Wednesday, April 30, 2008

Another One Bites the Dust

As we have been telling folks, another neighborhood supermarket has no officially gone by the wayside. As the NY Daily News reports this morning, a Key Food store in Bay Ridge will close its doors in June to, surprise, surprise, make way for another chain drug store: "A Bay Ridge supermarket will shut its doors in June - and most likely reopen as - what else? - a chain drugstore. As part of a citywide problem, the Key Food supermarket at Third Ave. and 94th St. will be replaced by a Walgreens, grocery union officials said they were told. "It's happening everywhere, and it's going to continue to happen; this is just the latest example," said Pat Purcell, president of the United Food and Commercial Workers Union."

If this trend continues than the only place that people will be able to buy their groceries will be from street vendors, or from higher priced small grocery stores. As Councilman Gentile tells the News: "My concern is that over the last 10 years, we've lost some major supermarkets in the community," Gentile said. "We have to rely on either the small convenience stores or drive."

The news of the store's closing was not greeted well by folks in the community: "This is the worst thing for me; I've been coming here for 15 years," said Lia Dizanis, 38, who lives a block away. "I have two little kids. I can't go far," she said. "There's already [a pharmacy] a block away. Do we really need another one?" There are about nine pharmacies within a 10-block radius of the Key Food, but only one supermarket - a Food Town Supermarket on 90th St."

As was mentioned, the store's closing represents a trend that the Department of City Planning has written about in a report that is slated to be issued in the next day or two: "A City Planning Commission study found that many New Yorkers drive to suburban supermarkets for better selection, causing smaller city markets to close. Bay Ridge shoppers said they worried about the strain on Food Town. "It's too small as it is," said John Walsh, 70, as he walked out of Food Town with a steak. "The lines are going to be terrible."

But the issue, we believe, is less about sales leakage to the suburbs than it is about the escalating cost of real estate a trend that we've seen taking place even in El Barrio. According to the East Harlem supermarket task force six markets have closed in the past couple of years, unable to cope with the rising rents.

East Harlemites are now forced to either walk for many blocks to shop, or settle for the higher priced bodegas. Clearly, we need dramatic and effective government intervention to stem the supermarket demise.

Cardwell Leaves a Void

As Azi reported yesterday, the NY Times' Diane Cardwell is leaving Room 9 to go to Stanford. But, as he points out, Cardwell will be missed because of her keen critical eye on the mayor's tenure-and particularly on his penchant for expanding the role of government. Here's one of her most trenchant critiques: "Mayor Michael R. Bloomberg has promoted himself as a model of fiscal restraint, issuing dire warnings about the slowing economy, recently asking agencies to limit hiring, and even listing “fiscal responsibility” as an interest on his MySpace page. At the same time, a review of the city’s budget since 1980 shows that Mr. Bloomberg has been presiding over one of the greatest expansions of city government since the John V. Lindsay administration, fueled by an extraordinary surge in real estate revenues, both from higher property taxes and transfer taxes from sales."

Which is, of course, a point that we've been making for over six years, even going so far as to compare the mayor and his administration to the Lindsay years. This guy has been profligate with the tax payers money, and we haven't gotten any real bang for the buck under his reign. As the Cardwell piece went on to point out: "Spending on schools jumped 14 percent, to $16 billion, driven by a 40 percent increase in teacher salaries favored by Mr. Bloomberg, among other expenses. And although the number of city workers has declined by about 1 percent since Mr. Bloomberg took office, he has been increasing the staff of late, adding nearly 10,000 workers since 2004, bringing the total up to 367,643."

Which is precisely the point of the NY Sun editorial that we commented on earlier. Where have the other editorialists been as the size and scope of government has been enlarged-with no discernible impact on the quality of life? Bloomberg is no reinventor of government; he's more of a renter of government-all for his own aggrandizement.

The Times captures this towards the end of the analysis: “He does look to the revenue side to meet needs,” said Charles Brecher, research director at the Citizens Budget Commission, a business-backed research group and a co-author of “Power Failure,” which studied New York politics and policy from 1960 to the early 1990s. “It’s not that he’s necessarily taken on new roles for government, but he’s put money into education, he’s paying people more, and there has been selected expansion in some services.”

All true, but to what good effect? We'll give the reliable Esther Fuchs the singing finale on all of this: "Ester R. Fuchs, a political science professor at Columbia University who was a special adviser to the mayor in his first term, said that Mr. Bloomberg’s spending pattern represents a new strategy for keeping cities healthy and competitive. “He was never antigovernment,” Ms. Fuchs said. “He actually viewed government as having a role, and by making government both more responsible and efficient, he made people more comfortable with the idea that government could spend the money effectively.”

Our advice? Don't let Dr. Fuchs write the history of this administration; we really don't need hagiography from sycophants.

Sun Shines as a Disinfectant

Yesterday's NY Sun editorial on the city council budget mess was a real first. For the first time there was an editorial focus on the over all budget problem-something that is systemic and does not relate exclusively to the malfeasance of the legislature. As the paper points out: "Lest the City Council slush fund be interpreted as just another dog-bites-man story about corrupt local government officials, the point needs to be made that this was a double default. Not only did the City Council create a slush fund by allocating funds to dummy organizations that did not even exist, but Mayor Bloomberg — the mayor with a reputation as a competent businessman manager — failed to exercise oversight over the money."

Exactly right; and that's not all, the Sun also takes a look at the opacity of mayoral spending, and the lack of any real oversight anywhere: "It was the inevitable consequence of a city budget process that is a sham. At the federal and state level, there's oversight and negotiation between the executive branch and the legislature over how much gets spent and on what. In New York City, there's no such negotiation. The entire budget "negotiation" is a talk about how much money the Council will get to spend itself, however the various members want."

What the Sun highlights, is the fact that the city council focus is a diversion from taking a hard look at a real reform of the entire budget-making process. The pea here is under the mayoral shell, and the mayor has failed in exercising the proper due diligence over, not only the council's spending, but his own.

So the Sun muses that the mayor's approval of the army of lawyers for the council is an effort to cover his own ass: "New York City's government spending consists of blank checks with no balances. In other words, the Council slush fund scandal isn't just about a few crooked Council members or Council staffers or even crooked Council speakers. What it is about is a default by both the Council and the mayor of their fundamental duties to act as a check on the other branch of government. It's no wonder that the mayor says he sees nothing wrong with spending taxpayer money on high-priced outside lawyers to protect the individual City Council members and their staff from federal and local prosecutors trying to get to the bottom of the matter. If the truth does come outs, it isn't going to leave anyone involved looking like responsible custodians of public funds."

It's time that everyone here gets a thorough good government enema; and it's high time for our guardians of the Fourth Estate to practice a more thorough vigilance, and not miss the forest for the trees.

