Wal-Mart Cries for Help

Acting as if his company was the struggling corner store, Wal-Mart's CEO Lee Scott told the National Governor' Conference on Sunday that his chain needs help with spiraling health care costs. Yeah, as if he were actually paying health benefits to the majority of his workforce.

If this wasn't so sad it would actually be quite funny since Scott claims that the company's health care costs "have risen 19% in each of the past three years and it's only a matter of time before it, along with other businesses, cannot sustain rising costs." Especially, we should add, those others that are truly covering their workers at the same time they're trying to compete with the Wal-Marts and BJ's of the world.

What is heartening is that it appears as if the campaign against the retail giant's poor record on benefits is beginning to bear fruit. As reported in AMNewYork (courtesy of the Associated Press),

"Under mounting criticism Wal-Mart last fall offered new lower-premium insurance aimed at getting more of its work force on company plans."

There are even new provisions that cover children of part-time workers.

All of which comes at a time when Wal-Mart is still the country's leader in employees on the government dole. Last Friday the Columbus Dispatch informed its readers that the retail giant "had the most workers on government health insurance rolls" in the state of Ohio (ahead of McDonalds).

At the same time that Lee Scott is trying to play catch-up and burnish his company image he couldn't resist taking a shot at health care legislation that is aimed at compelling companies to get their employees off the public rolls. He resents the requirement that companies "spend an arbitrary percentage" of payroll on benefits.

We're all for a nationwide approach to reining in health care costs. Wal-Mart, however, is the most inappropriate spokesman for this effort.

They Paved Staten Island and Made it a Parking Lot

We’ve mentioned in the past that Staten Island traffic congestion is already nightmarish and that the road infrastructure, according to the SI Chamber of Commerce, is at or above capacity. We’ve also mentioned that the borough’s top officials have called for a “Marshall Plan” to fix the myriad traffic issues on the Island.

Despite this, developers are still pushing additional automobile-dependent projects. One such proposal is the NASCAR speedway that has drawn considerable opposition from a wide cross-section of Staten Islanders. Of course, the 80,000 fans coming during a race weekend worries people but there is another aspect of the racetrack plan that isn’t talked about as much but will have a profound impact on the maneuverability.

According to the SI Advance, our friends the Related Companies want to build a 620,000 sq. ft. mall, similar to their Gateway Estates in East New York, as part of the NASCAR project. Councilman McMahon is concerned:

The potential traffic impact of that kind of lineup has City Councilman Michael McMahon calling the retail center a "Trojan horse."

During a peak Saturday shopping hour, the developers expect more than 1,800 cars coming into the center, and another 1,500 leaving.

It's the element that's sort of been presented as a gift, and no one's really looked at it. And it may end up being a thing that has a very serious impact on traffic and quality of life," McMahon (D-North Shore) says.

Of course Related says everything is going to be fine:

But the developers downplay the possible burden, saying much of that traffic would be on the road anyway, heading to New Jersey's big stores.

They also contend the road improvements they'll put in place for raceday events -- including new on- and off-ramps on the Island's two expressways -- will be able to handle retail traffic.

On race weekends, the developers predict in their traffic plan, fewer customers will show up because they'll be deterred by "the unusual race day travel conditions."

This is typical developer pabulum and if Related’s Bronx Terminal Market traffic analysis is any indication, nothing the politically-connected company asserts should be trusted.

Wal-Mart and BJs

The other issue is whether Related is going to tenant this mall with a Wal-Mart or BJs. The latter is the most likely option considering the two companies’ close relationship and Related's push to add the non-union store to its South Bronx Gateway Center:

Based on Related's other retail projects, though, BJ's would be a good bet.

Related has included a BJ's in its in Brooklyn and College Point, Queens, retail centers, and it plans to build another at the site of the old Bronx Terminal Market.

We’ll keep you all updated.

Shaw Departs

All of the local papers are reporting on the departure of Deputy Mayor Marc Shaw who's leaving the Bloombergers to join with the real estate development company Extell. Shaw will become Extell's VP for "strategic planning." We wish Marc well and can't help but use his departure to muse on a constant theme of ours: the interconnection of politics and real estate in this city.

You'll notice that Mr. Shaw didn't open up a neighborhood bodega or go toil with a public spirited not-for-profit. We can't really blame him for this since we know that Marc has children he needs to put through college. That's just the point, however.

Real estate is the premier industry in this city and folks in government are quite aware of this. Doing things for these folks makes sense because their interests seem to naturally be in the public interest, it's part of the "mobilization of bias" we have been talking about.

But of course there's another aspect of this that is less sanguine. The fact that the nexus of money and power resides in this quadrant creates a symbiosis that leads to the kind of revolving door we see with the lucrative departure of Marc Shaw. There is then a built-in self interest involved in the decision making process when it comes to economic development in this town.

Promoting development and the developers behind it has a potential benefit for the government official. This has been especially true of the good folks at EDC where the revolving door is well greased. As a result, policy is crafted with the built-in bias we talked about. Accountable development is sacrificed since the "accountants" are accountable only to their own worldview and personal self-interest.

The Young and the Restless Wal-Mart

You might have wondered what it would take for the NY Sun to find a reason to praise Andrew Young. Wonder no more. You see Jimmy Carter's favorite UN ambassador has come in for high praise because he has enlisted in the fight over Wal-Mart, lending his considerable prestige and support to the retail giant.

The Sun's editorial is entitled, "The Right to Low Prices", and goes on to underscore just how much the Sun feels that the retailer does for poor folks. Quoting economist Jason Furman the editorial opines that the successful effort to stifle Wal-Mart will lead "to higher prices that disproportionately harm lower-income families."

Going on in its praise of Mr. Young the Sun depicts the Wal-Mart fight as a "civil rights" battle where "the poor benefit most." Listen closely, Can't you hear the cadences of "We Shall Overcome" emanating from the lower Manhattan offices of the Sun? This is surely the silliest thing we've read in quite some time.

Let's put aside the fact that the Young-led Working Families for Wal-Mart is one well-funded Trojan Horse that will use poor people to enrich not only Wal-Mart, but of course Young himself. The Sun should know better and should be more aware of the ecology of neighborhoods in this city and the role of immigrant entrepreneurs in their resurgence. These are the issues we raise in our "conservative case" against Wal-Mart and they are especially germane to this city.

Still, the enlisting of Andy young is a harbinger of things to come as Wal-Mart uses its unlimited resources to line up the city's eager "booty capitalists" in its effort to penetrate New York's market. It won't do much good in Staten Island or Monsey, New York, but it will certainly resonate in East New York, the South Bronx and Jamaica. And this is where the real battle for New York will take place.

Toussaint not a saint

The New York Post editorializes today about the relatively high raises TWU Local 100 President Roger Toussaint received as compared with his rank and file. The Local’s rules explicitly forbid its employees from carrying over vacation time but an exception was made for Toussaint so that he could receive the increased salary. The Post reacts:

Now it comes to light that [Toussaint] flaunts the TWU's internal rules, too.

He claims he was just cashing in unused vacation time, not getting a true raise.

But that's a problem: TWU rules also say vacation time can't be carried over.

And this is the man who led Local 100 into battle.

Though we disagree with the Post’s general anti-union sentiment and failure to criticize MTA, they are absolutely correct that not only was the TWU’s President blithely breaking his union’s own rules but that this transgression is part of a larger failure of leadership. We believe that the rank and file realize this and that Toussaint’s days as the head of Local 100 very well may be numbered.

Related’s CBA Is Criticized Again

According to Heather Haddon in the most recent Norwood News, community groups continue to criticize the “community benefits agreement” for the Related Companies’ Gateway Mall, saying that the negotiation process was illegitimate, the concessions were minimal and the document not even endorsed by the taskforce ostensibly set up to draft the agreement:

“It’s a disgrace,” said Pasquale Canale, president of the 161st Street Merchants Association. “We don’t feel that the community got anything.”

Assemblyman and Bronx County chief Jose Rivera said most of the credit for the “benchmark” CBA belongs to his chief of staff Ululy Martinez (since the community wasn’t involved it’s probably appropriate not to mention them). Martinez said he consulted the touted agreements from California and admitted that while the Bronx version wasn’t as good it came close.

