Monday, August 31, 2009

Lead or Get Out of the Way

We were duly impressed by Stuart Appelbaum's calling out of Governor Paterson for his reticence in supporting the electoral challenge to Mike Bloomberg being mounted by Bill Thompson. As the NY Post reports: "A top state Democrat is blaming Gov. Paterson for the "complete silence" of their party in challenging Mayor Bloomberg in the fall election. Stuart Appelbaum, one-time chief counsel to the Democratic National Committee and president of the large Retail, Wholesale and Department Store Union, also warns that the governor will be ditched by powerful Democrats next year if he doesn't give all-out support to city Comptroller Bill Thompson in his all-but-certain challenge to Bloomberg, the Democrat-turned-Republican-turned-independent running on the GOP line."

It's about time that someone let the governor know that it's not all about him-and that the party deserves a titular head who is more than a figurine. And Mike Bloomberg needs to be challenged for his support of Republican electeds and principles; at least when it suited him to do so. No one deserves more credit than Bloomberg for the mess in the state senate this spring. Absent his enthusiastic support of the state Republican Party in general, and Frank Padavan in particular, the couping of the spring wouldn't have been possible.

The reaction of the Democratic Party to being called out on this issue, dots the "i's" and crosses the "t's" of the Appelbaum accusation: "Jay Jacobs, Paterson's handpicked state Democratic chairman, conceded he had "heard the complaint" that Democrats haven't taken on Bloomberg -- but he appeared reluctant to challenge it. "I would say my first obligation is to raise some money for a party that needs it. How aggressive we're going to be is somewhat dependent on our fund-raising," Jacobs said. Jacobs repeatedly refused to say flatly that Bloomberg should be defeated, responding to questions with phrases like, "I support the Democratic nominee," and, "The only way we get a Democratic mayor is to defeat the guy running on the Republican line."

Why the lockjaw here? Pure self interest: "Several Democrats, meanwhile, said Thompson is convinced that Paterson has ordered party leaders to keep hands off Bloomberg in hopes of forging a "neutrality pact" with the mayor to help his own election bid next year. "It's clear to everyone that David wants Bloomberg to support him, and in exchange, he's taking a dive in terms of supporting Billy," a Thompson backer said."

Reality check please. This simply underscores our observation that the power of Bloombucks dwarfs any of the muscle wielded by former Mayor Giuliani-precisely because the money, the threat of using, or withholding it, paralyzes the normal partisan instincts that we should be expected to see. As Appelbaum points out: "In the past, the state party would have [former Democratic media strategist and current Bloomberg spokesman] Howard Wolfson attacking the other side, but now there's nothing."

But the governor's strategy will not get him very far-and, in our view, will exacerbate his current slippage among the leaders of the party in New York. As Appelbaum concludes: "Gov. Paterson can't expect Democrats to support him next year if he's unwilling to support the Democratic Party this year."

More and more leaders need to demand a strong show of support for Thompson-heaven knows he sure could use it. And the thought that the governor's timidity may be race based is sad: "Some supporters of Thompson, who, like Paterson, is African-American, insisted that one of the governor's controversial race-related statements 10 days ago explained the governor's reluctance to back Thompson's campaign...A Thompson supporter called the statement "the governor's code language for why he's reluctant to support Billy: He doesn't want another prominent African-American on the scene because he thinks it hurts him."

All of which is symptomatic of a malaise in the Democratic Party-and an indication of the corrosive power of big money interests. Bloomberg, for his part, is demonstrating quite clearly that he only rises above party politics because he has purchased the loyalties of all involved. In Mike Bloomberg's world, the democratic process is simply a version of, "The Price is Right." So, apparently, for David Paterson it's now time to, "Come on down!"

Beating the Drum for Retail Equity

Now many of you might already know that the Alliance and the Drum Major Institute rarely see eye to eye on policy matters. But when it comes to the issue of retail development-and the need for worker equity-we're definitely on the same page. Here's DMI's take on the Kingsbridge Armory: "When city tax dollars are used to subsidize a private developer, community residents should benefit from the deal. That is the principle behind the fight to bring living wage jobs to the Kingsbridge Armory in the Bronx. Community leaders are prepared to stop the redevelopment of the historic structure into a mall--unless the developer agrees to require new retail tenants to pay a living wage."

And they go on to quote from the words and wisdom of Jesse James Masyr (via the Norwood News): "I can't ask tenants to have a [higher] wage package than they have just two miles down the road," Masyr said. He added that other people in the industry think Related is "crazy" for even attempting to proceed on this retail-heavy project, given the state of the economy. "Retail is dead," Masyr said."

Our advice to Masyr and Related: If it's too tough to develop this Armory site while paying workers a living wage-after getting millions of tax payer dollars-then simply walk away. Don't do anyone any favors -because you're not. This subsidized retail project-when an even larger Related mall has just opened down the road-will put a serious hurt on the existing retailers in the surrounding neighborhoods; the crowds down at Gateway are coming right out of the neighboring shopping strips, making those strips less viable by the day. Why replicate this phenomenon at Kingsbridge? What's the compelling public policy need?

The need, if it exists at all, is to develop the Armory as a model of pay equity-there is no other purpose when a new mall already has opened and is easily accessible to the folks in the Kingsbridge community. And DMI surmises that Related will still do well, even with higher wage requirements.

But John Petro, DMI's contributor on this topic, underscores our point as well: "My guess is that even with a living wage requirement, retail tenants in the space will do very well, as will the profits of Related Companies. It only takes one trip to the Target at Atlantic Terminal in Brooklyn, rumored to be the busiest in the country, to see that national retailers do very well in the city. Plus, with city subsidies to sweeten the pot, Related Companies is getting a good deal. But the real issue is: should the city be subsidizing projects like this in the first place? Does using city money to create poverty-level jobs make any sense?"

You see, no one has really done any of the necessary cost/benefit analysis on this-and Related's attempt in its EIS is simply risible. With neighborhood retail stores in record foreclosure, why use tax dollars to make their ability to survive that much more problematic? Especially when local retail dollars circulate in much greater degree to the benefit of the municipality.

DMI gets part of this: "Economic development subsidies are intended to create new jobs in the city by helping businesses relocate or expand their operations here. But job quality matters just as much as the number of jobs created. When the city subsidizes poverty-level wages, it pays twice. First, taxpayer dollars are first diverted from schools, infrastructure, and other city needs."

What's missing from the analysis, however, is the importance of local retailers-and the fact that retail subsidies for chain stores shift demand, but don't create it. So, without a living wage component, the Shops at the Mall project creates a double edged deficit for the city. Low wage jobs are, "created," (in reality merely shifted) using scarce tax payer money; while at the same time, struggling entrepreneurs are put in greater jeopardy of failure. Is this part of a "five borough economic plan" that can be defended by anyone?

Trafficing in Deceit

We have had the opportunity to review the city's traffic study on the Willets Point development-and the able rebuttal from Bernard Adler. If the surrounding communities-not to mention the city's tax payers-knew the real story on what kind of traffic mess this development will create, all hell would break loose. Put simply, there is virtually no way to mitigate the expected traffic flood that the additional 1,000,000 square feet of development will generate.

