Willets Developers Seek $42 Million IDA Corporate Welfare

Total project cost to City taxpayers balloons to $536 million

Tomorrow, December 5, 2013, the New York City Industrial Development Agency ("IDA") will hold a public hearing to consider an application by the joint venture of Sterling Equities and Related Companies – known as "Queens Development Group, LLC" ("QDG") – for IDA to authorize more "financial assistance" to QDG.

The additional financial assistance that QDG is seeking for its Willets Point / Willets West mall development will cost the City $42,645,802, and according to the public hearing notice, includes "payments in lieu of City real property taxes with respect to the WP Parking Facility and exemptions from City and State mortgage recording taxes with respect to mortgages recorded to secure financing for the WP West Retail Facility, the Hotel Facility, the WP Retail Facility and the Parking Facility."

Given that the IDA board of directors consists of such people as Kyle E. Kimball (a Bloomberg appointee who also happens to be the President of NYCEDC, the agency responsible for promulgating the Willets Point development), Amanda M. Burden (a Bloomberg appointee who also happens to be the Chair of the Department of City Planning, which approved the Willets Point development) and Michael A. Cardozo (New York City's Corporation Counsel and legal counsel to Mayor Bloomberg, whose legacy involves Willets Point), we anticipate IDA rubber-stamping QDG's application for the $42 million with no serious consideration of denying the application, and no serious analysis of the actual costs versus benefits of QDG's Willets Point / Willets West project.

In fact, the City has never publicly offered any comprehensive accounting of the actual costs to City taxpayers of implementing the Willets Point / Willets West mall development.

To the contrary: A "Cost/Benefit Analysis" document published by IDA in connection with tomorrow's public hearing claims that the financial "benefit" to the City of the QDG project over a 25-year period will be $211 million – but the only costs identified by IDA are the $42 million worth of financial assistance that is presently sought by QDG. This creates the false impression that the QDG project will result in a net benefit to the City over 25 years of $169 million – but that is demonstrably not the case, when all of the actual costs to the City of the QDG project are properly taken into account. Indeed, the actual costs vastly outweigh the $211 million alleged benefit, making the QDG project a losing proposition for City taxpayers.

Below we are summarizing the major costs to City taxpayers of QDG's Willets Point / Willets West mall development. To our knowledge, this is the first time that all of these costs have been compiled and publicly presented at once so that the total cost can be understood. All of the following costs are missing from the "Cost/Benefit Analysis" document published by IDA.

Value of City-Owned 23 Acres / Willets Point Phase One Property . . . . . $250,470,000+

On information and belief, the City has spent on average at least $250 per square foot to acquire Willets Point property (and in some cases, many times more than that). The Phase One area consists of roughly 23 acres, or 1,001,880 square feet. Therefore, a fair estimate of the cost incurred by the City to acquire the Willets Point Phase One property is at least $250,470,000. In 2008, the City Council was told that the City would recoup the cost of the property through the eventual sale to the developer. Now, instead, the City intends to gift the Phase One property to QDG for the price of $1 (one dollar). Nowhere has this price ever been justified.

Sewer Construction Cost . . . . . $35,572,000+

The City is currently constructing storm water and sanitary sewer lines – and incurring the associated costs – specifically to facilitate re-development of Willets Point and thus the IDA Project. The Request for Proposals for the sewer construction work describes the project as "126th Street Outfall and Sanitary Sewer Reconstruction projects for the EDC's Willets Point Development Plan".

Van Wyck Expressway Access Ramps Construction Cost . . . . . $66,000,000+

The new access ramps are prerequisites for any construction of "Phase 1B" of the IDA Project, and are components of the project. The IDA Project cannot be completed unless the access ramps are constructed, first. The City incurs the cost of constructing the access ramps. "$66 million in the City's budget will be allocated for the design, construction and buildout of the new ramps off the Van Wyck Expressway." – Council Member Julissa Ferreras' statement during City Council Stated Meeting, October 9, 2013.

Grant of Taxpayer Funds to QDG . . . . . $99,000,000

Per the project contract between QDG and the New York City Economic Development Corporation, "the City will provide the Joint Venture with a capital grant for the Development in the amount of up to $99,990,000 (the “Capital Grant”) which the Joint Venture will apply to reimbursement of the Joint Venture’s cost of the items set forth on Exhibit 'E' and Schedule '4' hereto". – Amended and Restated Purchase and Sale Agreement dated August 1, 2012; section 13.1.

Loss of Real Estate Taxes Previously Paid by Willets Point Phase One Property Owners . . . . . $42,500,000+

A conservative estimate of the real estate taxes paid collectively by the previous private owners of Willets Point Phase One property is $1,700,000 per year. Even without allowing for inflation, taxes that the City would have collected over a 25- year period from those same property owners would have totaled $42,500,00.

The subtotal of all of the above-identified costs to City taxpayers is $493,542,000.

When added to the $42,645,802 financial assistance that QDG is presently seeking from IDA, the grand total cost to City taxpayers is $536,187,802.

The actual total cost of $536,187,802 vastly outweighs the $211,993,947 alleged projected "benefit" to the City. In fact, the QDG Willets Point / Willets West mall project will result in a net loss to City taxpayers of $324,193,855 – nearly a third of a billion dollars. The only beneficiaries here are the developers.

Moreover, just as the costs to the City identified by IDA are incomplete and misleading, the alleged projected "benefits" – $211,993,947 – are suspect. For example, the projected benefit to the City includes $23,593,087 attributed to the "Impact of Construction Activity". It must be noted, however, that when it came time to award the contract for construction of storm water and sanitary sewers for the Willets Point development plan, NYCEDC awarded that contract not to any firm based in Queens, in New York City, or even in New York State. Instead, NYCEDC awarded the contract to a firm located in Holmdel, New Jersey – thus sending $35,572,000+ out of state and failing to deliver purported benefits to New York City. Nothing prevents a similar circumstance from occurring again, such that the projected $23,593,087 benefit to the City which IDA attributes to the "Impact of Construction Activity" will not materialize.

Our information above demonstrates that QDG's Willets Point / Willets West mall development will result in a net loss to City taxpayers of nearly a third of a billion dollars – but unfortunately the losses are not capped at that amount, and will be even worse. For example, we have not discussed the cost to the City that results from waiving collection of fair market rent from QDG for its use of the 30.7-acre parkland property site to operate its 1.4 million square foot Willets West mall; nor have we discussed the City granting QDG an exemption from sales tax totaling $20 million on construction work; nor have we discussed the tax credits that QDG will enjoy as a result of the New York State Brownfield Cleanup Program.

In our opinion, the City's failure to publicly account for all costs of QDG's Willets Point / Willets West mall development is a continuation of the pattern of deceptive and even illegal activity of NYCEDC and the City administration in promulgating the proposed Willets Point development. That activity has included:

• Unlawful lobbying by NYCEDC, and unlawful lobbying by the Flushing Willets Point Corona Local Development Corporation, an entity funded by NYCEDC as well as by the Mets (whose owners also own Sterling Equities, which is one half of QDG), as formally determined by the New York State Office of the Attorney General;

• Informing the City Council that the high cost of Willets Point property acquisition would be recouped through the sale to the developer, then reneging and instead gifting the property to QDG for $1 (one dollar);

• Agreeing in writing with the New York City Central Labor Council to include a living wage provision in the Willets Point Request for Proposals, then reneging and issuing a Request for Proposals without the agreed provision;

• Professing in writing that the Queens-based Willets Point Advisory Committee would "participate in" and "help to guide" developer selection, then reneging and dictating the selection of QDG – and its proposal which requires the sacrifice of 30.7 acres of Queens' public parkland to QDG – behind closed doors, while rejecting three other proposals that respected the specifications of the Request for Proposals and required no parkland;

• QDG agreeing in writing "to alert [Queens Community Board 7] when all applications are made to NYSDEC", then reneging and submitting its Brownfield Cleanup Program application to NYSDEC without informing the Community Board. Indeed, the Community Board was unaware of the application throughout the entire public comment period, which has since ended. Significantly, QDG has omitted numerous City-owned Willets Point properties from its brownfield application, including properties whose former uses are exactly the type which QDG and NYCEDC insist require remediation;

• Touting the affordable housing component of the Willets Point development, then entering into a contract with QDG that delays any housing until at least the year 2025; makes the housing contingent upon new Van Wyck access ramps that no one is contractually obligated to build; and provides an opt-out clause, such that QDG may pay a cost-of-doing-business penalty and build no housing.

