Monday, August 20, 2018

Task Force Excludes Expert Public Stakeholders

Queens Borough President Melinda Katz and Councilmember Francisco Moya are the co-chairs of the “Willets Point Task Force,” a cherry-picked group that is supposed to recommend potential uses for Willets Point land. The Task Force will hold its third closed-door meeting this Wednesday, August 22.

Katz and Moya are denying Willets Point United and all current Willets Point property or business owners the opportunity to attend any meeting of the Task Force – despite Queens Community Board 7’s recommendation that Katz and Moya consider allowing a Willets Point representative to attend. Even worse, Councilmember Moya’s office directly lied to us by telephone last Thursday, stating that no August meeting of the Task Force has been scheduled – when Queens Community Board 7 knew that the meeting is set for August 22.

Katz and Moya are shutting out not only Willets Point United, but also the press. We are aware that Borough Hall has rejected several reporters’ requests to observe Task Force meetings, and has been unwilling to provide even basic information regarding what land use options the Task Force is considering, or how it operates.

Members of the Willets Point Task Force include
Kelly Olshan of Queens Council on the Arts (in
Giovanna Reid (in black) and Marta Lebreton
(in beige) 
of Queens Community Board 3.
Per information furnished to Queens Community Board 7, the scheduled topic of the August 22 Task Force meeting is to “develop preliminary recommendations,” prior to the final September meeting which will “review final recommendations” to be sent to Mayor de Blasio.

In our view, Katz, Moya and the New York City Economic Development Corporation (NYCEDC) are leading the Task Force to an outcome predetermined by them – and they are using public-sector Task Force members solely to create an illusion of community buy-in, not to solicit or seriously consider any creative Willets Point development ideas they may have. Given that Willets Point United has a wealth of knowledge about all that has happened with the proposed Willets Point development during the past ten years (and beyond), had we been allowed to participate on the Task Force we would have encouraged thorough consideration of all relevant issues and potential recommendations – not just the ones prioritized by Katz, Moya and NYCEDC. We believe it is for that reason, that Katz and Moya are deliberately excluding us (and in the case of Moya’s office, even lying to us).

While Katz and Moya are shutting us out of their meetings, they cannot stop us from informing Task Force members, via this writing, of issues we consider important, and recommendations we believe the Task Force should make to Mayor de Blasio regarding Willets Point. We hope that the more open-minded members of the Task Force (if any) will raise these issues during the Wednesday meeting as “preliminary recommendations” are formulated.

(1)  Recommend that the City immediately repair and maintain streets, and furnish other missing municipal services, throughout the 38 acres of Willets Point that are located beyond the Phase One area, where scores of industrial businesses operate right now.

Willets Point property and business owners pay steep taxes, but receive virtually no City services in return. Most obviously, the City has refused to repair or maintain Willets Point roadways for decades, allowing them to fall into a state of severe dilapidation. This discourages customer access, hinders the potential for business success, and creates unsafe conditions that extend emergency response times with potential deadly consequences – none of which would be tolerated in any other business district in the City.

Scores of industrial businesses operate today throughout the 38 acres of Willets Point that are located beyond the 23 acres of the Phase One area. See the Facebook page showing that they are “Open For Business” and the video that profiles a subset of 30 of them:

Many of these business are owned and/or operated by recent immigrants from a variety of countries around the world – exemplifying the positive “diversity” of the borough of Queens which Task Force co-chair Katz so often promotes.

Willets Point property and business owners have consistently requested that the City repair and maintain Willets Point roadways (at least, implement “wear-and-tear” paving). For the past several years, Queens Community Board 7 and the Queens Borough Board have included Willets Point street repair on their annual budget priority lists, stating in their fiscal year 2015 written reports that “This area has been neglected by the City of New York and needs a total capital reconstruction to include sidewalks, sewers, and street lighting.” Moreover, Queens Community Board 7 specified as a condition of its 2013 ULURP approval of a special permit sought by Queens Development Group for Willets Point property that “Road wear and tear rehabilitation must be implemented now for the remaining [Willets Point] Phase 2 property owners.” (Queens Community Board 7 decision of May 13, 2013 concerning ULURP No. C 130222 ZSQ, as documented within City Planning Commission report; emphasis added.)

