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By Nicole Gelinas

After The Fall: Saving Capitalism From Wall Street--and Washington

Eye on the News

Nicole Gelinas
Kill Off Atlantic Yards
The Forest City/Ratner project is everything that’s wrong with the Empire State.
19 December 2006

Selected Responses:

Sent by Randi on 12-22-2006:

Thank you for writing such a wonderful article. I'm a resident of Clinton Hill (about a mile from the project) and my heart sank when I heard that the PACB approved the project. I frequently disagree with articles on CJ, but this article hit it on the head. As a young professional who still has to live at Mom's because I can't afford a place to live in my own nabe, I don't understand the logic of bulldozing hundreds of privately owned, readily available apartments (currently sitting empty because they've been sold to FCRC) and building public-subsidized and luxury apartments that'll be ready 3+ years from now. The area surrounding the project is in desperate need of housing; any destruction to the current housing stock is foolish. Unless the plan is to shorten the supply of housing, increase demand and skyrocket prices, and force the middle class out of the nabe.

Tomorrow, the state’s Public Authorities Control Board will vote on public financing for the $4 billion Atlantic Yards basketball stadium and housing project in central Brooklyn, potentially giving it a final green light at the state level. Governor Pataki desperately wants to see the project approved as part of his legacy. If he succeeds, it will be a fitting monument to his administration, because Atlantic Yards stands for much that is wrong with New York State, which Pataki did little to change over twelve years in office.

For starters, New York won’t trust the free market to work. Sure, a private-sector developer, Forest City/Ratner, conceived the plan to erect the stadium and an instant high-rise neighborhood of 6,430 apartments atop a 22-acre, seven-block “footprint” of central Brooklyn (railyards owned by the state’s Metropolitan Transportation Authority occupy about 40 percent of the area, but the rest of the “project site” is already a developed neighborhood).

But this private-sector veil doesn’t mean Atlantic Yards is anything other than a centrally planned, public-sector project. FC/Ratner could never pursue Atlantic Yards without a half billion dollars in public subsidies, the government’s power to condemn private property, and exemptions from city zoning rules.

Further, the rationale behind Atlantic Yards is vintage New York central planning. FC/Ratner’s government supporters, from Pataki to Mayor Bloomberg to Brooklyn borough president Marty Markowitz, say one reason the project is necessary is to jumpstart economic development to overcome “blight.” State officials have determined that the area, some of which still falls under a 44-year-old “urban renewal site” designation, “has been physically blighted and underutilized for decades.”

But the reality is far different. A visit to the project site last year revealed two historic warehouses converted into condos alongside thriving modern factories whose businesses serve New York’s arts community, including one factory that employs more than two dozen legal immigrants. Working-class and middle-class apartment buildings, as well as a popular establishment called Freddy’s Bar, which dates back to Prohibition days, face the wrecking ball of state-sponsored urban renewal.

One business owner who owns property within the footprint, Drew Tressler of Global Exhibition Services, uses his 45,000-square-foot loft to design commercial exhibits and museum displays. As Tressler wrote in a letter to state officials: “Our building is a classic loft building in very good condition. What sense does it make to knock down a commercial building located on a six-lane highway to make way for luxury condominiums, while at the same time putting in jeopardy the jobs of 28 Brooklyn employees? Global has run a successful industrial design company at this location for 29 years, during which . . . we [have paid] taxes to the city and state of New York. . . . It seems unimaginable to have to consider moving, after watching the community I work in progress so dramatically through the years.”

As for the auto-body shops that also dot the area: no, they’re not beautiful, but who appointed the state to determine if a private property is “underutilized”? In any case, if the state left the area alone, it’s quite likely that the auto-repair owners eventually would sell out to developers, as they have all over the city. Manhattan has lost many of its gas stations and parking lots to development over the past decade through market economics, not central planning.

Second, New York’s government pursues redistributionist social policies to court its loudest special-interest groups. For evidence, look at who backs Atlantic Yards. The business owners and residents who already have a stake in central Brooklyn overwhelmingly oppose it—they’ve said so in hundreds of impassioned letters to state officials.