Willets Point United Inc. has submitted written comments to IDA conveying all of the above. The bottom line: Apparently development of Willets Point is only financially viable for QDG if it receives corporate welfare from taxpayers in excess of $536,187,802 – and even then, the alleged "benefits" of the QDG project do not offset that cost. The only explanation we see for nonetheless proceeding with this project is patricianage, as we have written previously. Officials are abdicating their fiduciary responsibility to New York City taxpayers, and we will continue to expose and oppose this.

WPU Road Trip to Property Rights Conference Nets Surprise Awards

Willets Point United ("WPU") members Irene Prestigiacomo and Joseph Adizzone were each presented with the Grassroots Leadership Award by the Property Rights Foundation of America ("PRFA") during its annual conference, held this year in Latham, New York. The awards are in recognition of their "Dedication to Preserving the Business Community of Willets Point, New York". In addition, Queens-based documentary video producer Robert LoScalzo, who has been tracking the Willets Point story since 2007, received PRFA's Fourteenth Annual Private Property Rights Advocate Award in recognition of his "Dedication to the Preservation of Human Rights Guaranteed in the United States Constitution".

Willets Point property owner and WPU member Irene Prestigiacomo accepts PRFA Grassroots Leadership Award.

2013 is the fourth consecutive year that WPU members have travelled north of Albany to deliver a presentation during the PRFA conference, which is attended by property owners, civic leaders, scholars, attorneys and others. PRFA (http://prfamerica.org) is a national, grassroots, New York-based not-profit organization dedicated to the right to own and use private property in all its fullness as guaranteed in the United States Constitution. In 2011, PRFA submitted a friend-of-the-court Amicus legal brief in support of WPU in our court case opposing the City's attempt to use eminent domain to forcibly acquire Willets Point property (a case that ended with the City agreeing not to proceed under its eminent domain Determination and Findings, as WPU wanted). This year, PRFA President Carol LaGrasse travelled to New York City to testify in opposition to the Willets Point development / Willets West mall on parkland, at the City Council on September 3, 2013.


PRFA President Carol LaGrasse (center) testifies at New York City Council, September 3, 2013. Joseph Ardizzone visible at left wearing Revolutionary War officer's uniform.

Robert G. Prentiss, former New York State Assemblyman, presented the awards on behalf of PRFA to individuals he described as "true champions of 'property rights for the people'". No one was told in advance who the recipients would be, so Prentiss' revelation of each award was a surprise.

In announcing the award to WPU's Irene Prestigiacomo, Pretiss said, "It is one thing to fight for others, staying in the background or when you are not personally threatened. But it is another thing when you stand up, and keep standing up, not just to fight for your own property, but to battle for your friends and neighbors when they are threatened – with the threat raised high by the tactics of the most powerful people in the government of the City of New York. This is what the gracious lady Irene Prestigiacomo has been doing."

Prentiss described Prestigiacomo's actions at Willets Point, speeches at prior PRFA conferences, and testimony to the City Planning Commission and to the City Council opposing "the radical plan to wipe out the [Willets Point] community for a parking lot".

Prentiss introduced award recipient Joseph Ardizzone as "the only resident of Willets Point" who "truly cares for the community and speaks with clarion impact, illustrating with his own person dressed as a Revolutionary War officer how our Constitutionally-protected rights were won so hard by the patriots over two centuries ago."


Willets Point property owner and WPU member Joseph Ardizzone in City Hall, Council chambers.

Ardizzone "has not only stood for Willets Point, but has stood with others in the City where wealthy interests such as Columbia University utilized eminent domain against neighborhood businesses. When a rally was held at the Court of Appeals because the fate of the businesses in the area west of Columbia University was being decided, he staunchly stood before the crowd and spoke for the rights of the people."

Prestigiacomo and Ardizzone were very surprised and humbled to receive the PRFA awards to enthusiastic and lengthy applause.


Ovation as WPU members receive PRFA awards.

Willets Point property owner, resident and WPU member Joseph Ardizzone accepts PRFA Grassroots Leadership Award.

"I'm overwhelmed," said Prestigiacomo at the podium. "I'm truly blessed with the people that I've met and that I've come to know. I continue to fight because I have a passion, like you do, for what's happening in this country, let alone what's happening in New York, with our constitutional rights."

Ardizzone, who is especially outraged by Mayor Michael Bloomberg dictating the sacrifice of 40+ acres of public Queens parkland for construction of the Willets West mall, remarked: "Thank you everyone that's here, to see what's actually going on in this country. Our rights are being taken away from us. I'm totally against that. We should continue fully and wholeheartedly, and do the best we can, to preserve the rights of the American citizens."

WPU is very proud that our members and their efforts have been recognized by PRFA with these Grassroots Leadership Awards.

In Mayor Michael Bloomberg's New York City, the principles of private property unfortunately are not honored and such awards are unheard of – but thankfully, that is not the case everywhere. We are gratified by our strong relationship with PRFA and by its support for our ongoing opposition to the Willets Point development / Willets West mall on parkland.


WPU members Irene Prestigiacomo and Joseph Ardizzone outside the annual PRFA conference, 2010.

Faith in New York Says No to Willets West

A growing opposition to Willets Point has emerged from the faith community in Queens. In Sunday’s NY Daily News, Msgr. Thomas Healy, pastor of Our Lady of Sorrows Catholic Church in Corona and Patrick Young, pastor of First Baptist Church of East Elmhurst, editorialize against the Bloomberg boondoggle. Speaking of the top down, failing to trickle down, development policies of the current mayor, the religious leaders point out:

“Economic development over the past decade in New York City has overwhelmingly benefited those at the top, while leaving the rest of us behind. Today, it has become much more difficult for working people in our congregations and communities to find dignified work, pay for housing, send their children to college and save for retirement. That is not good for families, congregations, or our city.”

As the men of faith go on to point out, this is particularly true of the bait and switch at Willets Point-but first they go on to lay out a statement of principle for development fairness:

“We believe every development in NYC that receives public subsidies should meet an “equity test” — a set of common-sense standards we should expect of developers and city leaders before a single shovel is placed in the ground. To get the go-ahead, a project must provide living-wage jobs, real affordable housing and enhanced open space, and it must be the product of sufficient community input.”

So how does this righteous goal compare to the reality of Willets Point? Not very well:

“While New York could greatly benefit from this brand of equitable development, the proposal to build a massive, 1.4 million-square-foot shopping mall inside Flushing Meadows-Corona Park is a poster child for everything that is wrong with development in our city. We strongly oppose the proposal, which would be the largest mall in NYC, for three reasons:

* The Mayor and Economic Development Corp. broke their 2008 promise to build 2,000 units of affordable housing at Willets Point. The project developers have inserted a dangerous clause into their contract, whereby affordable housing will be abandoned if Van Wyck off-ramps are not built.

* The City and developers have not considered the negative impact of the city’s largest mall upon surrounding communities and businesses, including increased car traffic, overcrowded subway trains and poverty-wage jobs.

* The proposal represents another example of public land being exploited for private benefit, without meeting community needs. The Joint Venture, which represents some of the country’s wealthiest corporations, are already enjoying more than $99.9 million in taxpayer subsidies, and being given public parkland worth nearly $1 billion, while not being required to meet real community needs for jobs, housing or open space.”

The current development plan for the Iron Triangle fails at every turn-and it is frankly incredible that the city council is even given this lame duck proposal any serious consideration; especially after EDC has pulled the rug out from under all of the negotiated deals contained in the original 2008 approvals.