We guess that for Martinez a paltry $5 million CBA that was negotiated after the land use process began, did not involve direct talks between the developer and affected communities and does not even apply to the development’s tenants is close to the comprehensive Staples or LAX airport agreements. And when pressed on the fact that the Gateway agreement does not force Related to do anything:

Martinez said Related was reluctant to make the agreement binding, but that officials succeeded in adding “enforcement mechanisms.” He didn’t elaborate on those measures.

When a developer is under no pressure of course it’s not going to sign a binding agreement. And if the document isn’t binding, what good is it?

The article continues to highlight community criticisms of the CBA and points out that a majority of the groups originally involved did not sign. Greg Bell, from Bronx Voices for Equal Inclusion, succinctly explains the lack of enthusiasm for this “historic” deal:

“Our two main focuses are transparency and inclusion,” Bell said. “This had neither.”

Borough President Carrion’s office responded, acknowledging that perhaps this was a tiny bit problematic:

Anne Fenton, a spokesperson for the borough president, admitted that the rushed nature of the endorsement process wasn’t ideal, but she said that the signatories did represent each of the committees. “We chose three people that were heavily involved,” she said.

Wow, three people! And who were these three groups that are supposed to represent the South Bronx community? Two are government controlled entities and the one community-based group is located 3.5 miles from the project site.

As we’ve mentioned before, it is important to criticize this agreement because certain elected officials and developers will attempt to use it as a model for future developments. Pat Canale, of the 161st Street Merchants summarizes this point:

Critics worry that a closed-door process has implications for the neighboring Yankee Stadium development. The new stadium and parking garage, which would put replace two park, is moving forward despite growing community opposition.

Canale feels burned by Bronx officials. “How can you forget the neighborhood that put you up there?” asked Canale, who collected over 250 signatures against the stadium in less than two days. “The Yankees weren’t the people who elected you.”

New York's Business Climate

As the NY Sun reports today the non-partisan Tax Foundation has found that "New York State has the most hostile business climate in the nation, largely due to higher personal income, sales and business taxes." This report, coming as it does on the heels of similar previous appraisals, makes it clear that our Republican elected officials have failed in their efforts to make the state and the city more business friendly.

Unfortunately, it doesn't appear that this message is getting through, since we don't see any of our city officials proposing tax and regulatory changes that would begin to alleviate this burden. Remember it was Mike Bloomberg who describe NYC as a "luxury item" and characterized the protests of bodegas against the confiscatory cigarette tax as a "minor economic issue."

Bloomberg has yet to demonstrate that he sees economic development as anything but the aggrandizement of large real estate interests. Will the City Council have a different perspective?

In Defense of Lobbyists

In today's NY Post the paper editorializes in support of lobbyists. What's really compelling in the piece is the way the Post goes after the mayor's rich man's noblesse oblige arrogance . To wit: "Bloomberg, as usual, is being hypocritical--this time in a classic 'the rich are really different' sort of way."

What's really interesting here is that it is the Post, and not the "get the money out of politics" NY Times (which broke the original story in this regard), that sheds a harsh light on the mayor's use of his great wealth to promote his own political agenda. "The mayor, the wealthiest man in American politics, has been giving for decades. Lately, though, his generosity has been locally focused...Beyond his longtime generosity to medical centers and cultural institutions, his gift list now includes many more local community and ethnic associations."

As the Times reported last year and the Post re-emphasizes in its editorial, "In 2004 alone...Bloomberg, with an enhanced regional focus gave some $140 million to 'more than 800 institutions and groups'-strategically spread around all five boroughs." And the mayor's future career as a philanthropist gives him even greater leverage, as groups vie for his continued largesse.

All of which makes a joke out of the mayor's interest in restraining the putatively nefarious influence of others. It is exactly as we have been saying, great wealth creates its own conflicts and those who promote lobbying and campaign reform without acknowledging this are not going to craft good public policy.

Lobbying Reform

In yesterday's NY Times the paper editorializes in favor of the recently announced lobbying reforms put forward by the mayor and endorsed by the council speaker. What's amusing in the paper's editorial is the assumption, without any evidence to substantiate the opinion, that there is a "kind of Jack Abramoff-on-the-Hudson scenario" operating on the City Council side of City Hall.

The Times goes on to say that this "coziness has been a huge disservice to New York's voters, whose interests have regularly been trumped by those with the money to hire lobbyists." Once again, it would be nice if the so-called paper of record would offer at least one example of this obviously egregious situation, instead of treating the observation as a revealed truth that is self-evident to all New Yorkers.

The paper also misconstrues how the political process works in this city. Wealthy interests often get their way because, well, they have inherent clout themselves. The Related Company spent tens of thousands of dollars on directly wooing Bronx officials. Its lobbyists were not the evil middlemen in this quest but played a secondary role.

In spite of this (the Times would call it influence peddling), there is nothing in the Bloomberg-Quinn reforms that addresses this potentially untoward situation. What the paper also misses is that there is a Weltanschauung in this city in favor of development. The existence of this worldview leads most of the media to reflexively endorse projects that "create jobs" and promote "development" without examining the relative merits with any real due diligence or, better yet, healthy skepticism.

The shame here, and we come back as always to the Bronx Terminal Market, is that the NY Times acts as a conservative force in NYC politics because its own interests are conjoined with what has been characterized as the city's permanent government. This leaves the paper unable to credibly evaluate the "special interests" that the Times itself is so much an integral part of.

Once again we must say that if lobbying reform is to have any credibility it needs to focus on the city's real estate industry and be linked closely to a concept of accountable development and a reform of ULURP. For a more comprehensive look at this perspective see the recent Gotham Gazette post on "Redefining Economic Development."

Solid Waste Battle

We have been commenting on the "Prague Spring" that has been orchestrated between the mayor and the City Council. Our position has been that the way in which city government is structured, with its strong mayoral form of governance, makes it essential for the City Council to act as an important check on executive excess and even stupidity. This is especially true with a mayor whose great wealth apparently gives him as sense of both noblesse oblige as well as infallibility.

Given these parameters the council needs to evolve into a real legislature, something that is difficult under the restrictions of existing term limits. That is why we took no offense when Speaker Quinn recently axed all those staffers. If Chris Quinn is going to restructure the council and strengthen its capacity to be a real counterweight to the mayor then we're all better off.

It goes without saying that the garbage issue, because of the profound weaknesses in the mayor's SWMP, offers the council the kind of opportunity to step up and truly legislate. The first responsibility of the council is to offer a comprehensive evaluation of the SWMP's flaws. A close look will expose its failure to come up with any significant waste reduction plan and, once this is clearly shown, the profligate nature of the building of so many marine transfer stations will become apparent.

Let's be clear. The use of food waste disposers for the reduction of both residential as well as commercial garbage offers the most realistic as well as economical method to alleviate our city's costly dependency on trucking garbage to out-of-state landfills. That is why the recently introduced measures (Intros 112 and 133) need to be advance quickly, along with a thorough critique of the limitations of the administration's proposed SWMP.

The previous council's failure to do this allowed the mayor to claim the policy high ground in his insistence on "fair share" siting for the city's transfer stations. As we have said all along, siting that allows for fair burden sharing is no substitute for a comprehensive waste reduction strategy that ameliorates everyone's burdens.

Toussaint’s Bind

According to Steve Greenhouse of the NY Times:

The union representing New York City's subway and bus workers filed papers last night opposing the Metropolitan Transportation Authority's call for binding arbitration to settle their long-running contract dispute. The union said a new agreement could still be reached through negotiations.

The main problem, however, is that TWU Local 100’s bargaining position has been tremendously eroded due Roger Toussaint’s fruitless strike and a proposed contract already turned down once by the members. The Times reinforces this point:

When the authority formally asked for binding arbitration on Jan. 25, it toughened its proposal, taking the pension reimbursement off the table and asking that new employees pay 6 percent of their wages toward their pensions, up from 2 percent for current workers.

According to the Post, the most likely course of action is that the Toussaint will ask for another vote on a contract similar to the one rejected last month. The major question is whether the “beleaguered” union head still retains enough control to make members accept a deal they feel is substandard, especially in terms of the required health care payments.

In fact, on Tuesday February 28, 2006 from 4 p.m. to 6 p.m. members of the TWU will be protesting in front of the NYC Transit Health Benefit Office in Brooklyn demanding, among other things, that the 1.5% “health care tax” must be excised from proposed contract. This certainly isn’t good news for the current TWU leadership and is most likely a sign of things to come when Toussaint is up for reelection later this year.