However, contrary to the wishes of the Community Board and the Borough Board, no street repair services have yet been provided in the 38 acres of Willets Point that are located beyond the 23 acres of the Phase One area.

The Task Force should recommend that the City immediately provide street repair and maintenance services, and any other municipal services that it is presently withholding from Willets Point.

(2)  Recommend that the City exercise the contractual “call option” to take back two acres of property located in the heart of the Phase One area, which the Bloomberg administration gave to Queens Development Group (and which it still unnecessarily owns).

The Task Force should be considering the 17 acres of the Phase One area a blank canvas, where any proposal could be implemented – but right now, the canvas isn't blank. That’s because Queens Development Group owns two acres in the middle of Phase One, putting the City at the mercy of Queens Development Group to consent to any plan for the area. Fortunately, the City may exercise a contractual “call option” and take back those two acres to ensure maximum flexibility for the use of the Phase One land.

Our new video (below) and associated blog post explain why it is essential for the City to reclaim these two acres, and to do so prior to the contractual deadline of December 20, 2018:

The Queens Ledger and the Queens Chronicle have reported on our recommendation that the City reclaim the two acres from Queens Development Group.

The Task Force should recommend that the City exercise the contractual call option to reclaim the two acres from Queens Development Group, prior to the deadline.

(3)  Recommend that the City reaffirm the Bloomberg administration’s promise to convene a special advisory committee to participate in and help to guide Willets Point developer selection.

The present work of the Task Force to produce recommendations regarding Willets Point, is not a substitute for later participation in selecting the project developer(s).

The Bloomberg administration had promised that a Willets Point Advisory Committee, whose members would include representatives of the involved community boards and other entities, would participate in and help to guide developer selection.

The Task Force should specify that the City is still obligated to form a Willets Point Advisory Committee to participate and help to guide developer selection for each and every phase of the project.

(4)  Recommend that Phase One land must be remediated, regardless of the use that eventually occurs there.

The original, primary pretext for the City to spend hundreds of millions of taxpayer dollars to take possession of Willets Point property, was to ensure that it would be properly remediated, to an extent that allegedly could not be achieved by individual private property owners.

As remediation was the objective and the promise, the Task Force should recommend that the Phase One site must undergo environmental remediation.

Consistent with the 2008 Willets Point development plan, the chosen developer(s) should bear all costs of remediation, in exchange for the privilege of developing the site.

In the event that no developer is willing to pay costs of remediation, then the City should remediate the land and pay the costs of doing so. Apparently funds are available: The Bloomberg administration had authorized a capital grant of $99 million to Queens Development Group, $40 million of which was to cover costs of remediation. Those funds can be diverted from Queens Development Group and used to pay an environmental firm to be hired by the City. Thereafter, terms with any developer should reflect the fact that the City, not the developer, paid the costs of remediation.

(5)  Recommend that Phase One, and all other Willets Point land, revert to industrial/manufacturing/distribution uses.

Since rezoning Willets Point in 2008, the City has had ten years to implement its promised “next great neighborhood” throughout Willets Point – and has failed to do so. The truth is, that concept never was feasible, and never should have been pursued.

Willets Point is located directly under the flight path to LaGuardia Airport, at the closest point to the runway – thus susceptible to roaring jet engine noise all day long. It is also hemmed in and isolated by the Whitestone Expressway, Van Wyck Expressway and Grand Central Parkway. For those reasons, among many others, Willets Point is not desirable as a location of a neighborhood or housing, but is perfectly suitable as a location for an industrial park.

23 acres of Willets Point Phase One land are essentially vacant and dormant at this time. It is absolutely not too late for the City administration to decide to remediate those 23 acres, install necessary infrastructure, then revert that land to industrial/manufacturing/distribution uses together with the additional 38 acres beyond Phase One.