Some of this was covered in the local papers last year. As the Queens Chronicle wrote: "Currently, the opposition group is focusing on traffic congestion that the project would create. According to the EIS, the plan would generate increased traffic on the Van Wyck and Whitestone Expressways as well as the Grand Central Parkway..." But, as the Willets Point United's attorney Mike Gerrard told the Chronicle, that's not the half of it: "He also pointed to the EIS, calling it striking. “The plan will destroy traffic on the Van Wyck. It would lead to appalling traffic every day.” Gerrard noted that a Willets Point interchange would have to be added, which requires federal approval. “This is far from a slam dunk.”

The city is actually aware of the potential for a traffic nightmare, but it is in its interest to downplay the possibility-and, of course, the cost of remediation. What we do know, is that even the city believes that two ramps on and off the Van Wyck will be needed; but no one knows if NYSDOT or the Feds will agree to approve them.

What we do know-and know for certain, since it is in the city's own EIS-is that at least twenty intersections in and around the proposed WP development will be at "F" level of service; meaning severe delays with all of the attendant air pollution and environmental damage. And this unmitigated mess isn't even on the days when there's a Met game or a tennis match!

As usual, the city's idea of mitigation is a traffic signal here, and a new parking restriction there-a wholly inadequate response to the more than 6,000 new car trips that the development will generate. In addition, the city's EIS completely ignores the impact that the newly generated traffic-not to mention the problems that off ramps will create-will have on the Van Wyck and Grand Central. The city, for its part, even makes the risible statement that its addition of, "acceleration and decelleration lanes," will, "likely improve traffic conditions on the highway network." (Pet., Ex. 1, FGEIS at 29-60)

Of course, this is exactly opposite to what the NYSDOT has assumed about the impact of off ramps-particularly those that exit on the left, as the city is planning to do. As the Adler report underscores; "NYSDOT communications contain multiple comments and concerns that the proposed ramp will not have adequate sight distance...The Department is also concerned that the ramp will not have sufficient capacity to accommodate the potential traffic volumes which will lead to a significant queue spillback of traffic onto the northbound mainline of the Van Wyck Expressway, leading to more and severe accidents."

And, as WPU has also outlined in its Article 78 challenge to the FEIS, "the local roads and Northbound Van Wyck Expressway will all but grind to a halt at key hours." And, by the way, we're still unsure if these not so great mitigation ramps will even be approved. But we did get a kick to discover that the city has set aside $50 million to be used for additional measures to mitigate.

Please! The amount of post development mitigation that will be necessary here, will run into the hundreds of millions of dollars-and thew city tells us, that it will review what's necessary after the project is built. What this means is that, while the developer and his tenants get fat on the receipts from the project, the tax payers-but not the developer-will be presented with a huge post project bill-similar to what happened over at the Garden State Mall after its developer seriously underestimated traffic volumes; and after customers and local municipalities cried out because of impassibility on Route 17 and the adjacent local roads.

But even more seriously, what the city is doing here is purposefully hiding the eventual costs-both financial as well as environmental-so as not to frighten the locals and the tax payers of NYC. What is responsible here, is to outline the necessary mitigation-which will include the building of additional roads and lanes-before the project is built-when costs are more reasonable. After the development is constructed, however, this additional transportation infrastructure will become prohibitively expensive, and might even entail additional condemnation.

So what we have is an environmental scam on the citizens of Flushing, Corona and Jackson Heights-the communities in the line of fire from the after shocks of the Willets Point project; and the entire borough of Queens, for that matter. It will be a traffic and environmental nightmare foisted on these communities by the very same Kermit the Mayor who has been ridiculously posturing as an environmental activist. But traffic-free roadways are apparently only desirable in the limousine alleys of Manhattan-and the shlubs in the local nabes can just go choke on Bloomberg's development fumes.

All of these issues will be hammered out in court, but our friends at the Queens Civic Congress should be aware of what lies ahead if WPU fails in its legal battle. It is their members that will bear the brunt of an ill conceived over developmet that fails in its basic planning requirement to insure that local communities are not made to pay an inordinate price for this so-called progress.

Vendors Met Their Match?

We have been saying all along that the city's vending oversight regime is both a farce and a disgrace-and is badly in need of a complete overhaul. We assumed, prematurely it seems, that the exposé in the NY Post last June would have jump started some curative action on the part of the city. So far? Zilch!

But it just might be that there is some hope on the horizon. Why? Well, it seems that there is a vending problem right in front of the Metropolitan Museum-only a few short blocks from the Bloomberg estate. As the Post reports, the mayor has finally gotten outraged by a problem that has been vexing store owners for his entire tenure with no response out of city hall: "Street vendors are engaged in "fraud" when they cynically hire disabled veterans to skirt permit regulations, Mayor Bloomberg said yesterday as he commented on the increasingly bitter food fight in front of the Metropolitan Museum of Art."

How are they doing this? "Only truly disabled vets have the right to set up shop anywhere, according to a 19th-century post-Civil War law, but some epicurean entrepreneurs have taken to hiring them as cover." We're shocked-not at the fraud-but at the fact that the mayor has taken eight years to come out of his coma on this issue; and why hasn't he done something when the Post highlighted how peddlers were using dead people to get permits that they later sold for tens of thousands of dollars?

As the paper told us in June: "The hot dog you just bought from a food cart may have been sold by a dead man. The city is investigating a racket where scammers pretend to be vendors who have died or left the country. The crooks pay $200 renewal fees for the lucrative permits -- which should have been returned to the city -- in the name of the vendors. And then they either operate the carts themselves or lease the permits for thousands of dollars."

We have complained about the fact that fruit peddlers are operating multiple carts in violation of the one man, one cart rule-along with the fact that the peddlers routinely operate carts in front of existing food stores and flout the rules on size, storage, cleanliness and location. And the problem lies with the city's archaic and lax enforcement regime that cares not one wit about the tax paying store owners who are getting ripped off.

As we pointed out almost four years ago:

"What is really galling for store owners is the fact that these peddlers, having none of a store's significant overhead, are able to siphon business from the markets by underselling the legitimate businesses. We even have anecdotes of store customers coming in to upbraid store managers because of the store's "rip-off" prices. Supermarkets, particularly in Manhattan, pay exorbitant rents and the concomitant property taxes are astronomical. These are the taxes that the city needs to pay for all of its vital services. It is simply unconscionable for peddlers to be allowed to in essence steal the legitimate business from store owners.We are asking the administration to vigorously enforce the law and we have petitioned the City Council to examine ways to toughen enforcement. If nothing is done to interrupt this trend pretty soon the street vendors will be replicating a supermarket's entire inventory. If you think that this is far-fetched then go to 86th Street between 1st and 3rd Avenues to see the bazaars already in operation."

But Bloomberg's huffing and puffing on the veteran vendor fraud masks the failure of his administration to act to remedy an entire vending system that is rife with fraud; and, making a bad situation worse, with no real enforcement mechanisms that are effective or make any sense. What has taken them so long to respond?

