Knowledgeable observers were surprised that the original Willets Point business coalition, the Willets Point Industry and Realty Association, hired Peter Vallone Sr. to lobby on its behalf. Vallone had no record of engaging in adversarial battles against the political establishment-quite the opposite. Vallone's entire political carer was spent in cutting deals, and if WPU's lawyer Mike Rikon is correct in his submissions to the city, many of the larger members of this original group knew exactly what they were doing by engaging Mr. Vallone.
For a select few, the Vallone representation resulted in sweetheart deals cut for their benefit; agreements that were not available to any of the smaller property owners who were not part of the WPIRA inner circle. According to attorney Rikon, this violates the essence of the state's Eminent Domain Procedure Law (EDPL). Once the city council passed its ULURP application for the Willlets Point project, all of the proper protocols under the EDPL should have been triggered and observed. This is not anywhere near what happened.
As Rikon points out: "There has been a violation of the entire process set forth in the Eminent Domain Procedure Law at Section 303 thereof which requires independent appraisals of the properties to be condemned with a written offer of 100% of the highest approved appraised value. This was not done for all condemnees or even for a single condemnee. Rather, what followed were individual oral offers and negotiations to select individuals but not to all of the property owners. This is a violation of the statute. It is also a violation of equal protection of the law. See EDPL Section 101.
And Rikon goes on to say:"What was done in the Willets Point Development Project was to make deals with prominent owners of property who had garnered political opposition to the project’s approval. But the deals did not follow compliance with EDPL Section 303. The deals, containing extraordinary provisions, were made only to appease the opposition from the members of the City Council supported by the select property owners."
What this also means is that the entire opposition to the Willets Point development was Kabuki theater-a staged production designed to enhance the bargaining position of the larger members of the WPIRA coalition. The corollary to this observation is that the little guys-property owners, tenant owners, and workers-were simply used as cannon fodder. They were sold out in the end, but in reality, their disposal was planned for from the beginning.
In some ways, we can appreciate the skill in which this was done-and kudos to those businesses that, as a result, made out like bandits. That, however, doesn't excuse the city's violation of the EDPL which, if true, adds to the growing list of illegal and unethical behaviors we have seen in this entire process.
But let's put a face on the sweetness of the deals we are talking about-as Rikon does in his discussion of the deal made with Part Authority:
"The NYCEDC also entered into a contract with Parts Authority Partners Real Estate, LLC on September 26, 2008...The NYCEDC contract agreed to pay the seller $18,150,000 for a 24,739 square foot site.
In addition, the contract provided the seller with numerous extraordinary benefits. The contract was conditioned upon the seller receiving $1.5 million dollars in relocation assistance. The seller and its multiple tenants (Hunt Construction, Mets Stadium Auto Glass, Anjo Realty and CBS Outdoor) were permitted to remain on the property for at least, but possibly more than, 24 months.
During that time, the seller was only required to pay rent in the amount of $1 per month. The NYCEDC would pay all real estate taxes. In addition, despite the fact that NYCEDC would be the owner and landlord, the seller was permitted to collect all rents from its tenants/subtenants on the property. The NYCEDC also agreed to pay New York City Transfer Taxes and any title insurance premiums."
Sweet indeed-and a justification for the Vallone hiring if there ever was one. Rikon summarizes: "In light of the above, it is clear that a select group of property owners, but not all, received preferential treatment from the City of New York including “sweetheart deals,” relocation assistance, a significant loan at a discount rate, rent free accommodations, option contracts at preferential values, agreements by the City to purchase land on the owner’s behalf, the entitlement to collect rent from subtenants but without having to pay any rent to the City, and title to newly constructed City facilities and buildings. This selective preferential treatment is clearly a violation of the statute and a violation of equal protection of the law."
How below board and corrupt was this? Recall Fernanda Santos' City Room article that revealed nicely the EDC scheme: "Whenever the city pursues a development project that involves buying land from private parties, it usually keeps details of the negotiations with property owners under wraps. Sale prices are rarely disclosed to avoid influencing other owners into asking more for their property.That has been the case in Willets Point, a 62-acre section of Queens next to Citi Field that is the target of one of Mayor Michael R. Bloomberg’s most ambitious development plans."
Except, as Rikon points out, the invocation of the EDPL protocols legally requires the city not to do this: "When asked which parcels the city had bought and how much it had paid for them, David Lombino, a spokesman for the Economic Development Corporation, said he could not disclose that information “because it would impede negotiations with other landlords going forward.”
The scheme was so important to EDC that it screamed bloody murder at the City Room expose-calling Santos to have her correct some of the property sale details. But in the end, there was one thing that EDC refused to do-comply with the terms of EDPL: "Mr. Lombino still declined to disclose how much the city paid per square foot of land — or building — it has acquired in Willets Point."
What about the rest of the "holdouts?" To this day they have yet to receive any written offer as required by law-and the city has commenced condemnation of their property. So, a process that began with the illegal lobbying work of Claire Shulman has continued along the same tawdry vein-with EDC acting outside of the law because it believes that it can, after paying off the larger property owners, simply beat up on the little guys.
Showing posts with label deals. Show all posts
Showing posts with label deals. Show all posts
Friday, March 18, 2011
Tuesday, April 27, 2010
Wide discrepancy in EDC's deals
From the NY Times:
Whenever the city pursues a development project that involves buying land from private parties, it usually keeps details of the negotiations with property owners under wraps. Sale prices are rarely disclosed to avoid influencing other owners into asking more for their property.