In fact, doing so would be consistent with the conclusions of a report prepared in 1991 for the predecessor of NYCEDC, the New York City Public Development Corporation, which found: “The lack of adequate infrastructure is the most obvious impediment to the success of Willets Point. … A few conclusions can be drawn about the development potential of Willets Point. (1) The area is most suitable for development by owner occupants, and (2) the area is most suitable for industry and industry-related commercial uses” (Urbitran Associates, Inc. in association with Richard Dattner Architects, “Willets Point Planning Study prepared for New York City Public Development Corporation,” October 1991, p. 4).

(6)  Recommend that, in the event of any City acquisition of the 38 acres beyond the boundaries of Phase One, the City must exhaust every means of negotiation with private property owners, and fully compensate them for the value of their land and for relinquishing its significant development potential.

(7)  Recommend that, in the event of any City acquisition of the 38 acres beyond the boundaries of Phase One, the City must provide relocation sites for existing businesses, in a manner agreeable to the businesses and for the purpose of ensuring their continued operation.

The City and NYCEDC must assume responsibility for actually providing acceptable relocation spaces for existing Willets Point businesses. No business should be expected to depart Willets Point, without the City and NYCEDC first securing a relocation site.

NYCEDC routinely misleads the public by claiming that it has “relocated” Willets Point businesses from the Phase One area. In truth, NYCEDC enticed businesses to vacate the Phase One area despite having nowhere to go, by offering paltry payouts for a limited time – after which a business would receive nothing, and be evicted. Faced with that choice, many businesses accepted the payout, and departed Willets Point. NYCEDC had no role in “relocating” them, anywhere, or in ensuring their future survival.

In fact, so insufficient were the City’s Willets Point relocation services and funds, that a group of Willets Point automotive businesses (the Sunrise Cooperative) sued the City. As part of a settlement, the City was compelled to provide greater funding, but even that proved inadequate, and the City did not relocate those businesses. Sunrise Cooperative declared bankruptcy in 2016.

Businesses displaced from Willets Point in the future must be protected from similar fates.

*     *     *

In addition to the specific recommendations above, before the Task Force commits to any “vision” concerning Willets Point, we suggest that Task Force members acquaint themselves with the extraordinary traffic impacts that would result from the full build-out of Willets Point as intended in 2008 and analyzed in the Environmental Impact Statement.

At the City Planning Commission on August 13, 2008, Bernard Adler, former Commissioner of Traffic for the City of White Plains, testified: “I have never seen this level of unmitigated impact, in the forty years I’ve been practicing. … This is an unprecedented overload of the local roadway system.”

Michael O’Rourke, past President of the Metropolitan Section, Institute of Transportation Engineers, testified regarding significant traffic impacts on the Van Wyck Expressway, including spill-back onto the local highway network as well as local streets:

Beware of any claim by NYCEDC, that new Van Wyck Expressway access ramps will eliminate the severe traffic congestion caused by developing Willets Point. Regarding those proposed new access ramps, the New York Times declared that “E-Mails Show State Officials’ Skepticism About Willets Point Project” and published excerpts of emails written by officials including New York State Department of Transportation project manager Peter King: “‘If I were a betting man, I’d start dropping the odds regarding success for E.D.C. on this project,’ Mr. King said in an email to a state transportation analyst on May 11.”

Finally, we recommend that Task Force members understand who their fellow Task Force members are – especially the notorious Flushing Willets Point Corona Local Development Corporation (FWPCLDC), represented on the Task Force by Terry Sun.

FWPCLDC is the organization that took direction from NYCEDC and illegally lobbied for approval of the Willets Point rezoning in 2008 – triggering a three-year investigation by the New York State Office of the Attorney General, which issued more than 30 subpoenas for testimony and documents to employees of FWPCLDC, The Parkside Group, Mayor’s Office, NYCEDC and other entities. The investigation concluded with formal findings of wrongdoing by FWPCLDC and NYCEDC, the Attorney General proclaiming that they “flouted the law,” and requiring the corporate restructuring of NYCEDC, among other remedies.

FWPCLDC was, and still is, substantially funded by the New York Mets organization. The Mets owners also own Sterling Equities, which together with Related Companies comprise Queens Development Group – the entity which received two acres of Willets Point Phase One land from the Bloomberg administration, and which Mayor de Blasio is allowing to develop a separate six acres of Phase One land.