The following from the Post story highlights Bloomberg's asleep at the switch nonfeasance: "Bloomberg was reacting to a Post report yesterday highlighting the case of Pasang Sherpa, who defaulted on his $642,000 city contract to operate a hot dog stand in front of the Met. He returned later with disabled Vietnam vet Leo Morris Jr. -- whom he paid $100 a day to stay nearby, Morris told The Post. Disabled veterans do not need a special permit to operate in front of the Met. "Maybe he's just catching up on his memos now," Vietnam vet Dan Rossi, 69, quipped about Bloomberg. He said he's been complaining to City Hall for years about what he called "rent-a-vets."

Maybe Bloomberg should call 311? The entire vending apparatus is in need of an extreme makeover-and if the mayor goes back to sleep after his assumed re-election, then it will be up to the city council to get a better handle on the out-of-control problem. Maybe we need a march of store owners and workers on 79th Street to get Bloomberg's attention.

Friday, August 28, 2009

More Armory Wages of Sin

The question that some of the opponents of the redvelopment of the Kingsbridge Armory have is; Can the unbridled greed and naked political power of the Related Companies be thwarted in the interests of what's best for the local community and the city as a whole? Up until now, Related has been able to really do anything it wants-and get from Mike Bloomberg everything that it has asked for; from the redevelopment of Bradhurst Avenue, to the two Gateway Mall projects, nothing has stood in the company's way. Perhaps, until now.

You see a coalition of business, labor and community is growing that would restrict the unilateral scope of the real estate giant's reach-and if Related balks on a CBA it could, as we have said before, lead to the scuttling of the entire enterprise. As the Bronx News Network reports:

"This morning, Bronx Boro Prez Ruben Diaz, Jr. and Stuart Applebaum, the head of the Retail, Wholesale and Department Store Union, held a press conference on Kingsbridge Road, in front of the Kingsbridge Armory, to show solidarity in their opposition to a big-box supermarket at the Armory and also to promote the merits of the Community Benefits Agreement (CBA) they sent to the Related Companies (the Armory's developer) last week.Also showing their support were Assemblyman Jose Rivera, Councilwoman Maria Baez (suddenly, she's everywhere these days), Ozzie Brown of Community Board 7 and some members of the Kingsbridge Armory Redevlopment Alliance (KARA)."

Quite an array of political bedfellows. It seems that Related has the uncanny ability to unite all factions in the borough; and if all of these folks stay together on the supermarket and living wage question than Related will have to decide if it makes business sense to develop the Armory-because if unanimity reigns here, than the city council will be hard pressed to over ride the wishes of the entire borough. It's not as if developing the Armory is like the continuation of some vital city service-something that demands ignoring the wishes of the entire borough's political establishment.

The challenge here for all of those standing in the way of Related's unfettered development desires, is to come to an agreement that all of the players can stand behind. We don't think that point has been reached, but we're sanguine that agreement can eventually be achieved since the goals of the coalition are solid.

As BNN tells us: "We also learned a few more details about what's included in the draft CBA sent to Related. One, as we reported last week, there is indeed a living wage "policy" included. Applebaum talked about a "living wage" of $10 an hour still only adds up $21,000 for a year. “Related is saying that $21,000 is too much to give workers in the Bronx, and I don’t accept that,” he said."

And with Bronx unemployment at a record 12.5%, the borough needs to have the kind of employment that rises above the minimum-something that chains stores are capable of doing if they want to do business in the community. If Related balks, our suggestion is to de-designated the company; and figure out anew how to develop the Armory in a way that treats the neighborhood with respect, and provides meaningful economic development for the borough's struggling work force.

Daily News Calls Out the Indians-Without Reservation

Three cheers for the editorialists at the NY Daily News for their strong support of the federal court ruling against the black market Indian cigarette retailers on Long Island: "A federal judge has finally ordered the shutdown of Indian tobacco dealers who've been flagrantly dodging hundreds of millions in sales taxes. A big thank you to Federal Judge Carol Amon. And kudos to Mayor Bloomberg's lawyers for providing her with the slam-dunk evidence of mass thievery against the taxpayers."

The mayor does deserve a belated thanks, but along with the caveat-as we have pointed out-that it was his action in raising the tax to a confiscatory level that has opened the black market flood gates in the first place. And the legal effort by the city should have also been accompanied by an aggressive street-level enforcement effort to interdict the wave of illegal sellers who have set up shop on the city's sidewalks.

In addition, it was the initial legal challenge by John Catsimatidis that we believe prompted the Bloombergistas to get involved. And he deserves the kudos here as well. But the News misses a crucial point-and in the process ends up blaming the victims of the buttlegging: "For years, smoke shops based on Long Island's Poospatuck Reservation have been selling millions of untaxed cigarettes to buttleggers who peddle them by the vanload in the streets and bodegas of the city."

The bodegas are the victims of this scam, not co-conspirators. The estimated loss is around $250 million a year-and the rising level of bodega bankruptcies can be at least partially attributed to the loss of a significant revenue stream; a fact that didn't seem to motivate the mayor who seemed to be solely concerned about the lost tax dollars.

The News is, however, right to point its finger at Albany: "Amon's ruling stands in stark contrast to the weak-kneed posture of Albany officials, who have failed to crack down on wholesale tax evasion going on right under their noses. Gov. Paterson has continued the fruitless policy of trying to negotiate with Indian scofflaws. And so Poospatuck merchants have robbed the city and state of $840 million between 2004 and 2008. But, at last, the thievery may be ending."

Let's hope so. With rising budget deficits and struggling mom and pop retailers, New York can ill afford to let the Indian rip-off continue.

Is it Legal?

It's been two months since Willets Point United filed a complaint with the office of the New York State Attorney General about the alleged illegal lobbying activity conducted by Claire Shulman and her erector set lobbying entity mouthful called, the Flushing, Willets Point, Corona Local Development Corporation. Now the AG is Andrew Cuomo, and the Cuomo family has deep roots in the borough of Queens-not to mention Queens politics; and it's hard not to envision that the investigation of someone like Shulman creates a certain conflict in the body and soul of the aspiring Cuomo-but AC has confounded critics in ther past, and perhaps he will again on this issue by showing just how little he regards political privilege.

Still, since the complaint was filed on June 30th, one can understand the skepticism of WPU that the AG will come out swinging on this issue. But this is a situation that cries out for clarification-if not vigorous prosecution. We have, for instance, the contradictory statements from Shulman herself and those of the mayor's spokesman concerning just what the money for the LDC was supposed to go to. Lobbying, or not? As the NY Times pointed out last week: "The Mayor's spokesman, Andrew Brent, tells the paper that when the city gave Shulman $450,000 -- coincidentally, the same amount Shulman reported spending on lobbying work -- they never expected her to lobby with it. She was supposed to do "outreach, public relations, and marketing," says Brent -- she never mentioned lobbying (which might be defined as outreach, public relations, and marketing aimed at elected officials)."

Now, as we pointed out, Mayor Mike has taken time out from his strenuous campaign schedule to say something different from what his aide and economic development officials told the NY Times last week. In an interview with the Times Ledger, Bloomberg famously told his subjects: "These groups are designed to lobby,” Bloomberg continued. “I don’t know if they technically broke the law.”