And the idea of a massive mall-nowhere seen in the original plan-is particularly galling to the men of faith and those congregations that they represent:

“The development represents a huge opportunity to construct affordable housing, enhance open space and create living-wage jobs — and yet the Economic Development Corp., Mayor Bloomberg and the developers are deciding instead to build a mall. While we believe our city could greatly benefit from responsible development at Willets Point, the current proposal takes us further down the road toward inequality.”

So, what’s the antonym of responsible? Yes, irresponsible it is. This is irresponsible development by an administration that has made these kinds of projects mundane-always a gold mine for developers and a shaft for the community and its small businesses. We’ll give the pastors the final word (Hint it has a resounding No in it):

“Faith and community leaders from across the city strongly urge the City Council to vote “no” this Wednesday if the current proposal isn’t significantly improved, so that our communities and city leaders have more time to create a better development proposal for Willets Point that would deliver real community benefits to the people of New York City.”

Willets West Mall on Parkland

Memo to Council Members Ferreras, Comrie and Weprin:

Crain's is reporting your last-ditch maneuvers to make the city "guarantee payment of $70 million to erect ramps" to and from the Van Wyck Expressway, without which NO housing may be built at Willets Point.

Apparently, you are DISREGARDING a primary objection of the community to the entire proposed project: the 1.4 million square foot shopping mall that would be built on 30+ acres of Queens parkland. Opposition to that mall on public parkland includes the Queens Civic Congress, which consists of 100+ civic associations throughout Queens; the Roosevelt Avenue Community Alliance, which recognizes that a mall at that location will destroy and displace numerous family-run businesses in Corona and Jackson Heights; and Queens Community Board 3, which voted 30-1 to DENY this application in part because CB3 opposes the mall on parkland; among many other groups that are opposed because of the MALL.

Regardless of whether or not the City provides $70 million for highway ramps, the community DOES NOT WANT THE PROJECT, because of the mall on parkland. Therefore, if you respect the will of the people, you will vote "NO".

But even if you succeed in obtaining an ironclad guarantee from the City of $70 million for highway ramps – and we don't believe an ironclad guarantee is possible now – that alone still does NOTHING to guarantee the housing and affordable housing, which a large sector of project opponents wants to see built. That's because regardless of the
availability of $70 million, the project contract between Sterling/Related and NYCEDC still allows Sterling/Related to pay a cost-of-doing-business penalty of $35 million (in 2025), and build NO housing. Moreover, simply setting aside $70 million for highway ramps does not alter the text of the contract which states: "For the avoidance of doubt, in no event shall EDC or the City be required to construct the Ramps as part of the Development." [Contract Section 3.3.]

As long as those two clear contract provisions remain in effect, there still is NO CLEAR PATH to construct any housing or affordable housing at Willets Point. Thus, if you insist on ignoring the community's outrage over a mall being constructed on 30+ acres of Queens parkland, and want to push for housing, then you must not only obtain $70 million that is necessary for the Van Wyck ramps, but you must also REQUIRE that the project contract be revised so that the City guarantees to construct the Van Wyck ramps, and so that NO option exists for Sterling/Related to buy their way out of constructing the housing by paying a penalty. The construction of the ramps and the housing must
be guaranteed.

We repeat – Obtaining $70 million for highway ramps does not address the overriding problem with this project: the construction of a huge mall on parkland; AND, it alone does not and cannot guarantee that any housing will ever be constructed, because the project contract still contains escape clauses. It is the project contract that will
determine, years from now, what the parties are actually obligated to do.

The pending ULURP application of Sterling/Related has been rushed to coincide with the end of Mayor Bloomberg's final term, and the integrity of the Willets Point project originally approved by the City Council in 2008 – which involved NO mall on parkland – has been sacrificed. None of that is necessary. Denying this ULURP application of Sterling/Related will allow the next City administration to take a fresh look at this project, and to ensure that its goals – including
prioritized affordable housing – are respected, not evaded by a developer.

Sincerely,

The membership of Willets Point United Inc.

Living Wage and Dishonesty at Willets Point: A Challenge to de Blasio

We have underscored the hypocritical dishonesty of EDC about the question of a living wage at the Willets Point development before, but now that a vote is imminent it is appropriate to return to this field of schemes that the city is trying to foist on Queens. Here’s what we pointed out almost two years ago:

“In the battle over whether the city should adopt a living wage for retail workers when a development project is heavily subsidized the issue of Willets Point has wormed its way into the discussion. 

City Hall News lays out the reasons:

"In June 2008, the president of the Retail, Wholesale and Department Store Union, Stuart Appelbaum, stood on the steps of City Hall to praise the city’s Economic Development Corporation. Along with several other powerful union bosses, Appelbaum touted the EDC plan to jumpstart a long-stalled, $3 billion project at Willets Point in Queens, because he said it would lead to the creation of so-called “living wage” retail jobs for his workers – paying a minimum of $10 an hour.

“It won’t just mean thousands of jobs,” Appelbaum said. “It will mean thousands of construction and permanent jobs that pay prevailing wages and living wages.”

Juan Gonzales in the NY Daily News also weighs in on the correlation:

"And in 2008, when the mayor wanted the City Council to approve a proposed $3 billion Willets Point development project, his deputy mayor then, Robert Lieber, made such a deal with several labor unions.Under that deal, the city would require that all construction, maintenance and security jobs at Willets Point pay “prevailing” wages — far higher than $10 an hour. 

As for retail jobs, Lieber promised to “view favorably” Willets Point proposals that “maximize” the number of “living wage jobs.” He even specified $10 an hour for a living wage. Because of those promises, the unions backed the plan and the City Council approved WilletsPoint."

Only one problem: EDC has-like it has done with so many other things -- reneged on the deal. In doing so EDC and the rest of the gang down at city hall demonstrate that they will say almost anything just to advance their crooked scheme to abscond with the Willets Point property. The key prevaricator in all of this is former Deputy Mayor Lieber -- a stone chump if there ever was one.

As City Hall reports:

"Appelbaum’s contentions that his members could expect living wage jobs at Willets Point were based upon by a letter penned in April 2008 by Robert Lieber, then the city’s deputy mayor for economic development, to the then-head of the city’s umbrella labor organization, Gary LaBarbera.

“NYCEDC will view favorably development plans that maximize the number of jobs that meet the City’s living wage and health benefits standards,” Lieber wrote. “The proposal must explain how the proposed tenanting plan maximizes the number of jobs that meet these criteria.”

That was then, and this is now-just as WPU has already reported: "

Yet this May – when the EDC put out a 125-page request for Willets Point proposals to developers – there was not a single mention of living wage jobs. It did state that developers had to hire construction contractors who would pay prevailing wage and that some building workers would get prevailing wage salaries—but retail workers were left out completely. Earlier this week, far from offering tacit support for a living wage, the EDC released a list of 36 projects around the city, including Willets Point, that it said could be jeopardized by the living wage bill."

In response EDC has started to spin like a top: 

"EDC spokesman David Lombino declined to directly address why living wage language from the 2008 letter never made it into the requests for proposal. “When seeking proposals for development, the city always considers the creation of well-paying jobs in addition to other factors like the feasibility of the project, proposed uses, job density, and cost to taxpayers,” Lombino said."

And so it goes-just like with the purported revenues at Hudson Yards. The city never lives up to its promises, but now we have a new team coming into office and Bill de Blasio has made living wage and affordable housing his signature issues for dealing with income inequality. The WSJ reports today:

“A proposal by Bill de Blasio to guarantee higher wages at city-subsidized projects could set up a battle with business and real-estate interests if he is elected. Real-estate and business leaders and labor experts alike said they were surprised to learn that Mr. de Blasio, the Democratic nominee and front-runner, would demand a so-called living wage of $11.75 an hour in cash and benefits to all workers on most city-subsidized projects—including, most controversially, to retail workers.” (emphasis added) 

Yes, the same workers that Stuart Appelbaum is supposed to represent have been thrown under the speeding bus. That brings us to de Blasio-and his promises on this issue:

“A campaign spokesman said the plan is part of an economic-development vision "that is less about trickle-down, subsidizing a fast-food restaurant, providing subsidies to low-road, low-wage employers."

