[HK-Online] MP Tenants Rumble; NYPIRG & Enviros on WS

[Kitchen]

Hell's Kitchen Online                                6/23/04
http://hellskitchen.net "All the News the Times Won't Print"
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IN THIS ISSUE ...

1. Manhattan Plaza Tenant Turmoil (Backstage)
2. NYPIRG Announces Opposition to West Side Stadium
3. Environmental Groups Challenge Provisions of Pataki's Javits Legislation

A few developments of note. Below is a Backstage article detailing the 
ongoing issue of 168 Manhattan Plaza apartments being withheld from proper 
use under the original MP formula: 70% performing arts, 15% community and 
15% elderly. Many know of examples where politically-connected insiders can 
get a MP apartment almost with no effort, while other artists struggling 
just to get by can be on the waiting list for years. This has been an 
ongoing issue for years, but only recently has it risen as an issue where 
MP residents are focusing on it. Apparently the MP Tenants Association 
isn't too concerned as they're attempting to legitimize this practice. The 
MP Tenants Association is also supporting the city's plans for a West Side 
Central Business District with approximately 28 skyscrapers and the 
displacement of many residents and businesses (something MP tenants are not 
being told).

New York Public Interest Research Group announced today its opposition to 
the West Side Stadium proposal. While stopping short of addressing the 
broader issues (Hudson Yards, Javits and many transit/transportation 
concerns), it's a welcome sign for NYPIRG to join in opposition. Of prime 
concern to NYPIRG (and its Straphangers Campaign) is that the Metropolitan 
Transportation Authority (MTA) receives full market value for the 
development rights of the MTA-owned rail yards (some estimates put the 
value at $1.5 billion). The city has all along assumed it would get those 
Air Rights for virtually nothing, which they could then sell to developers 
wanting to put up the proposed 28 skyscraper district that would replace 
much of the existing West Side. See NYPIRG's statement below.

Also included is a letter from Environmental groups objecting to parts of 
Governor Pataki's Program Bill 90-R that would authorize the Javits 
Development Corporation to double the size of the Javits Center up to 42nd 
Street. They objected to parts of the bill that would limit any opportunity 
to challenge the legislation. Although there were loopholes in the bill 
(now apparently closed) that could have helped the city with the stadium, 
the Governor's bill really concerned the Javits expansion and its 
financing. So why then did Quinn, Gottfried and others deceive Westsiders 
others into thinking the Assembly hearing was all about a stadium? 
Apparently the state legislators ended their session yesterday without 
taking action on the bill, but they could deal with it later when they come 
back to deal with the state budget and other pressing matters.

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MANHATTAN PLAZA TENANT TURMOIL
New Landlord Prompts Rent-Rise Fears
Backstage, June 23, 2004
By Leonard Jacobs

In 1977, when the now-defunct New York Board of Estimate approved plans for 
a "limited-profit housing company" called Manhattan Plaza, the 
entertainment industry hailed the decision, since it guaranteed that 70% of 
the apartments would house performing artists meeting certain criteria, 
such as income levels.

Nearly 30 years later, Back Stage has learned that Manhattan Plaza tenants 
are facing a new owner of their 1,527-unit, two-building complex, and have 
multiple reasons to be concerned. There are some issues stemming back to 
the first days of the building's tenancy, such as the fact that, according 
to the Manhattan Plaza Residents Alliance (MPRA), at no time have a full 
70% of the units actually been occupied by performing artists.

There are also more complicated issues -- like the growing possibility that 
rents could rise dramatically throughout the complex. In addition to many 
actors, through the years Manhattan Plaza has housed everyone from 
"Seinfeld" co-creator Larry David to Grammy Award winner Alicia Keys.

Alliance President Susan Johann, a noted art and commercial photographer, 
told Back Stage that the fight to reach 70% started when Aquarius 
Management, the original owner, "siphoned off 168 apartments for its own 
use" as soon as the building began to accept tenants. According to 
documents provided to Back Stage, the mandated demographics for Manhattan 
Plaza are 70% performing artists, 15% elderly, and 15% community residents 
"residing in substandard housing." By removing 168 apartments from the 
roster, "1,359 apartments are left, 70% filled with performing artists. So 
it's really 70% of 90%, if you will -- those 168 apartments have always 
been reserved for whoever the management felt like putting there."