Wal-Mart Health Care Spending Drops

According to "America Pays, Wal-Mart Saves,” WakeUpWalMart.com’s new study of Wal-Mart’s health care policies, what was thought to be a bad situation is even worse. Here are some key findings:

Wal-Mart health care spending actually dropped in the latest public filing with the Internal Revenue Service (from 2003-2004);

In 2005, nearly 300,000 Wal-Mart workers and their family members depended on taxpayer-funded public health care at a total cost to American taxpayers of $1.37 billion.

In 2005, Wal-Mart failed to provide company health care to 57% of its workforce, leaving over 775,000 Wal-Mart workers and their families without company health care;

The Wal-Mart health care crisis will cost taxpayers an estimated $9.1 billion over the next five years;

As we’ve commented in our Conservative Case Against Wal-Mart, a major concern is that the company is exploiting the American taxpayer by having them subsidize its “everyday low prices”. With 13% of its workforce on public assistance and a 3.5% drop in health care spending (compared to 7.6% jump for the average company during the same time), Wal-Mart is assuming that it will continue to receive corporate welfare handouts. Check out the WakeUpWalMart.com site for all the details.

In response to these revelations as well as the fair share healthcare bills in places like New York City and Maryland, Wal-Mart announced that it plans to improve the health care offered to employees. According to the NY Times:

Wal-Mart said that for the first time it would permit part-time employees to enroll their children in the health insurance plan, and it pledged to reduce significantly the waiting period before a new part-time employee is eligible for benefits, though it declined to specify the reduction.

It’s good to see Wal-Mart responding to valid critiques and attempting to improve its health care plans. However, like Wal-Mart Watch, we are pleased by cautiously so:

“Our curiosity is certainly piqued by his interest in ‘significantly reducing the waiting period for part-time associates.’ After all, that waiting period is a stunning two years. Moreover, Wal-Mart has admitted in internal documents that it is actively pushing full-time workers onto part-time status, reducing both their earning power and benefits.

“And Scott’s other announcements to tinker with their health benefits must be evaluated in the harsh light of the multitude of hidden charges buried in their plans. Wal-Mart’s new so-called ‘Value Plan’ remains a raw deal for its employees who can’t afford the high deductibles and strict eligibility requirements.

“Wal-Mart can and should act as a catalyst for change in the American health care system.”

Spitzer Attacks Governor's Refusal to Enforce the Law

As the NY Post is reporting today the state Department of Taxation and Finance, under the direction of Governor Pataki, "defiantly has said that it will not enforce a new law requiring Indian tribes to pay tax on the sale of cigarettes to non-Indians..." The law is scheduled to take effect on March the 1st next week.

This refusal has elicited a stinging rebuke from Attorney General Eliot Spitzer who said that "the department will be breaking the law and costing taxpayers millions..." All of this is, as we have commented, a remarkable display of arrogance on the part of the executive branch. It now appears that our conservative, law-and-order governor is deciding which laws he feels he should enforce, clearly a recipe for anarchy.

Even more so considering the history of this controversy and the outbreaks of violence in the 1990s when Indians were protesting the state's moves to enforce these tax laws. As State Senator Raymond Meir of Utica, NY, told the AP yesterday, "This is a dangerous precedent...It's an invitation to anarchy."

Tax Commissioner Eristoff continues to waffle here and says "he'll wait and see if the legislature agrees with Gov. Pataki to again delay enforcement by a year-a delay that the Democrat-led Assembly already rejects." Or, as Assemblyman Pete Grannis says, "No one is considering it seriously."

The report goes on to speculate that, "The next tier of action after Wednesday could be lawsuits, by non-Indian retailers against the state or by the state Attorney General's office against wholesalers, but either course would be lengthy." What's left is the possibility of direct legal action against the Indians themselves. These are the folks who are willfully failing to comply with requisite state and federal law and are misleadingly advertising that their cigarettes are "tax free."

All of which makes it even more compelling for the city and state to refrain from imposing any new taxes on cigarettes until this issue is resolved. The greater the disparity between legal outlets and those that are avoiding the tax the larger the black market that is created. The money quote comes from Eliot Spitzer:

Come Wednesday, state government will be breaking the law and begin costing taxpayers millions of dollars by choosing not to enforce legislation that would end the huge sales advantage that Indian tribes have over taxpaying competitors off reservations.

Wal-Mart: Not in My Backward

Via Wakeupwalmart.com, a new real estate survey demonstrates that while Americans consumers may like Wal-Mart they do not want it anywhere near their communities:

The Saint Index(C), a new survey by the Hingham, MA-based Saint Consulting Group, confirms Americans' love-hate relationship with Wal-Mart. Even as the global company revs up a campaign to protect its reputation, and despite Wal-Mart's undeniable popularity among consumers, almost two-thirds of those surveyed (63%) said that they would oppose a Wal-Mart store if one were proposed in their community.
[...]

According to The Saint Index, only landfills, quarries, power plants, and casinos generate more vehement community opposition than large retail stores. However, respondents singled out Wal-Mart as particularly unwelcome.

This NIMBY factor is extremely relevant to the debate over Wal-Mart entering in New York, including places like Staten Island. Because this city is a series of overlapping neighborhoods – many of which already suffer from traffic congestion and other negative affects associated with box stores – Wal-Mart is going to have a very hard time finding suitable space away from residential communities. Combine this dilemma with the overall concern New Yorkers display towards the store and the world’s largest retailer is going to find itself struggling mightily to enter the 5 boroughs.

Will The Council Respond?

We have been commenting on the issue of the lease transfer involving the emergence of the Related Company as the landlord of the BTM property. Our argument has been that the lease needed to be put out for public bidding after a full appraisal of the value of the land was done. Normally the transfer is then made subject to a land use review process.

This contention was the crux of the legal challenge that the BTM merchants unsuccessfully brought against their eviction from the Market. It was unsuccessful because Judge Cahn ruled that, under the City Charter, the mayor had the power in regards to the city's public wholesale markets to override the provisions (Section 384) of the Charter requiring the public bidding.

It is our belief that this is one crackpot ruling but, as it stands now, it is the law and it means that the Council's power of review that inhere in Section 384 have been abrogated. This is a concern, or should be, of all of the businesses and thousands of workers in the wholesale markets. It should also be a concern of the City Council since the ruling exists as a direct challenge to its oversight role.

As it stands now the mayor (or his commissioner in this case) has unbridled power to evict businesses and punish workers. He can even, as the BTM case demonstrates, eliminate the entire wholesale market if a "better" use comes along.

It is time for the Council to address this "market exception" and revise Section 1301 so that it clearly delineates the mayor's powers and subsumes them under Section 384. This is the kind of checks and balances we've been talking about in our concern with the institutional integrity of the City Council.

A Massive Proposal

Under the sub-title “Wal-Mart Supercenter could stress Valley, traffic, stores, people” the Rockland Journal News editorializes against the planned Suburban Supercenter we talked about yesterday.

Due to poor planning and inadequate infrastructure, the road where Wal-Mart wants to build is simply inappropriate for a 215,000 sq. ft. Wal-Mart, the paper says. They point to the local mayor’s concerns:

But Mayor George Darden is worried. A Wal-Mart Supercenter is planned at the former Rockland Drive-In Theater in Ramapo's Monsey hamlet, next to Kennedy Drive, and the mayor is concerned about the effect on area businesses and a further worsening of traffic in the busy Route 59 corridor.

"It's already impossible to go down Route 59 there," Darden told reporter Sulaiman Beg. "I think it's the wrong place and the wrong time. It's not a good idea."

Similar to the situation in Staten Island, the elected officials and residents of Rockland County are concerned with their quality of life and are questioning whether adding a store that will generate over 1,000 peak hour cars is appropriate for a crowded area already saturated with strip malls. Also like Staten Island, the community sees better uses for the plot that Wal-Mart wants to build on:

Darden said he would like to see a passive park at the site instead, a good idea considering this section between Route 59 and the Old Nyack Turnpike is largely built up with multi-family housing approved by Spring Valley, as well as numerous shopping strips.