Tuesday, April 29, 2008

Pot and the Kettle

As we've been highlighting constantly, the furor over the city council's discretionary spending masks the much greater allocation of no bid funds that are dispensed by the Bloombergistas. Now these chickens may be coming home to roost. As the NY Sun reports this morning: "Mayor Bloomberg is coming under fire from the members of the City Council, who are criticizing his distribution of taxpayer dollars just as the council is facing heightened scrutiny for its own allocation of public funds to local organizations."

And it's about time. If these spending patterns are examined, you'll find that the council misdeeds pale in comparison to the lack of oversight on executive spending. Will the editorialists who've been in a state of apoplexy over the member items have any outrage in reserve for St. Michael?

Maybe a state comptroller investigation will trigger a more equitable evaluation of the city's spending habits: "The state comptroller, Thomas DiNapoli, announced in January that he would audit the city Department of Education’s increasingly common practice of awarding noncompetitive contracts, which have totaled more than $270 million since 2002." Can't wait to see what he finds-after all, the educational success of the city is money well spent-right?


The NY Times, once again exhibiting its unique brand of trained incapacity (courtesy of Liz), fails in its editorial to understand the bigger picture on this issue: "It is time to end these slush funds in the State Capitol and in City Hall. Instead, all projects should be financed through the regular budgeting process. That is the only way to ensure more transparency and that the public’s and not the politicians’ interests are served.

What would be a better fit to print is the suggestion that there be a full examination of how the no bid contracting at DOE served the Mayor's interests without achieving very much in educational advancement. We can't have greater transparency in one area of city government when the greater need for sunshine elsewhere is ignored.

NY Post on the Warpath

The NY Post editorializes today in favor of the governor taking strong action to insure that cigarette taxes are collected from Indian retailers: "Gov. Paterson says he's worried about Albany's deteriorating fiscal for tunes. Well, he could start collecting hundreds of millions in new revenue tomorrow by putting his foot down on Indian tribes' longstanding mockery of state cigarette-tax law. So what's taking so long?"

Indeed, what is the hang up? The Post sees timidity here in the face of potential Indian violence: "But the tribes, raking in dough from booming black-market sales, refuse to comply - and Govs. George Pataki and Eliot Spitzer each meekly acquiesced. Both no doubt feared a reprise of Pataki's enforcement effort, a 1997 crackdown that resulted in (among other acts of violence) Seneca Indians blocking a state highway with a giant tire fire. In other words, the govs chickened out."

What a sad scene. Millions of dollars being passed up because of the terrorist veto-and we're now on the third governor without the intestinal fortitude to simply enforce the law. Isn't it bad enough that the state's convenience stores and bodegas are getting the shaft? Do the tax payers also have to pay more so that a few Indian retailers can rake in the dough?

Let's get moving on this. No one should be above the law; and no one should be allowed, through the threat of violence, to intimidate. The average tax payer doesn't. The Post has the last word on this: "Contrast that with the hoops that state legislators jumped through in the recently passed state budget to squeeze every last drop of revenue from the tax code - most notoriously, a creative reinterpretation of the sales tax that would turn the screws on Web retailers for a measly $50 million. Maybe if shoppers built a tire fire on the Capitol lawn, Gov. Paterson would take notice? He needs to collect the cigarette tax now. It's not just the money - but also the principle of the thing."

East Harlem Supermarket Task Force

Or friends at Local 1500 of the UFCW have alerted us to the establishment of an East Harlem Supermarket task force; it seems that El Barrio is experiencing the same gentrification tsunami that have forced supermarkets out of other neighborhood. The task force is being spearheaded by Senator Serrano and Assemblyman Powell, but includes the Coalition Against Hunger, the DOH, WEACT, Mt. Sinai, Council member Viverito and of course Local 1500. We're taking the liberty of highlighting some of the task force's key focal points:

Challenges Faced by Supermarkets

(1)"The core problem is renewal of leases." As old leases expire, cost of rents so high that it becomes prohibitive to renew;

(2) Large corporate drug stores are often able to provide same products for lower prices than independent supermarkets;

(3) Supermarkets rep say that street vendors selling fresh produce cut into their profits. If healthy options are an integral part of protecting supermarkets, then we have to consider the profit margin of the healthy foods they sell;

(4) Traffic issues of major concern. Road work impedes deliveries.Loading docks needed. Apparently, wholesaler White Rose spent $750,000 in parking tickets last year alone;

(5) Examples like the new development at 135th Street across from Harlem Hospital. The landlords wants to keep C-Town but the new rent they offer is overwhelming. It's noted that many sites of priced-out supermarkets remain vacant for a long time. (Landlords go from wanting to make so much money to making no money at all;

(6) Overzealous inspectors will sometimes create headaches over relatively small violations at the supermarket.

We think that these issues are generic to neighborhoods all over the city, and as the task force points out, there are some important policy steps that need to be considered:

Possible Courses of Action and Related

(1)Developing an system whereby landlords receive property tax abatements if they invite supermarkets and then maintain affordable rents for them over time (to which we would add waiving the commercial real estate tax for supermarket space);

(2) Developing dedicated loading zones in back of markets, as well as dedicated off-hour loading times;

(3) Off-grade rental spaces still cost a lot, but are significant lower than street level. Could be an option in the new developments going up;

(4) Increase advocacy on food stamps. Food stamp participation has declined by 320,000 people in the last 12 years. Increasing this number will bring increased revenue at supermarkets in low-income neighborhoods. Also: we could look at ways of spacing out food stamp availability, to reduce the imbalance of supermarket profits over course of the month.

This is the kind of brainstorming that needs to be done on a city wide level, and we congratulate the East Harlem group. The combined grocery price rise with the disappearance of local supermarkets is reaching a crisis level. It needs to be addressed pronto if we're going to have a truly sustainable city.

Monday, April 28, 2008

Paper or Plastic?

In this morning's Newsday, there's an article dealing with the effectiveness of plastic bag recycling. As we've commented before, we're not persuaded that the voluntary measures will work-nor are we convinced that the environmental concerns are unassailable here. One thing we should all be aware of is the impact of unintended consequences; remember that the ethanol push and the current food shortages are connected-something that the global warmers need to be cognizant of.

Now NYC is about to implement its own voluntary recycling program for the bags, receptacles that are omnipresent in every city neighborhood litter basket, and are generally filled with dog poop. But will the folks recycle? As Newsday points out: "It's unclear how voluntary measures that rely on conscientious shoppers would reduce litter tossed by those who presumably care little for the environment. "When people recycle, they recognize a material has value and are, we believe, less likely to litter," said Keith Christman of the plastic bag industry group Progressive Bag Affiliates."

And the rates where voluntary programs are in place aren't a cause for celebration: "San Francisco, which banned nonbiodegradable bags last year, had voluntary recycling in place for decades, said Mark Westlund, spokesman for the city's Department of the Environment. "We found we were getting about a 1 percent recycling rate, which means that the program is about a 99 percent failure," he said."

The problem, unlike with the bottle law, is that absent any monetary incentive there's no compelling reason, other than an environmental consciousness, for customers to recycle: "There is really no incentive for bringing back the bags," said Mike McGuire of Huntington, after he redeemed two sacks of plastic soda bottles for their deposits at the store's bottle room."

