Friday, December 09, 2016

Politico's Shafer: "a real estate operator makes the least natural fit for the job of president"

America’s First Real Estate Presidency, wrote Politico's Jack Shafer 12/7/16. Some excerpts:
If you’re wondering what’s behind Trump's transition antics over the past few weeks—exaggerating the sticker cost of Air Force One, rolling the dice on an official phone call with Taiwan, sweet talking/shaking down Carrier to keep its factory in the United States—look no further than the real estate mind-set, which defines the way Trump thinks and acts. As a real estate guy, he always craved risk...
Then there’s Trump’s unique relationship with the truth, which earned him a chart-busting 59 four-Pinocchio ratings from Washington Post fact-checker Glenn Kessler during the campaign. That’s a whole lot of big, fat lies in a very short period; but by developer standards, it’s a modest haul....
Not all real estate lies are lies. Many are mere exaggerations, as when a landlord hypes a property’s sun-drenched patio that upon inspection turns out to be a grimy air shaft. Through his career, Trump has exaggerated the way other people breathe....
The lust for gambling—a subset of risk—is endemic among the real estate crowd. Where developers differ from the common man is they almost exclusively wager with other people's money...
Real estate tends to be a family business, with the companies passed down to the children to continue. That’s how Trump got his start... Trump has done the same for his eldest children and, extending that practice to government...
From his first days in real estate, Trump exploited the media to amplify his power and importance...
Shafer's conclusion:
Do I need to argue by this point that a real estate operator makes the least natural fit for the job of president?...
But the difference between a president and a scam-artist real estate guy is a president cannot skip out on debt or responsibility or without real repercussions. Behavior like that will put the lives of great numbers of innocent people in peril. When you fail in the presidency, you don’t merely lose an investor’s money. Bankruptcy is not an escape option. Trump has no business making citizens pay for the crazy risks he might decide to take.

The anecdote is the policy: not just our "stunt presidency"

Slate's Julia Turner 12/4/16 wrote The Stunt Presidency, subtitled "Donald Trump plans to replace governing with gimmickry. It’s already working."

She pointed to the "many reasons to be skeptical" of Trump's claim to save 1,000 jobs at Carrier Corp., but says none matter:

The incident shows how keenly Trump understands the power of a concrete example. The Carrier deal will be good for the workers whose jobs will stay in Indiana, yes, but it functions primarily as a stunt that expertly reinforces Trump’s brand. As a candidate, he promised to use his deal-making skills to improve the lot of the American worker. Now, nearly two months before he even takes the oath of office, he has delivered. No matter what happens on Trump’s watch—to Carrier, to the manufacturing sector, to employment numbers overall—there will be some set of voters, and not just Trump fans, who vividly remember this moment, thanks to its clarity, to its tangibility. Each critique of the Carrier deal requires the listener to hold in his or her head several levels of abstraction: ideas about how systems and incentives work, ideas about cause and effect, ideas about how corruption can unfurl or how policy can affect millions of people. And so each critique has less impact than the sturdy story: Last week in Indiana, Donald Trump saved a thousand jobs.
I don't agree completely, but I do recognize that the "anecdote is the policy" also applies to real estate business (and see how that shapes Trump's world).

Consider the various happy people who have gotten jobs at the Barclays Center or the presumably happy people who will win the lottery for below-market housing.

The critiques of those anecdotes require complexity. Yes, the jobs are better than no jobs, but they're not careers. Yes, the affordable apartments--especially for low-income households--offer far better and more secure housing than can be found on the bruising open market. But the housing is less affordable, and less timely than promised, and hundreds of thousands of people remain in need.

The journalistic response

Writes Turner:
If journalists choose to ignore these easy narratives, they will stand uncontested, because Trump can deliver them to voters on his own. Journalists must instead set out to challenge these stories—by, say, following Carrier and its employees over the next four years, or by examining how the federal contracts for parent company United Technology Corp. do or don’t change, or by tracking the fortunes of other companies in the field—but as they do they’ll still be directing attention at the tidy diorama Donald Trump has put forth.