The supporters, by contrast, are community groups like the Association of Community Organizations for Reform Now, or Acorn. They support the project because FC/Ratner has pledged to make 2,250 of its apartments “affordable” for low- and middle-income families. One letter-writer from Acorn, Greg Blankinship, blithely wrote that the Atlantic Yards project “is a very good idea for those who are lucky enough to receive an apartment.” Another supporter, Gabriel McQueen, said the project was a good idea because it would put “everyone on an equal playing field, . . . [providing] affordable apartments and not luxury apartments. . . . Affordable housing is a good thing and no other developer [besides Ratner] has been willing to step up to the plate.”

The crux of Atlantic Yards’ purported public support, then, is this: Brooklyn residents who cannot afford brand-new, “luxury” style apartments want the government to step in and take the private property of others, in the hopes of having it redistributed to them. New Yorkers who live in brownstones or other low-density housing should beware, for under the logic of the FC/Ratner project, it would be better to condemn additional low-rise New York neighborhoods and replace them with high-rises that include affordable housing. After all, why should two families get to live in a Park Slope brownstone, taking up a lot of precious space, when the government, using eminent domain, can raze their building and turn it over to a more efficient private owner, so that 100 families—a third of them low- or middle-income—could live there?

Third, New York’s unaccountable government plays favorites. Atlantic Yards can bypass all normal city and state development regulations, to which FC/Ratner’s competitors must adhere, because the project’s gatekeepers aren’t impartial government bodies but are the state-run Empire State Development Corporation, which has already approved the project, and the Public Authorities Control Board.

The ESDC is anything but a fair, transparent government body. In fact, Pataki has used it for patronage, having allowed a top political fundraiser, Charles Gargano, to head it for years. But Pataki’s not alone. State Senate Majority Leader Joe Bruno reportedly used the ESDC to steer a half a million dollars in earmarked government grants to a company whose major investor had given him free plane transportation. Now ESDC will use eminent domain not to benefit the public but to benefit FC/Ratner, because Ratner knows exactly how to play city and state politicians with its grand “affordable-housing” plans.

And as for the PACB: three appointees, one each controlled by Pataki, Bruno, and Assembly Speaker Sheldon Silver, staff this board, which is supposed to rein in public-authority debt. But the “three men in a room” don’t consider the PACB to be the non-political, fiduciary body it’s supposed to be; they use it as a political tool. Everyone knows that last year, for example, Silver didn’t use the PACB to kill the West Side Stadium because it was a bad deal on the merits (which it was); he killed it because a major supporter, Madison Square Garden, didn’t want competition so close by.

Fourth, New York’s finances are opaque. New York is set to shovel nearly $500 million into Atlantic Yards on behalf of city and state taxpayers because the project will supposedly make a “profit” on such subsidies. Maybe: but ESDC drastically changed the amount of that estimated “profit” in early December, literally at the last minute, from $1.4 billion to $944 million, and without discussing the change before voting on the project (blogger Norman Oder first reported the change at atlanticyardsreport.blogspot.com).

ESDC’s projections of future jobs are just as sketchy. It cut the number of permanent new jobs the project will “produce” from 7,400 to 5,000, but, as the New York Times notes, either estimate is “guesswork.” Also, as Oder points out, neither the city nor the state has released information on how much in local subsidy solely for affordable housing the project will require over the years.

Finally, New York ignores the obvious and best solution: get the government out of the way. Yes, there’s a real problem at Atlantic Yards: those nine acres’ worth of uncovered MTA railyards keep the neighborhood from reaching its potential. The city should rezone the space above the yards for residential and commercial construction, so that the MTA can sell or lease the property through a fair, competitive bid to one, or several, developers, just as it’s finally doing with its similar property on Manhattan’s West Side.

The PACB should do the right thing Wednesday and vote Atlantic Yards down. If it doesn’t, the project is a perfect target for Governor Eliot Spitzer on “Day One,” because killing Atlantic Yards is like killing a little bit of everything that’s so wrong with the Empire State.

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