Willets Point United will have much more to say about particular members of the Task Force, and its operation, at a future time.

Monday, July 30, 2018

VIDEO: de Blasio Administration Must Take Back Two Acres from Queens Development Group

A new video released by Willets Point United demands that the de Blasio administration act before a December 2018 contractual deadline, to protect taxpayers’ interests by reclaiming two acres of Willets Point property which the Bloomberg administration gave to Queens Development Group.

In the video (below), Willets Point property owner Irene Prestigiacomo explains the give-away of the two acres to Queens Development Group; the comprehensive development project which the property was supposed to facilitate; the court decision that effectively prevents that project from proceeding; the contractual provision that allows the City to take back the property under present circumstances; the lack of action by the de Blasio administration thus far to reclaim the property; and City officials’ fiduciary responsibility to taxpayers to do so before the deadline lapses.

Ms. Prestigiacomo asks (06:38): "As corrupt as this City sometimes can be, have we really reached the point where a developer can keep public property worth tens of millions, without delivering any of the project that was the basis for it to receive the property in the first place?"

The Basic Premise

A developer that receives public property worth tens of millions of dollars to facilitate a project, should not be allowed to keep that property when the developer is unable to proceed with its project. That is especially so, when the City’s contract with the developer allows the City to take back the property under the circumstances.

And yet, that is exactly what is occurring right now at Willets Point. As of this writing, Queens Development Group is keeping approximately two acres (90,500 square feet) of what used to be taxpayers’ property, even though Queens Development Group cannot implement the project that was the basis for it to be awarded that property.

To stop this, City officials must act before a contractual deadline of December 20, 2018 – presuming that the de Blasio administration hasn’t already somehow squandered the opportunity.

Below are supplemental details, not mentioned in the video.

Significant Taxpayer Costs to Originally Obtain the Two Acres

Before the two acres were given to Queens Development Group, they were City property – and before that, they were owned by a private party who operated a business on the site.

To acquire the two acres from the previous private owner, the City paid taxpayer funds of nearly $14 million, plus sweetened the deal by giving the prior owner other City-owned College Point Corporate Park property estimated to be worth between approximately $1.8 and $7.2 million, meaning that it cost the City as much as $21 million dollars to acquire the two acres of Willets Point land. Viewed differently, other Willets Point properties in the vicinity of the two acres have sold for a typical price of $400 per square foot – which if applied to the two acres, means they are worth $36,200,000.

Rather than recouping the cost of acquiring the property as it had said it would, the Bloomberg administration gave the two acres to Queens Development Group for $1 (one dollar).

Willets Point "Iron Triangle," with the two acres owned
by Queens Development Group shown in red, and the
Bloomberg-era "Phase One" portions shown in white.

The City is able to rescind that sale during a limited timeframe, under special circumstances such as those in the aftermath of the NYS Court of Appeals decision in Avella v. City of New York, which effectively prevents Queens Development Group's comprehensive development project from proceeding.

No Overlap Between the Two Acres and the New Six Acre Willets Point Project

Recently, the de Blasio administration announced a new plan to lease six acres of Willets Point Phase One property to Queens Development Group, to become an affordable housing development with a school. Those six acres to be leased to Queens Development Group are physically separate from the two acres previously sold to Queens Development Group by the Bloomberg administration.

Revoking the sale of the two acres to Queens Development Group does not prevent the separate, new, six acre affordable housing project from proceeding.

Deadline to Act

Unless the de Blasio administration has somehow squandered it, there is a window of opportunity to reclaim the two acres from Queens Development Group: The City must act before December 20, 2018, which is five years after the original date of sale.

Per the First Amendment to Amended and Restated Purchase and Sale Agreement between the New York City Economic Development Corporation and Queens Development Group dated December 20, 2013:

“§ 17.3  Terms of Options.
In order to exercise the … Call Option …, the party or parties entitled to exercise the Option shall deliver a notice to the other party or parties prior to the … Call Option Outside Date”.

The “Call Option Outside Date” is defined as five years after the date of the original sale, which in this case will be December 20, 2018.