Which means that the measure in the city is really a holding pattern orchestrated by the plastic bag group. The NRDC's Eric Goldstein's comments are to this point: "Eric Goldstein, a senior attorney with the Natural Resources Defense Council, supports the voluntary recycling laws but acknowledged that some backers have ulterior motives."I don't think it's a secret that some industry groups use voluntary recycling programs as a way of dissipating energy for more vigorous efforts to combat waste and litter," Goldstein said."

Which gets us right back to the efficacy question: "But will the programs work? "That's the $64,000 question," said Trottere, whose company sells disposable and reusable bags, and a recycling system that outfits retailers with bins and signs. "What is the average grocery shopper going to do? Are they going to inconvenience themselves, collect the bags and take them back to the mall?"

We'll all stay tuned. But let's not expect any great rush to the supermarket unless there's a significant deposit placed on the bags just as there is on soda and beer containers. The only certainty? Greater compliance costs for already hard pressed food retailers.

Indian Showdown?

As the NY Post reported yesterday, there may be a showdown that will force the Paterson administration to enforce the tax law on Indian smokes: "Tax-free cigarettes from Indian reservations will go up in smoke if some in Albany get their way. Lawyers for a state lawmaker and Gov. Paterson are scheduled to face off in an upstate courtroom tomorrow in a case aimed at forcing the state to follow the law and collect sales tax on every pack sold by the 200 or so reservation stores and via the Internet."

This is not insignificant by any means. Because of the high cigarette taxes in New York, one out of every three packs sold in the state are coming from tax evading Indian retailers, This is costing New York tax payers a fortune: "Last year, roughly 304 million packs of cigarettes were sold by New York's Indian tribes - and, as has been the practice for years, not a penny of tax was collected. As the state tax rises to $2.75 a pack - the highest in the nation - on June 3, New York would be forfeiting about $836 million in annual revenue by choosing not to collect taxes from reservations. In the city, the tax is $1.50 more."

So much for law and order. With budget shortfalls and tax hikes on the Albany agenda, you'd think that Governor Paterson and his advisers would be all over this. Think again: "Paterson has asked his staff to research the topic, and he wants to come to an agreement with the tribes, a statehouse spokesman told The Post. That is not sitting well with a host of critics. They are urging Paterson simply to follow the law." Shouldn't be that hard to do.

If higher cigarette taxes are the linchpin for reducing smoking rates, then it should be clear to one and all that tax evasion is allowing hundreds of thousands of smokers to keep feeding their addiction at a greatly reduced rate-not to mention the legitimate store owners who are getting shafted by the tobacco warriors: "It is driving hundreds of thousands of non-Indian customers away from licensed convenience stores, decimating their businesses," James Calvin, president of the New York Association of Convenience Stores, wrote in a recent letter to Paterson."

In NYC, where the state tax is seen and matched by an additional $1,50 per pack, the black market is flourishing, and no one is really taking this issue head on because of the fear of being politically incorrect. The mayor should get on his soapbox immediately-for the children, if not for the small store owners that he doesn't seem to give a fig about.

Saturday, April 26, 2008

Food for Thought

The high cost of food is now impacting the area food banks, and other purveyors to the needy. As the NY Daily News points out: "Out-of-control food prices have risen so steeply that a charity feeding 1.3 million New Yorkers is in crisis. The numbers of hungry people relying on the Food Bank for New York City have risen by 24% in only one year as costs for basics - including bread, eggs and milk - have skyrocketed. Prices are so high that donors who give the bank food have had to cut back."

As we have commented, this food crisis will soon roil the political process, as government looks to address the skyrocketing cost of groceries. This issue does, of course, intersect with the problem of vanishing local supermarkets-the first exacerbating the second as the availability of healthy affordable food diminishes all around.

So we're gonna have to see some kind of political response to the crisis, and the increase in food stamp availability should be seen as a companion to the government assurance that local grocery stores can continue to operate profitably in the city's neighborhoods. Large supermarkets that are able to effectively discount are crucial, otherwise the only alternative are higher priced bodegas that are no substitute for large food discounters.

The crisis is real and, as the News points out: "U.S. Department of Agriculture figures show eggs cost 25% more now than they did a year ago. Milk and other dairy products jumped 13%. "We'll find ways of getting food," said Cabrera. "We'll just have to be very creative and find new ways to rescue food that would otherwise be wasted. "But if food prices keep rising like this, we're going to have to hope for more help from the government."

We're waiting for real political leadership here in the city. So far the mayor has been silent, but if he can focus his attention on this issue then perhaps we can get some action. Here's something that a tad more important than charging commuters a fee to enter the CBD.

Friday, April 25, 2008

Point-Counterpoint: Divide and Conquer

Eliot Brown has an intriguing post on the Observer web site on the possibility that the city may pursue a two-phased development strategy. He sites a portion of the EIS: "The alternative plan, studied in the draft environmental impact statement, calls for acquiring the land and building the project, in two phases. The plan includes acquiring the land on the western portions of the site first, where most of the smaller automotive-related businesses are based, while the owner-occupied businesses on the eastern portion would have more time before they sell their land. The plan would be the same in size, though the first half would be done by 2013, according to the plan studied, while the second half would be done by 2017."

If true, this would mean that the city was going to go after the most vulnerable of the smaller businesses, taking them out so that it could create a momentum that would eventually put the larger "owner-occupied" firms in an increasingly untenable position. A classic divide and conquer strategy that the smaller businesses need to be aware of if they're gonna survive this process.

Blight Fight

In spite of the high degree of opposition to the Willets Point ULURP application, an opposition that saw 29 city council signatories to a letter to EDC chastising the agency for moving the rezoning of the Point prematurely, some Queens officials aren't giving up. As the NY Sun reports: "Elected officials in Queens are calling for the city to move forward with a proposed development in Willets Point, despite strong objections from City Council members and local businesses. Yesterday, Queens President Helen Marshall led a rally outside of City Hall in support of the $3 billion plan, which would include a convention center and hotel."

Queens BP Helen Marshall told the city hall presser that the Iron Triangle area was, "blighted,” and said that the development was needed to remove environmental hazards." Talk about throwing the baby out with the bath water. The blight in question here is a self inflicted wound by a city that has neglected the area even while businesses have been contributing taxes and employment for decades.

Still, the pols in support here don't have the real say in the matter. As the Queens Chronicle reports (courtesy of Liz), even Speaker Quinn appears to be unwilling to grant the current ULURP application any legitimacy: " Council Speaker Christine Quinn was not happy that the plan is going forward despite such major opposition. “When a majority of council members signal their concern about a project, all parties should take notice,” she said. “While there is still time to work out any differences, I am disappointed that the plan was certified when there is clearly such adamant opposition in the council.”