"We're not saying that's all the Bloomberg administration did, but to the extent that the mega-development projects had a high focus on retail, often low-wage retail, we'll look to invest development dollars and target development dollars into creating good jobs," said the spokesman, Jonathan Rosen, calling it a "very high priority."

Okay, then. This thrusts the Willets Point deal right into center stage, because as we have seen, the promises have not been kept-and the trickle down here is more a trickle up, up to the coffers of the Mets and Related. But we shouldn’t be surprised at the comments from Bloomberg lackey Seth Pinsky:

“The Bloomberg model has proven to be a successful one. If someone is campaigning on the concept of trying something different, I think that person has a high bar they need to achieve in terms of explaining how that something different will work better," Mr. Pinsky said.

Mr. de Blasio's plan would address a critique of the Bloomberg administration: that too many of the jobs created have been low-paid.”

Success, we guess, is really in the eyes of the beholder-and as far as little Seth is concerned his world view, and current paycheck, comes right from Big Real Estate. Yet Pinsky is experiencing some cognitive dissonance-even while lacking any sense of irony:

"Mr. Pinsky said the next mayor will need to tackle inequality—a growing issue nationwide. Of Mr. de Blasio he said: "He's hit upon an issue that is absolutely critical to the future of the city. The income gap could be an existential issue to the future of the city."

The Bloomberg model has aggrandized the Relateds and Vornados of the world at the expense of neighborhoods and small business. In the process, the average New Yorker has been short changed and all of this has been promoted through the generous use of tax subsidies.

Willets Point could be de Blasio’s Rubicon-a river if crossed that will mean his rhetoric is not matched by his real commitment to equality and fairness. How do you come back from this unethical corporate welfare scheme? We’re all waiting to see what Bill will do.

City-owned properties omitted from developers' Brownfield cleanup application

Please see following letter from Willets Point United to entire City Council, which will vote on the Willets Point plan this Wednesday. As the letter notes, a legitimate reason why some of the properties that are within "Phase One" are NOT included in the Brownfield Cleanup Program application, is that they are not owned by the City. It is important to note, however, that even discounting those properties, there are still numerous properties that the City DOES own, that Sterling/Related have excluded from their BCP application and thus from the program. Why don't Sterling/Related want a BCP Certificate of Completion pertaining to those properties? Do they not want NYSDEC looking so closely over their shoulders to scrutinize the remediation (if any) that they perform on those particular properties? How is the pubic interest served by deliberately excluding properties from the BCP -- when remediation is a top selling point of the whole project?

Letter Brownfield Application by unitedtriangle

Wasteland

In an editorial (“Wasteland”) that would have been an accurate description of the intellectual vacuity of its own editorial page, Crain’s unsurprisingly signs on in support of the Willets Point boondoggle:

“As a crucial City Council vote on the massive Willets Point, Queens, redevelopment draws nigh, the opposition has become increasingly desperate, holding rallies and amping up its rhetoric. To hear them tell it, the project is a blatant bait-and-switch that enriches wealthy developers with city subsidies and turns treasured parkland into a parking lot and a mall. If that sounds too bad to be true, it is.”

We say unsurprising because Crain’s would support building a brothel in your backyard as long as it was being built by a connected real estate firm that the so-called paper is in business to shill for. And don’t expect honesty from these toadies: 

“Fortunately, save for a few misguided activists, Queens residents and community leaders see through the propaganda, and there is every reason to believe the council will approve the first phase of the plan as early as this week.”

A few misguided activists? Well, as we said, don’t expect intellectual honesty from an organ of Big Real Estate. We suppose that using eminent domain to take away people’s property and build a mall is what passes for good government in this house organ-and the idea that CB#’s 30-1 vote against the boondoggle is the work of a few misguided cranks when you’re in the business of promoting the 1%.

Here’s how the property owners are characterized:

“Willets Point, an industrial area near Flushing, is a stain on the city that many a politician has attempted to clean up. Mayor Michael Bloomberg is the first to get a plan going to accomplish that, yet he has had to overcome resistance from a few defiant industrial shops that prefer the status quo.”

Isn’t it amazing that there are property owners who prefer the status quo of keeping their property rather than having it turned over to the Mets and Related-for a $1 fee that Crain’s neglects to discuss?

But nothing underscores the ass-kissing inanity of Crain’s than its praise for the brain dead councilmember from Corona:

“Councilwoman Julissa Ferreras is still negotiating for the best package of community goodies she can get from the developers, the Related Cos. and Sterling Equities, but to her credit, she seems driven to get a deal done rather than sabotage a much-needed project that has eluded the city for decades.”

Crain’s goes on to damn the Willets Point business owners with faint praise:

“It is a testament to the pluckiness of these folks that they have carved out profitable operations there, but they must accept that a first-class city cannot tolerate the conditions that characterize the area's infamous Iron Triangle: dirt streets with cavernous potholes, no sewer system and unfathomable contamination.”

There an old saying that there was a German who, while passing a Jewish ghetto set up by the Nazis, turned to his companion and said, “Boy, don’t these Jews smell.” To which his companion replied, “That’s not the Jews that smell, its Nazism.”

The neglect of the Iron Triangle and the deprivation of basic city services is what has characterized city policy for 60 years. That does not mean that you add injury to insult to injury by taking the property away from the victims of this neglect-and then turn it over to friends of the mayor without any real charge.

And what about the promise to relocate the businesses? Thousands of workers and minority entrepreneurs sent packing to the four winds. Can you say anti-immigrant income inequality better than this?

Crain’s goes on the bloviate about the great new neighborhood that it supposes will be created:

“The proposed mixed-use, $3 billion project, which requires at least two phases and will be carried out over several administrations, promises not only to clean up and modernize the polluted site, but also to deliver a new neighborhood in northeast Queens. It's as ambitious as it is complicated, given the high cost of the remediation and of ultimately making 35% of the housing units affordable to satisfy the community.”

The fact is that the remediation-contrary to original assertions from the Deputy Mayor at the time-will be paid for by the tax payers, But Crain’s needs to throw off its wet suit and dive completely into the deception tank with the following howler:

“Various changes to the plan, portrayed by opponents as evidence of a devious plot, were in fact necessary adjustments to make the project economically viable. For example, the mall and parking lot—slated not for green parkland but for what is already a parking lot—will generate revenue to fund decontamination of the land. The residential component was pushed back because housing wouldn't sell in a wasteland.”

No mention of the fact that the developers can buy their way out of the deal, or the fact that there was no mention of any mall in the original approval. We can say without equivocation that there will never be housing at Willets Point if this current development is allowed to stand in the next administration. It is, and will always remain, a mall and a parking lot to aggrandize the bottom line of the billionaires that Crain’s ass kisses for every single day.

Malling Crain's

In this week’s Queens Tribune, Len Maniace, First Vice President, Jackson Heights Beautification Group, deconstructs the Willets West development-just another one of those disgruntled and isolated gadflies who happens, unlike the editorialists at Crain’s, to truly understand what the city is trying to do over at the Iron Triangle:

“A s we approach a City Council vote expected for October, give the developers of a massive shopping mall project called Willets Point West credit for this: together they possess a fabulous imagination. They predict their project will lead to a revitalization reminiscent of 42nd Street. The mall proposed for the Citi Field parking lot will transform Willets Point into a destination, a magnet for shoppers who then will provide spillover benefits when they dine at the restaurants of Corona and Jackson Heights.

But how likely is that vision? Not very on either point. That’s because the scheme presented by the developers is an anti-city plan that would result in more cars, congestion, air pollution, and wasted energy.”