Now here's a dude who came after the football player Plaxico Burress hammer and tongs for carrying an illegal firearm, after the hapless Burress literally shot himself in the foot. A warning? After all, Burress only managed to hurt himself for his own illegal stupidity. Not happening with Savonarola Blomberg. When it comes to the issues he deems important, it's throw the book at 'em. But, when it comes to a situation where the interests of one Michael Bloomberg are being advanced, the potentially illegal activity is reduced to a technicality it seems.

That doesn't mean, however, that everyone must see the world through the mayor's own jaundiced eyes-and the latest issue of the Queens Tribune hones in on the story: "In the build-up and battle for the redevelopment of the Iron Triangle, the Flushing Willets Point Corona Local Development Corporation championed the proposed rezoning and rebuilding of the 62-acre plot of land. With former Borough President Claire Shulman, 83, at the helm, the corporation actively promoted Mayor Mike Bloomberg’s plan. It initially hired prominent lobbying firm the Parkside Group before advocating the plan to elected officials – and then taking over those duties itself, spending about $450,000 on lobbying efforts."

Uncertainty about the legality of the lobbying effort remains-with even a veteran lobbyist unsure of how to view things: "Yet the group’s actions fall within a legal purgatory, according to attorneys interviewed by the Tribune. There is no legal precedent for such a case. “The spirit of the law is meant to go towards paid lobbyists hired to affect legislation,” said Sid Davidoff, President of the Advocacy Association of New York. [For Shulman] “The question is ‘Where’s the prime responsibility?’ It is very gray, and that’s part of the problem.” The Mayor’s office and the Economic Development Corporation maintain the corporation was hired to perform outreach efforts, while Shulman told the Times lobbying was part of the equation. While the corporation’s actions are common, several attorneys disagree on the definition of the word “lobby.” Federal, State and City laws vary, each setting thresholds for both financial and interpersonal activity."

But, in the end: “A five minute meeting [with an elected official] does meet the threshold,” Davidoff said. “If you’re attempting to affect legislation, then it is lobbying.” The question then is not whether Shulman and the LDC lobbied, but whether they were allowed by law to do so. As WPU told the paper: "A complaint brought by Willets Point United, a collective of landowners in Willets Point opposing eminent domain, sparked the controversy. “Our lawyers informed us that she broke state corporation laws, that she lied to the IRS, filled out fraudulent tax returns,” said Jerry Antonacci, head of WPU. “You can’t tell me this lady is a veteran of politics and doesn’t know the law.”

Here's the crux of the matter. The incorporation papers for the LDC proscribe lobbying. The LDC's filing with the Federal government to obtain it's tax exempt status-signed by Claire herself-specifically denied any lobbying effort, in spite of what the former Queens BP now is proclaiming from the roof tops; in effect, placing Shulman squarely in a perjured situation.

So, with all of this swirling around, and the issue of the city government possibly funding an illegal effort to wrench long established businesses from their land in the forefront, it is incumbent on Mr. Cuomo to act expeditiously-since the money to the LDC is still, at least as far as we know-still flowing from the city's coffers. In this case, justice delayed is really justice denied-and if Cuomo won't act, it may be necessary to appeal this to a higher law enforcement authority to see just how technical this violation of law might really be.

Thursday, August 27, 2009

Living Wage: Armory's Dying Wish?

Yesterday, Bronx BP Ruben Diaz and Assemblyman Jose Rivera joined with Stuart Applebaum of the RWDSU to demand that the development of the Kingsbridge Armory include a living wage component. As the NY Daily News reports: "They want a living wage - even if it kills the deal for redevelopment of the Kingsbridge Armory. The demand is among a list of nine that Bronx Borough President Ruben Diaz unveiled Wednesday in a proposed community benefits agreement (CBA) he and local stakeholders hope to hammer out in negotiations with the armory developer, the Related Companies. "This is an excellent opportunity to set a new paradigm," said Diaz, "where corporate America can come in and make a profit, but do it in a way that truly benefits the community."

Which raises the question of whether the Related Company will ever accede to this reasonable request-or resist, and allow the project to die. That assumes, of course, that the proponents of the living wage demand are able to muster the same support that opponents of a supermarket in the Armory have. Currently, all eight Bronx council members oppose the large food use; but where the delegation as a whole stands on this other key issue remains uncertain.

That being said, the demand for a living wage remains as a compelling component of any subsidized retail development. In our view, it is always problematic to use tax payer dollars to incentivize new retail projects; since the end result is usually the shifting of retail sales from existing mom and pop stores to national chains, And, as Stacy Mitchel's seminal work in this area underscores, this kind of policy results in a net loss to the locality.

Put simply, local dollars re-circulate at a much more productive rate that those of national chains headquartered elsewhere. Therefore, if we are going to subsidize chain stores that cannibalize existing neighborhood retailers, the least we can insist on is that these entering retail outlets pay the locals at a proper living wage. Anything less is simply cheating both the neighborhoods and the tax payers in general.

Appelbaum gets it right: "I don't buy that assumption," said Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union. "It's not a matter of whether it's going to be profitable, but the size of the profit they will make." Living wage advocates point to the $40 million in city taxpayer money subsidizing the armory project in the form of tax breaks and city-funded repairs. "If they are taking from government," said Appelbaum, "they have to give back to the community."

And, as the Crain's Insider reports this morning: "Bronx Borough President Ruben Diaz Jr. and local leaders have drawn up a community benefits agreement that they hope to negotiate with The Related Companies, which is seeking city approval to redevelop the Kingsbridge Armory. They’ll ask Related for recreation space, local hiring, living-wage jobs, a pledge from employers in the development to not interfere with union-organizing campaigns, and the exclusion of a big-box grocery store. A Diaz spokesman says the plan includes a “legally binding enforcement provision,” to ensure that the developer complies. Negotiations with Related are expected to kick off soon. "

So let's get to it! This project symbolizes all that's wrong with the mayor's top-down development policy-and the tush backwards supermarket initiative. In its current fiscal state, the city can ill afford robbing from Peter to not pay Paul schemes. If this project isn't constructed with the proper foundation, then it should rightfully collapse under its own ill-conceived weight.

Fire in the Holier Than Thou

The revenge of the culpable may be upon us-and those indicted and convicted in the Deutsche Bank fire aren't going down meekly. As the NY Times reports this morning: "Lawyers for three construction supervisors and a demolition subcontractor charged in the fatal fire at the former Deutsche Bank building argued in court papers filed on Wednesday that city, state and federal agencies and other contractors were more to blame than their clients."

Bring them all before the bar of justice is our motto here-and, as Wayne Barrett dramatized last month, there's indeed a great deal of blame for the city to share: "The Voice's cover story this week, "Bloomberg's Biggest Scandal--the Deutsche Bank Fire--Should Be His Downfall" -- examined the determination of top city officials, including Bloomberg's longtime top deputy Dan Doctoroff, to ignore the risk of installing Bovis Lend Lease and its prime subcontractor Galt at the demolition site of the bank building. Doctoroff brushed aside warnings from the city's investigations department about Galt in deference to Bovis' reckless desire to hire the mob-tainted firm."