Thursday, December 08, 2016

Ten years ago, Atlantic Yards passed without official doubt; "post-truth" look back

Screenshot from Oct. 2006 NY Voices/WNET
interview of Gargano by Rafael Pi Roman
It was ten years ago today: in just 15 minutes, the unelected board of the Empire State Development (ESDC, now known simply as Empire State Development) approved the Atlantic Yards project at a meeting at its 37th-floor headquarters in Manhattan.

It was a strange time, and seems stranger still with ten years of perspective.

Atlantic Yards had been announced three years earlier, as Brooklyn was beginning to boom and developer Forest City Ratner was scouting around for new development deals. All seemed sunny.

But the ESDC was hardly an independent fact-finder, its board members with scant knowledge of the project. Chairman Charles Gargano, a political appointee, was either deluded or deflecting in his statements about eminent domain.

Now, with the benefit of hindsight, we also know that the ESDC did too little due diligence regarding the project. No, Atlantic Yards would not take ten years to build. No, the state had not prepared analyses showing what might happen if the real estate market and economy swiveled.

Nor had developer Forest City Ratner necessarily been prudent, having taken out loans to buy property under the expectation that it could soon start vertical development and deliver revenue, rather than pay carrying costs. Indeed, executives of parent Forest City Realty Trust now say one lesson is that they need to "control" land rather than purchase it.

A comment on my blog posted by "Marion" seems wise in retrospect, suggesting "a slow down in marketing all the other new buildings under construction (how goes 1 Hanson Place?) may have the greatest impact of all.... Neither Ratner nor the banks financing this project will proceed to build empty buildings. Time will tell."

Delays and doubts

Adjusted version of state map showing railyard not blighted
and thus a larger share of project site not blighted
Time has told.

The project was delayed after lawsuits and the economic downturn, and renegotiated in 2009, with an ostensible ten-year construction plan but a 25-year "outside date." That potential 2035 completion was adjusted, seemingly, by a 2014 agreement to build the affordable housing, at least, by 2025. That was linked to the state's approval of new majority investor Greenland USA.

But full 2025 project completion--and perhaps, the affordable housing--no long seems valid; in November, Forest City Realty Trust acknowledged it had stalled new development and was adjusting its economic forecasts to 2035, which likely indicates stabilization of cash flows a few years after completion. But we don't know for sure.

Still, perhaps the most important lesson after a decade is that the ostensible justification for state intervention, to remove "blight," was then and now bogus. First, the use of graffiti, cracks in the sidewalk, or underutilization to indicate blight was laughable, and ignored the context of a gentrifying neighborhood. The blight designation failed the "cappuccino test."

The Vanderbilt Yard, used to store and service Long Island Rail Road trains, was said by the state to be blighted. That was questionable--note the adapted map above--but, even if it we accept a below-grade railyard as de facto blighted, the project has proceeded in exactly the opposite way to "cure" that blight. Construction started on the arena block, and then moved not to the railyard, as was originally suggested, but to the southeast block of the project.

The ESDC decision: a recap 

As I wrote, the ESDC board decision 12/8/06 was rubber-stamped. Though Gargano had said that “it’ll be up to the board members to vote yes or no” on Atlantic Yards, the press release had already been prepared The vote, by the four present board members out of seven total, was a formality.

Board members' brief questions and comments showed neither much understanding of the project location nor sympathies toward public concerns. And Gargano, gamely taking some tough questions from reporters afterward, gave no quarter.

The meeting began as Ann Hulka, a senior VP for real estate, uninflectedly read a boilerplate description of project changes officially announced the previous month.

“The entire project is expected to be completed by 2016,” she recited dutifully, adding that the project “avoids or minimizes adverse environmental impacts to the maximum extent practicable… and provides mitigation where practical and feasible.”

“A blight study was prepared which documents blighted conditions on the project site. ESDC intends to exercise the power of eminent domain to remove these blighted conditions," Hulka said. "Without condemnation, ESDC would be unable to assemble the site, remove the blighted conditions on the site, and develop the project.”

Of course, the major contributor to blight was the below-grade 8.5-acre railyard. Condemnation was not needed to "remove the blighted conditions on the site." That could have been accomplished by putting

Today the railyard awaits a deck, with a small segment, perhaps a quarter of the original parcel, now used for the arena.

At one point, board member Charles Dorkey, a bond lawyer, had identified Atlantic and Flatbush avenues on one poster. He pointed to the southern border of the project site. “Is that Pacific, at the bottom of the project?”

