30 Issues: Private Money for Public Good

Friday, October 25, 2013

The High Line in Lower Manhattan. (Stephen Nessen/WNYC)

It's Housing and Urban Development Week on the Brian Lehrer Show's election series "30 issues in 30 Days." See the full 30 Issues schedule and archive here.

Vicki Been, director of the Furman Center for Real Estate and Urban Policy at NYU, and Steven Spinola, president of the Real Estate Board of New York, discuss to what extent the city government should rely on private money for public amenities like affordable housing, more parks, and open space.


Vicki Been and Steven Spinola

Comments [22]

b from Greenpoint, Brooklyn

Greenpoint-Williamsburg broken promises,

* Hundreds of units of new affordable housing that was promised on city-owned sites in the 2005 rezoning.
* The comprehensive transportation study for all of Community Board #1 that the community has lobbied for since 2005 (and that wasfinally promised as part of the Domino rezoning in 2010).
* $14 million of City funding promised for parks and open space in northern Greenpoint (promised in 2005; not being delivered as part of the current applications).
* $10 million of City funding promised for infrastructure improvements on the Greenpoint/Williamsburg waterfront.

2005 Points of Agreement,

Oct. 25 2013 03:31 PM
b from Greenpoint, Brooklyn

Please help our waterfront survive greedy developers and poor city planning!

Oct. 25 2013 12:28 PM
Peter Krashes from Prospect Heights

In 2006 and again in 2009 when the project agreements were modified, FCRC promised an arena, a specific number of new jobs, affordable housing, a new rail yard, and open space in exchange for roughly $300,000,000 in public subsidies, property control of 22 acres of land in the center of a revitalizing area, and even several public streets at a bargain rate. All of the subsidies and property control were based on the promise they would deliver the project in full in ten years.

FCRC made these promises knowing affordable housing subsidies weren't sufficient given construction costs, and they didn't explain how they were going to build the platform over a rail yard that is key to the project. It has been everyone's assumption FCRC was going to pursue additional subsidies or reduce costs, and if neither of those things happens, delay. But the promise that the project would be complete in ten years with the provided subsidies has been useful for the developer because it skewed government decision-making: How does government evaluate options if the information it is relying on is insufficient or incorrect?

So on what terms is FCRC going to deliver the project now? They have already said they are going to build using modular construction to lower construction costs, but modular construction delivers lower paying construction jobs (and potentially few construction jobs). They have effectively shifted the risk of lower construction costs to the public.

FCRC has also delayed constructing the promised permanent rail yard and changed the project's construction sequence to enable delaying or not building the platform over the rail yard -- therefore also delaying the removal of the blighting influence on the project site the project is ostensibly designed to eliminate. They apparently hope moving forward they can reduce costs of constructing a new rail yard and a platform. Who benefits if they succeed? Does the savings go to the project's investors, or to the public through more open space, improved affordable housing, or less density. Who makes that decision? And if the delay in building over the rail yard continues, then the de Blasio's family's back yard will be larger than the permanent open space the project provides its first several thousand families and pedestrians will be walking in circles.

Atlantic Yards oversight is recklessly thin. There is little government staff dedicated to the project exclusively, there is no independent board, and almost all information the public relies on about the project comes from FCRC about jobs, the delivery of benefits, and the extent environmental commitments have been met. FCRC has refused to hire the independent compliance monitor they promised for the project to verify their claims. Future Mayor de Blasio, please stop using FCRC's talking points and get us an effective independent compliance monitor and governance reform for the project now!

Oct. 25 2013 12:27 PM
Michael D. D. White from Brooklyn Heights

One of the most overlooked problems with so-called “public-private” partnerships (which those in the know frequently refer to more often as “private-public” partnerships because of the way the private sector tends to take over making government participants subservient) is beautifully addressed by one of Jane Jacobs most overlooked, least read books: “Systems of Survival.”

