The campaign for a CBA for Albany's proposed convention center

Here in Albany, NY, (where I live) the Coalition for Environmental, Educational and Economic Justice (CEEEJ) is trying to make sure that the new convention center, if built, will have a CBA attached to it.

The Albany Convention Center Authority is seeking about $190 million from the state, and a study of the project's viability will be finished next month. Without the additional funding, the convention center might not be built.

This CBA will be fairly unique because the Albany Convention Center Authority is a government entity, and not a private developer. Although other CBAs, notably the LAX agreement, have involved public authorities, this will be the first in New York.

Campaign launched to reform Atlantic Yards governance

Yesterday, elected officials and community leaders launched a campaign to reform the governance of the Atlantic Yards development. The campaign centers around proposed state legislation that would create a development trust, made up of high-level political appointees, and a stakeholder council appointed by local officials. For more, see here and here.

It's hard to say whether this type of development trust might be successful in the Atlantic Yards situation, but the proposal does point out the the oversight provisions in the CBA have not succeeded in satisfying stakeholders and officials.

More on Atlantic Yards, the IRS and tax exempt bonds

Norman Oder at the Atlantic Yards Report explains that, while Forest City Ratner plans on going ahead with the arena even if the IRS changes the rules relating to tax exempt bonds, losing the bonds would probably result in a loss of about $165 million to the developer.

The Atlantic Yard Report also has two stories about the IRS rules, for those of you interested in the nitty gritty of the bonding issues and why it's been called a tax loophole. See As IRS moves to close "loophole," ESDC fights for AY funding scheme and Rep. Kucinich asks IRS, Treasury to hold off on approving financing deal for AY arena, other projects.

Gentrification in Harlem

The Times has another story today discussing gentrification in Harlem--one of the criticisms aimed at Columbia for its plans to expand into Manhattanville and one of the reasons that the community has been interested in negotiating a CBA with the university.

Atlantic Yards & Yankee Stadium face difficulties with tax-exempt financing

A few years ago, New York City started using tax exempt bonds in an "aggressively creative way" to provide cheap financing for large economic development projects. But that might change under proposed IRS rules, which, if adopted, will apply to bonds issued after February 2007. State and city officials are trying to prevent the rule change, or, failing that, obtain waivers for the Yankees, the Mets, and the Atlantic Yards arena.

Both the Yankees and the Mets have relied extensively on the tax exempt bonds in financing their new stadiums, and they're lobbying to ensure that they'll be exempted from the new rules, if passed. This is especially important for the Yankees, as the team has expressed a need for additional financing. (The picture to the right shows the new Yankee Stadium, on the right, next to the old one. Photo by Mary Alteffer from the AP.)

The story is slightly different for the Atlantic Yards arena, however. The developer, Forest City Ratner Cos., has long been planning on using the tax exempt bonds to finance the $950 million facility (not to mention the rest of the project), but no bonds have actually been issued for the project. Although Bruce Ratner has admitted that the rule change is going to be an obstacle for the development, he remains optimistic and claims that constriction could begin in the fall. (The photo shows part of the project footprint, including the MTA's Vanderbilt Yards, looking north west toward Atlantic Ave and Flatbush. Photo by Chang W. Lee for the Times.)

The Times paints a more pessimistic picture of the project's future:

The Internal Revenue Service initially approved the use of the bonds for the ballparks, but quickly issued a proposal in 2006 to tighten the rules governing the use of tax-exempt bonds so that it would be more difficult, and perhaps impossible, for this kind of financing to be used again by profitable, private enterprises like professional sports teams.

Now state and city officials say the proposed rules are jeopardizing what is planned to be the city's next big sports palace: the $950 million Barclays Center, an 18,000-seat basketball arena for the Nets that is the centerpiece of the huge residential and commercial complex in Brooklyn known as Atlantic Yards.
...
The $4 billion Atlantic Yards project already faces delays because of litigation, a sluggish economy, the lack of commercial tenants and the reluctance of lenders to finance large real estate developments.
...
When the project was approved in December 2006, Mr. Ratner optimistically indicated that its first phase — the arena, an office tower, a retail complex and three residential buildings — would be completed by 2010. But under a financing agreement completed nine months later, he was given 12 years to complete the first phase.
The economic picture has changed significantly. This year, Mr. Ratner acknowledged that he would not begin construction of the office tower, once known as Miss Brooklyn, until he had an anchor tenant, which could take years.
...
Real estate executives say that if Mr. Ratner cannot get tax-exempt financing for the arena, it will make the project significantly harder.

For more on this story, see the New York Times article and the Atlantic Yards Report posting.

News of the financing problems only adds to the list of delays facing the Atlantic Yards project. As I've mentioned before, communities considering CBAs need to be aware of the vagaries of the development process, since, in many cases, the community won't benefit until the project is well on its way to completion.

Pittsburgh is becoming a CBA town

Continental Real Estate Cos., a developer hoping to build a hotel and entertainment complex between Heinz Field (the structure on the left in the picture) and PNC Park (on the right), is struggling with local authorities in a dispute over an option agreement involving the land (see here for another account of the story). The Stadium Authority, which owns the land, believes that the option has expired, but Continental has stated that it's going to press on with the project. "Well, we're going to sue them" (meaning the Stadium Authority), Continental's chairman said.