We agree with Mayor Darden and especially considering that the land right next to the proposed Wal-Mart is state owned and has been promised to the community for parkland. While certain officials will disingenuously tout the tax revenue this supercenter will generate (the supercenter would replace a regular Wal-Mart so how much new tax revenue will actually be generated?), there needs to be proper planning and consideration of traffic and quality of life issues.

The editorial ends:

Additional drainage and traffic studies are supposed to be in the works, and the proposal will go before the Planning Board for a general discussion at some pointy.

This proposal needs more than a "general" discussion.

It requires full input from Ramapo, its Comprehensive Plan designers, Spring Valley and urban renewal officials, residents and the New York State Department of Transportation. If the land can be saved for a park, that would be best.

If not, scale this proposal way back, for it would affect too many adversely.

We would say that the project needs to be scaled back entirely for its adverse impacts won’t be mitigated until Wal-Mart is out of the picture.

Checks and Balances?

In today's NY Sun, Jill Gardiner focuses on the rapport between Mayor Bloomberg and Speaker Quinn and writes that, "the two have acted like old friends since Christine Quinn was elected to the post seven weeks ago." In particular, Quinn stood with the mayor on his lobbying reform package and seemed to be part of the Bloomberg team in the dog-and-pony that was done on education financing in Albany last week. How are we to react to this lovefest?

Well, given the comments of the mayor's spokesman, Stuart Loeser ("Given the choice between a constructive partner in governing and the alternatives, the mayor certainly prefers a constructive partner"), we're a mite bit uneasy with all of this coziness. And the positive comparison to former speaker Peter Vallone is both inaccurate and unnerving.

Vallone was quite capable of standing up to the mayor, as he did on the Guiliani mega store proposal, but often let the mayor bulldoze him on faux mob-busting initiatives in carting and the public markets like Local Laws 28 and 42. Not to mention the mayor's attack on HANAC where Vallone simply hid under his desk.

All of this "partners in government" rhetoric certainly gives us pause because we're simply not all that enamored with the Bloomberg worldview particularly his tendency to see development from the top down. It is a paternalistic liberalism that lacks creativity and entrepreneurial spirit when it comes to the role of government.

What is particularly queasy in the Sun piece is the comments of mayoral toady Mitch Moss: "It's always better to start out harmoniously. Your alliances will help you get through the rougher times." What a load of self-serving crap! And when Moss and Loeser are whistling blithely you know immediately that the mayor is the senior partner in this arrangement and is getting the bigger cut of the political profits.

With a governmental structure that heavily favors the mayor it is important that the Council begin to sharply carve out its independent role because as Tom Lehrer reminded us about Vice President Hubert Humphrey, "Second fiddle's a hard part you know, when they don't even give you a bow."

Quinn needs to find a number of issues that she can use to properly carve out the Council's independent role. She has already flunked the Gateway issue where she allowed the mayor to roll her on the issue of the lease transfer and the Council's oversight responsibilities. Our hope is that solid waste will provide Quinn with the kind of an issue she can utilize to elevate the council's independence and proper place as an important check on mayoral incompetence.

One thing we know for sure is that the little guys, neighborhood folks and small businesses, have no real place in Bloomberg's world. Quinn's collaboration then, if it means less independence and more reliance on supporting mayoral initiatives, does not bode well for these less powerful constituencies. Just ask the BTM merchants.

Suburban Super Wal-Mart Update

A couple months ago we reported on Wal-Mart’s decision to open up a supercenter in Spring Valley, in the suburbs just north of New York City. Due to traffic, planning and small business concerns, the town’s mayor and county legislator are both very leery of the project.

According to our discussions with county officials, the town’s planning board will most likely issue a “positive declaration” within the month forcing the Wal-Mart developer to conduct a full Environmental Impact Statement (EIS). However, this decision can be overruled by the town board so we will be pressuring the supervisor and other board members to uphold any positive declaration.

The need to environmentally review a Super Wal-Mart should be obvious especially in this case. Considering the development would be on busiest local road in the county, with one of the highest number of traffic accidents, an independent analysis is key. Furthermore, we have learned that the developer is actually petitioning to reduce the number of required parking spaces, something that would exacerbate the predicted traffic problems.

In addition to our continued political outreach, we will be contacting the various small businesses that would be impacted by a Wal-Mart. Many of these stores are owned and patronized by the tight-knit and influential Orthodox Jewish community in the area and, as this Washington Post article highlights, Wal-Mart has been adept at dominating various business sectors including religious items. For this reason as well as others, the world’s largest retailer may find stiffer resistance in Spring Valley than it anticipated.

A Raise for Roger

Yesterday's NY Post reports on yet more problems for the TWU's Roger Toussaint. It seems that members are questioning whether Toussaint violated union by-laws when he orchestrated himself a series of pay raises, raises that exceeded the "meager ones" received by Local 100's rank-and-file.

In the Post article Toussaint's Sancho Panza, Ed Watt, admitted that "an exception was made for Toussaint, but countered that, 'The Post's agenda is obviously to discredit Local 100.'" Some comeback. When faced with unpleasant facts Watt looks to shoot the messenger.

This line of defense continues in today's Post follow-up with Watt countering the paper's disclosure with, "It is unfortunate that the New York Post continues to ignore even basic facts in favor of their anti-worker agenda." That may be so about the Post but it doesn't take away from the serious questions about Toussaint's leadership.

As one worker comments, "People get into a position of money and prestige and they forget about the people they represent. He should be held accountable." What this means is that even more pressure is placed on Toussaint to really deliver the goods on a contract. Certainly the reservoir of goodwill has evaporated.

All of which adds to why there is a growing discontent with Toussaint's stewardship of the local. It will be interesting to see if Roger the dodger can overcome all of this as union elections loom later this year.

Troubles in the SWMP

According to yesterday's NY Times, Mayor Bloomberg's garbage disposal plans may be, well, in the dumps. The plan's problems devolve from the controversy surrounding the Manhattan aspects of the disposal methodology, particularly the use of two sites on the West Side and one on the East Side for waste transfer stations. As the paper reports:

"But some environmental advocates are worried that the new obstacles will not only delay its adoption and execution, but compel the city to abandon some elements entirely."

What's tricky here is the interdependence of all of the parts of the disposal plan. Without the Manhattan sites everything else in a "fair share" methodology is put at risk. This is put best by the NRDC's Mike Izeman:

"Bloomberg won the land use battle, but the larger solid waste war--if that's not too strong a word--between the Council and the administration is still unresolved."

All of which calls to mind some of our comments on the deficiencies of the city's proposal. The concept of fair share is only good policy if the overall disposal plan is progressive at reducing the amount of garbage the city generates in the first place. Without this component, fair share only means that everyone is made to suffer equally.

The SWMP as it is presently constructed fails miserably in the area of waste reduction. That is what makes the issue of food waste disposers so compelling. This methodology, if implemented properly, has the potential to increase the level of waste reduction and to obviate the need for the number of transfer stations proposed in the current SWMP.

The critics of the use of disposer remind us of the old axiom about democracy: "It's the worst political system, except for all the others." As the leading experts on their use have pointed out, when a comparison of disposers with the other disposal methodologies is undertaken, this method out performs all of the others on both environmental as well as economic grounds. And, given the absence of realistic waste reduction strategies in the SWMP before the Council, the disposer approach becomes essential.

It is time for the City Council to step up, challenge the mayor's faulty assumptions, and devise a better plan. Food waste disposers should be a significant component of such a revised SWMP.

ED Debate

The disingenuousness about the use of eminent domain as an economic development tool continues. The latest example, cited by Jacob Sallum in a Washington Times column, comes from Indianapolis mayor Bart Peterson.

Last fall Peterson told a Senate committee that "most people agree to sell"when face with an ED action. Sallum's comment: "...in the same way having a gun available makes it possible for a bank robber to negotiate with a bank teller."

Sallum goes on to describe the efforts underway all over the country to rein in the ED abuse. He is particularly concerned because last summer's Kelo decision "allows local governments to take perfectly good (not 'blighted') homes and businesses on behalf of private developers." In agreeing that any private use that enhances local tax revenues is fair game, the SC ruling has the potential of opening up a floodgate.

Peterson also dragged out the infamous "plan", the one that needs to be in place before any ED can proceed. As we have already commented, there is always a plan, and its existence offers no protection to anyone being threatened.