The first land use hearing on this matter will be on May 5th at Community Board 7. Here's a synopsis of the review process: "Public hearings will begin on the community board level, proceed to the Borough President’s Office, the City Planning Commission and finally the City Council. Marilyn Bitterman, district manager of C.B. 7, said on Monday that the board’s Land Use Committee would hold its first Willets Point meeting on May 5. It will not be heard by the full community board until June." This one will really be interesting.

Community's Armory Challenge

As we've been saying, the effort by the coalition of community groups in the Northwest Bronx to negotiate a viable CBA will be a real challenge. As the NY Daily News reports this morning: "Deal with us or no deal, a coalition of community, unions and elected officials told the newly selected developer of the Kingsbridge Armory Thursday. The group said it wants The Related Cos. to agree to a community benefits agreement better than the one it now has at another one of its Bronx projects."

Oh yes, the other Bronx project referred to is the Bronx Terminal Market site, land that Related acquired for next to nothing and without the benefit of a public bid. The company's asthma-inducing mall is currently rising next to the Deegan, and the CBA that was "negotiated" was a creature of no real community input-a set up by BP Carrion and friends.

As history has proven, Related's not the easiest company to negotiate community friendly agreements with-and if they bring Jesse James Masyr into the discussions, hold fast to your community benefits wallets. So far, however, the community coalition's hanging tough: "Thursday, the Kingsbridge Armory Redevelopment Alliance (KARA) gathered on the steps of City Hall to demand the firm negotiate a binding benefits agreement before final project approval. "The Kingsbridge Armory was built to serve and protect our community," said Desiree Pilgrim-Hunter, a founding member of KARA. "Let's make it a beacon of hope once again."

The list of KARA's demands also presents a challenge. As The NY Times reported on yesterday's event: "Among the items on their wish list: an agreement for the jobs at the shopping center to meet the city’s “living wage” standard of $10 an hour, or $10.50 without benefits, instead of the $7.15-an-hour minimum wage; a hiring preference for local residents; community space in the project, including a recreation center; and a guarantee that the construction work will be done by union workers only, and that an apprenticeship program for local residents will be established."

For its part, Related is saying all of the right things: "A spokeswoman from Related, Joanna Rose, said in a statement,“Related looks forward to working with the community and all the stakeholders to redevelop the Kingsbridge Armory and continue the renaissance of the Bronx.” The devil, as usual, will be in the details.

We'll see how all of this transpires, particularly as the strength of the city council continues to erode in the face of the slush fund scandal. It may be that the current political constellation is aligned just right for the community to have maximum impact. KARA, for its part, is an impressive grass roots coalition: "KARA - which includes the Northwest Bronx Community and Clergy Coalition; the Retail, Wholesale and Department Store Union; building trade unions and local churches - is well positioned to influence the process."

Happy Hour at DOH

With the restaurant industry getting a stay in order to appeal the Judge Holwell decision on calorie posting, leave it to the Department of Health to give us a good laugh. Here, in the NY Sun, is the city's response to the appeal: “Each month its implementation is delayed, another 10 million meals are served at chain restaurants in New York City without point of purchase calorie information, further worsening the obesity epidemic and its related health risks...”

Leave it to the DOH to allege, with absolutely no evidence, that their regulation is crucial for the fight against obesity. Last we looked the Department's "study" was rejected by the CDC' Morbity and Mortality journal. Here's what we obseved a few weeks ago: ""City health officials ran into difficulties at the end of last year when they tried to get the report published. The editor at the Morbidity and Mortality Weekly Reports, published by the CDC, wrote in an e-mail message to Dr. Frieden that the “conclusions being drawn by the study, are of course, problematic.”

Thursday, April 24, 2008

UFCW Pushes for Supermarket Development Plan

In response to the exodus of supermarkets in NYC neighborhoods, the UFCW Local 1500 has launched its own political effort to spur supermarket development and retention. As the latest issue of Supermarket News points out: "The United Food and Commercial Workers Local 1500 on Tuesday applauded a recent study by the city’s planning commission showing detrimental public health and economic effects of a lack of supermarkets in certain city neighborhoods and unveiled a 14-point statement of policy suggestions designed to assist communities gain greater access to food stores. The policy suggestions encourage the preservation and development of supermarkets in low-income communities by making economic incentives available to food retailers to build and operate stores, and to discourage supermarkets from being evicted."

Given the wave of losses, most recently in Bay Ridge where a Key Food store is being converted into a CVS, and also given the fact that the availability of affordable food is rapidly becoming an important political issue, the union's push here is a timely one. Where waiting to see just how sincere the Bloombergistas are on this; and how much resources they will be willing to commit to insure that low income New Yorkers especially have access to healthy foods.

Up until this point, the mayor and his health minions have relied on industry compliance-forcing changes on restaurants in the form of calorie posting on menus; and have looked to flood produce peddlers into neighborhoods where markets are struggling to make money. The supermarket program, however, would mean that the administration would have to use its own money (or rather the tax payers' cash) to effect change-always a more formidable barrier.

The real interesting scenario is whether Mike Bloomberg will intercede on behalf of the Soundview neighborhood to prevent the loss of the one major supermarket in the community; and in doing so confront Vornado, a real estate entity that has become engorged at the public trough. A real test case.

Vornado Watch

According to the Observer's real estate blog, our friends at Vornado, undeterred by their failure to outbid Jerry Speyer for the Far West Side property, are back in the game: "Vornado Realty Trust, led by CEO Steve Roth, has been selected to develop an expanded trade show facility on the far West Side, expanding a modest convention center on Pier 94 into Pier 92." And it appears from this report that the project will be subject to some kind of environmental review since Vornado has hired good old Philip Habib to do a traffic study.

What this means is that Vornado, intent upon evicting a neighborhood Key Food from a shopping center that it owns in the Bronx, needs to curry city favor in order to get approval for its latest real estate venture. It would be a perfect time for the city council and the mayor to use this discretionary opportunity to get the proper quid pro quo from the Distrusters at Vornado.

The project at Pier 94 will not be the last favor that Vornado seeks-and we'll be looking to see who's gonna step up. As the Sun reports this morning: "Along with the Related Companies, Vornado is involved in the plan to remake Pennsylvania Station and turn the surrounding area into a premier residential and office district. With the right public pressure we're sure that Roth will see the handwriting on the wall, as he did when he scrapped his Wal-Mart project in Rego Park.

The Price is Rice

With the city having lost over 1/3 of its supermarkets in the past five years, it will be increasing difficult for consumers-particularly those in low income neighborhoods-to find good modern food outlets. This problem will be exacerbated by the fact that food prices are rising all over the globe, and Americans are becoming really worried about the cost of groceries. As a Gallup survey found: "Rising food prices are a significant worry for Americans, with 73% of consumers in a new USA TODAY/Gallup Poll citing higher grocery bills as a concern, and nearly half saying food inflation has caused a hardship for their households."

In the city, one manifestation of this world wide crisis can be found in the scarcity of rice. As the NY Daily News reports this morning, "First we face a gas crisis. Now it's the price of rice that is hitting New Yorkers hard as the nation's shopkeepers confront shortages and several states have even started rationing." The scarcity of vital food staples, when coupled with a scarcity of supermarkets, could become a perfect storm in the city if policy makers don't start to address the problem right now.

