Diaz's Other Demands

Prevented Agreement

On Bronx Armory Mall

By Henry J. Stern
December 18, 2009

The pot continues to bubble at the Kingsbridge Armory.

On Tuesday, we reported the City Council's decision to reject the proposed shopping mall which Related Companies wanted to build as a reconstruction of the long abandoned facility in the Bronx.  Wednesday we published news and editorials about the Council's action.  Today (Friday) we have Mayor Bloomberg's veto message, a Post editorial on the subject, a column by Steve Cuozzo, and a Crain's Insider article on responsibility for the impasse.

Just as we covered, in three articles last week, former Republican Senator Joe Bruno's continuing legal difficulties and their consequences, we find that the Kingsbridge affair develops new aspects each day.  We write about Democrats as well as Republicans, where issues of integrity, judgment and hubris are involved.  In the case of the Armory, we believe that city-wide questions on economic development are at issue, as well as the scope of the City Council's role in deciding questions of land use pursuant to the City Charter.

First, yesterday Mayor Bloomberg vetoed the City Council's rejection of the plan to build a shopping mall in the long-abandoned armory at Jerome Avenue and Kingsbridge Road. You can link to his statement on the issue here. Council approval was required under the Uniform Land Use Review Procedure, which is part of the City Charter.  The plan had previously been approved by Bronx Community Board Seven and the City Planning Commission.  The matter now goes back to the Council, which will consider over-riding the mayor’s veto at its meeting Monday.  Since its decision last Monday came on a 45-1 vote (with only outgoing Queens councilmember Helen Sears dissenting), it is expected that, unless a delay is agreed to, the necessary two-thirds majority (34 votes) will be assembled to override.

The Council decision did not mean that 45 of its 51 members had individually evaluated the proposal and found it unsatisfactory for economic reasons.  Under the rubric of deference to local officials on land use issues, the Council ratified the wishes of the Bronx delegation and Borough President Diaz.  The principle is comparable to "senatorial courtesy", under which a senator can block the President’s nomination of an official from his home state who s/he deems unsuitable for any or no reason. 

When the impact of a land use decision is purely local, this policy has a rationale.  If a community and its elected officials do not want a park to be renovated or redesigned, it may be sensible to spend the capital funds elsewhere, rather than impose an unpopular plan on the people who will use the park or other facility.  But when the proposal has city-wide significance, e.g. the location of a marine transfer station or a facility which will serve an entire borough, it would not be appropriate to yield to parochial nimbyism.  Nimby is a well-known acronym for "not in my backyard".  Nimby’s recently sprouting cousin, Banana, reflects a negative attitude toward public improvements in general.  It stands for "build absolutely nothing anywhere near anybody."

Second, there is a column on p43 in Thursday's Post, by Steve Cuozzo, LUNATICS IN CHARGE: Council's Mad Kingsbridge Vote.  Link to it here.  Cuozzo argues that "the chief culprit is Speaker Christine Quinn, who seems willing to do anything to keep her job.  In the past, her soft spot for far-left union Unite Here blocked overdue rezoning of the Garment District.  It’s scary to imagine what she'll let the radicals get away with now that she needs their backing."  In Ms.Quinn's defense, it may be argued that, by yielding to the inevitable, she maintained her position of legislative leadership.  The Bronx, along with Queens, gave her key support when she was elected Speaker in January 2006.  The Council's majority leader, Joel Rivera, is a Bronxite.  His faction has, however, lost power in the last year.  His father and his sister are both members of the Assembly.  His position in the Council may be contested next month.

Third, the controversy over the Armory was further stoked today by a vehement editorial on p34 of today’s New York Post which makes previously unpublished allegations about Bronx Borough President Diaz and the demands that he allegedly made of Related Companies during the negotiations which preceded the vote. Diaz's objection in this case was not to the reconstruction of the Armory per se, but what policies would be followed by the retail stores which might rent part of the space, and what other goodies could be made available as part of the transaction..

The editorial is titled KINGSBRIDGE COMMISSAR, which suggests a comparison with apparatchiks of the former Soviet Union.  The Post thunders against the supine Council and the demanding Borough President. It is so forcefully written and the charges are so fresh that we set it out here, rather than requiring you to link to it.  The Post's editorial style consists of short paragraphs, so there is a lot of white space surrounding the words.  Here goes:

"Mayor Mike yesterday vetoed that City Council measure killing a proposal to develop the Kingsbridge Armory in The Bronx.

"The council is poised to override the veto, so it's unlikely to have any practical effect -- but symbols count, so good for the mayor for sticking up for jobs in the city's poorest borough.

"Real jobs, that is -- as opposed to those handed out from Borough President Ruben Diaz Jr.'s patronage trough.

"Diaz was instrumental this week in killing the Kingsbridge proposal -- a retail development at the crumbling armory that would have meant 2,200 jobs and $300 million in investment for The Bronx.  

'The notion that any job is better than no job no longer applies,' he said, in a line that could've come straight from 'Alice in Wonderland.'
Diaz, along with his union allies, was most immediately incensed that developer Related Cos. refused to require retailers to pay workers well-above-market wages -- a demand Related said would scare away all potential tenants.

