Empty Rooms at the EDC Inn

As we mentioned the other day, the touted Muss development in Flushing is floundering-an it bodes ill for the ultimate success of both Willets Point and Flushing Commons. The WSJ has the story: "In one of the largest cases of buyers remorse in New York, scores of people who agreed to purchase apartments in a new development in Queens filed suit Monday seeking the return of their deposits. The suit, filed in federal court in Brooklyn, could throw a wrench into the marketing efforts of Sky View Parc, a huge shopping center and condominium development that is planned to eventually include nearly 1,100 apartments in six towers. The complex is a few blocks from the heart of the Flushing commercial district. It has been controversial because of its size and the impact it might have on local business and traffic."

The possible failure of this project tells us a few things about how economic development projects are evaluated in New York. In the first place, much too great a reliance is placed on the oversight of the NYC EDC-an agency that uncritically reflects the values of the city's real estate community. EDC functions as a revolving door/employment agency for NY's big real estate companies.

Secondly, the city's land use review process does not do anything approaching an adequate job in evaluating the economic and job-creating merits of projects that come before it-and it takes an unusual set of circumstances for the council to reject any development that comes before it for a vote. With well connected real estate companies-aided by building trades eager to get their folks to work-pushing a project, little time is given over to reviewing the costs, as well as the benefits, of any given project.

But let's go from the general to the specific here. The Muss development was partially sold on its ability to provide affordable housing-a clever tactic that often leads to the development of a myopia when it comes to the overall impacts of a project-and traffic is a central concern when it comes to a development, "a few blocks," from down town Flushing (as we have pointed out time and again). But as far as we know there was little analysis of either the potential profitability of the residential complex, or the impacts that the development's box stores would have on the Flushing retail community.

Some of this, we argued last summer, should have been taken into consideration when the city council reviewed the Flushing Commons project-but that battle underscored the flawed nature of the review process, one that is exacerbated when a local council member swims in the developer's fish tank. So, while Muss is floundering, Flushing Commons will be usurping Muni Lot1-and creating further gridlock for an already challenged local road network and mass transit infrastructure.

Flushing Commons, however, underscores how ULURP is badly in need of remediation. The city council has no mechanism-let alone inclination-to undertake its own impact analysis of any given project. It therefore allows itself to be the handmaiden of either the mayor- or a particular developer who proffers "studies" that are a reflection of self interest, and certainly not the public interest. Exacerbating a bad situation, is the fact that none of these individual projects are seen in any larger context-and the cumulative impacts of, let's say, Muss, Flushing Commons, and Willets Point, are either ignored or downplayed by self interested parties.

Keep in mind here that Willets Point envisions 5,500 condos but, much as New London, in overly optimistic fashion, envisioned a mixed use development anchored by Pfizer, there are few guarantees that-after billions are spent-there will be a market for these residential units. And there is a real chance that, just like New London, the City of New York will be left holding the billion dollar bag for the cost of a white elephant that trampled on the property rights of little guy land owners.

This kind of cautionary tale is underscored by an article on the floundering Xanadu project in New Jersey in today's NY Times: "It wasn’t a pretty view on the 13-minute train ride Sunday from Secaucus to New Meadowlands Stadium — old landfills, mud flats, the garish bulk of the stalled Xanadu project. But it might as well have been paved with money. The 2.3-mile train line to the Meadowlands, opened last year, offers a unique tour of inflated and deflated dreams, poor decision-making and, most of all, enormous spending — a fair amount of it from taxpayers, and a fair amount that will never be recouped — in the inimitable New Jersey style."

All of this should give NYC officials pause, especially since the Willets Point scheme is being moved forward in a climate of sever fiscal austerity. So, while New Yorkers are being asked to do with less, Mike Bloomberg wants to spend billions on his own legacy project. In our view, the local council member and her colleagues should be calling for a moratorium on any Willets Point related expenses because not a single firehouse should be closed while EDC and the mayor continue to spend money like drunken stockbrokers on a speculative real estate venture.