And it looks as if the issue could become a major factor in this falls election, and in all likelihood. the next mayoral cycle here as well. As the NY Sun points out this morning: "When talking about the concerns that preoccupy voters in tough economic times, political analysts often turn to a well-worn phrase: bread-and-butter issues. It seems hard to dispute, then, that the cost of bread could end up playing a role in this year’s campaign for the White House."

And if we can help it, the shortage of supermarkets in NYC will be front and center for all of the city wide candidates for public office next year. Maybe then we can take all of those fruit peddlers and turn them into union workers at the local A&P, Key Food and Gristedes.

Wednesday, April 23, 2008

Community Armors Itself

As the Crain's Insider reports this morning, a coalition of community groups is gearing up to insure that a strong-community-based-benefits agreement is hammered out as part of the land use application for the redevelopment of the Kingsbridge Armory: "A day after the Bloomberg administration officially selected The Related Companies to redevelop the Kingsbridge Armory in the Bronx, a coalition of 20 groups said yesterday that it would press the firm for a community benefits agreement. The Kingsbridge Armory Redevelopment Alliance says it will not support the plan unless the agreement includes guarantees of union construction jobs, permanent living-wage retail jobs, and community space."

This shapes up to be a major battle since the Related Company is not known for its rapport with local communities-relying instead on cultivating support among Bronx electeds instead. And the community's biggest concern is about jobs, and not just any kind of jobs. As the NY Times pointed out yesterday: "“We have real needs here, and this building is an asset in the community that has not been used,” said Desiree Pilgrim-Hunter, a resident of the area for 25 years who supports the plan...“They have to provide jobs that pay, not low-paying jobs that continue the cycle of poverty,” said Father Joseph Girone of St. Nicholas of Tolentine Roman Catholic Church, which is a few blocks from the armory."

So expect that this will be an arduous process, one that will require vigilance so that the developer doesn't renege on its promises surrounding the tenanting of the facility-big box stores are an anathema to the community, and would cause gridlock in the Kingsbridge Road/Jerome Avenue corridor: "The retailers have not yet been chosen. Negotiations are continuing, which call for Related to buy the building, retain the exterior and rebuild the interior. The plan requires approval by the City Council, which officials said probably would not be granted until next year."

Yet it appears that EDC finally may have a clue about the importance of community support.
As the Times indicates, EDC President Seth Pinsky supports the local input: “The key to the success this time around was that from the very beginning of the process we’ve involved the local community,” Mr. Pinsky said." Vigilance is important here, because much can go wrong.

Supermarket Sayonara

As the NY Daily News reported yesterday, and as we've been saying for a while, the city is hemorrhaging supermarkets in almost every neighborhood. The News account concerns a Department of City Planning report (not yet available online) that finds: "A study discussed yesterday by the Planning Commission determined that virtually every neighborhood throughout the city lacks enough supermarkets, and the ones that exist are generally too small. That means that city shoppers flock to the suburbs to do much of their supermarket shopping, and the number of supermarkets is shrinking even as the city's population is growing."

What this means is that a comprehensive retention and promotion program for supermarkets is essential in order to meet the health and economic needs of the city's neighborhoods. The situation's so bad that many of the minority supermarket owners (around sixty according to our sources) have opened stores in North Carolina, Connecticut and Florida-an indication of how the cost of real estate is affecting both large and small food retailers.

The DCP study highlights the health issues that underlie this crisis: "Commenting on the study by her staff, Planning Commission Chairwoman Amanda Burden noted that the lack of supermarkets is most severe in areas of the city with high rates of obesity and diabetes. The study noted that diet-related diseases can be aggravated by the lack of availability to fresh fruits and vegetables." Which is why we have been saying that veggie peddlers are no substitute for good modern supermarkets.

An even more in-depth look at this market drain can be seen in the latest issue of City Limits. The magazine focuses on the city and state's efforts to emulate the Pennsylvania Supermarket Initiative: "Agriculture officials said they’re hoping to establish a program to boost supermarket development in underserved communities, basing the effort on a Pennsylvania program – the $120 million Fresh Food Financing Initiative – that’s been on the books since 2004. Widely considered a national model, Pennsylvania’s program has already helped to renovate or build 50 food stores statewide, all in underserved areas, since its inception."

The key here is to amalgamate various funding sources to make new market development not only feasible to the developer, but feasible in the ability of the market operator to offer food at prices deemed reasonable for the targeted neighborhood: "The Penn program encourages supermarket development by coordinating an array of funding sources, including the New Markets Tax Credit, private foundation grants, and municipal and state development funding. To receive funding assistance, stores must be located in low- or moderate-income census tracts; provide a full selection of fresh foods; and be located in areas where fresh food is lacking."

According to existing data cited by City Limits, the city has lost about 1/3 of its existing supermarkets. As we've remarked before, the loss can be attributed to rising rents: "In New York, the project is still in early discussion stages. Nonetheless, the effort could find a welcoming home here. City residents have lost one-third of their supermarkets in recent years, dropping from 1,312 in 2002 to 877 in 2008, according to a market analysis done by F&D Reports, a research group focused on food retail and distribution. That loss, said F&D’s Larry Sarf, is due to one thing: Skyrocketing rents."

City Limits also underscores the crucial health issue: "Losing markets can be more than just an inconvenience—it might well worsen residents' health. For every additional supermarket in a census tract, fruit and vegetable consumption increases by as much as 32 percent, according to an American Journal of Public Health study from 2002." The corollary question here is, what kind of health impact results from the loss of a large supermarket in a community that is determined to be lacking in decent access to things like fruits and vegetables?

All of this makes the decision of Vornado Realty and Distrust to evict a 30,000 sq. ft. Key Food from its location in Soundview all the more appalling. Soundview is precisely the kind of community that the DCP study is most concerned about. Vornado is simply not a good corporate citizen and we're planning-along with the 22,000 strong men and woman of Local 1500 of the UFCW- to inform the entire city about this until the mayor intercedes on behalf of the health of Bronxites.

Tuesday, April 22, 2008

Pie-in-the-Sky on the Menu

As the cockamamie scheme to use calorie posting to reduce obesity goes slowly forward we can always count on the editorialists at the NY Daily News for a huge dose of comic relief. Here's their take from today's editorial observation: "Talk about living off the fat of the land. Seven restaurant chains have begun posting calorie information in their outlets in the city - and the numbers are, to put it mildly, gut-popping...It's enough to make you think twice about ordering - and that's the point of Health Department efforts to enact calorie-posting rules starting this week."

Here's the rub. No one has been able, least of all the Department of Health, to demonstrate that this calorie information-information that will be confusing because of the complications of the fast food menus-will be utilized to make the customers choose healthier foods. And the idea that the restaurants are trying to avoid the loss of profits is silly: the private sector knows how to adapt to new demands from its customers.