“This is Dean Street,” ESDC Director of Planning and Environmental Review Rachel Shatz responded patiently. “Pacific is the one in the middle.”

What about the timing?

Board member Joseph Holland asked about the timeline for the project, seemingly an issue already covered.

“The first phase, assuming no litigation," Hulka responded, "the first phase of the project-"

“Assuming no delays from litigation,” Gargano interjected, leaning forward a little tensely.

Hulka reiterated that the first phase—five towers, an arena, and a new and relocated railyard—would be completed by 2010, with the remainder of the project completed by 2016. The ESDC offered no worst-case scenario.

Afterward, when Gargano took press questions, I pointed out the skepticism of the planned ten-year buildout expressed by Kathryn Wylde of the Partnership for New York City, a project supporter who suggested the project would likely take 15-20 years.

“So how can you say this environmental review is sufficient?” I asked.

“Number one, I don’t know where Ms. Wylde’s facts come from” Gargano responded. “We hire consultants to advise us on these issues.... And they say the project can be built over a ten-year period... If the project is estimated to take ten years and we have some delays, as a result of lawsuits or whatever, it could take 11 years, or 12 years. So what... Those who are in the business of developing, those who understand construction, they’re the people we listen to, not the people who want to be out there talking numbers they have no knowledge of.”

The issue, of course, wasn't merely constructibility but rather whether the project was economically sustainable. It turns out that Wylde, like Laurie Olin, Chuck Ratner, and Marisa Lago after her--also participants in or supporters of the project--spoke wisely about delays.

“What about the track record with MetroTech?” I asked, pointing out that Forest City Ratner's Brooklyn project took nine years longer than planned.

“I have very little knowledge about MetroTech,” Gargano responded. “MetroTech started a long, long time ago.” Long enough for people to forget.

With some perspective

The video I mashed up in January 2010 combined footage from the board meeting (shot by the producers of Battle for Brooklyn), audio from two episodes of the Brian Lehrer Show in December 2006, footage (via NY State Senate) of a January 2010 hearing on eminent domain called by state Senator Bill Perkins, and footage (via BrooklynvsBush) of singer-songwriter John Pinamonti's prescient Atlantic Yards anthem/elegy, The Burrow, shot in May 2007.

As I wrote, probably the most astounding statement during the hearing came when ESDC General Counsel Anita Laremont asserted that ubiquitous environmental consultant "AKRF does not find blight; our board finds blight."

Now Laremont was speaking technically; legally, the board is charged with determining blight. But AKRF works for the project applicant either simultaneously (in the case of Columbia University's expansion) or consecutively (in the case of Forest City Ratner's Atlantic Yards project) with the ESDC.

AKRF gets contracts worth several million dollars to produce reports (paid for by the project applicant) on blight and environmental impact. Board members have no special training. They never disagree with AKRF.

As the video shows, Gargano, in a 12/7/06 appearance on WNYC's Brian Lehrer Show, stuttered, claiming improbably that the board did not plan to vote on eminent domain, a statement belied by footage of the ESDC board meeting and deemed by Lehrer, in his 12/11/06 follow-up show, an episode of "classic political evasiveness."

ESDC board member Dorkey is pictured showing his unfamiliarity with the project.

Interspersed with the statement by government officials and Lehrer are excerpts from roots musician John Pinamonti's anthem/elegy, "The Burrow," filmed in May 2007 at Freddy's Bar and Backroom, long demolished and and now part of the B3 (aka 38 Sixth Avenue) construction site.

"Come on down and see," Pinamonti invited his listeners. Gargano, Dorkey, and the rest of the board never bothered, so they couldn't figure out whether the neighborhood was "shot to hell," whether the site bordered a historic district, or even whether the decision could pass the "cappuccino test."

That's no coincidence. Because AKRF wasn't hired to do a neutral study of neighborhood conditions, as Laremont claimed at the hearing.

It was hired to "prepare a blight study in support of the proposed project," as shown in the contract scope for AKRF's work for ESDC, excerpted at right, part of a document I obtained via a Freedom of Information Law request.

But they still found blight.


The world of "post-truth" didn't begin with Candidate and PEOTUS Donald Trump. It's part of the real estate whirl, apparently.