Maniace understands just how grotesque a contradiction this development is to the Bloomberg sustainability vision:

“While Brooklyn, other parts of New York City, and indeed cities around the world look to sustainable, smart, transit-oriented growth, Queens is being served up a leftover dish of 1960s auto-dependent development. If a 1.4 million square foot shopping and entertainment center is going to be successful, it’s going to need a lot of people coming and going. That’s truckers transporting goods to be sold, sales people selling them and shoppers buying them – lots of shoppers.

How do the builders plan to move all these people – along with residents of the already approved 5,500 housing unit, also by Sterling Equities and Related Companies?”

As Clark Gable might have said, “Frankly, they don’t give a damn.” Certainly it will not be by mass transit: 

“The nearby No. 7 train that stops at Citi Field is already overcrowded. At a City Hall public hearing earlier this month, the developers didn’t spend much time on transit improvements. Even minor improvements such as additional exits from the elevated station didn’t seem likely. “The Willets Point station is not a priority for the MTA,” one official told members of the City Council.”

And where will all of these shoppers come? We must by now be running out of those shoppers that EDC always claims are going to be diverted from leaving town to shop: “The developers should know better. Malls suck business out of nearby commercial areas, such as downtown Flushing. And it’s highly unlikely that mall shoppers would bypass the food court, cross over the Grand Central Parkway and search out restaurants in Corona and Jackson Heights. This is nothing like patrons at Lincoln Center strolling across Broadway to dine at Upper West Side eateries.”

In other words-much like everything that this administration has done over the past twelve years-this is a neighborhood small business disaster. A disaster that will bring Queens traffic to a gigantic stop: 

“Instead, the developers are counting on road improvements, including new and hugely expensive highway ramps. That means more cars, congestion, air pollution, and wasted energy, not just in the immediate area, but also along nearby highways, which are also overcrowded.”

But Mr. Maniace is wrong here since there are no plans to build these ramps-and there may never be any. So the congestion he foresees is without any ramp mitigation and will be an unholy mess for local roads and highways.

If, as Crain’s alleges, this mall is a genuine linchpin for the future housing and other amenities, how is this future being monetized and assured? Why hasn’t the city forced the developers to put, let’s say, $200 million in escrow-a sum they will forfeit if the ramps and housing don’t get built. Why are all of the risks being borne by the tax payers? Haven’t we seen what has transpired already over at Hudson Yards?

In short, this development does little more than reward the Wilpons for engaging in an illegal lobbying scheme-a multi-billion dollar reward that should have been obviated by an indictment.

Village Voice on Hudson Yards: Great Minds…

Graham Rayman, a very good reporter, follows up on our Hudson Yards post this morning (Or maybe we were following him):

“The Bloomberg administration is preparing to hand another $328 million in tax breaks to its favored developer, The Related Companies, for ... get this ... a fancy shopping mall and a high-end office skyscraper in the Hudson Yards project on the west side of Manhattan.”

Needless to say, there are critics of this giveaway:

“James Parrott, deputy director and chief economist of the Fiscal Policy Institute sharply criticized the giveaway, "It is the height of fiscal irresponsibility for the NYC IDA to provide massive taxpayer subsidies to a Manhattan luxury mall," he tells the Voice.”

Yah think? And the Voice sees the same bait and switch that we had alluded to in our post this morning:

“To some, it feels a little like a bait and switch. Back in 2006, then IDA chairman declared that the tax breaks would be more than repaid by the new growth. The revenue was then supposed to be used to finance the extension of the 7 subway line into the area. The city would have had to make up the difference with its own funds.”

Isn’t it amazing how so many of these deals don’t turn out the way they were alleged:

"It's bad enough that the City is pouring hundreds of millions of dollars in tax breaks into Hudson Yards office buildings after taxpayers foot the bill for extending the #7 train to this project's doorstep," Parrott adds.

John Fisher, who runs Tenant Net, a bulletin board on development and housing issues, says, "It smacks of cronyism. It's typical of how Bloomberg treats his friends. And if you are taking away tax revenues, you won't have the money to pay for the subway extension, and then that money has to be covered by the city budget."

So a real gauntlet is being thrown down to the new mayor-Fresh Direct, Hudson Yards, and Willets Point, all redolent with the same stink of cronyism for those close to the mayor. When asked to comment on the Hudson Yards deal, the de Blasio campaign said the following:

“A spokesman for democratic mayoral candidate Bill de Blasio would not comment directly on the proposal, but said, "If elected, a de Blasio administration will of course review all projects with any eye to maximizing affordable housing, creating good jobs and protecting taxpayer's interests."

We’ll see if BdB can walk this walk because we have too often allowed cronyism to pass uncritically because of the mayor’s great wealth. Favoritism, however, is still favoritism, even if there isn’t the tawdry quid pro quo that normally accompanies this kind of political shenanigans. 

Hudson Yards Bait and Switch: Taxpayers socked

The IBO has come up with a new report on the massive Hudson Yards development and has discovered-what a shock!-that the projections and estimates offered when the deal was originally struck have changed; and Related (yes, them again) is asking for a large tax abatement for the 1.1 million square foot retail mall they are building:

“When the Industrial Development Agency, which is administered by the quasi-public Economic Development Corporation, announced its plan for making tax incentives available to spur construction at Hudson Yards, the discussion focused on making the construction of new office space more affordable. Residential and retail components of the Hudson Yards plan were ancillary.”

“Providing a property tax abatement for the mall means the city will need to pump more money than previously expected into Hudson Yards to meet the development’s debt service obligations. It also undercuts a shift in city policy away from showering retail projects with tax breaks.

Now, however, we see a new focus:

When the Industrial Development Agency, which is administered by the quasi-public Economic Development Corporation, announced its plan for making tax incentives available to spur construction at Hudson Yards, the discussion focused on making the construction of new office space more affordable. Residential and retail components of the Hudson Yards plan were ancillary."

Let’s not forget that the Bloomberg administration changed its tax abatement policies to downplay subsidizing retail development:

“The Bloomberg Administration sought to lessen the use of property tax breaks for retail projects with the revamping of the city’s Industrial and Commercial Incentive Program in 2008. But the Industrial Development Agency has substantial leeway to provide tax breaks to the mall if the agency sees fit.

Under the tax exemption policy for Hudson Yards approved by the IDA’s Board of Directorrs, the mall can qualify for tax abatements if it’s of sufficient size (at least 1 million square feet) or furthering the commercial purposes of the office tower.” (Emphasis added)

Does this sound familiar? It does to those of us at Willets Point who are forced to listen to EDC claim that they need to build an even bigger mall in order to fund the other-more publicly desirable-aspects of the original Iron Triangle development. But, as always, the tax payers are (and will be) on the hook for more than was assured to us by the gonifs at EDC:

“A tax break for the mall means there will be somewhat less money flowing to the Hudson Yards Infrastructure Corporation from new development within the 26-acre Hudson Yards site. The infrastructure corporation, created by the city, issued $3 billion in bonds to pay for the extension of the 7 subway line and to make other improvements aimed at spurring development in the Hudson Yards area.

Under the financing plan for Hudson Yards, all of the money that would typically flow to the city from property tax on the new developments at the site is instead directed to the infrastructure corporation to help pay debt service on the bonds. Because debt service would begin to come due before there was sufficient new revenue to pay the bondholders, the city was temporarily on the hook to make the payments. As the project proceeded and development picked up, city officials expected that Hudson Yards would increasingly generate the funds needed to make the annual debt payments on the borrowed money.”

So, what has happened instead?

“It hasn’t worked as planned. The pace of new development has been slower than expected, forcing the city to spend more of its own funds. A report by IBO’s Sean Campion found that from 2006 through 2012, Hudson Yards produced only $170 million in tax and fee revenues from development—$113 million less than anticipated by project planners. In the early years, interest earnings from investing the bond proceeds offset some of the shortfall but those have now dried up. Over the seven-year period, the city has provided the infrastructure corporation with $374 million in funding for debt service and other needs. 