The News ends with this flourish: "The industry should take its appeal and, pardon the pun, stuff it. Rather than worry about fat profits being nibbled away as customers realize what they've been eating, the chains should concentrate on meeting the potential new demand for, say, less whopping Whoppers." If the Daily News believes that this scheme will transform the fast food menus then we know what they've been consuming over at 33rd Street-pie-in-the-sky!

Might Makes Blight

With the Willets Point development ULURP moving sluggishly out of the planning gate, it is becoming increasingly clear that the 62 acre site, neglected by the city for decades, is suffering because of the city's announced plans to relocate the existing small auto-related businesses. As the NY Daily News reports this morning: "Though the Bloomberg administration's sweeping Willets Point redevelopment plan is far from a done deal, the bottom has already fallen out of the once-thriving auto repair business in the gritty industrial zone, store owners and managers said.
"Welcome to hell," Dennis Skeahan, 50, manager of Sunrise Auto Parts on Willets Point Blvd., said while waiting for customers under a hot sun last week. "It's not slumping - it's dead!"

This is part of a pattern wherever the threat of the use of eminent domain is in the air-as we've seen over in West Harlem where Columbia has bought up properties, allowed them to fall into disrepair, and has then asked that the development area in question be declared blighted. This has been, as the News makes clear, a thriving business destination before the development scheme was floated: "Working-class people used to come from all over the city to have their cars repaired. But with the city poised to swallow up the tangled industrial haven, managers said customers are looking elsewhere to fix their flat tires and busted windshields."

Well, good news may well be on the horizon, as the city council begins to question the entire development proposal. As the NY Sun points out: "The plan has drawn criticism for its possible use of eminent domain. Earlier this month, business owners around the Willets Point area filed a lawsuit against the city, accusing it of willingly neglecting the area to allow it to fall into disrepair.

In a letter to EDC, 29 council members outlined their skepticism: "This plan would displace more than 250 businesses, which employ 1,711 workers. The plan provides no guarantees that the displaced workers and small businesses will be treated fairly or compensated with meaningful benefits to the surrounding communities such as housing affordable to the average family," the letter said."

And now, according to Crains Insider, some of the plan's key backers are, well, looking to back out: "The city could be in danger of losing two key supporters of its proposed Willets Point overhaul. Queens Borough President Helen Marshall and Queens Chamber of Commerce Executive Vice President Jack Friedman are angered by potential alternatives that were revealed in the project’s environmental impact statement, which was released yesterday."

When it rains it pours-and the administration's plan appears to be all wet when it comes to getting the kind of political support needed to obtain approval. This is one land use review that has not begun auspiciously.

Pointing Over and Out

As Liz reported yesterday, and the NY Daily News reports this morning, it doesn't look good for the Bloomberg Nine in the Willets Point fray-and at the end of the ULURP process it appears to us that Mighty Michael will have (once again) struck out: "Twenty-nine Council members signed a letter sent today to Deputy Mayor Lieber and pledged to kill the Willets Point redevelopment plan unless it undergoes significant changes."

Here's the money quote from the Council letter: "Your decision to push the project forward into ULURP without public discussion indicates to us that you are not serious about ensuring that the project meets the basic standards of public benefit and fairness required for a redevelopment of this magnitude and this level of public investment."

And there's more on this development from the Observer's Eliot Brown, who first broke the ULURP certification story last week: "The letter seems to spell trouble for the Bloomberg administration on this project, which imagines a complete redevelopment of the manufacturing and car repair-intensive district. "As the plan currently stands, it has no chance of surviving the public review process. We urge you to come to the table and work with us," the letter reads."

It certainly appears to us that the Bloomberg administration is playing a high stakes game of chicken, but without a strong ally across city hall it's hard to see how this will go forward; there are still too many unresolved issues, and the fate of 250 businesses and over 2,000 mostly minority workers that Tom Angotti so eloquently has documented, cannot be left to the same folks who've, up until this point, only exhibited a contempt for small businesses. As Councilman Monseratte says: "As currently structured this plan cannot go forward..."

Not to be outdone yesterday, Azi also chimed in on the Willets Point matter, underscoring our concerns about displacement: "The redevelopment plans would take out all the auto shops and replace them with housing, office space, hotel rooms and possibly a convention center.
“The plan provides no guarantees that the displaced workers and small businesses will be treated fairly or compensated with meaningful benefits to the surrounding communities such as housing affordable to the average family,” says the letter."

Given the strength of the letter-and the fact that the Land Use Committee Chair Melinda Katz has already voiced her concerns-it does appear that the Blooombergistas are preparing for another land use crash and burn. And the mayor's legacy....?

Monday, April 21, 2008

Sun Shines on Bloomberg's Childishness

In a wonderfully on point editorial, the NY Sun chastises Mike Bloomberg for his "adult" in the White House comment: "For Mr. Bloomberg to turn around and suggest that Mr. Bush is somehow not an adult or that that he is lacking in leadership abilities displays just an uncharacteristic lack of graciousness by the mayor. It may be that Mr. Bloomberg is feeling frustrated by his own lack of leadership abilities — his inability to get a West Side stadium or congestion pricing past the legislature in Albany, the same legislature that has also blocked his plan to evaluate the city's public school teachers using test scores."

Petulance is not unexpected when you find rich folks stymied by their own inabilities in politics. It's just nice to see the press call it like it is as far as the great Bloomberg mayoral legacy is concerned.

Regimen at the Armory: Bait and Switch?

As the NY Post reports this morning, the redevelopment of the Kingsbridge Armory has been given over to the Related Company-which brings to mind the count the silver admonition when someone unsavory shows up at a dinner party. The stated plan is as follows: "Under Related's plan, the 575,000-square-foot site will become home to an "anchor" department store, up to 35 smaller shops, a number of restaurants and a movie multiplex. "It's going to be catalytic for the neighborhood," said Seth Pinsky, president of the city's Economic Development Corp."

Whether this is a catalyst or a death knell will depend on the vigilance of the elected officials and the good people over at the Northwest Bronx Community Clergy Coalition-the local community watchdogs on all of the doings at the armory. Put simply: Related can't be trusted and iron clad agreements need to be put into place to insure that there isn't any last minute "modifications" of the developers plans.

In particular before "anchors away," there needs to be a certainty about the kind of anchor store that will be sited at this complex-and with the Bronx's first supermarket, a MortonWilliams Associated, located right across the street we don't need to see any food use or a box store that doubles as a supermarket, a la Wal-Mart or Costco.

The access to the armory site is nowhere near ideal so that any unacceptable uses for the development will be hotly, and successfully contested, given the community's organized role in all of this. We'll be watching this one closely.

Food Fight at the Met

In what's rapidly becoming a common theme, there's a rent dispute threatening the continued existence of a Met Supermarket in the East Village; and like the other dispute we've been talking about in the Bronx, it all comes down to preserving affordable supermarkets as real estate values climb. As the NY post reports: "Negotiations between NYU and the Met Foodmarket - which occupies the ground floor of a university-owned building at 107 Second Ave. - came to an abrupt end earlier this month when the store was offered a three-year lease at triple the current rent, said owner Michael Schumacher."

