In a demonstration of maximum hubris, a spokesman for Related defends the rent disparities by pointing to the fact that Related paid $40 million to buy out Bunztmann lease. To us that is more of an indictment than a defense since the $40 million is not only risk-averse (The City guarantees the money and will reimburse Related if the deal folds), but is also way below the value that the lease and the development rights would have fetched in an open bidding process.
On top of that, as Juan Gonzalez underscores today, the House of Detention has apparently been gifted to Related. This $40 million property makes this entire deal a wash. When you put things in this perspective the unfairness of the rent disparities becomes glaring.
So, the City seems OK with the “ghetto merchants” paying Related’s development costs but feels it has no obligation to assist the BTM merchants in their relocation efforts.
In fact, if there is no viable site available it is not clear why EDC and Related cant develop the now available Velodrome site for a new wholesale-retail BTM. This is would not only be the right thing to do, it is exactly the kind of mitigation that the CEQR technical manual advocates when businesses are threatened with displacement:
Similarly, for actions that would result in significant impacts because of direct displacement of businesses, alternative sites should be considered that would not displace any businesses. If those businesses occupy only a portion of the project site, a smaller project or an alternative configuration that avoided them could also be considered.