Giving up tax revenue that would have come from the shopping mall means the city’s tab will continue to grow.” (Emphasis added)

This is what happens when crony capitalism drives the policy train - and Hudson Yards is the mirror to the Willets Point future if the current crazy give away is approved next week by the city council. This is just another reason why the new mayor should come in and revisit any deal that the lame duck city council approves for a lame duck mayor.

And while he is at it, he might want to take a second look at all of the failed promises at Yankee Stadium and the Gateway Mall (The former Bronx Terminal market). The legacy of cronyism and corporate welfare is a disgrace that has gone unnoticed by most of the main stream media in this city.

Willets Point on the Brink: Vote NO on A Billionaire Land Grab in Queens, NY

Quotation of the clergyman at the end: "Julissa -- We are your people.
This will destroy our neighborhoods; change our lives. Council members,
listen to us: Vote "NO" on October 9."

Haber’s Sound Advice: Ignore Julissa Ferreras

In this week’s Times Ledger Ben Haber issues some sound advice to the city council: Ignore Julissa Ferreras because the violation of law involved in the current city proposal to build a mall on CitiField’s parking lot is too egregious to allow one council member’s lack of intelligence to prevail:

“For too long there has been an unwritten law that in connection with legislation pending before the New York City Council, the Council member whose district encompasses the area on which there may be an impact has the say on whether the legislation should be enacted or rejected. Not only does this not comport with legitimate democratic processes, but it ignores the fact that a single Council member does not speak for all the residents of a district and ignores the fact there may be an impact upon an entire borough as well as the city.”

The question of whom Ferreras actually speaks for is an open one, but we can discount any notion that she speaks for the public interest. Her apparent support of a mall on parkland is a case in point:

“To allow this deception is to sanction the taking of a huge section of Flushing Meadows Corona Park land on which the current lot sits and to sanction a significant land use change without the Uniform Land Use Review Procedure. All Council members, guardians of the public’s interests, must protect the integrity of ULURP and land use change for the entire city. To ignore that duty is to lay the groundwork for further intrusions in the future in other Council districts.”

Haber goes on to underscore why Ferreras is wrong about Willets West:

“While I am uncertain as to where Councilwoman Julissa Ferreras (D-East Elmhurst) stands on the issue, from what I have heard her say, she supports the mall. If she does, I urge all Council members to make an independent judgment and not accord Ferreras any greater weight. Not only should they give great weight to the attempt to bypass a mall ULURP and land use change requirements, they should consider the effect a shopping mall will have on the hundreds of small merchants and existing malls throughout Queens and the city and the traffic congestion it will cause on the Grand Central Parkway, the Van Wyck Expressway, Northern Boulevard and Roosevelt Avenue.”

Her lack of sensibility on this issue is highlighted by her support of a BID in the contiguous commercial areas around the proposed mall-a proposal that has drawn the fire of local merchants:

“Some business owners are saying no to the expansion that would bring a business improvement district (BID) to the Jackson Heights and Corona area for fear of losing what makes the community diverse.
The 82nd Street Partnership, a non-profit group promoting the current local BID covering four blocks and over 160 businesses, announced in March it would be extending all the way through 114th Street as part of Councilmember Julissa Ferreras’ New Deal for Roosevelt Avenue to form the Jackson Heights-Corona BID.”

The crackpot idea that promoting a BID will mitigate the impact of a 1.4 million square foot mall as a neighbor gives a god indication of the lucidity of the council member’s thinking process. In fact, the BID-by raising the rents of store owners-will only exacerbate a bad situation and make it that much worse:

“The commercial rents are extremely high,” said Ruben Pena, a liquor store owner and community activist. “The community is going to get hurt. They are fighting to make ends meet.” The BID expansion is a component of Councilwoman Julissa Ferreras’ “New Deal” for Roosevelt Ave., which focused on cleaning up the corridor, which cuts through several Queens neighborhoods. Ferreras cites safety issues, poor lighting and cleanliness as the top complaints among residents.  

“The current problems on Roosevelt Ave. hurt everyone,” Ferreras said in a statement. “This is why I believe a business improvement district is a solution to this problem.” 

Ferreras is, unfortunately, going nowhere for the next four years. But that doesn’t prevent more intelligent members of the council from interceding in an intervention to promote good government. Haber is right, and he deserves the final word:

“If great weight is to be given to a particular area, the Council should take note that Ferreras’ district contains Community Board 3, which, after conducting a ULURP on the amendment to allow a parking lot at Willets Point, rejected the application with a vote of 30-1 with 1 abstention. That rejection made clear the board was not going to allow a phony amendment to the 2008 plan as a cover-up for a 1.4-million-square-foot shopping mall.

It is CB 3 that speaks for the community and not Ferreras. I believe all of the above are good reasons why allowing a single Council member to decide if a bill should or should not be enacted has no place in our Council.”

Julissa Ferreras, Honor, and the Dereliction of Responsibility

We are winding down towards the final City Council determination of the fate of the city’s bastardized Willets Point development, and the whereabouts of the local accidental council member, Julissa Ferreras are unknown. Ferreras has flown the coop-at least as far as the property owners from the area are concerned-and has refused to meet with the representatives of Willets Point United. Even her staff has stonewalled the meeting. Not only that, but it seems that Ferreras has encouraged other council members to do the same because WPU has found it hard to get meetings with her colleagues.

Frankly, we’re not really surprised since we have known that Julissa is simply over her head, and the less frequently she meets with principled opponents of the project, the less likely the world will be apprised of her inadequacies. Here is someone who owes her job to the since departed Hiram Monserrate and at the first sign of trouble for her former boss, simply threw him under the bus, Character she doesn’t have. But what about those Hispanic businesses that she is “championing?”

Ferreras makes a great deal about these immigrant workers and entrepreneurs-posturing mightily at the recent land use hearing about their plight, and excoriating city officials for their failure to do what they said they would for the relocation of the businesses and their employees. But no one really takes the scarecrow seriously and we wouldn’t be surprised if they break down in guffaws when they repair back to their offices. Ferreras isn’t someone that they have any regard for, and her threats are little more than meaningless woof tickets.
That is why the community came out so strongly on Sunday to give Ferreras an ultimatum on the Willets Point bait and switch giveaway. El Diario has the story:

“Community leaders and residents of Corona, Queens, marched yesterday to protest the planned construction of a large shopping center in Willets Point, who say it would not consider the needs of this largely Latino community. The demonstrators claimed not to protest because they are opposed to urban development, but by the lack of assurance that the promoters keep the promises they had made initially to improve conditions in the area.”

The protest was about the removal of the affordable housing component of the development plan-and the negative impact of yet another mall:

“One of the biggest complaints is that it ensures that it will build over 2,000 units of affordable housing, as stated initially, and also that the City has not taken into account the possible negative impact this construction will have for the small businesses in the area. "Right now I'm not doing business, and if they build the mall would be my death," said Luis Gonzalez, who runs a bodega on Avenue 41, a few blocks from Willets Point. "They said that if they build it would create jobs, but I do not trust anything."

Other residents complain that there are enough malls in the area and that another would not create the kind of jobs that are needed.”

What the residents realize-and what the original city council approval recognized-was that minimum wage retail is not real economic development-and that was why the council included an “historic” living wage provision in the original approval. That provision is now truly historic because it has been relegated to the dustbin of history-eliminated as another aspect of the city’s bait and switch. Listen to the wisdom of the residents-some of whom would make a better elected official than the current cero a la izquiereda:

“I know from my own experience that the mall jobs are not good for families," said Maria Alvarez, who works as a clerk at JC Penney in Queens Mall shopping center and took part in the march as a member of Make the Road."Most workers only earn minimum wage and have to have two or three jobs to live.”

Ferreras knows all of this but has no backbone-or the wherewithal to actually lead a real opposition that would extract significant concessions. Hiram Monserrate did any number of things that deserve our scorn-and putting Julissa Ferreras in as his replacement ranks right up there at the top of his many failings.