And the city's actions in only targeting the fire officiers-but not the agency head-is equally shameful. As the Times pointed out in June: "Seven Fire Department officers were censured on Wednesday for failing to ensure timely inspections before a fatal fire at the former Deutsche Bank building in August 2007. The punishment, far more lenient than could have been meted out, nevertheless drew immediate criticism from union officials, who said department brass had not emphasized the inspectional rule and had rarely enforced it."

And union officials were quick to condemn the selective persecution: "But union officials said that singling anyone out for punishment was misguided because the seven men were as hard-pressed as any of their colleagues to follow the rule in question — one that requires basic inspections at all high-rise buildings, being built or demolished, every 15 days. The union said the rule was widely disregarded. One union official criticized Mr. Scoppetta and the Bloomberg administration, saying that if the 15-day rule were widely known, it should have been known at all levels and in the city government. Failure to make the rule a priority — in the face of a building boom over the last 15 years in Manhattan — rested with the departmental brass, who had been held blameless to date, union officials said."

But Mr. Management is great at taking charge-but not in accepting blame; or even insisting that his commissioners accept it as well: "There is nothing more reprehensible than a leader who pins his own failures onto his subordinates,” said Deputy Chief Richard J. Alles, a Uniformed Fire Officers Association official. “I would say that the buck does have to stop somewhere, and when you run a department, you own it — directly or indirectly,” he said. “So, commissioner, it’s yours, shared with others, including the mayor.”

So we await the journalistic outcry on this entire shameful episode-and not the simple tsk tsk that always seems to accompany a Blomberg blunder. As we commented last month: "Let's not forget that two firefighters were killed as a result of the city's actions here: "Manhattan DA Robert Morgenthau has indicted Galt and two of its officials in the negligent homicide case involving the death of two firefighters, Robert Beddia and Joseph Graffagnino, at the bank site. He also charged one Bovis employee, but said he did not indict Bovis because it could have caused the collapse of a company that employs thousands."And, as Barrett has told us, not a single paper has even bothered to call for the removal of the fire commissioner-an incompetent administrator with no fire fighting expertise, whose claim to fame involved a see no evil approach to child abuse when he was in charge of Administration for Children’s Services (ACS)."

So, while the current complainants are certainly guilty-and we all know that misery loves company-it still remains that the real culprits in the death of two of our bravest have never been singled out; not even for the opprobrium they deserve. Talk about Teflon!

Indians Courting Defeat

As the NY Times is reporting today, illegal Indian cigarette sales on Long Island may be coming to an end: "A federal judge ruled on Tuesday that a group of tobacco vendors on an Indian reservation on Long Island cannot sell tax-free cigarettes to the general public until a court rules in a closely watched legal battle between the reservation and New York City. A temporary injunction issued by Judge Carol B. Amon of Federal District Court in Brooklyn gave the city at least a temporary victory in its efforts to collect hundreds of millions of dollars in tax revenue."

Let us remember that it was John Catsimatidis who struck the first legal challenge against these tax cheats; and the city jumped in with its own challenge-and the current budget meltdown makes the situation that much more compelling for the tax happy mayor: "The city will go after every dollar that is owed to city taxpayers,” Mayor Michael R. Bloomberg said in a statement on Wednesday. Under Judge Amon’s ruling, a group of cigarette businesses on the Poospatuck Indian Reservation near Mastic can sell tax-free cigarettes only to tribe members, for personal use, until a verdict is reached in a federal lawsuit the city filed in September."

The Indians, for their part continue to allege-contrary to the US Supreme Court-that their sovereignty makes them immune from this kind of legal challenge: "The judge’s ruling is completely wrong,” said Harry Wallace, a lawyer and the chief of the Unkechaug Indian Nation, which is on the Poospatuck reservation, adding that it ignored the Indian nation’s sovereignty."

Lost in the city's search for tax dollars, is the fact that retailers on Long Island and in NYC are taking a bath with all of the illegal butt smuggling: "The city says the reservation businesses are illegally selling large amounts of cheap cigarettes to people outside of the tribes, including bootleggers who bring cartons upon cartons into the city for resale. City officials estimated that the sales deprived the city of $420 million from 2004 to 2008."

The losses experienced by local bodegas amounts to close to $2 billion in the same time period-and what isn't mentioned in today's story, is the culpability of the city in raising the cigarette tax to confiscatory levels without any plan to counter act the buttleggers that we predicted would flourish in the high tax environment. As we said over three years ago: "The Alliance has been fighting the black-market creating increases in the cigarette tax for the past five years. We were particularly upset in 2002 when the newly elected mayor, someone who had given no hint of his predilections in this area, increased the levy by a city record 1800%. When we predicted it would lead to rampant smuggling and hardship for the city's 13,000 bodegas, the mayor called our lament, "A minor economic issue."Well unfortunately we were right. Legitimate outlets in New York City have lost 60% of their cigarette sales while black market activity has proliferated all over our neighborhoods."

So, while the mayor rightfully goes after the lost tax revenue, we hear nothing about the need to preserve local commerce; thankfully, if the current court ruling stands, city retailers won't need the expressed sympathy of their mayor once the flood of illegal product is significantly slowed. But the city's action, however belated, is a big improvement on the state's retarded response; and this court ruling should hopefully spur state officials on: "The loss of tax income to tribal tobacco businesses has taken on greater urgency for many officials amid state and municipal budget cuts."

Urgency indeed is needed here; and we have seen state senate officials say that they are prepared to act; and, as the legislature returns next month to address another large budget gap, the lost Indian tax revenues loom large-and the failure of Governor Paterson to act becomes even more egregious. As the Buffalo News reported last week: "Despite a ballooning budget deficit, the Paterson administration quietly has written off taxes it had been expecting to collect on sales of cigarettes by American Indian retailers — an admission that yet another governor has no plans to resolve the long-standing, thorny matter."

This issue can't be left to doe on the vine-not with local convenience stores and bodegas sucking wind in the face of the economic recession. And with additional service cuts on the legislative agenda, the governor and the legislature can't continue to shuck and duck leaving tax payers holding the bag. The lates court ruling, however, should be a call for action on all levels of government.

Wednesday, August 26, 2009

City Hall's Odor

What in the good Lord's name is Mike Bloomberg doing-contradicting his own spokesman, not to mention the city's economic development agency. As the Iron Triangle Tracker reports (citing the Queens Ledger): "Bloomberg blasted a New York Times article published last week that suggested a group led by former Borough President Claire Shulman illegally lobbied city officials on behalf of the Bloomberg administration."

So, what did the Times get wrong here? "Mayor Michael Bloomberg dismissed Monday accusations the city used public funds to form a group headed by former Queens Borough President Claire Shulman to lobby on its behalf during the administration’s battle to push through the massive Willets Point redevelopment project. “It’s a cheap shot at Claire Shulman, who has dedicated her life to this city,” Bloomberg said during an interview with reporters and editors from the Community Newspaper Group, Times Ledger Newspapers’ parent company."

Now Shulman's group, a bogus LDC that was set up for one thing, and one thing only-to lobbby the city with the city's own money-was assessed the largest lobbying fine in the city's history; and the Times reporting of the fine is certainly no cheap shot. But check out the mayor's take on the lobbying activity itself.