Johann acknowledges that the struggle to reach a genuine 70% figure has 
outlasted mayors, borough presidents, and scores of elected officials, and 
that tenants' actions were forcefully thwarted by Aquarius through the 
years. But now that Manhattan Plaza is under new ownership, she says, the 
fight will only intensify.

The MPRA formed earlier this year after news broke in The New York Times 
that the complex was being sold to the Related Companies, a 32-year-old 
real estate conglomerate that develops, finances, and manages 
government-assisted rental apartments. The Related Companies is the 
third-largest owner of multifamily rental apartments in the country. Other 
than the usual apprehensions any tenants might have regarding a new 
landlord, the manner in which the sale was announced and communicated to 
the residents, Johann says, was disturbing.

"We had no warning, and then there was a January 13 article in The New York 
Times saying the Related Companies bought it -- it turns out they were in 
secret negotiations for a year. Well, Manhattan Plaza is supposedly a 
public-private partnership; the federal government has spent $430 million 
over the last 20 years [in subsidies] for this $90 million building." The 
alliance's website, www.manhattanplazaresidents.org, states that at a Jan. 
24 meeting officially telling the tenants about the sale, "verbal 
guarantees were given that nothing would change.…" Johann disputes those 
assurances.

"For one thing, the Related Companies immediately decided to jack up rents 
to push out the businesses that have made Manhattan Plaza their home for 
years. The florist, the smoke shop, the deli -- they won't allow any new 
leases. And for what -- another Starbucks?"

More worrisome is the Related Companies' intention to enter into the "Mark 
Up to Market" program operated by the Department of Housing and Urban 
Development (HUD). Currently, Manhattan Plaza is part of HUD's Section 8 
program -- federal subsidies that help keep rents at below-market rates. 
"Mark Up to Market," Johann says, "gets the government to pay the 
difference between what we now pay and up-to-market rents."

Entering into the program requires the filing of a rent comparability 
study, which essentially argues that the fair market rates of the dwellings 
are higher than the combined total of current rents and subsidies. A copy 
of the study, obtained by Back Stage, may prove eye-opening to Manhattan 
Plaza renters. At market rates, a 425-square-foot studio is 
fair-market-priced at $1,700 a month. A 975-square-foot one-bedroom is 
$2,850; a 1,275-square-foot two-bedroom is $4,200 -- that is, as the study 
says, if tenants "were not receiving rental subsidies and rents were not 
restricted by HUD or other government agencies."

Is it only for higher profits that the Related Companies wants to enter 
into the program? The alliance's website says: "[The Related Companies' 
chairman and CEO] Steve Ross is a financial partner of Deputy Mayor Dan 
Doctoroff, the man behind the push for a West Side stadium for the Jets, a 
corridor of office skyscrapers, the expansion of the Javits Center, and the 
2012 Olympics." Sensing that Midtown West property values could rise should 
any of these projects happen, "key players" of the Related Companies held a 
March 9 tenants meeting to discuss entering into the HUD program and made 
it "clear through remarks by both HUD officials and [the landlord] that 
Related's willingness to maintain Section 8 at Manhattan Plaza was 
contingent upon implementation" of the program. That could, in effect, 
"raise the ceiling rents of Section 8 tenants," and that would mean "huge 
increases in rent for a number of tenants."

Two phone calls to the Related Companies by Back Stage yielded mixed 
results. The first went to a general mailbox and was unreturned. Upon the 
second call, a receptionist said that Howard Rubenstein Associates, a 
public relations firm, handled press inquiries for the Related Companies, 
CEO Stephen M. Ross, and Manhattan Plaza. A subsequent call to Howard 
Rubenstein Associates was pending at press time.

RESIDENTS READY TO RUMBLE

In April, the MPRA retained the services of a lawyer, Jack L. Lester, who 
issued a memo to the tenants of Manhattan Plaza. "I have been retained…to 
research and investigate the legal rights of all Manhattan Plaza tenants as 
a result of the new Owners' announced plans to alter your rent structure," 
it reads. "If necessary, I am authorized by the MPRA to pursue available 
legal remedies…. MPRA will seek full statutory compliance by all parties 
involved in rent proceedings."

And on June 14, the MPRA issued a letter to a list of elected officials, 
including Mayor Michael Bloomberg, New York State Attorney General Eliot 
Spitzer, U.S. Sens. Charles Schumer and Hillary Clinton, and City 
Councilwoman Christine Quinn.