The key point in this discussion is Sallum's observation that all it takes to seize someone's home or business is "the unilateral judgment of politicians that society would be better served if the property were in different hands." A scary thought indeed, especially in New York City where, as one councilmember remarked about a large local real estate company: "Related is a fourth branch of government."

Quinn Purge

The Friday night massacre at the City Council was to be expected. This is the nature of the spoils system and in many ways is preferable to the lifetime tenure of a civil service bureaucracy. Inevitably there will be a number of good people who are let go and a number of numbskulls who are retained.

The democratic nature of the periodic purging is that it allows the new leadership to put their own people in place and set their own agenda. The real criticism should begin after this process is completed and the direction of an administration or legislature is made clear.

From our perspective, and given the early moves that have been displayed, we are concerned that the new speaker has lost touch with her neighborhood roots and has become enmeshed within the concatenation of special interests that have traditionally toyed with the Council.

Whether this comes to totally characterize her tenure remains to be seen and we're hopeful the situation evolves sufficiently to create the appropriate balance that is necessary to good government. What will be particularly important to see is how Quinn cultivates the kind of institutional integrity that will allow the Council to perform its vital role in a democratic system of checks and balances.

The Thoughts of Wal-Mart’s Lee Scott

The NY Times reports today on internal communications between CEO Lee Scott and Wal-Mart’s managers it obtained from Wal-Mart Watch. A number of Scott’s thoughts are quite revealing but from our point of view the following was the most interesting:

A manager of a Wal-Mart's store in Medford, N.Y., asked about Wal-Mart's repeated failure to gain zoning variances and other government permits to open its first store in New York City. "We're going to have to be a lot more sophisticated about it than we have been," he said, saying that Wal-Mart brings good jobs and great prices. "But I think you'll see us get the stores."

We’re pleased that our efforts in Queens and Staten Island have shown Wal-Mart that they can’t just waltz into New York City. And we believe that our success so far demonstrates that the “good jobs and great prices” argument is seen by many New Yorkers as either untrue or outweighed by the retailer’s considerable negatives.

Definitely check out the whole article which has links to all of Scott’s postings from the last couple of years.

Integrity in Government Part 2

In today’s NY Sun, Andrew Wolf talks about the poor economic state of Bronx and how Borough President Carrion has done little to improve this situation. He specifically points to the recently approved Bronx Terminal Market redevelopment and says that Carrion can claim no credit for the project for it was a Bloomberg Administration initiative wholly irrelevant of the BP. As for the “Community Benefits Agreement” negotiated by Carrion, Wolf responds that this agreement is really an:

“extortion scheme that links permission to build with concessions that the local politicians can dispense to their supporters, a new form of patronage coerced from the private sector.”

Wolf is exactly right here and his trenchant comments are quite relevant to our previous comments on integrity in government. We’ve already mentioned that if the Mayor and Speaker are truly concerned about limiting special interest access to the halls of power, the first place they should be looking is the Bronx Terminal Market sweetheart deal driven by a close relationship to real estate interests.

But Wolf’s comments also demonstrate that integrity reforms need to address another aspect of the Terminal Market situation: government officials that utilize faux community benefits agreements (CBA) in order to enhance their own interests. As the “C” in CBA suggests, the community should be the recipient of developer concessions not the politicians and quasi-public agencies they support. In the case of the BTM agreement, the majority of the money is going to the Bronx Overall Economic Development Corporation (BOEDC), an agency controlled by BP Carrion, and of the few groups that actually signed the document most are government-controlled. It also seems that this same situation is occurring with the CBA being secretly negotiated for the Yankee Stadium giveaway.

Again, if the Speaker and Mayor want to enhance the honesty of NYC’s government, it needn’t look farther that the Bronx Terminal Market development and all the nefarious machinations associated with it.

"Groundbreaking" Integrity in Government Measure

Once again the mayor has used the term "groundbreaking" to describe one of his policy initiatives. The first time that we recall the term being used was when he was describing the recycling effort that was a supposed key variable in the proposed SWMP. At the time we commented that the proposal was only groundbreaking if the mayor was digging with a plastic spoon.

Now we come to the joint policy proposal on government integrity that the mayor and Council Speaker Chris Quinn announced yesterday. Our only response is: Break out the entire set of plastic utensils! It calls to mind Machiavelli's observation that, "It is better to appear good than to actually be good."

First of all the proposal is not in reaction to any particular scandal. So there is no indication that, in forwarding this initiative, there will be any improvement in governmental integrity. It would have been nice if there had been a set of hearings preceding the policy formulation. Rather what we are given here is an a priori set of assumptions that, quite frankly, fail to address "the sway of special and moneyed interests..."

In fact the chutzpah of this proposed reform is mind-blowing. We have just recently seen the approval of a project that, at the end of a 99 year lease, will be worth $4 billion to a certain developer. Yet, the lease in question was never even put out to bid and it was disclosed that the CEO of the real estate company was a close friend of the deputy mayor. Yet somehow this kind of "special favor" goes unmentioned at yesterday's press conference.

In addition, the company in question lavished tens of thousands of dollars in campaign contributions, money that, in at least one case, got an elected official to completely reverse a public position. Yet nowhere in the reforms proposed yesterday do we see this kind of special interest influence addressed. Therefore the concentration on lobbyists, while certainly appropriate, leaves a huge policy gap in place for those concerned with governmental integrity. As the Alliance's Richard Lipsky says in today's NY Daily News, "It's the kind of loophole you can drive a whole fleet of trucks through."

If the mayor and speaker are really interested in reform they can start by capping the money that a company like Related can give to elected officials. Make the cap similar to the one proposed for lobbyists but give it even more strength by putting a limit on the total amount the company, and all of those who feed on its largesse (lawyers, insurance brokers, land use consultants, et al), can contribute to elected officials.

While the council is at it they should look to greatly strengthen the power and independence of the city's Conflict of Interest Board. As we have pointed out during commentary on the Doctoroff-Steve Ross love fest at the Bronx Terminal Market, the COIB needs a major overhaul. The Board should be completely independent of the mayor and the council and, in addition, should be invested with investigative and prosecutorial powers.

So, we're glad that NYC is looking to clean up its act, even though the evidence of its dirtiness is yet to be proffered. If the Council is really interested reform, however, it needs to figure out a more comprehensive package that targets the most special of interests in this town: real estate.

Today's NY Sun piece by Jill Gardiner picks up Lipsky's comments in this regard:

"I don't necessarily think that lobbyists are being unfairly targeted, what I'm saying is that by only targeting lobbyists it [the proposal] overlooks the essence of special interest politics and conflict of interest politics in this city, which is the power of the real estate companies"...Mr. Lipsky said if the mayor wants more 'integrity' in government, he should stop awarding developers with connections to key members of his administration plum projects.

If this isn't done than the putative reform package will underscore Murray Edelman's observation about the gap between the symbolic and the tangible in government policy making. Its passage will act as symbolic assurance that action has been taken, lulling a gullible public into what Edelman calls "quiescence", while leaving in place the system of tangible rewards for those special interests with the greatest power.

Grinding Forward

As we had hoped, at yesterday's Stated Meeting the City Council introduced the pilot program for the legalization of food waste disposers in commercial establishments, a measure that the Alliance has been promoting for the past three years. Intro 133 will allow 1500 supermarkets, green grocers and other food stores to install disposers that will greatly alleviate the disposal costs of these neighborhood businesses.

Of course the benefits of the use of disposers go way beyond the cost-avoidance that they bring to retailers. In addition, disposers will reduce truck traffic, cut down on the export of city garbage, and greatly enhance public health.

What Intro 133 will do is to establish a methodology to gauge the impact that disposers might have on the city's waste water infrastructure. This evaluation is necessary because critics of their use have claimed, without real justification in our view, that disposers threaten the environmental health of the city's surrounding waterways.

That is why the Alliance, in collaboration with Sanitation Committee chairman Mike McMahon, will be bringing in two of the world's leading experts on food waste disposers, Professors Robert Ham and Carol Diggelman to help the Council develop the evaluative methodology for the pilot
program. What is clear, however, is that the use of disposers at both the commercial as well as the residential venues is the best method at the city's disposal to reduce waste and help alleviate the municipal dependency on exporting garbage.