"But it turns out that's just a wee bit of the command-and-control economy envisioned by the beep.

"Indeed, Diaz's proposed 'community-benefits agreement' -- that's code for the City Council-sanctioned shakedowns typically imposed on businesses with the temerity to invest in New York's future -- was breathtakingly arrogant.

"In addition to the wage concessions, he demanded:

* A promise from Related to bar supermarkets, fast-food chains and "big box" retailers like Wal-Mart, Target and Home Depot from the armory.

* 'Labor peace' agreements from retailers that would've allowed workers to unionize without a secret ballot.

* Money from Related to pretty up the storefronts of competing local merchants -- plus $3 million for a low-interest business-loan program. (Read: a Diaz-dominated slush fund.)

"That's not all: Related and its tenants would also be required to hire their workers through the economic-development arm . . . of Ruben Diaz's office.

"To that end, tenants would have to file notice whenever a job position opened -- and Related would have to pony up $6 million and 5,000 square feet of free office space to staff the agency.

"Clearly, this goes far beyond the typical 'community-benefits' baksheesh.
All that was missing, frankly, was a mask and a gun. Clearly, if one seeks to do business in The Bronx, one plays by Diaz's rules.

"Like Related, legitimate businesses may decide they don't want to roll around in a mud puddle with Bronx politicians.

"Who would blame them?"

A fourth item on the controversy appeared this afternoon in Crain's Insider, a newsletter published by Crain's New York Business, an informative magazine.  The article accurately reports that there was some criticism of the deputy mayor, but it is by no means clear that anyone could have persuaded the parties to agree on the wage issue, which has never before been imposed in a New York City zoning change.  If the wage provision had been included, it would have been almost impossible to make a deal in another part of the city without a similar requirement.  This would risk our losing economic developments which would provide thousands of jobs, many of which would be high-salaried. We reprint the Crain's column here:

Criticism of deputy mayor follows armory fiasco

"The failed Kingsbridge Armory negotiations did not appear to win Deputy Mayor Bob Lieber many fans. Insiders say Lieber offered concessions to the Bronx City Council delegation that he later had to withdraw because Mayor Bloomberg did not agree to them, or because city lawyers raised red flags about their legality.

"Lieber, a former Lehman Brothers executive, did not develop a rapport with the folks across the table, at one point telling the owner of a supermarket opposite the armory that he wasn't interested in the store's Bronx history. And he did not allow the would-be developer of the armory, The Related Companies, to negotiate directly with the Bronx officials. It is not clear Related would have succeeded, but at least it would have shared more responsibility for the fiasco.

"A spokesman for Lieber defends the deputy mayor, commenting, 'When you say 'No, thank you' to thousands of new jobs in the Bronx during a recession, you've got to be particularly creative in blaming other people.'
Lieber previously reached agreements on Willets Point and Coney Island, but each involved one council member, not an entire delegation. Bronx leaders had differences of opinion and sometimes moved in and out of the room during negotiating sessions. One insider says Bronx Borough President Ruben Diaz Jr.'s aspiration to run for citywide office in 2013 was an unhelpful factor, although it is too early to tell if defeating the Kingsbridge mall will enhance or undermine his chances.

"What will become of the dilapidated, vacant armory now that Related's $310 million project is dead? The city's capital plan includes $10 million to keep it from deteriorating over the next nine years. It is not clear where money to redevelop it might come from. It would also take about three years for a new plan to reach the council for approval."

OUR CONCLUSIONS AND SOME QUESTIONS:

1.This situation was not helped by the city discussing offers and then withdrawing them on legal advice. But if one man is responsible for the impasse, it is Ruben Diaz and not Bob Lieber. 2. The new and relatively unknown borough president of the Bronx is trying to make his bones by standing up for poor people, whether they have jobs or not.  3. This project is at least two years in the making. The eleventh hour is not the time to demand a wage clause which is unprecedented in similar agreements. 

4. The world should not be required to change gears because BP Diaz succeeded BP Carrion. 5. The city has a very competent negotiator in Commissioner of Labor Relation James Hanley.  He might have been helpful in this situation. 6. We hope the plan is resurrected when the parties cool off.  The Bronx could use the private investment, particularly with its 13.4% unemployment rate  

7. The whole concept of 'community benefits agreement' should be carefully examined to make certain that these are not political payoffs to local operators. 8. In the Yankee Stadium replacement, the Yankees dealt with the Bronx's political leadership.  That is harder to do when the leadership is in flux. 9. The Bronx is the city's poorest borough.  The fact that this project has so far failed is not helpful to the people who live there. 

10. If the new Council believes that it can show its strength by over-ruling the mayor, that may be correct in the short run but it will lead to difficult days ahead. 11. Does the City Council wish to emulate the bumbling clowns in the state legislature?  12. Or do they see themselves as avatars of a populist revolution which will lead to a new social order in New York City; and if so, who will pay for it?

StarQuest #631 12.18.2009 1984wds