Developer Has Mixed Record in Brooklyn

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Over the span of two decades, the Forest City Ratner company has left its mark in the borough of Brooklyn, erecting a huge office complex and a number of retail malls. Now, the company wants to embark on an even larger venture, turning the Atlantic Yards into a basketball arena surrounded by towering apartments and offices. WNYC’s Andrea Bernstein takes a look at the company’s track record and its history of government support.

REPORTER: Just over the Brooklyn Bridge, right off Flatbush Avenue, there’s a gaggle of 25-story or so orange office towers surrounding a clean and orderly urban park. Metrotech, it’s called. Brad Lander, a city planner who heads the Pratt Center for Community Development, looks up, remembering what it was like here 30 years ago – in the mid 1970’s

LANDER: It was totally different now what you have is sort of a suburban office park…what you had here 30 years ago is a mix of homes and small factories and small retail shops.

REPORTER: In the 1970’s few to no large businesses wanted to locate in Brooklyn. In those days, the borough was roiled by uneasiness and beginnings of a crime wave that would last two decades. But one developer – Forest City Ratner, had its eye on Brooklyn. The company has made developing underserved urban areas a specialty. Local officials were ecstatic.

But there was a price – heavy public subsidies and a complex designed to make a largely white office staff feel safe in mostly black downtown Brooklyn. The fortress-like towers surround the park. Even today, there’s little here to lure anyone in who doesn’t have a reason to be here. There’s an Au Bon Pain, and a few other lunch spots. Not much more. Brad Lander:

LANDER: It wasn’t designed to have a street life. In Lower Manhattan or in Midtown there are very tall buildings but on their ground floors they have a street and they’ve got retail shops on the ground floor so officer workers come downstairs, that was designed out of this place.

REPORTER: It took more than architecture to get businesses to come. The city gave Forest City Ratner a huge package of tax and other incentives. And then, after that, it paid out more – upwards of $200 million to Chase bank to be the first tenant. At the time it was the biggest corporate retention deal in city history. Millions more went to Bear Stearns, another tenant here. Was it worth it?

Jonathan Bowles is the head of Center for an Urban Future, a left-leaning think tank. He’s generally critical of corporate subsidy deals. But he says when faced with the massive hemorrhaging of certain corporate jobs in the 1980’s, the Metrotech project filled the void.

BOWLES: Aand so we’ve hung on to some companies and those back office jobs we wouldn’t have if not for Metrotech.

REPORTER: As for establishing downtown Brooklyn as a major business center, Bowles, Lander and others say Metrotech did that, too. But taxpayers are STILL doing their part.

One of the biggest employers here is the City of New York.-The Fire Department has its headquarters here, and so does the Department of Information Technology and Telecommunications. According to city records, the city pays 32 million dollars every year to rent office space in these buildings it helped to build. Documents filed with the Securities and Exchange Commission show Forest City Enterprises, the parent company of Forest City Ratner has $7.3 billion in assets and does business in 19 states and the district of Columbia. But what is its largest tenant? The City of New York. Jonathan Bowles.

BOWLES: The idea of Metrotech or downtown Brooklyn expansion is not to put government buildings or government offices in a subsidized corporate location. That’s just silly.

STUCKEY: Look, the city has to take the space some place so is it wrong that Forest City has the space?

REPORTER: That’s Jim Stuckey, Vice President of Forest City Ratner. He says in the 1980’s the non-profit Regional Plan Association recommended that city and state agencies move into Metrotech.

STUCKEY: To help seed the area to bring a population in to help the area be safe, to help bring other retail businesses back to life and to help create the infrastructure that other companies would follow that’s exactly what happened. There’s 22,000 jobs where there were no jobs before.

REPORTER: That’s true. But they’re not new jobs. At a city council hearing last spring, Councilmember Leticia James wondered aloud why the public should make new investments in the ATLANTIC YARDS project when Metrotech hadn’t created jobs for Brooklynites.

JAMES: And those industries, as you know the vast majority of those employees do not look like me, do not live in the Borough of Brooklyn

REPORTER: Stuckey replied Metrotech was never intended to give jobs to local residents.

STUCKEY: No one ever represented that Metrotech that it was meant to be a project other than a project for back office operational office jobs it was not ever represented in its history /EDIT HERE/ I know a lot of people are saying now that we’ve said things ten years ago but I’ve checked the record and asked people to show me where we said it and I’ve yet to see it. I’ve yet to see it.

REPORTER: The public has made other investments in Forest City projects in Brooklyn. The Atlantic Center Mall lies directly across the street from the proposed new Nets arena. Since its inception, the Mall has had difficultly attracting an anchor tenant – Caldor came and went, then A&S, then Macy’s. The state’s economic development agency has offices where Macy’s used to be.

The state has another large office here. Tucked behind a Marshall’s discount store is the Brooklyn office of the Department of Motor Vehicles. The DMV moved its Brooklyn offices here about two years ago from a nearby location that was slightly smaller. Documents obtained from the state show the DMW paying $1.6 million dollars in annual rent, going up to $1.8 million after five years. That puts it at about twice the rent of its prior location around the corner. The DMV says the new quarters are more accessible and have better parking. But like Metrotech, the Atlantic Center Mall is well-stocked with Government tenants. Stuckey told us the mall’s troubles have more to do with problems in the retail industry than anything else. But the mall’s long, hot corridors provide no place for the largely black and Latino customers here to congregate. Shopping can be an uncomfortable experience – and at the Council hearing, Stuckey acknowledged that.

STUCKEY: We recognize that when we did it we believe like most people did that retailers wouldn’t come to New York City so we listened to some of the major retailers on how we should design the project and I will tell you it was a mistake.

REPORTER: The company seems to have learned from that mistake. It’s nearby Atlantic Terminal Mall – opened last fall -- is much easier to navigate, and its almost full. It has since its inception been anchored by an enormously successful Target store. A spot check of the employees finds many do live in Brooklyn.

A block up Flatbush Avenue, Forest City has promised to build thousands of units of affordable housing. It says it will give preference to people from surrounding communities for the jobs created by the housing, offices and Basketball arena. And it put those promises in writing. The company hopes that will ease the way for a series of public contributions. The MTA votes tomorrow on whether to award the yards for $100 million, half of what its assessor said the property was worth.

For WNYC, I’m Andrea Bernstein.