OPINION
MARCH 7, 2009
A Hole Grows in Brooklyn
The local economy should have been left to develop on its own.
By JULIA VITULLO-MARTIN
New York
In December 2003, Mayor Michael Bloomberg thought he had a slam dunk. He along with Brooklyn Borough President Marty Markowitz and developer Bruce Ratner struck a deal for a $4.3 billion development project that was to remake downtown Brooklyn by building expansive residential and retail space, and a gleaming new $950 million arena that would bring the New Jersey Nets to the borough.
Now, more than five years later, what's been brought to Brooklyn is a very large hole in the ground and a project that is coming to symbolize why large government projects can be riskier than allowing local residents to fix up their own communities. What we see in Brooklyn is the beginnings of the failure of a massive government plan to revive the economy of a neighborhood.
The idea behind the project, known as Atlantic Yards, was that a pro basketball team would appeal so strongly to sports-mad Brooklynites -- still smarting from their 1957 loss of the Dodgers to Los Angeles -- that they would embrace razing 53 smaller buildings and replacing them with 16 new ones built on a much grander scale.
The arena was to be built on a deck over the old Long Island Rail Road (LIRR) yards, for whose use the developer would pay $100 million to the financially strapped owner, the Metropolitan Transportation Authority (MTA). This win-win, proclaimed supporters, would provide 15,000 construction jobs, hundreds of millions of dollars (eventually) in tax revenues, thousands of units of affordable housing, and gorgeous green space.
The projected December 2008 ground-breaking for the arena came and went without a shovel hitting the dirt. The chances that the Nets will be playing in Brooklyn for the 2009-10 season, as promised, are nil. Architect Frank Gehry has laid off his entire Brooklyn staff, and Mr. Ratner's company (Forest City Ratner) has renegotiated its loans. Financing to finish the project has dried up amid a global financial meltdown.
Meanwhile, Forest City Ratner is losing $20 million a year on the Nets after having bought the team in anticipation of moving it. Adding insult to all of this injury, Newark, N.J., Mayor Cory Booker has been publicly wooing the Nets by saying Newark has a stadium ready to go. Indeed, the Nets will be playing two exhibition games in it this year.
The ill-fated project in Brooklyn reflects a breakdown of the state and city's strategy of favoring big-government, centrally supported, highly subsidized projects over the kind of small, privately funded, unsubsidized, incremental development that was already occurring in Prospect Heights, as the area is officially known.
It seems that smaller scale redevelopment wasn't happening fast enough for government officials, eager to jump-start Brooklyn's economy. They leapt to support the developer's contention that the neighborhood was blighted, and that its property owners were therefore vulnerable to the state's exercise of eminent domain.
Now officials have a mess on their hands. The development got just far enough to do considerable damage to the neighborhood without progressing far enough to do any good. Atlantic Yards has razed 26 buildings, with government help, creating the blight its developer had argued was there all along. Now there are gashes where late-19th century and early-20th century buildings once stood.
Local property owners and residents have been predicting disaster from the start, and have been fighting the project shrewdly and relentlessly from day one. Under the leadership of a former graphic designer, 39-year-old Daniel Goldstein, a group of locals formed "Develop -- Don't Destroy Brooklyn" in early 2004 to fight back.
As the owner of a sunny two-bedroom apartment in a building that had been renovated into condos in 2002, Mr. Goldstein is the kind of investor-resident who was moving into Prospect Heights just as government officials were calling it blighted. "It was just what I was looking for," he told me. "Great transportation, mixed-use development, on the nexus of four or five of the best neighborhoods in the country."
Indeed, a multitude of young New Yorkers who were also moving into the area agreed that Prospect Heights was developing just fine. Blogs proliferated, the most prominent of which was the tenacious Atlantic Yards Report, run by freelance journalist Norman Oder. No controversy or nuance went unnoticed. Every remark, decision or negotiation by the developer, the MTA or government officials got held up to public scrutiny.
For example, the MTA accepted Forest City Ratner's bid of $50 million for the LIRR's rail yard, even though an appraisal valued it at $214.5 million. Extell, a Manhattan developer, later submitted a competing bid for $150 million. The MTA rejected that bid, but did negotiate with Forest City Ratner to get it to double its bid to $100 million. The MTA then accepted Ratner's new bid, even though it was $50 million less than Extell's.
The MTA hasn't seen a dime of the money yet. The opposition has waged a relentless court battle that has halted construction of the arena. Mr. Goldstein, whose condo stands smack in the middle of the proposed arena site, is the lead plaintiff in a lawsuit aimed at blocking the state's use of eminent domain to condemn his building.
Mr. Ratner, an experienced developer of government-financed and tax-abated projects, hasn't given up. Early on he won support of the Association of Community Organizations for Reform Now, a national left-wing pressure group that lobbies for low-income housing. Mr. Ratner also courted activists Rev. Herbert Daughtry, pastor of the House of the Lord Pentecostal Church, and James Caldwell, head of Brooklyn United for Innovative Local Development, a jobs advocacy group. This has enabled Mr. Ratner to turn out influential African-Americans to counter the mostly white, middle-class opposition to Atlantic Yards.
Nonetheless, Prospect Heights now looks far worse than it did in 2003, when buildings were being renovated and sold to newcomers. If Mr. Ratner can restart the project, he may be able to restore some health to the neighborhood. If not, Atlantic Yards will go down as a massive, government-backed renewal project that destroyed the neighborhood it was intended to save.
Ms. Vitullo-Martin is a senior fellow at the Manhattan Institute.
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