Ratner Must Pay Up: And So Will NYC for Willets Point United

As Develop Don’t Destroy is reporting:

“A judge today ruled that the Empire State Development Corporation ("ESDC") is liable for legal fees incurred by community groups that sued successfully to compel a supplemental environmental impact study (SEIS) for the second phase of Forest City's controversial Atlantic Yards project.  She referred the parties to a referee to determine the amount of the award, which under an agreement with ESDC, Forest City Ratner will then have to pay.”

Good for them! Just another example of how Big Real Estate cheats their asses off and expects the politicians and the courts to turn the other way:

"Justice Friedman's ruling today is another reminder of the sordid 10-year history of the Atlantic Yards project, which to this day has largely failed to deliver on the promises that were used to sell it to the people of New York," said Candace Carponter, Develop Don't Destroy Brooklyn's legal director.  "We're gratified by today's decision, but the fact remains that, as Justice Friedman suggests, had the ESDC and Forest City Ratner not knowingly misrepresented the facts to the court, the entire Atlantic Yards project, including the heavily subsidized Barclays Center, would never have gotten off the drawing board."

Too often, these kinds of vindications come posthumously-and what should be seen as criminal or civil liability ends up being simply throwing coins at beggars. Willets Point United is facing the same situation-with the criminal activity being exposed and little or no consequences for the perps. But when the city pulled its eminent domain proceeding-fearing the exposure of massive corruption-they opened the tax payers to being on the hook for all of the WPU legal fees. As the Daily News reported:

“A group of Willets Point property owners want the city to pay their hefty legal fees after pulling plans last week to take over their land through eminent domain proceedings. The city halted its controversial approach because it was instead nearing a deal with a developer to overhaul the industrial cluster of auto body shops and scrap yards next to Citi Field.”

Show us the money-the city must be made responsible for putting the property owners through a living hell. All for nothing, as the News points out:

"Michael Rikon, an attorney representing about two-dozen WilletsPoint business owners, said he will file a petition for the city to repay his clients’ legal fees. Willets Point United members have shelled out more than $300,000 in legal fees since 2008, he said. That number is on top of the money group members paid to attorney Michael Gerrard, who represented them in their fight against new exit ramps on the VanWyck Expressway. Rikon said his clients are entitled to the money under section 702 of New York State eminent domain law."

The $300,000 is really chump change when seen in the context of a $400 million boondoggle-and still escalating fraud-but it is symbolic of the disregard of the plutocrats for the fate of the peons. The City Council has now been given the opportunity to give this bait and switch the bum’s rush, but given the total lack of character of the leadership-and their obeisance to Big Real Estate (not to mention the complete lack of competency of the local council member)-this is as unlikely as the sun setting in the East. It will be up to the new mayor to take a look at all of the unethical and criminal behavior involved in this mayoral grift-and decide if there really will be a new day for New Yorkers.

Crony Capitalism as Economic Development

Ben Haber, the Socrates of Queens County, has penned a prescient letter to the Ledger calling on the City Council to vote the current Willets Point project down. As Haber points out, the bait and switch has yielded a huge mall that will feather the nest of the mayor’s rich friends while causing heartache to the residents of Corona, Jackson Heights and Flushing:

“The amendment that seeks to build a parking lot at Willets Point is a ploy to sneak through the back door a transfer of the Citi Field parking lots to allow construction on the vacated lots a 1.4-million-square-foot shopping mall. This is without a Uniform Land Use Review Procedure and replacing parkland, since Citi Field is on land that is part of Flushing Meadows Corona Park. Affordable housing will not be built until 2015, if ever.” 

Now we think that Ben means 2025, because there will be no housing without the Van Wyck ramps that will be built on the 12th of Never. But Haber gets to the root of the sham when he ridicules the idea that the billionaire owners, and mayoral BFFs, of Related and Sterling Equities couldn’t afford to develop the rest of Willets Point with the affordable housing and the other goodies unless they got to build their mall:

“At the top of the list of deceptions that have accompanied the application is the claim for requiring a prioritized Citi Field shopping mall as a financial engine to generate enough funds with which to construct the original Willets Point plan, suggesting that without it the original plan cannot be accomplished.  

Ignoring its speculation, it is untrue and a ploy to have the mall, which is what the application is all about. Related Cos. are the developers of the $20 billion development underway over the Hudson Yards in Manhattan. The claim that these multibillion-dollar companies — which are being given the Willets Point land the city has acquired for hundreds of millions of dollars and more in the future for $1 and a subsidy of $99 million — do not have the financial wherewithal to build Willets Point without a huge shopping mall is an in insult unworthy of belief and a reason to reject the application.”

Haber goes on to question whether the city council represents the people-a rather droll inquiry that has an unfortunate answer:

“The original Willets Point plan approved by the Council in 2008 is one thing. A deceptive huge shopping mall is something different and unacceptable. It remains to be seen if the word from the Council is that its constituents are not just billionaire real estate moguls but the little people, the poor, the middle class and small businesses, which are the backbone of an urban society and reject the application.”

We know where the formerly Mighty Quinn stands, but what about the supposed progressives on the city council? And what about the Public Advocate? When it comes to real estate it seems that the pols represent the 1%-unless we see a radical departure from the Permanent Government script.

What’s a New Mayor to Do? Bill de Blasio and Willets Point

We have been speculating about what a Mayor de Blasio might do with the development of Willets Point when/if he gets into office in January-arguing that he is under no obligation to rubber stamp a skewed Mike Bloomberg vision.

We have been buoyed by his statements concerning thecorporate welfare give away to Fresh Direct: “Fresh Direct would never have gotten more than $100 million in government subsidies to stay in New York City if he ran City Hall, Bill de Blasio said Thursday. The Democratic mayoral nominee said his administration would remove subsidies from large companies such as Fresh Direct and “give them to smaller companies.” This is a sign that de Blasio sees economic development in a radically different light. 

But if a Mayor de Blasio would balk at throwing $100 million tax payer dollars at a crony of his predecessor, than how about $400 million for two cronies? That’s the subject of our Op-ed in yesterday’s NY Daily News:

“In the first place, the development at Willets Point was intended to be one of Mayor Bloomberg’s signature legacy projects – the “first green neighborhood,” and all that palaver. Instead, owing to the good work of the team assembled by Willets Point United, the original mega-deal was derailed and the current Rosemary’s Baby was given birth. Instead, of all the essential public benefits that were originally negotiated — affordable housing, a living wage and traffic relieving ramps — we have been given the city’s largest retail mall built on parkland. The property taken under the threat of eminent domain is now earmarked for a parking lot.” 

Any original whiff of public good has been aerosoled out by this stinky new sweetheart deal

“Make no mistake about it. When the original Willets Point deal was proposed by the city, there were over 30 council members who had signed a letter opposing the project — and one of the strongest bases for that opposition was the city’s threat to use condemnation to take away property that had, in many cases, been in families for decades.

This opposition was only overridden when the Central Labor Council negotiated a “historic” living wage provision — and the council negotiated a deal for 2000 units of affordable housing. This was the linchpin of the compromise that enabled the council to overcome their strong objection to the use of eminent domain.”

And then there’s the corporate welfare to dramatize just how far from the public interest this gift to the Wilpons and Steve Ross really is:

“All of these promises have been tossed aside in the city’s current Willets Point proposal — along with the sworn assurances from Deputy Mayor Robert Lieber that the city would be compensated for the $200 million it paid for the property purchased under the threat of condemnation. Instead, the city is gifting the property to the developers for $1!”

Only in Mike Bloomberg’s NYC, could gifting be so easily turned into grifting-and as far as gifts are concerned, this is one that keeps on giving for all of the critics of the mayor’s penchant to bend the rules when it concerns him and his friends:

“Making a bad deal that much worse is the fact that it has now been revealed by the Attorney General of the State of New York that the original compromise that led to the city council’s approval of the development in 2008 was advanced by an illegal lobbying scheme devised by the Economic Development Corp. and a local development group made up of real estate interests. The entire land use process was tainted by illegality.”