Which brings us to the second measure introduced at yesterday's Council meeting, Intro 112. This bill, introduced by McMahon, would mandate the installation of disposers for each new kitchen installation done in the city. In combination, the Council is definitely moving in the right direction to reduce waste and also to reduce the need for additional transfer station construction.

Bloomberg Not So "Above Politics"

Its becoming quite clear that Mayor Bloomberg, despite all the spinning that emerged from the recent mayoral campaign (spin that resonated with gullible toadies in the media), is not immune to playing politics. As Joyce Purnick analyzes in today's NY Time$, it appears that the mayor's feints against State Senator Serph Maltese may devolve from the senator's hardball tactics in 2002 over the closing of a local firehouse ( a battle that the senator won).

From our perspective the symbolic use of the above politics mantra is an ideological weapon. You see, when you claim an apolitical status in reality what you are doing is demonstrating that there are certain political forces that you aren't going to let sway your judgment. In NYC this image often involves appearing not to be beholden to organized labor. It also allows someone to posture in such a way so that the interests he is beholden to remain unacknowledged.

For a great many of our local pundits real estate interests make up the firm foundation of the city's political reality, kind of like the old saying; "What's good for General Motors, is good for the USA." They take it for granted that development, in all of its trickle down manifestations, is essential for the general good.

To an extent they are right, but only to an extent, and dependent on a proper evaluation of the nature of the development in question. A corollary to this perspective is to use the "anti-development" label to stigmatize opponents of a particular project, in the process side-stepping the kind of due diligence that should be done to determine whether or not a deal is the best deal for every stakeholder in the impacted area.

When it comes to large economic development projects Mike Bloomberg, precisely because he comes from great wealth and looks at those who have it as kindred spirits, sees the world through the eyes of the mega-rich developers. As we have said before, he is not beholden to these special interests he is their apotheosis.

NY Town Rejects Eminent Domain to Build Wal-Mart

From the the AP via the NY Sun, a very auspicious development concerning a town's attempt to use eminent domain to obtain land for Wal-Mart:

MASSENA, N.Y. - Growing public opposition has persuaded town officials to drop a plan to use eminent domain to ensure the construction of a Wal-Mart Supercenter at a local mall. "The public is not in favor of that, and we're listening," said Town of Massena Supervisor Gary Edwards. Conversations with residents led town officials to abandon using eminent domain as an option Monday, just two days before a scheduled public hearing. Mr. Edwards estimated residents opposed the idea by a three-to-one margin. Eminent domain is the power of a government body to take private property for public use.The owner must be paid fair market value for the property. Town officials considered seizing property at the St. Lawrence Centre mall where there is an empty anchor store, formerly an Ames department store. Mall owner Carlyle Development Group of White Plains has been trying for more than a year to sell the land to Wal-Mart so it could build a supercenter, which Carlyle hoped would add foot traffic to the mall that has struggled with 50% occupancy.

Manhattan's CB #8 Takes the Lead on Vendors

The Alliance has been taking the lead on the issue of the proliferation of fruit vendors all over Manhattan and we are glad to report that Community Board #8 has taken the first proactive step against the growing menace by passing a resolution at its January meeting that calls for greater regulation and enforcement of the vendor problem. The Board's reso is directed at all vendors but its provisions need to be examined by the City Council because quite a few of them need to be incorporated into new law.

The main thrust of the board's concern is the manner in which these vendors pose a threat to pedestrian safety. Pointedly, the board is worried that "current rules governing street vendors do not adequately protect the public and allow pedestrians to move freely..." It also indicates that the current rules "allow too many vendors in a given area..." This was the Alliance's point in our opposition to the council's stoop stand bill, a measure that was directed at store owners rather than vendors.

Board #8 also makes a number of other strong points. In particular, it underscores the threat that these peddlers pose to local store owners. In doing so, it points out that:

"The Community Board supports local stores that pay taxes and are responsible for maintaining the cleanliness of the sidewalks in front of their establishments...street vendors routinely ignore the cleanliness of the areas they occupy..."

After highlighting the scope of the problem Board #8 resolves the following items that the Alliance finds to be especially compelling:

1) Any street restricted to sidewalk cafe's should be restricted to street vendors

2) The city should establish a dedicated enforcement group similar to the Traffic Enforcement Unit specializing in vendor enforcement

3) The city should reinstate the Vendor Review Panel

4) The city should consider instituting 24 foot clearances for pedestrians on all sidewalks where vending is permitted

5) The ruleas governing vendors need to be standardized for easier enforcement; and (our favorite)

6) A street vendor should be restricted from selling outside a store that sells the same merchandise

All of this is good work by Board #8 and should be replicated across the city by each community board. The Alliance will be leading the way here. In addition, we have here the foundation that the City Council can use and expand upon in its tackling of the overall vendor problem.

Toussaint Fires Dissident

Following a familiar pattern, embattled TWU Local 100 President Roger Toussaint fired a union official for publicly disagreeing with him about the recently voted down contract. According to Chuck Bennett of AMNY:

Richie Rivera, was ordered back to work as an air-brake mechanic at the Coney Island Overhaul Shop, after union leaders learned he was airing his beef with Toussaint to a reporter.

Rivera, who is immensely popular with the rank-and-file, had issues with the most recent contract’s proposed 1.5% contribution for health insurance and substandard benefits for members living in New Jersey. He brought these issues to Toussaint and then things took a turn for the worse:

"I'm not surprised. The minute I walked out of Roger Toussaint's office the day we had our disagreement I knew I would be finished," Rivera said.

From that point on, Rivera was isolated and then finally fired. He says of Toussaint: “He goes on the defense and squashes his opponents.”

Bennett files another story on Rivera today, reporting that the former union leader will definitely go back to the Coney Island shop position where he represents 4,000 members, despite a substantial pay cut:

"I just want to run my shop where the union can't interfere," Rivera, 40, said. "I defended my members' rights … and now I have to defend my rights against a union president out of control."

With a contact lacking and valuable union members being fired, Toussaint is certainly not portraying himself as a leader to be trusted. We believe that as the Taylor Law fines kick in and members hear more and more about Toussaint’s secretive, dictatorial style – not to mention the deal he left on the table to go on strike – they are going to ask for more than just a token change come union election time at the end of the year.

Tobacco-Free Kids, Intellect-Free Adults

In the Alliance's campaign to close the loophole that allows Indian retailers to sell cigarettes tax-free, we have argued that the existence of this tax avoidance venue renders any new tax increase ineffective in accomplishing the stated health goals of the policy measure. Simply put, with so many tax-free avenues open the only thing that an increase does is to increase the attractiveness of the illegitimate outlets.

Which brings us to the arguments of some of the anti-tobacco advocates. One of the things that has always fascinated us, and not only when it comes to the issue of tobacco control, is the assumption that the "industry" study or report is-ipso fact-unreliable. Now we'd be deaf and dumb if we didn't acknowledge that in terms of the tobacco industry there is no credibility whatsoever.

This doesn't mean, however, that the anti-tobacco folks (or any other good government pretender for that matter) are unquestionably reliable. These people have biases as well.
Every interest is a special interest and reports and studies must be independently evaluated for their merit.

This can be seen particularly in the arguments pro and con on the issue of second hand smoke where the reports issued by anti-tobacco advocates were reprinted as gospel by a media that refused to suspend its disbelief because it by and large shared the advocates' views. Lost in all of this was the fact that the World Health Organization had done a ten year longitudinal study that failed to show correlations between second hand smoke and cancer and heart disease.

Of course none of this was reported when Mayor Bloomberg introduced his ban on indoor smoking in his first term. All we heard was the Health Commissioner's outrageous claims that 1,000 New Yorkers were dying every year from the effects of secondary smoke. Any contrary point-of-view was attributed to the evil empire-the "tobacco lobby."

Now we come to the tax question and once again we confront activists arguing public policy and making little or no sense at all. Case in point: Campaign for Tobacco Free Kids. First, they begin their arguments for higher tax increase by labeling every argument a "cigarette company myth." When you see this you know that you are in the realm of propaganda, or better yet theology.

One of the "myths" they tackle deals with the impact of smuggling. It is a classic strawman argument because it focuses, not on the impact that smuggling has on legitimate small retailers (folks they could care less about), but on state revenues. They argue in their "fact sheet" the following: That every state that increases the cigarette tax experiences a revenue boost "despite the lost sales from related smoking declines and despite any increase in cigarette smuggling or other tax-avoidance."