In that book Jacobs points out that attempts to mix business enterprises with government and politics are inherently flawed, because the moral systems that apply to each (each working well when confined to their own respective contexts) must necessarily remain different and incompatible. Jacobs’ book is full of examples of what happens when realms that should remain distinct (together with their associated moralities) improperly intermix, so that one gets what she calls “monstrous hybrids.” That includes, the Soviet Union running businesses, police departments for sale (“Robocop”?- How about prisons?), the Mafia, etc.

For more see: Wednesday, February 13, 2013
One-Stop Petition Shopping: Report On The Brooklyn Heights Association Annual Meeting, LICH and Libraries.

Oct. 25 2013 11:55 AM
Michael D. D. White from Brooklyn Heights

In response to the observation of Brock from Manhattan that private sector operations trump those of government “because the government is typically populated with the least motivated people with the lowest aptitude” he seems to be forgetting that the people participating on the private sector side of these so-called “public-private” partnerships more often than not came, via the proverbial `revolving doors,’ from the government sector. In other words, they are the same people so there should be no discernible difference in their competence because they are the same people.

On the other hand, whether these individuals might be less competent than those in the rest of the private sector: These “public-private” partnerships are often beset by characteristics reflecting the absence of a truly competitive environment and capitalism. It could therefore perhaps be alleged that they are all less competent and have, accordingly, taken refuge from competition in this environment.

Maybe, but I come out of government myself having spent 27 years doing some pretty complicated work, and am loath to insult myself in this respect. In truth, I think that doing these deals, whether done properly or dishonestly manipulated, often involve a lot of required skill and competence.

Oct. 25 2013 11:40 AM
RoseAnn from Hudson Heights

Going out to eat was much better. We had fewer choices and went out less often, usually to celebrate a special occasion. (and all the girls got corsages to wear out)

Oct. 25 2013 11:30 AM
antonio from baySIde


Not sure about that. Most assume the dark days of late 60's to the early 90's is waiting to make a comeback, given the right variables. One thing which is never factored is the wealth. Housing in that area has gone up at least 50 times. Cities are the new suburbs; In the sense that's where the affluent are going to.

Oct. 25 2013 11:27 AM

Roberta, just give Barclays a decade or two to get old and your worst nightmares will be realized then. Look at the old Yankee stadium and others. It's coming; just takes time.

Oct. 25 2013 11:16 AM
Michael D. D. White from Brooklyn Heights

One of the problems with so-called “public-private” partnerships is the way that perceptions get confused and manipulated. So it was that Joe Lhota as head of the MTA participated in giving the impression that Forest City Ratner was giving the public a subway entrance for “free” when, with Forest City Ratner getting massive subsidies that was hardly the case. What was really true was the reverse, Forest City Ratner was getting the gift of massive public subsidies impoverishing the public, returning little benefit.

See: Wednesday, September 26, 2012
Promoting Obfuscation of What Government Does and Doesn’t Do To Give The Private Sector (Including Ratner) More Credit

Oct. 25 2013 11:15 AM
jgarbuz from Queens

Before "urban renewal" and the government getting involved in housing and everything else, we lived in tenements, played stickball, "stoop" ball, and "Chinese" handball on the streets and in the midst of traffic. We got our summer "showers" from fire hydrants :) Actually, as a kid, it didn't seem all that bad in retrospect :)

Oct. 25 2013 11:13 AM

What went wrong: too many people in too small a space for too long a time.

Today the going theory for low-income housing it to spread out the people, so that the ills of warehousing are not so great, so that services aren't over-burdened (security, upkeep, non-criminal activities like sports & arts, etc.), and so that it's harder for equipment, walls, hallways to not fall victim to Guliani's broken window theory.

Oct. 25 2013 11:12 AM
jgarbuz from Queens

Singapore has a super-scraper going up that will have all the social "infrastructure" INSIDE the enormous building. That is, schools, clinics, police, shopping malls, parks, etc. You cannot build all the infrastructure OUTSIDE the buildings anymore. More will have to be built INSIDE as more and more of us choose to or have to live in a densely populated city.