After that 12/8/06 hearing, Nicholas Confessore of the New York Times pointed out to Gargano that he'd made factually incorrect and contradictory statements about eminent domain.

“I have no idea of what you’re talking about,” Gargano responded testily. “If you’re going to ask me a question, ask me a question."

Confessore continued, and Gargano responded, “Eminent domain has not occurred on this project. I never said it did.”

A bit later, Confessore offered the direct quote from Gargano’s May 17 interview in Metro, : “The facts are that we didn’t really have to use eminent domain because there were friendly condemnations done. The amount of condemnation that we had to do was very small.”

Faced with reality, Gargano denied it. “I don’t know what’s written there,” he said. “What I probably did say, I recall, is that if there is any condemnation that will be required, it would be very small.”

Today, perhaps fittingly, "Ambassador" Gargano is making bank as a promoter of an even more questionable enterprise: pitching EB-5 investor visas to Chinese millionaires desperate to buy their way into the United States.

Wednesday, December 07, 2016

Forest City Realty Trust reverses itself, will drop family control; Bruce Ratner to leave board (Pacific Park loss a factor?)

Some six weeks after the controlling Ratner family rejected a plan to change the dual-class stock structure of Forest City Realty Trust--which investment analysts, corporate governance experts, and activist stockholders have criticized as avoiding best practice and contributing to a lower stock price--the family reversed itself yesterday.

From Scopia Capital August 2016 presentation
The timing suggests that a precipitating factor was the $300 million impairment--loss in asset value--announced in early November on the Pacific Park Brooklyn project

Notably, Bruce Ratner, Chairman of the Brooklyn-based subsidiary Forest City Ratner, is stepping down from the parent's board and, unlike his cousin Chuck Ratner, who's stepping down as chairman, got no praise from the company. Bruce Ratner's spot on the board, to be taken by an independent director, will help tip the board to non-family control.

The headline on the press release was Forest City Enters into Agreement to Eliminate the Company's Dual-Class Share Structure; Announces Board Changes and Corporate Governance Enhancements.

On board was Scopia Capital Management, which (as the Plain Dealer noted) owns 8.4% of FCRT's Class A shares, and surely wants to see the value unlocked. Scopia titled its August 2016 critical presentation "The ABCs Of the Dual-Class Structure at Forest City: Towing an Anchor."
From Yahoo Finance

Forest City's stock went up 9.81% yesterday, but, as shown in the chart at left from Yahoo Finance, 10%, that only partly recovered from the loss that occurred after Forest City announced a $300 million impairment, mostly on Pacific Park.

So what changed?

The press release was silent, but I have to believe that last month's announcement was a factor.

Also, on 12/1/16 downgraded the stock (see below right) from C (hold) to D+ (sell). Yesterday, in response to Forest City's announcement, Citigroup upgraded Forest City from neutral to buy.

The details

Under the proposed reclassification, shares of Forest City's Class B stock, owned by the extended Ratner family, would be exchanged shares for 1.31 shares of Class A stock. Shareholder approval is expected, as the Ratner family, and Scopia, have signed on.

In a joint statement, Chairman Chuck Ratner along with Scott S. Cowen, Chairman of the Special Committee set up to evaluate the change, said, "Eliminating the dual-class share structure is an important step in Forest City's continued evolution. After carefully reviewing the Company's options to further enhance value for shareholders, we determined that now is the right time to collapse the dual-class structure."

That doesn't explain why it wasn't the right time six weeks ago.

Chuck Ratner will retire from Forest City at the end of this year, after 50 years of service, and will step down from the Board; he said he'd always aimed to retire at age 75. FCRT President and CEO David LaRue saluted him. He will be succeeded by cousin James A. Ratner, now Executive VP of Development, as non-Executive Chairman, and James Ratner will give up his management job.

Regarding Bruce Ratner

Also, in full: "The Company also announced that Bruce C. Ratner, who has served as a Director since 2007, will also step down from the Board by year-end. Bruce Ratner will continue in his role at the Company's New York subsidiary."

That's not saying much.

Tuesday, December 06, 2016

From the latest Construction Update: electrical service moves ahead at B3 site

According to the latest Atlantic Yards/Pacific Park Construction Update (bottom), covering the two weeks beginning Dec. 5 and circulated today at 12:55 pm (late) by Empire State Development after preparation by Greenland Forest City Partners (GFCP), there's some new work.