Of course, when you increase the cigarette tax, as the City of New York did by 1800%, revenues will inevitable increase even though sales may plummet by over half. These half wits then go on to proclaim that smuggling is a "relatively minor problem." The Campaign goes on to argue that the NYC increase "supposedly" led to the highest degree of smuggling but (strawman again) city revenues increased. This only is a minor problem if you don't own a bodega or green grocer since those outlets lost millions of dollars of sales and ancillary revenues from sales of other items that would have been accompanied when the cigarettes were purchased.

So, according to the Campaign for Tobacco-Free Kids, smuggling is still a minor problem when over half of all smokers aren't paying the tax. This is exactly the mayor's point-of-view since anything that impacts a small store's bottom line is a minor issue for him.

All of which begs the question of Indian sales. It is indisputable that this is the loophole that is flooding the streets of the city with illegal smokes. If you care about kids smoking than you should be getting on your soap box and railing against the governor. It is clear that if this loophole is closed city and state revenues will increase since the nearest available non-taxed outlets will be closed. Those are the facts that even the ideologically blinded folks of the Campaign should be able to see clearly.

Business Up in Smoke

The New York State Association of Convenience Stores (NYACS) has been one of the most diligent opponents of increasing the cigarette tax without first collecting those same taxes from Native American retailers. NYACS puts out an informative newsletter called Tax Fairness Talking Points and its latest issue tackles how a raised cigarette levy would further harm small businesses:

• New York retailers and wholesalers would lose about $82 million in gross profits.

• Gross profit losses would average about $11,000 per store.

• Over 1,200 New York retailer and wholesaler jobs could be displaced due to the tax hike (based on estimated gross profit losses).

Another key point is that the reduction in cigarette revenues is the result of smokers purchasing their tobacco tax-free at Native American reservations or on the streets not because they stop smoking. Read the whole report.

Mo' Money Mo' Money

Today's NY Times reports on the mayor's blast against the state legislature for its "failure" to forward the $6 billion that Judge DeGrasse had opined the city schools needed under the fiscal equity lawsuit. This time, however, Bloomberg managed to also take a pot shot at Assembly Speaker Shelly Silver by announcing that, because of Albany's failure, plans to construct a new elementary school in the Speaker's district would (perhaps) have to be delayed.

Mr. Silver, apparently not intimidated by the threat, responded by accusing the mayor of "reneging on a commitment seemingly made only to further his bid for re-election." To paraphrase Clint Eastwood, perhaps the mayor shouldn't be making threats that his body can't cash. He has now threatened both the speaker and the senate majority leader and for the life of us we can't see what we expects to accomplish with his bombast.

In fact, as far as the state senate goes his threats have (to use Dirty Harry once again) a "make my day" quality and should serve to strengthen Joe Bruno's hand with his upstate and suburban constituencies. Which is precisely the point that David Shaffer makes in today's NY Post. In fact he calls Bloomberg's attack "Mike's GOP Gift."

There is of course no great eagerness in other parts of the state to fund a NYC school system that has historically been, despite the high levels of funding, a colossal failure, a point that is driven home by today's point about the city's high schools reported by the NY Sun. What this all points out is that the mayor is a classic liberal in the mold of John Lindsay. Nowhere do we see any recognition of the dangers inherent in high taxes, restrictive regulations, and big government.

Wal-Mart on Staten Island: An Update

Yesterday's Staten Island Advance has an update on the effort of Wal-Mart to build its first NYC store in Tottenville on SI. The article actually focuses on the potential building of a Stop & Shop supermarket at a location on a Page Avenue next door to the Wal-Mart site. What is clear, however, is that the Tottenville community is extremely concerned with the overdevelopment and concomitant traffic in their neighborhood.

In fact, even the pro-development Staten Island Borough President, James Molinaro, has predicted a "traffic nightmare" if $100 million of road improvements are not forthcoming in the impacted area. The supermarket is seen as part of the overall development challenge and, even though community people have told us that they would welcome an upscale market, there are major concerns about traffic.

This concern is best expressed by Tottenville president June Delaney who has not committed to support of the supermarket until "the city comes up with a plan-one addressing both traffic aesthetic concerns-for future development along Page Avenue." As she cogently remarks, "You can't just keep putting things there and say, 'OK, we will figure it out later."

All of which puts the plans for Wal-Mart on extremely tenuous footing. If a welcome addition like Stop & Shop is viewed with some skepticism you can imagine how the Tottenville folks feel about a regional market that will draw its customers from all over the Island.

This trepidation, however, isn't deterring the Wal-Mart people. We've just been informed that the Walmonster has hired respected NYC lobbyist Claudia Wagner to represent them before the City Council. In addition, as the Advance is reporting, the clean-up of the Lucent site on Richmond Valley Road is continuing.

The Lucent $10 million remediation is expected to last nine months and Cedarwood Development, which has the lease on the property and hopes to bring in Wal-Mart, "is expected to follow this spring with its own request for a zone change for the property." If true, than it will take a few months to review the application before it is certified for ULURP. We'd anticipate a fall certification at the earliest.

What's missing is the various requests for traffic studies and road improvements before any zoning review is conducted. The Alliance will be arguing for an independent analysis to precede any city certification of Wal-Mart.

Cigarette Taxes: Post Toasted

In yesterday's NY Post the paper's editorial hits the cigarette tax insanity right on the head. As the Post points out every time the tax is increased criminal activity thrives at the expense of legitimate store owners.

The editorial underscores this point with a depiction of the entire sordid NYC criminal history associated with cigarette taxes. The money quote is supplied by an official at the Department of Taxation and Finance Tax Enforcement Office:

"In New York it is literally more profitable to hijack a cigarette delivery truck than an armored truck."

What's saddest in this account is the ineffective response by municipal government to the cigarette tax crime waves. Few illicit activities are interdicted and organized crime has a field day. Now, however, terrorists are getting involved as well:

"Indeed, cops found counterfeit cigarette-tax stamps in the apartments used by the Egyptian Islamic Jihad group behind the 1993 WTC bombing..."

All of which brings us to the fantasies on this topic engaged in by Mayor Mike. The mayor believes that there is a direct correlation between the price of cigarettes and the level of youth smoking. As the Post points out though, "Actually, according to the Centers for Disease Control, New Yorkers' smoking habits mirror national trends: tax hikes have no evident effect."

With the sale of cigarettes plummeting at legal retail outlets the situation is totally out-of-control:

"Money that would go to New York grocers instead goes to North Carolina and other low-taxed locales."

Not to mention the ubiquitous Indian retail outlets.

The only response to this is to cease and desist any new tax increases on cigarettes and to move to immediately close the Indian retail loophole.

Fire Response Times Increase

The Mayor's Management Report says that fire response time has increase city wide by around 14 seconds. With the mayor asking for cuts in the FDNY budget we'll be interested to see how the department accomplishes this without closing any fire houses. What's happening in Woodlawn with Ladder 39, we believe will be repeated in other neighborhoods. The mayor is no friend of firefighters.

Bus Union Settles: Fruits of Local 100's Labor

The NY Post reported on Saturday that the members of ATU transit union Local 627, made up of bus drivers on Staten Island, had overwhelmingly approved the very same contract that TWU Local 100 had rejected last month by 7 votes. The 1,400 workers approved the pact by a 979-81 margin.

This was hardly surprising since, as we have already argued, the TWU strike fiasco had greatly weakened the bargaining power of the transit workers. The accuracy of our analysis is underscored by the comments of 627's president Angelo Tanzi, "The membership had the opportunity to see what the alternatives were and realized we weren't going to get a better deal than this."

This certainly puts Local 100 head Roger Toussaint in a bind since the MTA feels emboldened to push the local even harder to make concessions; while the local's rank-and-file have already made it clear that the current contract on the table is not sufficient.

All of which leaves Toussaint desperately pointing fingers at his union opponents. In Saturday's NY Daily News Roger's Sancho Panza Ed Watt is quoted as saying, "It's unfortunate that within Local 100 the contract was taken hostage to internal politics." Toussaint is claiming that the opponents’ main objective is "taking control of the local in elections later this year."