The letter reveals that the problem is not so much that Aquarius Management 
"defrauded taxpayers by allocating 168 apartments at Manhattan Plaza to 
friends and associates" but that "[the] Related Companies has purchased 
Manhattan Plaza and intends to continue the practice."

Johann says the MPRA will continue to "object to the Related Companies 
getting into this program and to holding 168 apartments like some secret 
list. There are performing artists, musicians, and stagehands who have 
applied and stayed on the list for years and haven't gotten in. There are 
people who don't fall strictly within the income guidelines and don't get 
in. But these real estate people get to put whomever they want into 168 
apartments? After all these years, what do we have here? What do they want, 
a class-action suit?

"It's like we have a village in a great big village, and we're a tiny 
portion of it making noise," she concludes. "On the other side, you have 
developers that are powerful and politicians that are powerful who receive 
campaign contributions. Steve Ross is one -- he put together the deal for 
the AOL Time Warner building. You're talking about a major wheeler-dealer. 
So we can make enough noise to stay here and make sure that rents don't 
'Mark Up to Market.' But we're going to lose the flavor of the neighborhood."

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NYPIRG ANNOUNCES OPPOSITION TO WEST SIDE STADIUM
(press release)

New York, New York-The New York Public Interest Research Group, Inc. 
(NYPIRG) today announced its opposition to the proposed controversial West 
Side Stadium.

The $1.4 billion stadium would be built on a platform over a rail yard on 
Manhattan's Far West 30's owned by the Metropolitan Transportation 
Authority.  New York City and State plan to spend $600 million to build the 
platform and a retractable roof; the New York Jets say they will spend $800 
million to build the stadium itself.

"The arguments against a West Side stadium are strong and reflect 
longstanding NYPIRG concerns about the environment and the use of scarce 
government resources," said Gene Russianoff, senior attorney for NYPIRG.

NYPIRG had not taken previously a stand on the proposal. (NYPIRG's 
statement in opposition to the stadium follows this release.)

In its statement, NYPIRG noted that stadia have a poor track record 
generating revenue and that if the city's financing scheme falters, city 
taxpayers would be on the hook. Recent news accounts have raised serious 
questions about the economic benefits projected by the Jets for the 
stadium, which would also be used as a convention and events center.

NYPIRG also cited serious environmental concerns and expressed skepticism 
about City claims that 70% of the new stadium's patrons will get there by 
public transportation. Russianoff said that NYPIRG was also very troubled 
by legislation recently proposed by Governor Pataki, which would severely 
limit environmental challenges to the related expansion of the Javits 
Convention Center and possibly to the stadium.

"A stadium would likely be an impediment to development," said 
Russianoff.  He noted that despite proposed additions to the stadium - 
including restaurants and an adjacent deck connection to the Hudson River 
Park - "in the end, the building would be a huge bulky box between the city 
and the river."

Russianoff added: "There are more important priorities for scarce city 
funds." According to recent polls, this view is shared by a majority of New 
Yorkers.
	
NYPIRG did not take a position on the larger West Side development plan. 
However, it called on the City and Metropolitan Transportation Authority to 
have an independent appraisal made of the value of the yards and said that 
the MTA must receive fair market value for its property.

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NYPIRG STATEMENT IN OPPOSITION TO WEST SIDE STADIUM
Wednesday, June 23, 2004

Background: New York City and State and the New York Jets have announced 
plans for a controversial football stadium and expanded convention center 
on the West Side of Manhattan.  It would be built on a platform over a rail 
yard on the far West 30's that is owned by the Metropolitan Transportation 
Authority.  The city and state have agreed to spend $600 million to build 
the platform and a retractable roof.  The Jets say they will spend $800 
million for building the stadium itself.  The stadium is part of a much 
larger $3.7 billion plan for developing the West Side, calling for 
extending the 7 subway line from Times Square to 34th Street and 11th 
Avenue; building new parks, streets and infrastructure; and expanding the 
Javits Convention Center. Supporters of the stadium argue that it will 
revitalize the area, bring major league football back to the city and 
generate long-term revenues for the city.  The City is pushing the project 
hard to start construction before a summer 2005 deadline for awarding the 
summer 2012 Olympic Games.
Opposition to the Stadium:  The arguments against a stadium are strong and 
reflect longstanding NYPIRG concerns about the use of scarce government 
resources and the environment:

- Stadia have a poor track record generating revenue:  Many studies show 
that stadia subsidized in other cities have not lived up to promises.  The 
New York City Independent Budget Office concluded: "Research on stadiums 
consistently finds that there is no basis for forecasting an economic 
development impact beyond that generated by the local expenditures of the 
team and its fans. In particular, none of the studies suggest any economic 
rational for assuming that building any new stadium would itself spur 
construction of office towers and hotels."  If the city's financing scheme 
falters, city taxpayers would be on the hook.  As The New York Times noted 
in a June 20, 2004 story: "According to the New York Jets, the stadium Š 
will be an economic whirlwind, attracting 60 football games, soccer 
matches, concerts, trade shows and conventions a year. An Ernst & Young 
report commissioned by the team estimates that the stadium will generate 
$72.5 million in annual tax revenue. But a close reading of the report and 
an examination of the track records of other combined stadium-exhibition 
halls suggest that the Jets' projections may be too optimistic. No other 
similar stadium has attracted anywhere near as many events as the Jets are 
predicting."

- A stadium would likely be an impediment to development:  As Newsday 
editorialized:  "A stadium will cost a fortune and will make the 
neighborhood less attractive to apartment buyers."  The City argues that 
its proposal is not just a stadium; it can be turned into a venue for 
conventions and concerts, active on many days of the year.  Its "edges," 
they say, will have attractions, like a flea market and restaurants; on the 
west side there would be a green deck over West Street.  But in the end, 
the building would be a huge bulky box between the city and the river  - 
much like the lifeless areas around the existing convention center to the 
north.

- There is strong public opposition:  Opinion polls show strong public 
opposition to public subsidies for a stadium, with 60% opposed.  Some 53% 
were opposed when asked "Would you favor or oppose the building of a new 
stadium Š on the West Side of Manhattan, if the only tax dollars used came 
from the increased tax revenue from new office and apartment building in 
the surrounding neighborhood?" Area elected officials and affected 
community boards are fighting the stadium.

- There are serious environmental concerns:  Dense Manhattan is the wrong 
place for a stadium; it will generate a great deal of traffic and attendant 
negative environmental impacts.  The City says that upwards of 70% of the 
new stadium's patrons will get there by public transportation, compared to 
the 4% who now take transit to the Jets Meadowlands stadium.  But that's 
hard to credit.  Madison Square Garden - which is actively opposing the 
stadium plan - says that only between 40% and 50% of attendees of garden 
events come by transit.  And the Garden is far better served by transit - 
subways, LIRR and NJ Transit - than would be the Jets stadium.  NYPIRG is 
also very troubled by a provision in the proposed and related Convention 
Center legislation which would eliminate Supreme Court review of 
environmental challenges to the project.  This bill may apply to the 
stadium site.

-  There are more important priorities for scarce city funds:  In December 
2003, New York Times writer Bob Herbert powerfully stated the case that a 
subsidized stadium was the wrong priority for New York City:  "Let's see. 
The city and the state of New York do not have enough money to adequately 
fund the public schools. Kids frequently find that gymnasiums, science 
labs, art classes, playgrounds and even qualified teachers are in short 
supply.  The MTA has already imposed the biggest fare hike in history, is 
in the process of cutting portions of its work force and may have to raise 
fares again in 2005 because of budget problems.  Students at the state and 
city university systems are facing the double-whammy of budget cuts and 
substantial tuition increases.  It's a sad story. Despite an array of tax 
and fee increases, the city and the state are essentially broke. There's no 
money for anything except the bare essentials.  Unless -- and this is hard 
to believe -- unless the needy group is the New York JetsŠ"

Special Concern About the MTA: The City and MTA are negotiating over how to 
compensate the MTA for its two rail yards on the West Side.  That is of 
great importance for the future of the transit system, since these revenues 
could be used to pay for repairing and expanding the transit system.  In 
July, the MTA will issued a 2005-2009 rebuilding program, vital to the 
future of the city's economy.  During the current 2000-2004 MTA rebuilding 
program, the city has cut its capital aid to the MTA by $90 million over 
three years.  The City has taken the position that the MTA yards have 
little value without the city's proposed improvements, such as the 
platform, 7 extension, new infrastructure and "upzoning."  The City would 
have the MTA receive revenues from properties built on the site at some 
point in the future, after development rights have paid for many of the 
planned improvements.  According to news accounts, MTA officials have 
countered by saying that the yards are worth $1.2 billion.  In NYPIRG's 
view, the MTA must receive fair market value for its property.  We have 
called on the City and MTA to have an independent appraisal made of the 
value of the yards.

