Vornado Diminished

It looks as if our friends at Vornado will be cutting down the size of its new office building in Harlem. As the NY Times reported on Saturday: "A 21-story office building planned in East Harlem for Major League Baseball is shrinking...But, according to real estate executives and city officials, Vornado’s inability to finance the $435 million project, known as Harlem Park, has delayed construction and is doing what critics who had complained about the tower’s size could not: reduce its height by about a third."

The project does, however, make an important point that we've been emphasizing about the real estate chazza, it's success is often linked to the ability to get the tax payers to foot the bill for its grandiosity: "The city also provided Vornado with up to $17 million in mortgage-recording and sales tax breaks for the project and an additional $5 million in sales tax exemptions for Major League Baseball’s network, for creating 250 new jobs. Although the site is close to public transportation, the city and Vornado argued that it, unlike other stretches of 125th Street, was hardscrabble and difficult to develop."

As the late Mel Allen would have said, "How about that!" Does Vornado even need the public money? Not according to our friends at Good Jobs NY who testified against the hand outs: "
GJNY has two concerns with IDA’s claim that this development wouldn’t happen “but
for” the subsidies:
The cost/benefit analysis for Vornado clearly states an alternative plan that would include a department store and condominiums. It should be made clear why the city is subsidizing one type of development when the developer clearly had a plan for another. The explanation might be reasonable, but absent one the public won’t know.

Secondly, it’s not fair to assume the city needs to use tax breaks to lure MLB Enterprises considering the site has access to transportation facilities such as the subway and Metro North and easy access other business and residential locations and Yankee Stadium and Citi Field."

With the shrinkage of the building it's quite possible that the subsidies will likewise be reduced. Not to be outdone, Vornado's looking for alternative sources of public money. As the Times points out: "The city’s tax breaks would decline with a smaller building. But Vornado has applied to the Upper Manhattan Empowerment Zone Development Corporation for a $25 million loan and for tax-exempt financing, which the developer, not the city, is obligated to repay. The project would also qualify for a property tax abatement and income tax credits from both the city and the federal government."

This is the same Empowerment Zone that is systematically redlining Hispanic East Harlem, and is an organization whose president, Ken Knuckles (a planning commissioner, no less), once questioned us as to why we were, "against everything?" Someone should start to examine the activities of Mr. Knuckles and the UMEZDC, and find out why he is in favor of so many questionable things-and why, perhaps, he is such a toady to the powerful.

Clearly, as Keith Wright tells the Times, “It’s like chickens coming home to roost,” said Assemblyman Keith L. T. Wright of Harlem. “What the political forces couldn’t do, economic reality has forced upon them. Nobody wanted towering office buildings on 125th Street. We wanted it to reflect Harlem architecture.” Still up in the air, literally, is the fate of the $1 million that Vornado pledged for community benefits.

Vornado is reaching the end of its rope, and the rest of the city is getting wise to its tricks. If it believes that it will get to develop 125th Street and Second Avenue, we think that it's in for a rude awakening And if it thinks it can act to threaten the public health of Bronxites in Soundview by evicting Key Food, well, the handwriting's on the wall for these public trough eate

Its days as a favored nation are about to end. Bettina Damiani of GJNY gets the last word on the MLB devlopment: "But critics have always questioned the level of subsidies for the project and the difficulty in determining the full extent of public assistance for Vornado and Major League Baseball. “It seemed like they were getting extra-special treatment,” said Bettina Damiani, director of an advocacy group, Good Jobs New York."