity of this proposal.

It isn't enough that EDC is a destructive force for neighborhoods and small businesses-all in the interests of their real estate patrons-now they want to add the destruction of parks to their ghoulish resume. Parks advocate Geoffrey Croft lays this all out in the NY Daily News:

"Flushing Meadows-Corona Park is under siege. The Bloomberg administration is attempting to push through three major projects that would permanently seize nearly 75 acres of public parkland for commercial projects that will also have enormous additional impacts on the surrounding communities. We now live in era where not only are our public parklands readily available for commercial development but it is activity being encouraged under this administration."

Under siege is an apt term for the kind of assaulting that the EDC real estate lackeys do when fronting for their real masters-certainly not the people of New York. As Croft points out the Willets Point side of this land grab is being justified by a 1961 ordinance that should be seen as having no validity more than 50 years later:

"The majority of the land for the $3 billion Willets Point project would be taken from parkland adjacent to Citi Field currently used for parking. The administration is attempting to get away with not alienating the land as is required under state law in order to use parkland for non-park purposes.The city is desperately trying to rely on a 1961 bill that never replaced parkland used for Shea Stadium.

If the 40-plus acres being proposed for mall use are no longer needed for parking then it should revert back to its original recreational use. Our elected officials should be pushing for that instead of giving away our public spaces to the highest bidder."

As if that wasn't bad enough, EDC wants to put a dagger right into the heart of the Flushing Meadows:

"Major League Soccer is pushing to build a 35,000-seat professional soccer stadium on up to 13 acres. The $300 million plan calls for filling in the former Pool of Industry from the 1964 World’s Fair. Proponents of the project have sought to characterize the site as decrepit and “under-utilized.” One of the more absurd MLS claims is that it’s a water body and that only 1 acre of grass would be used.
According to that philosophy, our water features, which make up fully one-third of all city parkland, are okay to develop. Besides providing pleasant views, the fountain area is used for jogging, as well as for wildlife."
In addition to these two land grabs there is also a proposal to expand the USTA tennis facilities as well-a cumulative shot in the solar plexus for the Corona and Jackson Heights neighborhoods-not to mention all of the Queens residents who enjoy this parkland refuge. Yet, as Croft reminds us, EDC is not looking to examine the overall impact of these three separate but combined developments:

The city Economic Development Corp. is also irresponsibly attempting to push this massive project through without conducting a full environmental review of all three projects, needed to assess the cumulative impact."

This is the EDC that wants to expand its powers because it feels that its current reach is not adequate in spite of the fact that it is in reality an well-armed weapon of the mayor's office. We agree that EDC needs to be restructured-not to give it more power, but to rein it in so that it is no longer a voice for the crony capitalists but a real expression of the popular will.

Sunday, October 21, 2012

Willets Point and the EDC Hearing

We discussed the scheduled EDC hearing last week and pointed out that the agency's effort to be able to lobby was not a good idea from any public policy vantage-except perhaps if you are one of the large real estate firms that has been able to benefit from the single minded obsession of EDC that mega-retail development is, and always is, good for NYC. The fact is that the current structure of city government already gives the mayor strong executive powers, and adding to this arsenal is not only unnecessary it is unwise as well.

All of this, however, is in the realm of theory. When we look at the practices of EDC a much grimmer picture is seen. This is an agency that operates too far away from any normal governmental system of checks and balances-designating developers for projects without any transparency and choosing consultants outside of the normal bidding process. As far aw we can see, historically there has been very little city council oversight of its operations-something that has been worsened by the current council leadership that is way too obeisant to the mayor's prerogatives.

The official who is supposed to check the operation of EDC is the NYC Comptroller-and for awhile it appeared that John Liu was trying to do just that. Unfortunately something has appeared to change, and Liu has gone into a kind of hibernation when it comes to the agency. Initially he sounded the alarm about the illegally lobbying uncovered by the AG:

"While these revelations of illegal lobbying are alarming, we cannot say that they come as a surprise. For some time, this Mayor has been using the Economic Development Corporation to create ‘Astroturf’ groups to support his agenda, reward allies and dole out welfare to wealthy corporations. While New Yorkers fund the EDC to create jobs – those jobs seldom materialize,” 

But we haven't heard a peep from Liu about the restructuring and WPU was left alone to carry the ball last month when a court hearing examined the legality of the EDC changes. Now, with the city council planning a hearing for November 1st, it is incumbent on Liu to have his voice heard on this important issue.