That has been the case in Willets Point, a 62-acre section of Queens next to Citi Field that is the target of one of Mayor Michael R. Bloomberg’s most ambitious development plans.
The area, arguably one of the most neglected pieces of real estate in the city, is home to hundreds of auto repair shops, junkyards and manufacturing businesses. Mr. Bloomberg’s goal is to perform a complete facelift, razing all that is there and replacing it with homes, offices, retail stores, restaurants, parks and a hotel.
An article in The New York Times on Tuesday details the fight that is being waged against the city by a group of land owners who don’t want to sell their properties, and notes that the city has reached deals to buy or has bought 64 percent of the land at the site.
When asked which parcels the city had bought and how much it had paid for them, David Lombino, a spokesman for the Economic Development Corporation, said he could not disclose that information “because it would impede negotiations with other landlords going forward.”
But with some research that information can be found. And it turns out that some owners did a lot better than others.
Whenever the city pursues a development project that involves buying land from private parties, it usually keeps details of the negotiations with property owners under wraps. Sale prices are rarely disclosed to avoid influencing other owners into asking more for their property.
That has been the case in Willets Point, a 62-acre section of Queens next to Citi Field that is the target of one of Mayor Michael R. Bloomberg’s most ambitious development plans.
The area, arguably one of the most neglected pieces of real estate in the city, is home to hundreds of auto repair shops, junkyards and manufacturing businesses. Mr. Bloomberg’s goal is to perform a complete facelift, razing all that is there and replacing it with homes, offices, retail stores, restaurants, parks and a hotel.
An article in The New York Times on Tuesday details the fight that is being waged against the city by a group of land owners who don’t want to sell their properties, and notes that the city has reached deals to buy or has bought 64 percent of the land at the site.
When asked which parcels the city had bought and how much it had paid for them, David Lombino, a spokesman for the Economic Development Corporation, said he could not disclose that information “because it would impede negotiations with other landlords going forward.”
But with some research that information can be found. And it turns out that some owners did a lot better than others.
Tuesday, April 20, 2010
The shocking reality of ownership at Willets Point
We didn't make this up, folks. Based on property records, this is what the city currently owns at Willets Point. The shaded areas represent what they paid for and hold title to. The rest remains in the hands of its original owners. So next time an EDC parrot quotes an ownership figure somewhere in the 70-75% range, ask them how that could be possible based on their own records...
Tuesday, October 6, 2009
And that's a conservative estimate...
People are starting to question the cost of the Willets Point redevelopment plan and whether it's worth it. From the NY Observer:
By our tally, more than $78 million in nine separate transactions have closed—though far more have previously been negotiated and yet to show up in city records.
There’s a number of things that aren’t told in that number, particularly what the city is spending in terms of relocation costs. There’s been $424 million allocated for both acquisitions and off-site infrastructure, an amount that would seem to be too small to do everything the administration has discussed.
The city has said the off-site infrastructure will cost about $150 million, for one.
And then there are land costs, which are substantial. Here’s the most recent closed deal: $11,993,825 for a lot that is 57,000 square feet (on the less valuable northern end of the site), according to the real estate tracking firm PropertyShark. That comes out to $210 a square foot, which, if extrapolated across the full 45 or so acres that are privately held on the site, would come out to $412 million.
According to an EDC document from December 2008, there was language written into some of the larger land purchases that would seem to give the landowners a pretty good deal.
For both businesses, House of Spices and Fodera Foods, two of the larger property owners on the site, an EDC board action said that EDC “must use its best efforts” to “promptly purchase replacement property,” then sell the property to those businesses for $1. Given that EDC would be condemning their land, then buying them new land (though “best efforts” seems a loose term), this could get expensive as well.
Does the City of New York have this kind of money, especially with the economy expected to get worse instead of better? As Neighborhood Retail Alliance puts it:
EDC has established an off set price here-and if the numbers are added up they probably would exceed $700 million. Where does the city expect to come up with this cash from-at a time when it is evicting the businesses and putting thousands of workers on the unemployment line?
By our tally, more than $78 million in nine separate transactions have closed—though far more have previously been negotiated and yet to show up in city records.
There’s a number of things that aren’t told in that number, particularly what the city is spending in terms of relocation costs. There’s been $424 million allocated for both acquisitions and off-site infrastructure, an amount that would seem to be too small to do everything the administration has discussed.
The city has said the off-site infrastructure will cost about $150 million, for one.
And then there are land costs, which are substantial. Here’s the most recent closed deal: $11,993,825 for a lot that is 57,000 square feet (on the less valuable northern end of the site), according to the real estate tracking firm PropertyShark. That comes out to $210 a square foot, which, if extrapolated across the full 45 or so acres that are privately held on the site, would come out to $412 million.
According to an EDC document from December 2008, there was language written into some of the larger land purchases that would seem to give the landowners a pretty good deal.
For both businesses, House of Spices and Fodera Foods, two of the larger property owners on the site, an EDC board action said that EDC “must use its best efforts” to “promptly purchase replacement property,” then sell the property to those businesses for $1. Given that EDC would be condemning their land, then buying them new land (though “best efforts” seems a loose term), this could get expensive as well.
Does the City of New York have this kind of money, especially with the economy expected to get worse instead of better? As Neighborhood Retail Alliance puts it:
EDC has established an off set price here-and if the numbers are added up they probably would exceed $700 million. Where does the city expect to come up with this cash from-at a time when it is evicting the businesses and putting thousands of workers on the unemployment line?
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