As the ITT tells us: "These groups are designed to lobby,” Bloomberg continued. “I don’t know if they technically broke the law.” Well, someone should know-and why not the city's chief executive whose acumen in management is desperately needed for an additional four year term?
And, if the lobbying isn't legal, than the city is directly in collusion with the LDC and the potential developers who forked their money over to the "lobbying" group in the hopes of scoring a bonanza in the hereafter.

But remember what the mayor's spokesman originally told the Times: "Andrew Brent, a Bloomberg spokesman, pointed to a letter Mr. Doctoroff sent Ms. Shulman three weeks after their first meeting. It outlined the goals of her group, including conducting and leading “outreach, public relations and marketing efforts” to support the proposed redevelopment in Willets Point, but it never mentioned lobbying elected officials."

Which brings us back to one of the central issues in this controversy-one that symbolizes all that's wrong with Special Interest Bloomberg. What is the city doing creating and funding-with the tax payer's dime-astro turf groups that are working to displace existing small businesses in favor of large real estate developers? Bloomberg may not be technically beholden to these groups-he doesn't have to be-but, instead, embodies their ethos and willing does their bidding at the expense of the less powerful.

The whole affair frankly is redolent with corruption; and the fact that the traffic issues and the Van Wyck off-ramp question may make the entire redevelopment moot, only odds to the smell her. When Mike Bloomberg looks out at Willets Point he undoubtedly sees an eyesore-one that is putrescence in his eyes. As a result of his actions, however, it isn't the Point emitting the odor-what's smelling is a stench wafting straight out of City Hall.

Bottleneck Ahead

Liz is reporting that AG Andrew Cuomo is launching a full scale investigation on the alleged perversion of the state's returnable container law-and provides the link to the AG's press release: "Attorney General Andrew M. Cuomo today announced that he is broadening an investigation started by Suffolk County District Attorney Thomas Spota into a recycling scheme that could cost New York State millions of dollars. The Attorney General is investigating middlemen in the bottle recycling industry that are potentially ripping off the state by illegally redeeming the same bottles and cans multiple times."

The double redemption scheme takes on a more ominous meaning when the state is scheduled to keep 80% of the unredeemed nickels-money that is earmarked for New York's beleaguered budget gap. But, in his release, Cuomo appears to act a if the alleged scheme was already hurting the state's treasury: "This scam siphons money from our State’s already overburdened budget while undermining the environmental protection fostered by the Bigger, Better Bottle Bill,” said Attorney General Cuomo. “By all indications the alleged corruption being announced today is not limited to Suffolk County, and we will continue this investigation throughout all of New York State. Today’s announcement is just the beginning. I want to commend District Attorney Spota and his entire team on the excellent work they have done.”

Here's the money quote as far as the unredeemed nickels are concerned: "As of the passage of the new “Bigger, Better Bottle Bill” in April 2009, which mandates that eighty percent of unclaimed bottle deposits are turned over to New York State, this scheme is now potentially stealing funds that rightfully should go to the state budget. On a statewide scale, this kind of scheme could be costing the budget millions of dollars. On August 13, 2009, Attorney General Cuomo secured a major victory for New York’s environment and budget by winning a federal district court decision to ensure the implementation of the Bottle Bill."

The key word in the above quote is, "potentially." And we can't see any shennigans by the accused while the state is examining them with a proctoscope. But going forward, what makes this especially challenging is that the company in the center of the investigation, Boro Recycling, is one of the largest-if not the largest-third party recyclers in New York: "In August 2008, Suffolk County District Attorney Spota initiated an investigation to determine whether local retailers were illegally redeeming the same bottles multiple times. The investigation revealed an arrangement between multiple retailers and a middleman recycling company called Boro Recycling (“Boro”). Boro was paid by distributors to collect and transport empty bottles for recycling. However, instead of recycling the bottles, Boro would actually bring the empty bottles back to retailers, who would again redeem them to the distributors for payment. Thus, the same empty bottles were repeatedly cashed in by the retailers, turned over to Boro by the distributor, sent back to retailers, and cashed in again."

If true-and if Boro is somehow sidelined by this-it creates a significant problem for all of those water companies that really have few options when it comes to arranging for the pick ups of their empty containers. Most of these water distributors do not store door deliver; and therefore can't simply back haul empties like so many beer and soda wholesalers do.

Clearly, with the state having a vested monetary interest in the redemption system, a methodology for insuring that collectors have a fiduciary responsibility-perhaps bonding is merited-becomes essential. But the AG's investigation, has the potential for creating short term chaos; and we imagine that the scrambling for collection agents has already begun.

Tuesday, August 25, 2009

More Armory Scuttlebutt

The NY Daily News also weighs in on the decision by Bronx BP Diaz to delay his ruling on the fate of the Kingsbridge Armory proposal: "Redevelopment of the Kingsbridge Armory has taken more than a decade so far, but it will have to wait up to two more weeks before moving forward toward approval. Borough President Ruben Diaz was expected to announce his decision yesterday, 30 working days after Community Board 7 voted on the plan under the city's Uniform Land Use Review Procedure. But he decided to delay his decision past the deadline to allow more time to meet with concerned parties and negotiate a community-benefits agreement with the developer, the Related Cos."

So far, only one thing is definite-no one in the Bronx political power structure wants any part of a supermarket in the Armory-and the News reiterates the attempted bait and switch by the developer that has generated considerable ire in the borough: "Meanwhile, Diaz will be leading negotiations with Related on the final terms of the CBA. Last week, he announced that his meetings with community stakeholders had produced a list of principles to form the basis of a CBA. The only provision made public was a demand that Related not include a supermarket in the retail mix. The inclusion of a 60,000-square-foot supermarket in the project's environmental impact study sparked controversy because the armory is directly across the street from an existing supermarket, and the city's original request for proposals specifically sought to avoid projects that would compete with the existing local businesses."

So, with the two week delay, the coalition of local businesses and concerned community residents have additional time to organize against the mayor's favorite son developer-something that will be done; culminating in a large march on the Armory in two weeks. And the interim gives the coalition time to gather even more signatures: "When the city selected Related as the winning bidder last year, the developer's proposal made no mention of a supermarket. The supermarket ban also has the support of all six members of the Bronx City Council delegation, which sent a letter pushing this issue to Mayor Bloomberg, along with 10,000 petition signatures from neighborhood residents opposed to bringing big-box stores or a supermarket into the armory."

We'll let the News slide for reducing the Bronx council delegation by one member; but the handwriting is certainly becoming quite legible on the wall-either Related publicly agrees to remove the supermarket, or risks the loss of the entire project. And we still haven't seen what the developer will do on the nettlesome living wage initiative that KARA and the BP both are pushing hard.

In our view, the building of box stores in the Armory-of whatever stripe-creates an undue pressure on neighborhood commerce. If the developer can't agree on providing a living wage, than the development simply isn't worth doing-especially when small retailers are reeling. So, in some sense, the die is being cast here, and the fate of the Armory, while still up in the air, is becoming precarious because the city chose a developer that hasn't been accustomed to compromise. We'll see if the Bronx resistance changes its mindset.