Oct. 25 2013 11:10 AM
BK from Hoboken

If a developer is being given an abatement, or zoning exception, etc, than there should be give-backs that benefit the public via public easements, affordable housing, etc. But when politicians are in the pocket of developers, we end up with atrocious deals like one here in Hoboken. The city gave the largest property owner in town am abatement to develop a precious waterfront lot into the W Hotel and Residences. So a piece of property that developers were fighting to develop, and then got zoning exception to build taller, and then got abatement so that the most expensive condos in town pay the least in taxes. The developer should have been giving the public something, instead of the public giving them an abatement that costs the rest of us money. The public got hosed.

Oct. 25 2013 11:09 AM



Oct. 25 2013 11:06 AM
Roberta from Brooklyn

The rise of the area around Barclay has absolutely nothing to do with Barclay. The area was rising long before Barclay and the arena brings nothing to residents of the area. (I acknowledge that the effects haven't been as bad as predicted by naysayers but it's not a factor in raising real estate prices in Ft. Greene, Prospect Heights, Park Slope, downtown Brooklyn, and all the surrounding neighborhoods, but traffic is worse.)

Oct. 25 2013 11:06 AM
jgarbuz from Queens

To Peckstiff

To continue yesterday's discussion, the government built great and very sturdy Housing Projects in New York. What went wrong with them?

Oct. 25 2013 11:05 AM
Robert from NYC

Private money for public good should be philanthropic ONLY not for profit of the corporations like the CitiBank Bikes, for example. If it was intended for profit then why wasn't it given to a small entrepreneur instead of CitiBank which rips off this city in every and any direction and way it can. We've already bailed them out of the financial crisis they caused, why should they make money off us in this way? Be a bank. Does anyone remember what banks are for? Not to fill the pockets of it's CEOs and executives. Barclays Center? Staples Center? CitiField? i can go on but and IT will go on. When will it stop.

Oct. 25 2013 11:04 AM
Brock from Manhattan

Is the private sector more favored because the government is typically populated with the least motivated people with the lowest aptitude?

Oct. 25 2013 11:04 AM
Truth & Beauty from Brooklyn

I think the City should decide how much public space it wants/needs to have and to keep, keep that space and let developers develop WITHIN ZONING LAWS. NO ONE, no matter how much money they have, should be able to influence or change zoning laws or public space. That needs to be decided by the City Council.

The City should NEVER assist any private developer build any kind of stadium or entertainment venue UNLESS there is a deal whereby the City receives a percentage of revenue in return for its investment. This is how capitalism works - but it seems to work much better for wealthy individuals than for municipalities. We need to learn from their example and profit from our investments rather than letting everyone else profit from them.

Private sector, when it gives or donates cash or buildings, gets tax deductions for these donations, so there is nothing more they should expect to get out of it. They should have NO MORE INFLUENCE with government than any other private citizen residing in the City. Period.

Oct. 25 2013 11:03 AM

whenever this topic comes up, it always seems like we've forgotten the lesson's learned from the Five Points: when left to it's own devices public business will always do the least possible for the biggest gain. That's just the law of Capitalism. If the gain is limited the worst will be built.

If we're gonna warehouse poor people in NYCHA projects, we must leave air and light around the overcrowded buildings. Even if it's an empty parking lot. It's wrong to go building between the buildings.

Oct. 25 2013 11:02 AM
jgarbuz from Queens

Look, if you are a builder, as with any business, you have to decide whether the project is worth doing (i.e., profitable) or not. Now, what is meant by "affordable housing?" It is housing that is meant to be used by low income or no income people to live there, and the government is going to subsidize most of their rent. And those tenants are going to have rights, but the landlord is dependent on the government to pay their rent for them. And the landlord has to hope that the tenants will not abuse, vandalize, or destroy the apartments.

Oct. 25 2013 11:02 AM
Ed from Larchmont

A funny line from the other day:

'Taxation without representation is tyranny; taxation with incessant representation is tedious.' Dennis Miller.

I guess I just don't have the appetite for all this.

Oct. 25 2013 08:16 AM

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