Bill de Blasio has made a purposeful effort to let the city know that he will not be doing any gratuitous giveaways to the 1%; and Willets Point affords him the opportunity to make a real forceful demonstration of how different he will be:

“So, Mayor de Blasio, send a signal to the city that there is a new sheriff in town and things are going to be done differently. We are not going to unceremoniously shunt aside hardworking small businesses to aggrandize the interests of the 1%. Say No to Willets West and set the tone for a different kind of politics.”

But Willets Point United has not been alone in this fight-and the NYC Parks Advocates and the Queens Civic Congress have been outraged by yet another aspect of the bad deal at Willets Point-the use and abuse of parkland. Bob Harris makes this point in the Times Ledger:

“The Council is holding hearings on the proposed Willets Point West Mall, which would use the parking lot adjacent to Citi Field. This land was originally parkland, but was leased to the New York Mets’ owners to be used as a parking lot for baseball fans. Now the Mets owners want to build this large mall for private economic development. If this parkland was not needed by the baseball team, then it should have been repurposed and used by the community people who come here to play and relax.

Fighting this “giveaway” was the Queens Civic Congress, the Flushing Meadows Corona Park Conservancy, the Fairness Coalition of Queens, Save Flushing Meadows Corona Park, New York City Parks Advocates and other groups.”

Harris also points out that the mall will have a great deal of collateral damage for small business in Queens-something that the merchants of Jackson Heights and Corona are very much aware of: “The Queens Civic Council, an umbrella organization of about 100 civic associations in Queens, testified that if this mall is built, it will harm many small mom-and-pop stores in surrounding communities as well as struggling malls in other parts of Queens.”

So we urge the next mayor of the great City of New York to send the right signal to all of the beleaguered small businesses, parks advocates, and threatened property owners-and to the real estate barons who have been feasting in Mike Bloomberg’s New York. As another Brooklynite might put it: Do the Right Thing!

Fresh approach to Fresh Direct

The all but assumed elevation of Bill de Blasio has been given a distinct flavor for opponents of the corporate welfare deal orchestrated by Mike Bloomberg for his friends the Ackermans at Fresh Direct. De Blaio has no love for this kind of cronyism:

“Fresh Direct would never have gotten more than $100 million in government subsidies to stay in New York City if he ran City Hall, Bill de Blasio said Thursday. The Democratic mayoral nominee said his administration would remove subsidies from large companies such as Fresh Direct and “give them to smaller companies.”

But is it too late to stop this obscene give away? No one is sure-not even the opponents of the subsidy:

“It would be difficult — if not impossible — for de Blasio to rewind the clock on contracts signed and sealed by the Bloomberg Administration. But de Blasio could try to undo deals still in the pipeline after 2014 if he becomes mayor. Fresh Direct is receiving $89 million from the city and $38 million in other government funding to build a 500,000-square-foot warehouse in the South Bronx that is scheduled to open in 2016.”

The NY Daily News is skeptical:

“It’s highly unlikely that a Mayor de Blasio would be able to kill the deal. Contracts have been signed, and the company’s new facility, in the South Bronx, is slated to open in 2016. A Fresh Direct spokesman defended the deal, saying it would “create 1,000 new jobs in the nation’s poorest congressional district.” 

The job creation is pure smoke and mirrors because, as is the case with all of these boondoggles, there’s never any cost analysis done-and subsidizing a delivery business will take away revenue from neighborhood markets. There is also the fact that there is a state subsidy as well-and a Mayor de Blasio could negotiate this away if he wants to play a little hard ball with the governor.

But all of this, of course, raises questions about whither the Willets Point deal under a new mayor. Will de Blasio be comfortable giving away $200 million worth of property for a mall with low wage retail workers not protected by a living wage agreement? That’s an interesting questions that awaits an answer from the working class warrior headed to Gracie Mansion.

Will Bill de Blasio Really Fight NYC’s Permanent Government?

For those of you who got carried away with all of the hope and change rhetoric in 2008-only to be gob smacked by the continuation of the anti-terror policies of George Bush-please be on your toes for the expected mayoral reign of Bill de Blasio, another elected official who we believe understands Machiavelli’s dictum that it’s better to appear good than to be good. All of de Blasio’s populist campaigning may only be part of a bait and switch that, at least when it comes to real estate, will simply be a continuation of the three terms of Mike Bloomberg. As Crain’s reports:

“It wasn't just the Afro that put Bill de Blasio over the top. The impressive hair of his son, Dante, featured in the Democratic primary's most memorable campaign commercial, was certainly a factor. But campaign cash from deep-pocketed industries that have nurtured Mr. de Blasio's rise in politics over the years ultimately helped the public advocate emerge as the favorite to become mayor.

But it isn’t only the cash that should make us leery. Daniel Goldstein is someone who should know:

“Critics say that despite his anti-Bloomberg campaign theme, Mr. de Blasio represents continuity with the mayor's pro-development agenda. "He was the same as Bloomberg, at least while he was in the City Council," said Daniel Goldstein, a community activist who battled Atlantic Yards for a decade.

On that project, Mr. de Blasio helped hammer out a community-benefits agreement with Forest City Ratner calling for union construction jobs and 2,000 units of affordable housing, none of which has been built. Forest City Executive Vice President Robert Sanna later gathered more than $13,000 in donations 

That is why we have seen the fate of Willets Point as a harbinger of understanding who is the real de Blasio:

“True, the public advocate has spoken harshly about real estate during the campaign. In July, he said, "Last time I checked, it wasn't the real estate industry's town and we were just living in it." And at his victory party after the Sept. 10 primary, Mr. de Blasio decried "luxury condos" replacing "community hospitals." He has pledged to require developers to include affordable housing in their projects.

But he has raised almost $300,000 from the industry—about 9% of his total—and his history reflects a more conciliatory approach to it. He bucked local opposition in Brooklyn to support the Atlantic Yards project, a Toll Brothers luxury-apartment plan along the Gowanus Canal and high-end condos in Brooklyn Bridge Park.”

What has been wrong with Mike Bloomberg’s development policies has been the promotion of tax subsidized crony capitalism-is there anyone who sees the good policy sense in the tax subsidized move of Fresh Direct from Queens to the Bronx? As we pointed this July:

For Mike Bloomberg it never gets old to reward his friends and billionaire cronies-and the award of huge subsidies to FreshDirect is just the latest example:

“The city has delivered a sweet deal to FreshDirect. The Industrial Development Agency voted Tuesday in favor of the online grocer's controversial plans to relocate from Long Island City to the Bronx — thanks to $127 million in public subsidies.  

The company has promised to use the money to build its new facility in the South Bronx, convert its truck fleet to green energy, and to hire local workers. A spokesman for FreshDirect told residents the move to Port Morris would create 1,000 new jobs over 10 years, a third of which were promised to go to borough residents.”  

FreshDirect is run by a young man named Jason Ackerman, whose uncle, hedge fund guy Peter Ackerman, is a partner in some of the mayor’s political action ventures. Peter, a former associate of Mike Milken, is naturally a financier like the mayor and the subsidies for his nephew’s company is emblematic of what passes for economic development under the billionaire mayor.” [Crains]

The same pattern is being repeated at Willets Point-with $200 million worth of property simply gifted to Related/Sterling Equities, in spite of the testimony given by Deputy Mayor Lieber to the contrary in 2008. So a kind of gauntlet is being laid down for de Blasio. The fate of the Iron Triangle’s corrupt new deal-absent the important affordable housing that the Public Advocate voted for in the council-hangs in the balance.

If de Blasio speaks out and lets the council know that he opposes this obscene corporate welfare deal, then we will be alerted to the possibility of real change from the last 12 years. On the contrary, if he remains silent, de Blasio will be loudly proclaiming the wisdom of the old French philosophy:

Plus ça change, plus c'est la même chose