(Disclaimer: Willets Point United shall not be responsible if a different deadline date applies for any reason, and encourages the accountable City attorneys to independently calculate the correct Call Option deadline date pursuant to all applicable contract provisions.)

Tuesday, February 6, 2018

“New Plan,” “New Deal” – But No New Competitive Bid?

From the outset of the proposed Willet Point development, it has been understood that a developer would be selected via a competitive sealed proposal process.

The City’s selection in 2012 of Queens Development Group (QDG) to develop phase one of Willets Point – to the exclusion of all other firms that submitted proposals – was predicated on QDG’s unique proposal that expanded the project to include a mega-mall on public parkland (leveraging a lease already held for said parkland by the Mets’ owners, who comprise half of QDG).

In the aftermath of the Court of Appeals decision which prevents QDG from implementing its proposal, Mayor de Blasio should have immediately availed himself of the opportunity afforded by the contract between QDG and the Economic Development Corporation (EDC), to rescind the sale of Willets Point property to QDG and cancel the contract award. Then, the City would have been free to issue a new request for proposals (RFP) to the entire present-day development community, for the “new” six-acre project which apparently is now the priority.

Instead, there has never been a competitive sealed proposal process for development of six acres of Willets Point property stemming from the intersection of Willets Point Boulevard and Roosevelt Avenue. Think of it: A reasonably-sized, six-acre project would likely attract a larger pool of developer proposals than did the 2012 RFP which encompassed the enormity of the Willet Point phase one site. There is absolutely no basis to think that QDG is the “best” developer for this six-acre site and configuration, because the de Blasio administration did not implement any competitive sealed proposal process (although it should have done so).

In its article published on February 6, 2018, the New York Times repeatedly refers to the six-acre project as a “new plan” and “new deal.” We agree, but wonder why there was also not a “new” RFP and “new” competitive sealed proposal process to determine it.

Beyond the 2012 selection of QDG as developer, the subsequent decisions by the Deputy Mayor, EDC, the New York City Land Development Corporation and the Queens Borough Board to dispose of hundreds of millions’ worth of City-owned property to QDG, were all predicated upon QDG’s prior, now-defunct proposal which expanded the project to include a mega-mall on public parkland.

We encourage investigations by the public, the press, the Comptroller and enforcement agencies, regarding whether or not it is consistent with City policies and procedures for the City to designate QDG to implement a “new plan” without issuing any new RFP, and for the City to dispose of valuable public property to QDG pursuant to decisions that were wholly based upon a different, defunct plan.

We also recommend that the press ask these questions:

•   What price is the de Blasio administration establishing, for the sale of Willets Point property to QDG? $1 (one dollar) per the Bloomberg administration, or a legitimate price that recoups the taxpayers’ cost of acquiring the property?

•   The New York Times mentions that QDG will remediate Willets Point property by a certain date. Does that remediation refer to the six-acre section of Phase One, or to the entire 23 acres of Phase One? If the latter, why would QDG remediate that land, prior to any decision about what will be built there?

•   Given that the Queens Borough Board is to evaluate and vote on the “business terms” of an award of development rights for the Willets Point project, and thus far the Borough Board has only voted on QDG’s prior development proposal which featured the mega-mall (which has been eliminated from the “new plan”), will the City seek a new approval of the Queens Borough Board for the changed iteration of the project?

•   During the January update meeting between Queens Community Board 7 (CB7), QDG, EDC and Mayor’s Office representatives, CB7 repeatedly lamented being excluded from ongoing discussions between the QDG, QDG and the Mayor’s Office about new plans for Willets Point. Thereafter, was CB7 involved in any such discussions, prior to the New York Times publishing the new Willets Point plan on February 6, 2018? Or, was CB7 still excluded by QDG, EDC and the Mayor’s Office?

•   Where is there an Environmental Impact Statement (EIS) document that analyzes impacts of a six-acre development stemming from the intersection of Willets Point Boulevard and Roosevelt Avenue, with no new Van Wyck access ramps present? The 2013 Supplemental EIS analyzed a project configuration that included the mega-mall, with no new Van Wyck access ramps present during the initial phase.