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Standing Strong at the Kingsbridge Armory

September 8, 2009

esnuestroIn a move rarely seen in The Bronx lately, an elected official is standing up for the creation of good jobs and accountable development. Newly elected Bronx Borough President Ruben Diaz Jr. has voted no on a land use proposal to build a subsidized mall inside the Kingsbridge Armory because the developer refused to sign a community benefits agreement.

This must come as a shock to Related Companies, which plans to develop the mall and has gotten subsidies and sweetheart real estate deals from the city in the past. Related was awarded the contract to purchase the armory from the mayoral-controlled Economic Development Corporation for the bargain basement price of $5 million. The armory is a landmarked building that spans an entire city block, has a new roof, and is directly across the street from a subway and bus lines. 

The city seemed to move in the right direction in 2006 by involving community leaders in developing a Request for Proposal and including language that applicants supporting a living wage provision for the permanent jobs associated with the project will be viewed favorably. But after that the community hasn’t been involved.

Diaz’s vote doesn’t mean the proposal can’t happen; the project now moves through the city’s 60-day labyrinthine land-use approval process that includes hearings and votes by the City Planning Commission and the City Council. If other elected officials follow Diaz’s lead, the city could leverage the subsidies to bring Related back to table with the community and still hammer out an agreement.

For nearly a decade the Northwest Bronx Community and Clergy Coalition advocated for community use of the armory. In 2005 the group joined with the Retail, Wholesale, Department Store Union to create the Kingsbridge Armory Redevelopment Alliance (KARA), which called for a project that creates living wage jobs,  promotes retail that doesn’t compete with long-time businesses and builds much-needed community, educational and recreational space for neighborhood youth.

The Borough President’s stance comes not a moment too soon. Unfettered, subsidized development has grown rampant in The Bronx: Gateway Mall (developed by Related) near Yankee Stadium and the Water Filtration Plant have not brought promised jobs, have run far over budget and/or have moved forward in the land use process under the guise of fake Community Benefit Agreements.

Kudos to Diaz for standing up for his constituents and hopefully setting a new standard that won’t allow subsidizing mega developments to come at the expense of locally owned stores and diminished wages, taxes and jobs.

Opening Week Problems for New York Yankees Go Beyond Blowin’ in the Wind

April 24, 2009

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There’s more going on in The Bronx at the new Yankee Stadium opening week than just the now infamous wind tunnel that’s left fans aghast. Here’s a run down of news that’s probably kept the team’s public relations staff team very busy:

 

            The City’s Economic Development Corporation released job figures for the stadium but they raised more questions than answers. For example, how many Bronx residents were hired? What are the wages and benefits? As expected, most of the new non-construction jobs are seasonal so what is the economic impact of those short-term jobs in contrast to the billion dollar subsidy price tag?

             Assembly Members Richard Brodsky and James Brennan asked the New York State Supreme Court to have the Yankees comply with a subpoena as part of the Assembly’s investigation into the $1.3 billion the team received from the New York City Industrial Development agency in tax-free financing the new stadium. It seems the subpoena is having an effect as the Yankees might have to turn over documents.

             South Bronx residents and advocates joined clamoring Yankee fans on opening day to demand officials move more quickly to replace the over 22 acres of parkland where the new stadium now sits.

             New York City Comptroller William C. Thompson, Jr. released another audit showing the Yankees owe the city $68,000 in rent. Not paying the rent is a disturbing trend for the Yankees as previous audits by Thompson show they have underestimated the rent by about $3 million since 2002.

             And finally, the already dubious economic multiplier effect of the new stadium is in serious doubt since the priciest seats are empty.  What are the restaurants, parking garages and concession stands in the stadium to do without rich fans?

NYC “Venture”ing Into Incentives For Wall Street’s Down and Out

February 27, 2009

Mayor Bloomberg announces 11 Initiatives to Support City’s Financial Services Sector

Mayor Bloomberg announces 11 Initiatives to Support City’s Financial Services Sector

If at first you don’t succeed, try, try again. That might be the motto of the New York City Economic Development Corporation which recently announced an incentive program to pump more public monies into the city’s financial sector. Exact dollar figures aren’t clear but news reports suggest the plan could pump $45 million from the city, state and federal governments along with private foundations into programs for unemployed Wall Street-types.