Unlike the Soundview situation, however, where Vornado the landlord is playing the Marie Antoinette "Let them Eat Cake" refrain, NYU appears to have a soupcon more social responsibility that the Vornado folks: "Alicia Hurley, the NYU vice president for government and community affairs, said, "We're hopeful, as well. It is certainly our intention to keep him in the space."

The key issue, of course, is affordability-and what the mayor intends to do with these kinds of rapidly becoming typical situations. As the owner of the supermarket tells the Post: "It was outrageous," he said. "We couldn't operate at even double the rent. We'd have to close."
That would leave local residents - including budget-minded NYU students and the cash-strapped elderly - out of luck." And this is happening all over the city.

Cutting Council Members' Items

On Saturday the NY Times editorial board decided to give New Yorkers another civics lesson, and our only response: "physician heal thyself." It appears as if the Times doesn't like the way in which the city council distributes discretionary funds; and believes that this should be the sole prerogative of the executive branch: "Discretionary funds are always prone to abuse, and so it is with City Council earmarks...It is disappointing that Ms. Quinn is not calling for the elimination of the discretionary funds. Legislators are elected to pass laws and draw up budgets, not hand out money to favor-seekers."

Well now, let's examine this blanket assertion. All the legislatures that we know-from the Congress on down-appropriate monies through the use of earmarks, and there's little doubt that the practice can really be abused in a piggish fashion. At the same time, all of the monies that are appropriated must be funneled through an executive agency. And the scandal involving the Donna Reid Fund can be laid partially at the door of a mayoral agency that failed to do any proper due diligence.

So the NY Times, what a shock, is simply flat out wrong in its Poli Sci 101 lecture. The Times, in all of its resplendent ignorance, also ignores the long history of executive abuses-and it might have taken the time in this context to reference the prison jaunt being prepared by Newark Mayor Sharpe James; not to mention Governor Rowland's malfeasance over in Connecticut.

So we understand that corruption and politics are often coterminous, and the legislative venue for appropriations is no exception. That being said, the call for the elimination of the legislative role in discretionary funding furthers the imbalance between the branches of government in NYC; and assumes executive propriety where we find its absence.

The Times' take is wrongheaded; "The system’s defenders argue that it allows council members to direct money to worthy community groups that might be overlooked in the big-ticket budgetary process. That may be so, but it creates far more serious problems than it solves. It leaves taxpayer money vulnerable to misuse and theft. It also makes it far too tempting and far too easy for politicians to use these funds for political gain. Council members are allowed to run their districts like fiefdoms they control with a big bag of public money."

Some fiefdoms! Some "big bag" of money. Remember the old saying: "The law in all of its majesty, punishes the thief who steals the goose from off of the commons, but lets the greater felon loose, who steals the common from the goose." Mayor Bloomberg has given out millions of dollars in unbid contracts-and has let certain developers heist public lands with no RFPs in sight. The Times' myopia in all of this is telling.

Here's the Times' final bon mot: "We know that even by uttering the word reform, Ms. Quinn has infuriated many of her fellow council members who believe it is their right to hand out taxpayer dollars as they see fit. It should not take federal indictments to show members the serious flaws of that system. But now that those indictments have come, Ms. Quinn has all the evidence she needs to press for a complete overhaul."

A classic case of misdirection from a paper that has had lockjaw throughout the Bloomberg reign; and another example of how the paper doesn't really get the entire process of government. The speaker's elected by her colleagues-and serves at their pleasure. To advocate a "complete overhaul" is to advocate a leadership change since no speaker has carte blanche to do as she wishes.

Pointing in the Wrong Direction

According to Eliot Brown's post at the Observer's web site, the city is preparing to certify the Willets Point redevelopment today against the wishes of the City Council that has the job of approving the massive project. This appears to us as one really bad move. As Brown points out: "The Bloomberg administration is plowing forward on its plan to redevelop the industrial area next to Shea Stadium, as it intends to start the rezoning process on Monday despite objections from the City Council. “We have asked them not to certify Monday,” said Melinda Katz, chairwoman of the City Council’s land use committee. “My feeling is that there are a lot of outstanding issues.”

So what's going on with this? The council, embroiled in its own external and internal turmoil, doesn't appear to be amenable to letting this project move forward without any designated developer or any concrete development plan. It would be allowing the administration carte blanche in deciding what will go into the area; and with so many Queens polls running for new offices in the borough this appears to be a gigantic waste of time and resources.

As Brown points out: "The decision to jump into the seven-month approval process without the blessing of the Council suggests a rising anxiety among members of the Bloomberg administration, which has 18 months left in office and a slew of large development projects left to implement. The vast majority of rezonings that start the approval process make it to the conclusion with approval from the Council, and should the city ultimately see defeat on its Willets Point plan, it would surely be a high-profile rejection."

So why do it? Apparently because it believes that the pressure of ULURP will expedite the negotiations: "Thus the city seems to be of the mind that by pushing ahead, with a deadline of November before the City Council must approve or deny the plans, they can hasten a resolution of the outstanding issues. “The administration has taken the position that they just want to start the clock and get the progress moving,” said Councilman Hiram Monserrate, who represents the area."

Given a lame duck mayor, and a speaker who's seen her power eroded by the slush scandals, this approach is fraught with difficulty-and it appears to us that it will be added to the list of major Bloomberg development blunders: "Both Mr. Monserrate and Ms. Katz have a long list of concerns with the plan as it stands right now, and neither professed confidence that they could all be resolved in the next seven months. Chief among them, in addition to the use of eminent domain, is affordable housing—the city has committed to mandate that 20 percent of the apartments be affordable, though the Council and advocates want more. Also at issue is the selection of a private developer—by rezoning the area first, the Council allows the city to select a developer of its choosing, without any oversight from the Council."

Unlike the Bronx Terminal Market, where local pols abdicated their responsibilities to proclaim their obeisance to developer largess, Willets Point will be the mayor's swan song-an epitaph to his political skills and negotiating acumen. In the years to come, in order to examine the mayor's body of work we're gonna have to exhume it.

Friday, April 18, 2008

A Legacy Admission

In today's NY Post, the paper's Adam Brodsky takes a look a Mike Bloomberg's mayoral tenure; and he's looking for legacy in all the wrong places. After praising the mayor's "caretaker" role- things didn't go rapidly downhill after 9/11, he can't seem to find anything of any lasting merit. Which is not terribly shocking.

The mayor said that we should judge his mayoralty on the success or failure of his education policies-strike one; mayoral control without any real educational vision has led us into a cul de sac. After playing around with all of the progressive miseducators for a few years, Klein and company are floundering and the city's test scores are stagnant. No legacy here, unless you include a lingering distaste for mayoral control of the schools.