Related Delay

According to the Bronx News Network, the Bx. BP has been given an extension for his evaluation of the Kingsbridge Armory project-this could mean a potential thumbs down if Related's response is too tepid for Diaz's liking: "Bronx Borough President Ruben Diaz, Jr. has asked for and received an extension on his deadline to submit his recommendation to the city regarding the Kingsbridge Armory mall project, saying he wants to see how the developer responds to a proposed Community Benefits Agreement (CBA)."

The delay granted is until September, 8th-and we believe that the big hang up here is going to be on the living wage component of a community benefits agreement: "Earlier this week, Diaz’s office sent Related a draft of an agreement that would bring the community addition benefits from the project aside from new shopping options and low-paying retail jobs. The agreement was a collaborative effort between Diaz’s office, Community Board 7, the Kingsbridge Armory Redevelopment Alliance (KARA) and local elected officials."

The Related reply may tip the balance: “We do not want to say yes or no on the ULURP application until we have some idea from the developer regarding their direction on the CBA,” said Diaz spokesperson John DeSio, in a e-mail."

We can't see the developer acceding to the community's demands; and, if not, we believe that Related is willing to use its political muscle to attempt to override the BP on the key issue of a living wage: "Related has said it will walk away from the project before including living wage requirements. Related officials could not be reached by the time of this post, but we'll keep trying. The Riverdale Press reported that Related is still reviewing the CBA document."

Which is not to say that the supermarket isn't also nettlesome: "The CBA also included language excluding a big-box supermarket at the Armory. Related had carved out space in the Armory for a 60,000-square-foot supermarket and Board 7 members had voted to support a new supermarket with organic food options. But Morton Williams, a local supermarket chain, had lobbied hard against an Armory supermarket and had the support of the entire Bronx delegation to the City Council."

So stay tuned. It should be an interesting few weeks before the upcoming primary on September 15th. Still, Related isn't winning friends and influencing people-at least not in the Bronx. That being said, the developer's power alley lies elsewhere.

Monday, August 24, 2009

Shulman and City in the Crapper

Queens Crap does a wonderful job (as did the Village Voice on Friday) outlining all of the messiness surrounding the Claire Shulman as Lobbyist furor-and this is an issue that shouldn't go away any time soon, since the city's cover up of its complicity is about to unravel as Shulman's explanations fail to jibe with the mayoral smokescreen.

First let's get the Voice's take: "Way back in October, the Willets Point Industry and Realty Association, a group strenuously opposed to the city's attempt to throw their businesses out of Willets Point so it could be redeveloped, accused former Queens borough president Claire Shulman of being an unregistered lobbyist for the Bloomberg Administration and the Economic Development Corporation on that issue. At the time, a spokesman for Shulman admitted to the Queens Gazette that she was a lobbyist and that she was going to revise the paperwork of her organization, the Flushing Willets Point Corona Local Development Corporation, to reflect that.

For their report today on Shulman's possibly illegal lobbying efforts on Willets Point, the Times questions city officials, who insist they weren't paying her to lobby -- though during the Willets Point campaign Shulman was "promising to meet with every member of the City Council as it prepared to vote on the plan last fall," says the Times..."

Sounds like someone hasn't gotten their lies straight-and it ain't Shulman who is essentially arguing against interests here. And if the activity itself was illegal, where does that put the mayor and EDC? In our view, as co-conspirators in an illegal scheme to defraud the tax payers and corrupt the legislative process.

Which leaves mayoral spokesman Andrew Brent kinda out on a limb in the Times last week: "The Mayor's spokesman, Andrew Brent, tells the paper that when the city gave Shulman $450,000 -- coincidentally, the same amount Shulman reported spending on lobbying work -- they never expected her to lobby with it. She was supposed to do "outreach, public relations, and marketing," says Brent -- she never mentioned lobbying (which might be defined as outreach, public relations, and marketing aimed at elected officials)."

Yah think? Shulman, for her part, has a remarkably good memory: "We hired lobbyists from the time we began, because we were told it was something we were supposed to be doing." Unsurprisingly, no one in the story says, "OK, you caught us," and offers himself or herself up for arrest." But what about our friends at the Parkside Group? As the Times pointed out: "Harry Giannoulis, president of the Parkside Group, which lobbying records show got $125,000, said Ms. Shulman hired it to lobby, among other duties."

Where does this fiasco leave us? It seems to us that someone is lying-and the prevaricators are all in the Bloomberg corner. So, if Shulman got $450,000 to do something other than what the city wanted her to do, than where is the DOI on all of this? (Or, perhaps, the AG) And another thing; is Shulman's group still getting funded to do, "outreach?"

But something really doesn't pass the smell test here. Last year, the Queens Gazette had this story right in the cross hairs-and Shulman admitted at the time what her real role was: "Just before the Gazette went to press yesterday, former Assemblymember Barry Grodenchik, a spokesman for Shulman, told the Gazette that the former borough president, indeed, was a lobbyist. "We are updating our city filing and are moving to update our state filing," he said."

So, why didn't EDC pull the plug on the scam then? And by the way, where is the fine for Shulman, who knew all along what her role was, but failed to register for it?

This entire effort to evict legitimate businesses from Willets Point has the rancid smell of corruption. A full and impartial investigation of the matter is needed here-and the brakes need to be put on any move to disturb existing businesses and their workers.

Schizophrenic Double Talk

You really gotta love the editorialists at the NY Daily News-their love, or simply obeisance to-Mike Bloomberg gives their opinings the confusing air of folks afflicted by split personalities. The latest manifestation was in yesterday's comments on the city's rising labor costs: "New York's unions have done well in the almost eight years Michael Bloomberg has been mayor. He has agreed to salary hikes that outpaced inflation, in many cases by wide margins.As the city recovered from the economic blow of 9/11 and then enjoyed boom times, Bloomberg shared surging tax revenues with the workforce. No one did better than the teachers. Historic pay hikes, meant to equalize salaries with suburban peers and to compensate for contract reforms, boosted incomes 43%, almost double the rise in the consumer price index."

So far so good, right? The News seems to get the fact that Grasshopper Bloomberg was frivolously giving away the store-while the underpinning of New York's economy, not to mention its competitiveness-was rapidly becoming unglued. But now, says the paper-given the dire economic circumstances that even a carefree mayor can recognize-Bloomberg needs to exercise restraint, particularly with the teachers: "Now, Bloomberg and the United Federation of Teachers are on the verge of fresh negotiations. New UFT President Michael Mulgrew expects a two-year deal with dual 4% hikes. Bloomberg must say no. The mayor and Mulgrew must jointly recognize that New York's economic circumstances - along with the wallets of the public - are vastly shrunken compared with 2007, the year in which Bloomberg and labor set a bargaining pattern of 4% raises."

Let's put aside for just a moment the fact that this 4% raise is a quid pro quo for the UFT's crucial support for Bloomberg's signature issue of mayoral control-something that the News shamelessly shilled for. Where was the paper when all of these contracts were being negotiated; and the city tax payers were being saddled by a bloated work force whose salaries and pensions are simply unsustainable?