Which means that all of Roger's rabbits believe that the 50% of the folks who voted No were too stupid to understand the contract's benefits and were duped by wily dissidents. That's not a great position to take going into an election asking for peoples' support.

JWJ on CBAs

Adrianne Shropshire, Executive Director of New York Jobs with Justice, has a great guest post on the Drum Major Institute blog today. She discusses how publicly-funded development are flourishing all over the city and that Community Benefits Agreements (CBAs) are a potential tool for ensuring that local communities reap benefits and lessen the project’s negative impacts. However, Shropshire argues that CBAs aren’t always beneficial:

CBA's in the hands of self-organized community coalitions have won important benefits for local communities but CBA's in the hands of developers looking for good PR are dangerous. As we look at the ongoing controversy surrounding the Bronx Terminal Market and numerous developments in Yonkers and related subsidy abuse we must ask ourselves are CBAs always the best answer and who should be leading the process?

Shropshire’s answer to this very real problem is, in part, governmental:

Legislating CBA's has to be part of the answer. Taking key segments in CBA's out of the arbitrary negotiation process and making them public policy should be one goal. There is no negotiating over job quality. Wage and benefit standards are non-negotiable. Prevailing wage and living wage shouldn't even be on the table. Environmental standards and containing sprawl are non-negotiable. Local hiring is non-negotiable. A clear role for community residents in the decision-making process is non-negotiable. Setting a floor will allow local communities to focus their negotiations on other desperately needed community benefits like affordable housing, childcare centers, open space, etc.

We will be pushing the City Council to have hearings on this entire issue and we’re sure Adrianne’s point of the view will be well received.

Poor State of the Borough

At his 5th State of the Borough Address, Bronx BP Adolfo Carrion focused on the recent Bronx Terminal Market deal as a highlight of his administration. Specifically, he touted the project’s “Community Benefits Agreement” and, according to Talise Moorer at the Amsterdam News, remarked:

“Good economic development happens when the community is a recognized, involved stakeholder in the process,” said Carrion. He added, “This community benefits agreement will ensure that Bronx residents will benefit from the investment in and redevelopment of their neighborhood, and it should serve as a benchmark for doing business in our borough and throughout the city.”

As we’ve mentioned before, the problem with this type of statement is that, the community was never involved in the meaningful CBA negotiations. As the Alliance’s Matt Lipsky comments:

“The process was created to be community-driven, but instead it was driven by the borough president,” he said. “The borough president hand-picked the community groups he wanted involved, did not take into account legal representation, and the community was not involved in the [final] negotiations.”

The Amsterdam News article continues:

Like Lipsky, critics generally claim that the Benefits Agreement does not compel tenants occupying the mall to provide living wages, access to unions, or opportunities for minorities or Bronx residents. They also allege the document lends itself to weak enforcement, in that a court cannot force the developer to fulfill any part of the agreement.

This CBA and the process by which it was crafted do not seem like a “benchmark” to us. In fact, the only purpose the Gateway agreement serves is to show future parties exactly what not to do when negotiating a community-developer compact. We agree with BP Carrion that “good economic development happens when the community is a recognized, involved stakeholder in the process” so hopefully next time this will actually happen.

TWU Local 100: Off Track and Busted

The NY Times is reporting today that the MTA and the TWU have reinitiated contract talks. The union is not in a good position because the rank-and-file rejection of the first pact has eroded their bargaining position. The MTA has made it clear that it will not accept any deal that "costs more than the one that was rejected."

Not only that, sensing the union's weakness here the Authority has, "proposed a considerably harsher contract..." and has left Local 100 in quite a pickle because the aborted strike has diminished the union's power and, making matters worse, union elections loom on the horizen. As Oliver (union members) would say to Hardy (Toussaint) "this is a fine mess you've got us into."

Strange Bedfellows at Willets Point

With Crain's Insider reporting that the search for a developer at Willets Point has started to narrow, it was fascinating to learn that a few of the largest property owners threatened under a potential eminent domain proceeding have hired Peter Vallone to defend their interests. The former speaker is now a lobbyist and retains his close ties to the Queens Democratic power structure.

What we found fascinating, however, was the fact that Vallone had supported Mayor Bloomberg last fall and it is the mayor who has pointedly commented about Willets Point that, "the land is too valuable for the businesses that are on it." It will be interesting to see how Vallone's support for the mayor translates into an effective representation of the Iron Triangle firms.

We're somewhat skeptical, not of Vallone's abilities here, but of the mayor caring a whit about who actually represents Willets Point. He has famously indicated that he makes his decisions on merit alone and it is unlikely that the lobbyist who represents the Point is going to change his desire to reconstruct the Queens area.

What the merchants need is a grassroots lobbying effort that goes beyond their own immediate area and looks to create a city wide coalition on the ED issue. If it’s only about Willets Point than, as Warner Wolf would say, "You lose."

Bloomberg's Small Business Irony

On Tuesday NY 1 had a report on Mayor Bloomberg's latest small business initiative. Presented by the mayor in all seriousness, the effort, labeled "NYC Small Business Solutions", would help the city's small firms "get permits and licenses they need."

The purpose of the program is to, "make it easier for people to start a business in the city." The irony of course is that for the last four years the mayor's anti-small business policies have made it exceedingly difficult for these same businesses to actually stay in business. Foreclosures and bankruptcies are at an all time high in New York and the mayor's tax and regulatory policies have exacerbated the post-9/11 trend.

The key point here is that if this administration is serious about a business sector that, according to the mayor, "employs half the private sector's workforce and accounts for 98% of all business in the city" then it needs to cease and desist its anti-small business agenda. This would mean, however, that the mayor would have to lower taxes and end the scorched earth enforcement policy that has characterized his first four years. All else is hypocritical cosmetics.

CBA Nonsense

Patrick Arden in yesterday’s Metro writes about how the Community Benefits Agreement created for the Bronx Terminal Market project had almost no community input or support. Arden interviews CBA taskforce members who rightfully complain that the agreement gave very few concessions and that the Borough President Carrion controlled the process in overbearing fashion:

Pasquale Canale, a representative of the 161st Merchants Association, said he was thrown out of a meeting after he objected to Carrion’s assertion that the Gateway CBA would be a “template” for an upcoming agreement on the stadium.

…

“Almost everything the community asked for, Related rejected,” Canale said. “They felt the deal is already done, so why should they bother.”

Canale is one of the few taskforce members to criticize the document openly because many, according to the article, are afraid of retribution from Carrion:

“Everybody had problems with the language,” said one member who noted that Related’s promises of jobs were called “goals” in the final document, which was feared to weaken accountability. “We all ended up going along with it, because we realized a lot of our money comes from the borough president.”

A spokesperson for Carrion said that most community-based groups that participated in the initial brainstorming did not sign the CBA because: “

Only three signatories were necessary to make it binding. Because the negotiations were going up to the last minute, they called seven people and stopped after they had three who could take off work to be there. They wanted to get it signed before the vote.”

First, who set the ridiculous rule that only three community signatories were needed to make the document binding?, second who determined that government-controlled entities like BOEDC, New Bronx Chamber of Commerce and HOSTOS would be legitimate community signatories and third, why haven’t more groups signed the pact now that there is time to do so?

The answer to the first two questions is that since whole process was politically-controlled the Borough President and others arbitrarily came up with procedures that maximized their influence and minimized that of the community (the answer to the third question is that the agreement stinks). Considering that there are hundreds of community-based groups and other similar stakeholders in the Bronx, the fact that only 3 were needed sign this agreement is mind-boggling.

The one hope is that the Gateway CBA does not become a model for future agreements:

“Others are unhappy about the agreement,” said Lillian Smith, of the Concourse Village Stockholders Association. “We should be making sure it doesn’t happen again with Yankee Stadium.”

However, we are not too optimistic about this. According to Yankee President Randy Levine, a Community Benefits Agreement is almost finished for the Stadium project yet, again, no real stakeholders in the community were involved in negotiation process. Interestingly, though, Levine acknowledges in Dave Lombino's NY Sun article today that the Bronx Terminal Market agreement was quite shabby:

Mr. Levine said yesterday that negotiations over a community benefits agreement were near completion. He said he expected the agreement would be "much more significant" than a $5 million agreement signed last week between the developer of the nearby Gateway Center mall, local elected officials, and some community representatives.