Conclusion:  Some brand opposition to a West Side stadium as 
anti-development.  NYPIRG strongly supports a range of major building 
projects.  These include a $17 billion Second Avenue subway; a $6.3 billion 
link between the LIRR and Grand Central Terminal; and a $22 billion-plus, 
five-year MTA rebuilding program, which includes such projects as a $750 
Fulton Street Transit Center and a $400 million rehabilitation of the South 
Ferry subway station.  In addition, NYPIRG is not taking a position on the 
larger West Side development plan.  Many critics of the stadium support 
development in this area and argue that a stadium would actually be an 
impediment to Mayor Bloomberg's long-term vision for the Far West Side.


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ENVIRONMENTAL GROUPS CHALLENGE PROVISIONS OF PATAKI'S JAVITS LEGISLATION

Eight environmental and civic groups released a letter to
state legislative leaders, objecting to a provision in Governor
Pataki's proposed convention center legislation that would
undermine state environmental law.

A copy of the letter is below.


ENVIRONMENTAL ADVOCATES OF NEW YORK
ENVIRONMENTAL DEFENSE
NATURAL RESOURCES DEFENSE COUNCIL
NEW YORK LEAGUE OF CONSERVATION VOTERS
NEW YORK PUBLIC INTEREST RESEARCH GROUP
REGIONAL PLAN ASSOCIATION
SIERRA CLUB, ATLANTIC CHAPTER
TRI-STATE TRANSPORTATION CAMPAIGN

June 17, 2004
Hon. Sheldon Silver                    Hon. Joseph Bruno
Speaker, New York State Assembly       Majority Leader
New York State Assembly                New York State Senate
Albany, New York 12248                 Albany, New York 12247

Dear Speaker Silver and Majority Leader Bruno:

We write to express our opposition to a provision in Governor Pataki's 
Program Bill 90R, which would greatly truncate judicial review of legal 
challenges of decisions by the New York State Urban Development Corporation 
in connection with the expansion of the Jacob Javits Convention Center.

The proposed legislation would expand the current boundaries of the Jacob 
Javits Convention Center and impose new hotel and car rental taxes in New 
York City for this purpose. Section 6 of the bill would restrict any legal 
challenges to the project under Article 78 of the Civil Practice Laws and 
Rules to the Appellate Division of State Supreme Court in the First 
Department, including a review of a "determination of the development 
corporation pursuant to article 8 of the environmental conservation law 
with respect to the convention center." (The legislation also retains the 
language from the original authorizing legislation that requires Article 78 
proceedings be commenced within 30 days instead of the 120 days generally 
in Article 78.)

This provision would be a disservice to both the environment and to the 
state's judicial system.

Normally, legal challenges brought under the New York State Environmental 
Quality Review Act would first be heard by a judge in State Supreme Court. 
At this level, there is an opportunity for both sides to develop the facts 
and create a detailed coherent record. For example, parties may submit 
affidavits and engage in discovery where appropriate.

But this legislation would eliminate State Supreme Court review, sending 
the SEQRA challenge directly to the appellate level. This would undermine 
the current basic three-tiered structure of judicial review, where a 
decision by State Supreme Court judge can be reviewed by both the Appellate 
Division and by the state's highest court, the Court of Appeals. It would 
also place an undue burden on the Appellate Division, which would have to 
digest a raw record.

We believe that the current judicial arrangement fosters a deliberative 
review of environmental challenges and that there is no compelling reason 
for singling out the Convention Center expansion. If the Governor believes 
current three-tiered judicial review is cumbersome - which we do not - 
there should a measured process of legislative and public debate of overall 
judicial review of SEQRA challenges.

We would note that as currently worded, the provisions of the program bill 
may apply to the proposed controversial West Side stadium. The site for the 
proposed "New York Sports and Convention Center" - which would include a 
stadium - is in the definition of the proposed boundaries for an expanded 
Convention Center boundaries and may be referred to as an "adjacent 
facility containing a plenary hall" in the legislation.

Yours truly,

Eric A. Goldstein					
Natural Resources Defense Council		

James T.B. Tripp
Environmental Defense

Jon Orcutt			
Tri-State Transportation Campaign			

Gene Russianoff
NYPIRG

Jeff Jones			
Environmental Advocates		

Robert Yaro
Regional Plan Association

Marcia Bystryn				
New York League of Conservation Voters

John Stouffer
Sierra Club, Atlantic Chapter