And to say that, "The standard that seemed acceptable almost three years ago is off the charts now. It's simply not affordable," is to give Mike Bloomberg a free pass for his lack of foresight. Has the News forgotten how the city was able to balance its books, post 9/11? While the mayor was treating the tax payers like some kind of piñata-and distributing the candy within to the public sector workers-the foundation of the local economy, particularly in the city's retail shopping areas, was crumbling.

As a result, when the economic tsunami did hit, the city's ability to weather the downturn was impaired-perhaps irreparably; and NY's unemployment rate has hit a 12 year high. But not to worry, as the News reported last week: "Educational and health services employment increased 25,500 to 722,000, a 3.7% gain for the year." So, while private sector employment craters, jobs that depend on a public subsidy continue to grow.

And the Daily News appears on the verge of actually getting it: "In retrospect, Bloomberg was too generous in beefing up the checks of workers who also enjoy, and will continue to enjoy, health and pension benefits that are light years beyond those afforded to the general public.
The mayor agreed to four years of 4% hikes, each time lifting pay more than the inflation rate. He held to the practice as recently as last month, granting twin 4% raises to 6,000 managers and nonunion employees. His record played a key role in the disastrous arbitrators' ruling that awarded hikes totaling more than 11% over three years to transit workers."

Which brings us back to the confusion over at 33rd Street and 10th Avenue. Bloomberg's eight year aggrandizement of the public sector is in essence now a chickens coming home to roost situation. But the News, unable-or perhaps unwilling-to connect the dots in a definitive way-by belling the Bloomberg cat-goes on to tell its readers: "Bloomberg has taken justifiable pride in his fiscal stewardship, as well as in his willingness to tell hard truths regardless of political consequences. Drawing the line as he runs for reelection will be tough, but that's the kind of mayor New York needs."

So, after basically painting the mayor as a generous profligate, he suddenly gets transformed into someone who can take, "justifiable pride," in his fiscal stewardship? Thought experiment: Imagine if the city's mayor was just a run of the mill non-billionaire Democrat. Would the NY Daily News conclude an editorial, like the one we have just commented on above, in the same laudatory way? The News, and the other tabloid with its incestuous touting of a fellow mogul, should stop covering for Bloomberg's ineptitude and draw appropriately conclusions from the data that even they can see.

Senate on the Warpath?

It looks as if the State Senate may be getting serious about the uncollected taxes on Indian retailers-amd the refusal of Governor Paterson to man up on the issue. As the Times Union reported last week: "In the latest example of how not even Democrats are cozying up to Gov. David Paterson these days, Craig Johnson, the Long Island Democrat who heads the Senate Investigations Committe, wants hearings on the lack of tax collections. This comes in the wake of a story earlier this week in the Buffalo News noting that Paterson has quietly written off the estimated $65 million it could have gotten by taxing Native American cigarette sales."

Now Paterson isn't alone in this example of shameful timidity; after all, Governors Paptaki and Spitzer was as equally pusillanimous. But the state's budget is now in free fall, and revenue needs to be found someplace; and Senator Johnson's doing the right thing: "Senator Craig M. Johnson, chairman of the Senate Standing Committee on Investigations and Government Operations, announced today plans to hold a hearing on the state’s long-unsuccessful attempts to collect taxes from cigarettes sold to Non-Native Americans on Indian reservations. This move was prompted by news that the Paterson Administration has quietly written off collecting this revenue — a move that is in direct violation of a law that the governor himself signed last year. The failure to collect this revenue is costing the state $65 million this year, according to the state Office of the Budget."

That $65 million number is a really low ball figure, however-and convenience store industry sources estimate that the state is losing closer to $600 million every year because of the state's failure to confront Indian tax avoidance. As Johnson says: "We literally can’t afford to look the other way, nor should the state Department of Taxation and Finance ignore a law that is barely a year old,” Senator Johnson, (D-Nassau,) said. “This Committee wants to be helpful in finding a solution, but the public also deserves to know where things stand between the state and Native American retailers and why there has yet to be an agreement.”

And Senators Klein, Stachowski and Griffo also weigh in on this crucial revenue issue-one that also impacts local convenience stores who can't compete with retailers who aren't charging taxes on their cigarette sales. Griffo's statement is to the point: "Griffo noted that according to some estimates, New York fails to collect $400 million a year in sales taxes on cigarette sales to non-Indians at Indian-owned businesses. “What this can mean to the state, and also to the local communities in Oneida County that should have been sharing in this money for 14 years, is very important given our current fiscal crisis,” Griffo said. “This is also a very important issue for the small convenience stores located near Indian-owned businesses. There should be a level playing field for them in which to compete.”

In NYC, this issue has a particular resonance as local bodegas are fighting to stay in business even while a major source of their revenue-over $250 million a year in cigarette sales-has literally gone up in smoke, lost to a burgeoning black market that blatantly sells illegal smokes right out on the sidewalks in front of the struggling stores. All of this is a consequence, of course, of Mike Bloomberg's confiscatory cigarette tax policy in the city.

As we told the NY Times seven years ago: "Richard Lipsky, a lobbyist for the owners of small delis, bodega owners and convenience stores, predicted in an interview that many neighborhood stores would not survive the higher tax as many smokers would buy their cigarettes over the Internet, from Indian reservations, from adjoining states or from smugglers." And so it went-but the least the city and the state can do is to insure that everyone who sells tobacco products pays the heavy freight.

And not to mention also, the fact that it has been determined that a good percentage of the black market money has been channeled into terrorist activity. As the NY Post reported last year: "Nearly two dozen Arab cigarette smugglers have been smoked out for buying and then reselling contraband butts to New York bodegas and other shops. Lured by fake ads in Arabic-language newspapers, the smugglers bought $6 million in contraband smokes from New York tax and federal undercover agents."

And the money is flowing: "And a top elected official now warns that the untaxed cigarettes could be funding terror overseas. All the profits of the smugglers - whose sales to hundreds of area stores exceeds the business of most legitimate wholesalers - "was shipped overseas to the Middle East," said Deputy Commissioner William Comiskey of the state Taxation and Finance Office. "We know that the money wasn't kept here," said Comiskey, whose agents conducted the elaborate sting, noting that "it's a possibility" that the smugglers' multimillion-dollar operations, which also include sales of guns and counterfeit tax stamps, could be at least partly funding terrorism."

Does this Comiskey fella still work for the state? If so, maybe he should send a message to our chief executive-hint: he's hiding under his desk-that his inaction is shameful. So it's about time that the senate stood up on this issue. With another two or three billion dollar shortfall facing the state this fall, it is simply unconscionable for the governor to refuse to act-in our view, it is an impeachable offense.

As Senator Griffo told the TU: "“First and foremost, the tax should be collected. The law of this state says sales of tobacco products to non-Indians should be subject to sales tax. “I don’t know how the Administration can pick and choose which laws they want enforced. Existing law is intended to be abided by, not to be negotiated. I can’t imagine what would happen to employers that went 14 years without obeying the law. We can’t just ignore the law. If the Administration thinks the law is wrong, the redress open to him is to go through the political process to enact a new law, not to simply give up on making the law work.”

It's time for action-and Paterson needs to be confronted so that the law is enforced. The bell is tolling on the governor's nonfeasance.