Among the 11 initiatives laid out last week are plans to create an “Angel Fund” to help harvest venture capital dollars in small start-up firms and a “crash course” training program starting next month for entrepreneurs to develop business strategies. These proposals seem to be moving forward to the chagrin and suspicion of some.

Public investment in small companies is nothing new, but this news struck a cord for two reasons. Our city and state budget is living history of what happens when one industry dominates the economy and hits a snag or collapses; the impact is paralyzing. Second, the return thus far on gambling with tax incentives on Wall Street hasn’t paid off on the jobs we’ve been promised.

No one expects the city to ignore the needs of those who lost their Wall Street jobs but this group is better equipped than most with its educational background and work experience to reinvent itself. Shouldn’t the city be helping unemployed New Yorkers without the Ivy League MBA? How about the laid off cook or manufacturer who wants to learn how to access capital funds or participate in a business development program?  Already the majority of funds from the city’s Economic Development Corporation go to commercial interests including its recent obsession with baseball stadiums. So we argue it’s time to stop putting all the tax-break eggs in one basket.

Last week’s proposal mimics plans put in place after the attacks of September 11, 2001; shore up the financial industry even if working families and small businesses were impacted more and expect the benefits to trickle down. Cash grants and tax-free bonds mostly went to large firms (think Goldman Sachs, American Express, Deloitte & Touche) and to build luxury housing.  These plans did wonders for developers, landlords and bond attorneys at the expense of everyone else, especially residents and firms in Chinatown.

Before another incentive program is created, EDC needs to engage with its colleagues in city government whose directive it is help small businesses, (Department of Small Businesses ServicesMayor’s Office of Industrial and Manufacturing Businesses, for example) and those outside of government like the New York Industrial Retention Network and come up with a plan that mitigates the silos of economic development subsidies to benefit the city’s numerous business sectors.

New York Advocates to “Drill Down” on Where Federal Stimulus Money Goes

February 26, 2009

cropped_workinggroup_presser_02_09-26A diverse coalition of two dozen advocates named the “NYS Stimulus Oversight Working Group” and led by Common Cause/New York have signed on to a set of common principles that would make the allocation of funds under the American Recovery and Reinvestment Act fully transparent.

At a press conference this morning on the steps of City Hall in New York City, members of the Working Group and local Council Members agreed that it would take citizens, advocates and elected officials to create a truly transparent process.

Among the recommendations the working group is proposing in the principles is creating a website that has bi-monthly reports, copies of written agreements with contractors, impact on energy efficiency and the environment and details on job creation and wages.

Addressing the desire to learn more about projects in New York State that received stimulus funds, Susan Lerner the Executive Director of Common Cause/New York, said, “New York City must collect all of the information related to the stimulus spending including drilling down” to the subcontractor level.” Advocates on the national level have also expressed this concern.

Several Working Group members also attended: Citizens Union, Environmental Advocates of New York, Good Jobs New York, NYPIRG and the Urban Justice Center.

Also in attendance at today’s press conference were several Council Members: Eric Gioia Chair of the Oversight and Investigations Committee, who recently proposed a form of “Google government” for all city tax exemptions; Gale Brewer, Chair of the Technology in Government Committee; Daniel Garodnick, Chair of the Planning, Dispositions & Concessions Committee and Robert Jackson Chair of the Education Committee.

The transparency issue seems to be taking hold locally as Council Member Bill deBlasio and Council Member Brewer move forward to create a website called SunlightNYC.gov.

“Smoking Gun” found in NYS Investigation of New Yankee Stadium

December 17, 2008

smoking-gun1Juan Gonzalez of the Daily News reports today that an investigation into the public financing of the new Yankee Stadium project by Assembly Member Richard Brodsky, (Chair, Committee on Corporations, Authorities and Commissions) has uncovered emails that show City officials inflated the land value under the new stadium, allowing the team to obtain a higher amount of tax-free bond financing.