But the Mayor and Stadium Authority Executive Director are much more interested in negotiating than going to court. There will certainly be much wrangling about the price--Continental wants to pay about $1.3 million, the price it claims was set in the option agreement, even though the property may be worth much more. But Pittsburgh wants the development to happen, especially because the city expects that the project will generate a good bit of tax revenue.

It looks like a CBA will be part of the negotiations too though. Community groups in Pittsburgh have been rallying for a CBA concerning the project, and organizations like One Hill, Pittsburgh United and North Side United have shown their strength and tenacity in negotiating to get community benefits. The dispute over the option agreement also gives the community a fair bit of leverage to get the developer on board to negotiate a CBA.

Columbia expansion update

The Times reported yesterday that Columbia has reached an agreement to buy out one of the few remaining property owners in its plan footprint. As part of the agreement, Columbia will pay for relocating Anne Z. Whitman's business, a moving and storage company, from West Harlem to Washington Heights.

Ms. Whitman had previously stated that she would not agree to a buy out. The agreement leaves only two holdouts: a family that operates a service station and Nick Sprayregen, who owns 5 buildings with about 300,000 square feet of space, most of which is devoted to his Tuck-It-Away self storage business. Eminent domain seems likely to enter into the mix soon.

There's still no word on the CBA, however.

A CBA for San Francisco's Hunter Point

From Julian Gross, the director of the Community Benefits Law Center:

Last week, the San Francisco Labor Council, ACORN, and the San Francisco Organizing Project entered into a community benefits agreement regarding a major development in the Bayview-Hunters Point neighborhood of San Francisco.

Under the CBA, Lennar, a national housing developer, agreed that if the project moves forward, Lennar will:

• ensure that 32% of housing units built within the project are affordable, at a range of income levels;

• provide over $27 million in housing assistance funds targeted to neighborhood residents, including down payment assistance enabling additional units to be sold below market rates;

• provide over $8.5 million in job training funds targeted to neighborhood residents;

• ensure that all project employers participate in a state-of-the-art local hiring program; and

• ensure labor peace in key industries within the project.

Since all of these benefits are contained in the CBA, they are legally binding and enforceable by the Labor Council, ACORN, and SFOP. In light of these commitments by the developer, these organizations took strong, public positions in support of the project on two key ballot initiatives presented to the voters on June 3.

On election day, San Francisco voters agreed with the Mayor, the developer, and the organizations signing the CBA that the project should move forward. An overview of the project and the dueling ballot initiatives is available here.

As the project is just beginning the formal approval process, there will be numerous opportunities for community members who did not participate in the CBA process to help shape the project by working with public bodies.

This CBA represents a historic labor-community partnership in San Francisco, laying the groundwork for future coalition-based advocacy in the city. Julian Gross, Legal Director of the Partnership for Working Families, represented the coalition in negotiations.

Riverside Motorsports Park CBA update

Back in February, a lower court in California ruled that the environmental impact statement (EIS) for the proposed Riverside Motorsports Park (RMP) in Merced was deficient, in part because the developer hadn't prepared a CBA, which had been included as a requirement in the master plan.

Last week, the Merced Sun-Star reported that the county and the groups that brought the lawsuit reached an agreement that the ruling voided most of the project's approvals. The agreement's "terms translate into even more uncertainty for RMP's already questionable future."

Before the project can go through, the article pointed out that RMP will have to go through a number of steps, including finishing that CBA, in order to get new approvals. Although this may press the timeline back, RMP officials are confident and plan to move forward. "[Q]uestions loom," however, "about the company's financial standing."

Chevron plant CBA update.

The Contra Costa Times reported on Thursday that local officials in Richmond, California, have approved a limit on the amount and type of crude oil that an upgraded Chevron plant will be able to process. The specifics of the cap, including the permitted sulfur content of crude and whether certain processes will be more restricted than others, will be determined soon.

Aside from concerns about emissions and global warming, community members are concerned that if Chevron upgrades its equipment, it might begin processing greater volumes of contaminated crude, contributing to localized pollution and health problems. Chevron, on the other hand, says that replacing its 40-70 year old machinery with safer and more efficient models will lead to no change in overall emissions, even if output increases.

(photo: Contra Costa Times. Richmond Mayor Gayle McLaughlin stands in front of a wheel of misfortune during protests. Among the slices are flaring, accidents, spills, mercury exposure and asthma.)

However, while the planning commission has been focusing on the crude cap, it removed the "CBA" provisions from the proposed permit. These provisions would have provided $1 million for job training and created an urban forest, among other things. Although the commission will forward the 5 community benefits provisions to the city council for consideration, the commissioners explained that they removed the provisions because "it is unfair to require Chevron to do what other businesses aren't mandated to perform."

Well, that depends on how you look at it, I suppose. Lots of regulations impose tough requirements on certain kinds of businesses in order to offset their negative impacts. A crude cap is a good example. And a CBA in this case (were it actually negotiated by the community and not by the planning commission) wouldn't have to be required; one of the beauties of CBAs is that they are voluntarily negotiated and agreed to.

Chicago's thinking ahead

As a finalist for the 2016 Olympics, Chicago will still have some convincing to do to win the bid.

In this regard, Ald. Toni Preckwinkle has pledged to support CBAs.

Atlantic Yards in context.

The Atlantic Yards Report has posted some new aerial photos of the Atlantic Yards development footprint and the surrounding area. The new photos, taken as part of the Municipal Art Society's Atlantic Lots project, are complemented by other photos and renderings of the area, giving an idea of the scale and context of the plan.

photo by Jonathan Barkey