Tuesday, December 08, 2009

Having Fund Yet?

Crain's Insider (subsc.) is reporting on the behind the scenes negotiations over the fate of the Kingsbridge Armory-and the idea floated about the creation of a wage subsidy fund that would somehow provide for a living wage: "Related says it won't give in on the living-wage issue because it could not get financing for a project under those circumstances. The Bloomberg administration, which has fully supported Related, is looking for creative solutions. A source says the company is talking about creating a fund that would supplement the pay of employees of the new mall. It is not clear how much city money would be involved, or whether the fund would make up the entire difference between standard retail wages and what the City Council is demanding."

Now the above paragraph seems a bit confused-first saying that the Bloomberg administration is looking for, "creative solutions," than describing how, "the company," is talking about creating a fund. Which is it? Here's where it really stands as of this morning.

The Bloombergistas proposed a small sum that would have provided for a worker subsidy that would have been adequate for only about two years-after that, zilch. The council came back with an enriched version of the plan that would look to create a self-perpetuating fund that would last for as long as the mall has retailers.

That counter proposal has been taken under advisement by the administration-which has told the Bronx delegation that it needs to consult with Related. So, with the vote scheduled for tomorrow, we can expect a response sometime today. The sticking point in our view? Precedent.
As the Insider points out: "But the solution would be unprecedented and could create similar expectations for future projects, such as the stalled City Point mall in downtown Brooklyn." The ability to resolve this issue comes down to how the administration and Related weigh precedence versus the need not to see the first defeat of a major real estate project in the mayor's eight year tenure.

Now, the NY Daily News also weighs in on the state of the negotiations-and we think that its subheader-"THE CITY HAS BLINKED in the Armory battle"-is nice, but premature; as the paper does point out: "But the sign of slight movement may not be enough in the deadlocked talks over the Kingsbridge Armory to push it past the finish line in tomorrow's City Council vote."

Our view? Too close to call-with the council's history of negotiating rather than killing also playing its part in this complicated political equation. And the support of the Working Families Party for the KARA/RWDSU position further complicates any easy resolution that precludes a living wage.

Which could mean that the land use subcommittee might vote tomorrow for modification and slight delay: "While opponents claim to have the votes to kill the project when the zoning and franchise subcommittee meets tomorrow, subcommittee member and Council Majority Leader Joel Rivera has signaled they will instead vote to delay the final decision to allow more time for negotiations. The subcommittee could vote tomorrow to modify the plan in some way, which would send the proposal back to the City Planning Commission for a two-week review before the full City Council must weigh in."

This tactic would, however, take away the leverage that Bronx council members have on the nine member subcommittee, since the modified application would by pass it and go directly to the full land use committee-and we don't think modification will be the preferred option-unless a deal is really close and needs a bit more time to ferment: "But by voting to modify the Armory proposal tomorrow, opponents would effectively stretch that deadline to Dec. 21."

However, it should be reiterated that even those who support the project without the living wage component, are united with the Bronx delegation in its position that any supermarket or big box food use be excluded from the final development. A very unusual and unpredictable situation that will, hopefully, become less murky as the day unfolds.