Notably, for the modular 461 Dean tower, aka B2, "Installation of hoist run enclosure panels will occur during this reporting period."

For 38 Sixth Avenue, aka B3, "Pursuant to permits, Con Ed vaults installation will commence." (In the previous update, that installation was said to "continue," which implied it had started.) "Pursuant to permits, Con Ed will install new ducts and manholes for B3 electrical service."

While the Sidewalk Bridge outside B11 (550 Vanderbilt) was previously predicted to be possibly taken down last month, now it may be taken down during these two weeks.

A hoist at B14, 535 Carlton will be dismantled and removed. At B14, "Open space work will continue" was listed as new work, though it wasn't part of the last update.

At the Vanderbilt Yard, "Water and sanitary piping installations will be ongoing in Block 1121 during this reporting period." While this was not stated as new, it was not on the previous update.

Also, "Drilling of piles for foundations in the B5 Building area will resume during this reporting period" and "Installation of the new MG Building foundation and duct banks will continue at the north side of the Carlton Avenue Bridge." (Not sure what MG Building means, but they didn't explain it.)

After-hours work

As in previous weeks, there may be Saturday and weekend work. Saturday work could occur at B2, B3, B11, B12 (615 Dean Street), and B14.

Weekend electrical utility work will continue at the LIRR rail yard.

The demolition that hasn't happened

As stated in the past 13 construction updates, demolition at Block 1120, the railyard block between Sixth and Carlton avenues, could commence upon receipt of Department of Buildings and Department of Transportation permits. A community notice will be distributed. Maybe it's not actually going to happen.

WTF: Gilmartin said to treat #461Dean modular project as a victory

From Bisnow, quoting (in paraphrase) Forest City Ratner CEO MaryAnne Gilmartin:
Forest City itself tried to innovate, she said, with its modular construction for 461 Dean St. Committed to using union labor and hindered by a partner locking it out of the factory where the units were assembled, Forest City was still able to assemble the world’s tallest modular building, although for much more money and time than expected.
Still, MaryAnne treats the project as a victory, believing she and Forest City were able to get the ball rolling on modular construction so it can be used by others and speed up the construction process considerably.
Oh really? Didn't Scopia Capital call B2 (ak 461 Dean) a "value destructive" transaction?

Wasn't the project a financial debacle?

Didn't Forest City plan to build all the towers in Atlantic Yards/Pacific Park using modular technology?

Didn't Forest City aim to "establish and grow a viable, cost competitive modular factory business"?

And didn't Forest City sell the modular business for a sum (and thus loss) it was unwilling to disclose?

C'mon, Forest City is not some government-funded or industry-supported general research lab. They aimed to innovate and drive profits, and for that generated a lot of anticipation. It didn't work out for them.

Post-truth and real estate

Gilmartin's statement was about as credible as that by Chuck Ratner, then CEO of parent Forest City Enterprises, claiming that his 2007 prediction of a 15-year project buildout really meant the time from conception to completion. We know how that worked out.
This recalled for me an 8/10/16 Washington Post article about an even more prominent real-estate figure, now the president-elect:
That deposition — 170 transcribed pages — offers extraordinary insights into [Donald] Trump’s relationship with the truth. Trump’s falsehoods were unstrategic — needless, highly specific, easy to disprove. When caught, Trump sometimes blamed others for the error or explained that the untrue thing really was true, in his mind, because he saw the situation more positively than others did.
“Have you ever lied in public statements about your properties?” the lawyer asked.
“I try and be truthful,” Trump said. “I’m no different from a politician running for office. You always want to put the best foot forward.”
Gilmartin and colleagues also see the situation more positively. That doesn't make it true.

The Long Island Nets in Brooklyn: "It made the most sense to play in an empty arena."

From a 12/5/16 Wall Street Journal article, The Golden State Almost-Warriors, about the D-League Santa Cruz Warriors:
There was a professional basketball game in the Brooklyn Nets’ arena last week and nobody showed up.
Really—nobody. It was 1:30 p.m. on Thursday, and the Santa Cruz Warriors and Long Island Nets were supposed to be playing a NBA Development League matinee. But tickets weren’t sold to the public. It made the most sense to play in an empty arena.
This is the peculiar situation for the players who are almost on the best team in basketball. The line between the Santa Cruz and Golden State Warriors can be the line between playing in empty arenas and playing with Stephen Curry and Kevin Durant.
(Emphasis added)

It didn't make the most sense for the players, or for the potential audience (retirees? school groups if they got a field trip?) who might enjoy $5 tickets.