That brings us to we we believe is the most important issue that the council needs to examine about these proposed changes that EDC is trying to effect. That is the way in which EDC has run roughshod over too many neighborhoods and small businesses-from the illegal lobbying on Willets Point and Coney Island, to the shafting of parkland in the Bronx and the eviction of minority wholesalers in the now defunct Bronx Terminal Market.

In Queens we saw the advancement of an idiotic idea to take away the key municipal parking lot in Flushing for a mall that will gridlock downtown and harm existing Asian businesses, Everywhere EDC operates we see the ruin of entrepreneurs and the aggrandizement of a select cohort of rich developers.

In the process, EDC has also created a no-bid consulting monopoly for one company-AKRF-and that has led to fraudulent reports and self aggrandizement at the expense of honest environmental reporting.  EDC needs to be reined in, not given even greater powers than it already is able to exercise.

The NYC Council's decision to hold an oversight hearing on the EDC restructuring is a puzzling one. We are at somewhat of a loss to figure out the genesis of the decision since it certainly wasn't in response to any advocacy on our part. We are, however, not going to look a gift horse in the mouth.

The council hearing needs to generate folks from all over the city who has suffered under the out of control development policies of EDC-and the recommendations coming out of this hearing should address the need to have greater controls over EDC's bidding process. A pre-development role for the city council would be a positive step in the right direction.

But most of all the council needs to see how this quasi-public agency abused the public trust in the run up to the 2008 approval of the Willets Point development at the city council-how it created a phony front group that masqueraded as a charity but was actually a cat's paw for well-healed real estate firms; and how it used close to $700,000 of public money to illegally lobby to dispossess property owners from their land.

The council needs to then take a critical look at how one of the members of the illegal lobbying team-Sterling Equities- was rewarded by EDC with $200 million of property and the development rights to build the largest mall in Queens. This is an agency that wants to legalize this kind of behavior? What gall!

Finally, since it is the topic that is most timely, the council needs to question how this EDC entity can even consider the destruction of Flushing Meadows Park-the kind of thinking that should prompt the legislature to seek the demise of EDC, not its restructuring. That's how we see the upcoming hearing, and we hope that others will chime in with us and sing along on November the first.

Friday, October 19, 2012

Can You Hear Us Now?

WPU has been challenging the proposed restructuring of EDC because we see it as an end run of state law-and can conceive of no public benefit from granting this quasi-public agency any more clout. As we said in July: "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."
As for the idea that the two separate entities will actually be, well, separated, that's nothing but a sham: "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."
EDC is an arm of the mayor-the single most powerful elected official in the city, If the mayor wants to lobby for a project he has many weapons in his arsenal-that is why we laughed when EDC claimed it got its ass whupped at the Kingsbrdige Armory because these mopes were barred from lobbying. As Crain's reported:

"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."

All of this is why WPU is thrilled that the city council will be holding a hearing on the EDC restructuring. As the notice says:

"Oversight: The Restructuring of the New York City Economic Development Corporation - What is the impact going forward?
                    Please be advised that the Committee on Economic Development will hold a hearing on Thursday, November 1, 2012 at 1:00 p.m. in the 14th Floor Committee Room, 250 Broadway, New York, NY regarding the above-referred topic."

Now we are sure that the hearing wasn't directly prompted by our concerns-or the fact that we had vociferously raised an alarm in a Supreme Court hearing last month about the restructuring. But make no mistake about it, this hearing is designed to try to garner support for this unwarranted move in order to weaken WPU's opposition-and the entire reason for the need to alter the way EDC operates devolves from our complaint to the NYS AG that ended when the AG cited the agency for illegal lobbying.

So we will be out in force next month to expose the chicanery of these officials-and the history of an agency whose entire reason for being seems to be to find ways to hurt small business, Given its history, it is a reckless act to grant EDC any more power.

Thursday, October 18, 2012

AKRF: Right in the Middle of the Conspiracy

In today's Queens Times Ledger the paper highlights the questionable role played in the Willets Point controversy by the environmental consultant AKRF:

"A Manhattan consulting company often tapped for city development projects plays dual roles in Queens, having supported a nonprofit that advocates for the redevelopment of Willets Point, but also preparing the study that helps determine whether or not that development will go forward."