There is one area where Bloomberg stands out. As Brodsky tells us: "And, yes, there is more to do - like tending to the one festering sore that New York pols consistently ignore: exorbitant taxes. New Yorkers pay more than almost any other urbanites in America. Alas, Hizzoner just raised the city sales taxes again - this time, by a whopping 33 percent, from 3 to 4 cents on a dollar. (It's been four cents, but was scheduled to drop to 3 by summer - until Mike jacked it back up.) He's also talking about boosting property taxes as much as 7 percentage points, even though he already raised them once during his first term."

And if the mayor had his way we'd have had the congestion tax as well. So the legacy here is a simple one: when faced with the challenge to make government more efficient, and save the overburdened tax payers some of their hard earned money, the mayor simply opted out-proving that he has more John Lindsay in him than Rudy Giuliani.

That will be his enduring legacy, missing the opportunity to reform how the public sector does business; and more concerned with regulating the private behavior of New York's citizenry. When the post 9/11 history is written, he will not be remembered fondly.

The Operation was a Success but the Patient Died

The mayor, as per Azi, has come out in defense of the way in which his agencies vetted the now disgraced Donna Reid Fund. As we recall DFTA said no, but DYCD said yes. What DOI should be doing, instead of examining the actions of the City Council, is looking to determine just how Asquith Reid was allowed to head a group getting city funds even while he was a city employee.

You know, when you leave that relevant question blank on an application form it should raise at least one red flag. Was DYCD asleep, or was there something untoward going on? So when the mayor comes out with instructions on how the council should go about dispersing its funds, he'd be better served by examining his own house-the one headed by the putative "adult."

This Little Piggy...

Will wonders never cease. In the category of the kettle calling the pot black, the mayor's calling om the City Council to bid out more of its discretionary spending items. As the NY Post reports this morning, " Calling for a reforms in how the City Council doles out pork-barrel funds, Mayor Bloomberg said yesterday that large grants to nonprofit groups should be awarded only by competitive bidding."

What's that about people in glass houses? Maybe the mayor just wasn't paying all that much attention when Deputy Dan Doctoroff started to give away city property to his buddy Steve Ross at the Related Company-a process that actually began only two months into the mayor's first term when Doctoroff awarded the Bradhurst development to Related along with the public subsidy that the Giuliani folks wouldn't pony up because of the issue of fairness.

The continued aggrandizement of Mr. Ross was aided and abetted by a whitewashed DOI investigation of the potential conflict of interest between Doctoroff and Ross-old friends and former business partners; a whitewashing that continued even as Deputy Dan was leaving government to set up shop at Bloomberg LLP. The most egregious example of this favoritism is of course the Bronx Terminal Market give away.

It is useful to revisit this incredible use of personal favoritism to aggrandize a super wealthy developer. Here's our original post:

Tuesday, August 02, 2005

Immaculate Deception

The City’s EDC is still twisting, turning and spinning in its effort to explain the supposedly autonomous manner in which the Related Companies managed to, all on its own, wedge itself into a lucrative no-bid deal to develop the Bronx Terminal Market. In a press statement the City asserted the following. Our responses are listed under each item:

1) The City could not have a bidding process because it didn’t control the site The City could have quite easily and legally issued a Request for Expressions of Interests (REI) for the BTM site. By doing so it could have gauged what the level of interest was for the site, what kind of diverse visions existed for the site and, most importantly, the potential value of the site when bid for on an open market.

2) The City “engaged a mediator” who recommended that Buntzman (the old landlord) bring in a developer to “increase the property’s value” If the City engaged a mediator then there was a level of public involvement that clearly disproves that this was a private deal. In addition, the charge to see if and how the property’s value could be enhanced also suggests that the City, far from speculating, already had a decent idea of how this could be done.

3) Buntzman met with “several developers” (including Related) Who besides Related did Buntzman meet with? Can we ask these folks to step forward in order to discuss their views about “enhancing the property’s value?” Also, are they at all miffed at not being included in the development? If they could speak without fear of reprisal would they characterize the City’s role as neutral?

4) The City asked Related to assess this site’s potential. How did Related get picked to “assess the site’s value?” (It seems to us that some steps are missing here).

5) Related thought the site had potential for retail and began discussions with Buntzman that resulted in the following “private actions:” a) Related buys Buntzman’s lease and b) Buntzman drops legal action against the City. So the “private action” only became private after Related somehow got exclusivity and after some failrly public interventions by the City. The dropping of all legal actions could not have occurred without the acquiescence of the landlord and NYC and it is likely that Buntzman was made aware that Related’s offer would be the one sanctioned by the City. The question then becomes: Would Bunzman have taken $42 million from another developer?

6)The City cannot “speak to” the discrepancy between the value of the velodrome and property and the House of Detention (HOD). Here’s the one honest statement in the release. The City can’t speak to the discrepancy because, having foregone all standard real estate due diligence (like appraisals) they simply and cavalierly swap parcels using an unacknowledged or nonexistent standard of comparison.

7) Related paid Buntzman $42 million for its lease. Once again the negotiations leading to Buntzman agreeing to be bought out, as well as the City’s role in that process, remain shrouded in mystery.

8) Related will be paying ground lease rent to the City when the development lease is signed and base rate plus a percentage of the revenue when the retail development opens. Ah the lease. The press release doesn’t mention just how favorable this is and avoids pointing out that in year 99 of the final lease the Related Companies will be paying less money on 2,500,000 sq. ft (around $2,000,000 a year) than the market tenants are currently paying on 403,000 sq. ft (around $3,360,000 a year)

9) The House of Detention is not now part of the current development plan nor is the velodrome site but the City has until April 2006 to decide on the House of Detention and Related can exercise an option on the veledrome site at which time rent will be negotiated

As to the “uncertainty” involving the HOD and the velodrome this is pure hogwash. The city will transfer the jail and Related will exercise its option because all of this is contained in the Memorandum of Understanding (MOU) between Related and the City. All parties simply want to keep the more controversial aspects of the deal out of the current land use application.One last observation about how private this BTM deal is: In the documents gathered by the merchants’ lawyers a 2002 rendering was found that depicted the Olympic velodrome on the BTM site. This was a full year before the Related deal was finalized! Clearly, Deputy Dan and the City were involved from the very beginning in the effort to advance an Olympic venue and to do so with a developer who happened to be Dan’s former business partner and a stakeholder in NYC 2012.

So now we come full circle, and Mayor Mike wants to introduce an RFP process for the council's spending. And the D (umb) O I(ncompetent) is looking into the council member items. As the NY Daily News points out: "Department of Investigation probers are poring through thousands of documents bearing the names of politicians, dollar amounts and a roster of nonprofit groups - some real, some not."

DOI should get its own house in order-maybe starting at DOE; and the council, as an independent branch of government, should tell the mayor's lackeys to take a hike-and launch their own investigation with an outside independent investigator hired at the council's behest. Letting the Bloombergistas into all of this is taking hypocrisy to a new level. It's time that the city council asserted its independent authority.