It made the most financial sense for the arena, which didn't have to staff the building with ticket-takers, ushers, security guards (beyond the minimum), and concession workers. The arena operating company and the Brooklyn Nets/Long Island Nets are owned by Mikhail Prokhorov's Onexim.

The people's arena!

(The Long Island Nets next year will move to the Nassau Coliseum, where, presumably, there will be cheap seats for sale.)

Monday, December 05, 2016

Atlantic Yards/Pacific Park and the common use of PTACs (461 Dean, 535 Carlton, etc.)

So, what's with these PTACs, or packaged terminal air conditioners?
PTAC grilles have been the least of the issues at 461 Dean 

PTACs have a bad rep. As Gothamist's Dan Nosowitz put it recently, "These Hideous Built-In Air Conditioners Are Spreading Across NYC Like A Virus." (Actually, the unit also includes a heater.) He wrote:
...they're typically long, low-slung boxes in appealingly nothing shades of beige and white, with a few dials on top, that fit snug against a wall. They're common throughout the country in hotels and motels, because they allow for the temperature of an individual room to be precisely controlled.
They're common in New York City, and thus often--though not necessarily--result in unsightly grilles in the exterior. I can't say the examples in the Atlantic Yards/Pacific Park seem particularly glaring, so unless they don't function well perhaps they'll escape scorn.
A PTAC at 461 Dean, from video

With PTACs, the metal sucks heat in the summer and absorbs apartment heat in the winter. And veteran real estate broker David Maundrell says some break down in ten years; a maintenance expert consulted by Gothamist says they can last far longer, if tended properly.

PTACs protrude at least nine inches into a room, according to Gothamist. PTACs are in the 461 Dean 50% affordable/50% market modular rental building-- though it was not explicitly described in the Construction Updates, given that the work was done in the factory.

The screenshot above left from a video about a 461 Dean model unit shows a PTAC, as does the screenshot below right from the 461 Dean web site.

And the slide below, from a 2016 case study on 461 Dean from the consultant Arup, confirms that they're using PTACs.

PTACs can be very costly for tenants, if they pay for heat, but the notice for the affordable housing lottery indicated that the rent includes does electric for heating.

At 535 Carlton

The 100% affordable 535 Carlton tower, as an Atlantic Yards/Pacific Park Construction Update indicated in April, was undergoing the installation of PTAC gas piping.

The 535 Carlton web site seems to show--maybe it's the angle--the PTAC protruding only modestly into the apartment. See image below. No finished photos have yet emerged.

The notice for the 535 Carlton affordable housing lottery indicated that the rent includes gas for cooking and gas for heating. (Some PTACs use gas, others electric, so this is surely a different component than the one used at 461 Dean.)

Not at 550 Vanderbilt, but likely at 38 Sixth

There's been no mention of PTACs regarding the 550 Vanderbilt condo building, which likely has a more sophisticated HVAC system.

But PTACs likely will be used in the 38 Sixth Avenue 100% affordable building, since it's being built along with 535 Carlton.

Below, a look at some building exteriors

535 Carlton/B14
461 Dean/B2
38 Sixth/B3

Sunday, December 04, 2016

OK, 550 Vanderbilt wasn't first: hiring Instagram fashionistas to tout new development

Ok, it's definitely a thing, hiring fashionistas with major Instagram followings to post photos of themselves looking glam and throwing that fairy dust over a new residential development. Extra points for picturing said fashionista on nearby, better established blocks.

And, it turns out, the developers and marketers of the 550 Vanderbilt condo, whose campaign I described, actually were not first.

Consider the 11/30/16 cover wraparound for the freebie Metro NY newspaper, toting the 365 Bond development in Gowanus.

It suggests an Instagram post by Linh Niller, though I couldn't actually find a post with her saying "Strolling through this dreamy neighborhood with the pup."