This new revelation comes into play as Brodsky and Rep. Dennis Kucinich (D-Ohio) chair of the House Domestic Policy Subcommittee have been pushing the city to release all email exchanges among city agencies on the issue. This past summer, Brodsky reported that his initial investigation suggested that the city Department of Finance boosted the value of the land from $26.8 million to $204 million. 

While it would be out of character for Brodsky to end his quest for all the documents he’s requested, this newest finding he claims is the “smoking gun”.

But don’t think this recent news would cause city officials to reconsider a new round of public financing for the Yankees or the Mets. Yesterday, the New York City Industrial Development Agency posted a public hearing notice on a proposal to give the Yankees an additional $371 million in tax exempt financing (of which $111.9 million would be federally taxable) in addition to the $942 million approved in 2006. The Mets, which got $547 million at the same time the Yankees got their financing, are requesting $82.2 million more.

In the past few months, the new Yankee Stadium project has taken more twists and turns than any time since the project was announced in 2005.  In addition to this week’s news, other emails made public recently showed that City Hall considered withholding its support for public financing if the City didn’t get a luxury suite with free food.

The news of more giveaways to rich baseball teams at a time when Gov. Paterson proposed a doomsday budget yesterday, we hope, will encourage New Yorkers to make their voices heard at next month’s IDA hearing.

Check Please! Yankees Forced to Pay $11 Million After GJNY Inspired Audit

November 7, 2008

crystalToday, New York City taxpayers finally got some Bronx cheer after an investigation by the office of City Comptroller William Thompson sent an $11 million tab to the New York Yankees.

A little over a year ago, Good Jobs New York’s staff hunkered down at the office of the New York City Department of Parks and Recreation with Field of Schemes’ co-author Neil deMause to sift through boxes of receipts submitted by the Yankees as part of an agreement started under former Mayor Giuliani that permits the team to deduct “planning expenses” for the new stadium from the rent it pays to the city.

The findings were extraordinary: receipts for gifts of crystal baseballs, steak dinners, bar tabs, baseball caps, “gifts for Japan” and one of my favorites, a $76 bill for shipping batting helmets to Tropicana Field in Florida. We urged Comptroller Thompson to conduct an audit of these expenses which we thought was long overdue.

Thompson’s office came through. After reviewing documents submitted between 2003 and 2006 the auditors found several blunders akin to crystal baseballs including receipts for: $34,328 in travel expenses to other stadiums, donating $50,000 to a Political Action Committee and $359,617 in bonuses to the staff of the stadium’s developer. The Comptroller also found $1.8 million in overstated deductions for MLB revenue sharing as the team used a method not agreed to in the lease. And in what could be considered the definition of chutzpah, the team submitted receipts for 2006 expenses, even though the city let them to take two years worth of the annual $5 million credits in 2005.

The Yankees have so far paid the city $7 million along with $600,000 in interest. A little more than $4 million is still due by March 2009.   Considering the news of a possible “headcount reduction” at the NYPD and higher taxes on the city’s middle class, let’s hope the Yankees don’t take six years to pay the rest of the rent.

The Grey Lady Wakes up to the New Yankee and Mets Stadiums

November 6, 2008

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Yesterday, The New York Times ran a lengthy article about the mounting public costs of New York City’s two rising baseball stadiums. Good Jobs New York has been meticulously tracking these subsidies for over three years.

The article documents the increase in tax breaks for the Yankees and Mets new homes from the $281 million announced in 2005 to $458 million today. The article also takes Mayor Bloomberg to task for his flip-flopping comments on subsidies for stadiums.

While reporters at other New York daily papers, Patrick Arden at Metro and Juan Gonzalez at the Daily News specifically, have devoted space and research to the ever expanding subsidies and seizing of 22 acres of park space for Yankee Stadium, this is The New York Times‘ baseball stadium subsidy coming out party, so to speak.

While the city stands by the project claiming $40 million in new revenues over 40 years, the article is chock full of counter arguments from economists claiming that sport arenas don’t drive economic development.