AKRF is no stranger to conflicts of interest, of course. We recall how it was called out in Manhattan when it was discovered that the firm represented Columbia in the eminent domain fight at the same time that it was working for both the city and  the state. At the time it defended itself by claiming that there was a "Chinese wall" between those at the firm working on these two separate issues. The court didn't buy the excuse and ESDC was forced to hire another firm in its place.

As Reason Magazine pointed out at the time, not only did AKRF have a conflict, but the consultants were basically hired to ratify a foregone conclusion and not render any impartial "analysis":

"In 2006, for instance, the ESDC hired the planning firm Allee King Rosen & Fleming, Inc. (AKRF) to perform an “impartial” blight study of Manhattanville. Yet as internal documents later revealed, the study was explicitly designed to rubber stamp the Columbia-ESDC agenda. In its initial outline, AKRF promised to “focus on characteristics that demonstrate blight conditions” and to emphasize “highlighting any physical blight that may be present.” In other words, the purpose of the report wasn’t to objectively determine if blight conditions were present, it was to “focus” on a pre-ordained conclusion that benefitted Columbia.

So AKRF is a dependable shill for the power elites in this town-but what the Ledger story does is to underscore how this shilling has crossed a line to the point where AKRF is actively colluding with all the players at Willets Point while advancing its own self interest:

"AKRF is preparing the environmental impact statement for Willets Point. At a Sept. 27 public hearing in Corona, Linh Do, senior vice president at AKRF, walked a crowd through how the statement would proceed and solicited input on what the company should consider when preparing it.
But AKRF was also hired by the Flushing Willets Point Corona LDC, a nonprofit headed by former Borough President Claire Shulman. The LDC has received state grant money to try and revitalize development along the Flushing waterfront west of downtown and across the Flushing River from Willets Point. After a bidding process, it selected AKRF to lead a team to perform environmental consulting and analyze ways the redevelopment of the area could move forward."
While all of these machinations were occurring, AKRF was also supporting the work of the Shulman LDC-and sitting on its board as a supporter: "
"And on the nonprofit’s website, AKRF is listed as one of its community supporters under a heading that reads: “Thanks to their generous support, the LDC is able to vigorously pursue exciting development initiatives for the greater Flushing Willets Point Corona area.”
In 2009, AKRF was a sponsor of a gala put on by the LDC, according to Nicholas Roberts, a project manager at the nonprofit, and Do said she volunteers time to brief the nonprofit on the progress of the Flushing waterfront project."
Do is quite the generous volunteering soul, isn't she? The Ledger story doesn't go far enough to uncover all of the incestuousness surrounding the LDC's effort to defraud tax payers and take away property for the benefit of its real estate developer members: A prime financier of the LDC is the NY Mets, which is owned by the owners of Sterling Equities, which Mayor Bloomberg has designated as a developer of the Willets Point project. Although the article also does not say so, AKRF is also the same firm that supervised the preparation of conflicting traffic reports pertaining to the proposed Van Wyck Expressway ramps for the Willets Point development.
So AKRF is, in the sports world terminology, the kind of referee that is labeled a "homer;" someone who fixes the game so that the home team cam win. But we have to take this a step further, Given the fact that AKRF has ended up lucratively benefiting from all of its efforts-volunteer as well as paid-we should characterize its consulting referring as a case of the ref fixing the game, not because of affection for the hometown, but because he has put down a large bet down on the home team.
From its very first involvement in this development AKRF has been busy cooking the books while feathering its nest. Its collusion and fraud on the Van Wyck ramps and its sponsorship of the LDC has paid off handsomely: "The LDC has received state grant money to try and revitalize development along the Flushing waterfront west of downtown and across the Flushing River from Willets Point. After a bidding process, it selected AKRF to lead a team to perform environmental consulting and analyze ways the redevelopment of the area could move forward."
All of this hot mess is why WPU has been so disappointed with the pitifully inadequate law enforcement effort of NYS AG Schneiderman. As a result of the lack of any sanctions for the illegal lobbying done by EDC and the Shulman LDC, the fraud and featherbedding has been allowed to continue-something that would not have been allowed to occur if there had been a real law enforcement action by a serious investigative agency.