And the very modern 365 Bond, next to a Superfund site (see Pardon Me For Asking coverage), doesn't look like landmarked Carroll Gardens nearby. Whatever.

See, Linh Niller Hunyh, according to her LinkedIn page, describes herself as "Stylist for 365 Bond lifestyle photoshoot for Marketing Campaigns; worked with Lightstone Group and Douglas Elliman to collaborate on the goals of the campaigns."

So she worked on this and this, part of a campaign shot in April by several "bloggers," er, marketers. (I didn't see any disclosures, as required by the FTC, of sponsorship.)

While this came before 550 Vanderbilt, I'm not sure if this was the first ever. Still, it's enough of a trend to be part of today's real estate marketing. It's not "fake news." But sponsored-but-seemingly-grassroots social media certain qualifies as "fake social media."

Saturday, December 03, 2016

An RFEI for a railyard in the South Bronx. Not for the one in Brooklyn. Despite what Gargano said.

From Crain's NY Business's Joe Anuta yesterday, State eyes massive development over South Bronx rail yard:
The state wants to deck over a nearly 13-acre rail yard in the South Bronx to make way for a massive waterfront development in the area, which is attracting more private investment as land costs rise elsewhere in the city.
Last month, Empire State Development released a request for expressions of interests [RFEIs] inviting developers to present offers for leasing or purchasing the land, decking over the yards, then building a sizable residential or mixed-use project on top.
The parcel sits along the Harlem River, just north of the Willis Avenue Bridge. It is currently used as a transfer station to move goods between cross-country trains and trucks that traverse the tristate area—a use the state plans to maintain going forward.
"It's exciting, and very rare to offer the opportunity to develop more than a dozen acres of prime waterfront land in New York City," ESD head Howard Zemsky said in a statement.

The parallel with Atlantic Yards isn't precise, but it's not absent, either. In this case, the state Department of Transportation owns a 96-acre area called the Harlem River Yards, which it leases, and now wants to develop 13 acres of it.

By contrast, with Atlantic Yards, the state--the Metropolitan Transportation Authority--owned an 8.5-acre railyard, but a private developer, Forest City Ratner, already had conceived a plan to tether that to private property, city streets, and other public property to make a 22-acre site. Only after that came the request for proposals, or RFPs. There was no RFEI.

In both cases, the state can override zoning.

According to RFEI document, bottom, the development objectives include:

  • Preserve the designated intermodal rail facility footprint at Harlem River Yards...
  • Maximize economic benefit to the State while minimizing the State’s economic and
  • environmental risk
  • Enhance the Harlem River Yards as an economic engine for the South Bronx and New York;
  • Increase public access to the Harlem River waterfront;
  • Increase the availability of high-quality affordable housing in New York;
  • Maximize incorporation of green building and sustainable design practices; and
  • Feature meaningful participation of Minority Business Enterprises, Women Business Enterprises and Service-Disabled Veteran-Owned-Business

The missing parallel

But the true head-spinner for Atlantic Yards watchers regards the RFEIs (requests for expressions of interest), because the state official whose authority approved the project, Empire State Development Charles Gargano, said in an interview that that was how the project was being developed.

As I reported, Gargano, on 11/15/05, appeared on the Brian Lehrer show on WNYC radio and was asked by the host, who'd just cited an essay by Hunter College planning professor Tom Angotti,  "Is this a through-the-looking-glass version of how development should work?

The exchange occurs near the beginning of the embedded audio below.

"If you understand development and how it does work," Gargano responded, "we have a process in government, state government and I’m sure other government bodies have the same, whereby we put out, first of all, on any area we’re trying to develop, we put out what we call an RF--I, request for-- EI, expressions of interest. And the reason why we do that is we want to pick the brains of the private sector, and see what kind of ideas they have, and after all, they’re the ones with the resources who are going to build these projects, so we want their ideas. We put out this RFEI, that’s the initial—that’s the first part of the process, and it has worked very well for many, many decades."

Not this time.

The MTA did not issue an RFP for the Vanderbilt Yard--the main public property contained in the proposed Atlantic Yards footprint--until 5/24/05, nearly 18 months after the Atlantic Yards plan was announced on 12/10/03.

The ESDC never issued an RFEI. Forest City Ratner had been in discussions with city and state agencies for a long time. That's not the "process" Gargano described.