Thursday, December 28, 2017

De Blasio Admin. Finalizing QDG Land Steal

Through the Willets Point grapevine, we hear that the City is about to transfer ownership of 23 acres comprising the “Phase One” area of Willets Point, to Queens Development Group (“QDG”) – the joint venture of Sterling Equities (whose owners also own the New York Mets) and The Related Companies that the Bloomberg administration designated as the developer. This is the infamous give-away of 23 acres of valuable taxpayer property, which cost hundreds of millions of public dollars to acquire, to developers for the unjustified price of $1 (one dollar).

For the de Blasio administration to proceed with this sale at this time is outrageous and potentially illegal, for reasons summarized below.

First, Bill de Blasio is squandering a golden opportunity to cancel the Bloomberg administration’s planned, unjustified give-away of hundreds of millions of dollars worth of taxpayer property to QDG for the price of $1 (one dollar), and instead to establish a legitimate price that is truly in the taxpayers’ interest.

At a typical cost of $400 per square foot, we estimate that the City spent roughly $400 million taxpayer dollars to acquire the one million square feet (23 acres) of Willets Point Phase One property, which the Bloomberg administration intended to gift to QDG for $1 (one dollar). However, the de Blasio administration is entitled to cancel the City’s contract with QDG, and to rescind the sale of two acres of Willets Point property already transferred to QDG for $1, due to the recent decision of the New York State Court of Appeals which found that QDG’s proposed “Willets West” mega-mall on parkland located west of Citi Field stadium cannot proceed as it lacks legislative approval. Per the project contract: “EDC has the option to require Developers to convey to EDC all Willets Point Development I site parcels which have been conveyed to Developers (the “Call Option”) if … there is a final determination in a Legal Proceeding which would prevent the Project from being developed” (First Amendment to Amended and Restated Purchase and Sale Agreement, § 17.2(i)).

The give-away of valuable City property to QDG is no less outrageous now than it was when the Bloomberg administration arranged it back in 2012. We had hoped that Mayor Bill de Blasio would have taken the opportunity presented by the recent Court of Appeals decision to rescind the sale, instead of going through with it.

Second, recall that the key reason that QDG was chosen to develop the Willets Point Phase One site, to the exclusion of several other developers that had submitted proposals, was that only QDG claimed to be able to expand the project by constructing its proposed “Willets West” mega-mall on public parkland located west of Citi Field stadium. If QDG is now unable to deliver that mega-mall on parkland, then the basis for choosing QDG as the developer in the first place no longer applies. Allowing QDG to develop the Willets Point Phase One property despite QDG being unable to deliver the Willets West mega-mall is to allow a “bait-and-switch” on the grandest of scales.

If QDG can’t build its Willets West mega-mall and must limit any development to the Willets Point Phase One land, then QDG is in the same category as the other developers that had originally proposed to develop only the Phase One land. In response to the City’s 2011 Request for Proposals to develop the Willets Point Phase One site, QDG never submitted a proposal that was limited to the boundaries of the Phase One site, and never competed against the other developers on that basis. So, there is no reason whatsoever to presume now that QDG is the best choice to develop only the Willets Point Phase One property.

If the initial phase of development is going to be limited to the Willets Point Phase One property, without expanding the project onto public parkland as QDG had proposed, then the City should issue a new, legitimate Request for Proposals for the Phase One site, and re-start the developer selection process, with no unwarranted special status given to QDG, Sterling Equities or The Related Companies.

Third, it appears that the de Blasio administration is on the verge of transferring ownership of all lots that comprise the 23-acre Willets Point Phase One site to QDG for $1 (one dollar), on the basis of authorizations granted by then-Mayor Bloomberg and the Queens Borough Board during December 2013, pursuant to City Charter § 384(b)(4).

However, as Willets Point United has written to Mayor de Blasio and his legal counsel more than once, not all of the lots within the Willets Point Phase One area were City-owned as of December 2013. City Charter § 384(b)(4) only entitles the Mayor and Borough Board to transact on property that is City-owned. Therefore, any authorizations of sale granted by then-Mayor Bloomberg and the Queens Borough Board during December 2013 obviously only pertain to the lots that were already City-owned as of the dates of those authorizations.

Since the City acquired additional lots within the Willets Point Phase One area after December 2013, whose sale could not have been authorized pursuant to City Charter § 384(b)(4) during December 2013, new authorizations of Mayor de Blasio and the Queens Borough Board are necessary before all of the lots within the Phase One area may legally be transferred to QDG.

City Charter § 384(b)(4), which the City acknowledges pertains to its sales of Willets Point property, provides that the Mayor, with the approval of the local Borough Board, may sell property of the City “without competitive bidding” and “for such price as may be determined by the mayor to be in the public interest”.

Only Mayor Bill de Blasio, or his successors, can determine a price that is “in the public interest” for Willets Point lots acquired by the City after December 2013. Although the former Bloomberg administration established an outrageous price of $1 (one dollar), present Mayor de Blasio is obligated to set his own price that is truly “in the public interest” – and we will be watching to see what price he sets. We hope that Mayor (and former Public Advocate) de Blasio will recognize his fiduciary responsibility to City taxpayers, and determine a sale price for valuable Willets Point Phase One land that at least recoups all of the public funds spent to acquire it.

Fourth, Francisco Moya, who has been elected the new City Council representative of Willets Point and nearby neighborhoods, previously announced his own plan concerning Willets Point development. Among other aspects, Moya intends to form an advisory council of neighborhood stakeholders, to evaluate and help to guide development decisions.

By unnecessarily selling property to QDG now, and locking in the choice of QDG and its development plan, before Moya has even taken office or assembled his advisory council, Mayor de Blasio is continuing the same shameful disregard for community participation in decision-making that was exemplified by his predecessor, Michael Bloomberg.

No irreversible action, including property sale, should take place at Willets Point before Councilman-elect Moya’s advisory council is in full operation and has had ample opportunity to significantly participate in decision-making.