Most interesting of the experts cited is Andrew Zimbalist. Zimbalist is an economist from Smith College who has written positively about New York City’s stadium projects but throws a bit of a curve ball in The Times piece. He rebuffs a claim that the Hard Rock Café and N.Y.Y. Steak restaurants at the new Yankee Stadium will bring much more business to the area saying, “it’s hard to imagine” they would provide many benefits during the off season, because it “would require a tremendous renaissance in that part of the Bronx.”  

All New Yorkers, not just economists, should pay attention to this evolving project since the Yankees and Mets are expected to apply for additional public financing (GJNY will forward details of the public hearing when it is announced) just as news of tax increases on the middle class and cuts in critical services are being proposed.

“Gaming the Tax Code” Hearing Yields No Winners

October 28, 2008

It didn’t break through the coverage of the presidential election or the meltdown of our financial system, but corporate welfare was center stage at the Capitol last Friday.

In his fourth Congressional hearing into the economic benefits – or lack thereof – of taxpayer-subsidized stadiums, Rep. Dennis Kucinich (D-Ohio) summoned to Washington the masterminds of America’s most expensive stadium: the Yankees’ new palace going up in the South Bronx. There was Randy Levine, President of the Yankees; Seth Pinksy, President of the New York City Economic Development Corporation; Martha Stark, Commissioner of the New York City Department of Finance defending the project. Also testifying was Assembly Member Richard Brodsky who as Chairman of the state’s Assembly Committee on Corporations, Commissions and Authorities is conducting an investigation into the use of public financing for the project.

If attendees (yours truly sat in)  and web watchers (see www.fieldofschemes.com and www.atlanticyardsreport for the play by play) expected the hearing to clarify how the Yankees project  – considered by many the murkiest deal in recent New York history – got a bundle of bond financing, they came away disappointed. (more…)

Legislative Umpires Call Yankees Out

September 19, 2008

The controversy around the public financing of the new Yankee Stadium heated up this week as a New York State legislator and a member of Congress put the squeeze on the team and New York City officials who helped finance the $1.3 billion stadium.

Testifying before the House Subcommittee on Domestic Policy, New York Assemblyman Richard Brodsky revealed that his summer-long investigation into the public financing of the new stadium shows that the city’s job creation figures and property tax assessments might not be up to par.  And Rep. Dennis Kucinich, chairman of the Subcommittee who has held two previous hearings on the use of tax-exempt bond financing for stadiums said:

“In the case of the new Yankee Stadium, not only have we found waste and abuse of public dollars subsidizing a project that is for the exclusive benefit of a private entity, the Yankees, but also we have discovered serious questions about the accuracy of certain representations made by the City of New York to the federal government.”

(more…)

After 65 Years, Union Insurers Will Leave the Big Apple

September 10, 2008

Amalgamated Life Insurance, created in 1943 by the Amalgamated Clothing Workers of America (now part of UNITE HERE) has opted to move to the suburbs north of New York City rather than renew its Manhattan office lease.

Amalgamated hasn’t fully explained why it’s leaving the city. It cited the $480,000 in tax breaks offered by officials in Westchester County and its expiring lease with New York University (a dominant landlord in the area), but it was offered a more generous subsidy from New York City officials hoping the insurance company would stay.

For those of us New York, the competition between municipalities raised some concern since intrastate bidding wars for a company is against state law. Except of course, unless a company is considering relocating out of state. Hence, the report that Amalgamated looked for office space in Newark, New Jersey.  While we may never know if Newark was a serious contender it wouldn’t be the first time a firm used the old tried and true tour of New Jersey to “kick the tires and then go back to New York to negotiate a deal.” Add the legal logistics of moving an insurance company out of state and the claim to move to Newark gets weaker.

Yet, the most troubling aspect of this deal is that officials in Westchester are bucking a positive national trend to increase public investment for jobs located near public transit.  The company’s Manhattan location is right near several subway and bus lines. While the city Amalgamated is moving to, White Plains, is on a commuter train line, the site chosen by Almagamted (the former headquarters of General Foods), is not within walking the train station.

Amalgamated’s plan to move might make the insurance company’s bottom line, but its effect on current employees and environment certainly isn’t neutral.