Saturday, April 07, 2012

Does the NYC EDC's Seth Pinsky deserve credit for the Atlantic Yards arena? Not quite (but he does for other things)

A New York Observer article, headlined online as Let’s Make a Deal! How Mike’s Mild-Mannered Closer Seth Pinsky Got the City Building Again: Dan Doctoroff's protégée picks up the mantle for PlaNYC., in print, as noted below, suggests that New York City Economic Development Corporation (NYC EDC) President Seth Pinsky also deserves credit for Atlantic Yards.

Here's the lead-off to the article:
Imagine, if you will, the landscape of New York City 15 years hence. A drive to Citi Field in Willets Point takes you past a pleasant if overpriced cluster of residential buildings, rather than seedy chop-shops. Roosevelt Island is home to a sprawling $2 billion applied-sciences campus spinning out an army of developers to populate ping-pong-table-clad start-up clusters from Dumbo to Union Square. On Manhattan’s far West Side, the rezoned stretch of Hudson Yards offers millions of square feet for office space, housing and retail and 14 acres of open public space. You can already see traces of a more built-up, scrubbed-down New York in Luna Park’s freshly-painted Scream Zone, the first new roller-coasters Coney Island has seen in 80 years, and the rapidly-metastasizing arena at Atlantic Yards, which will soon play home court to the rebranded Brooklyn Nets.
It’s hardly a scenario Seth Pinsky could have imagined in September 2008, when Lehman Brothers collapsed just seven months into his tenure as president of the New York City Economic Development Corporation (EDC), a not-for-profit arm of the Mayor’s office charged with fostering economic growth across the five boroughs.
...Under Mr. Pinsky’s leadership, however, observers say the EDC has transformed itself from a real estate matchmaker for companies seeking office space into a policy-setting organization, spearheading diversification away from the finance, insurance, real estate economy (also known by the unofficial acronym, FIRE, which had rarely seemed more apt). Thanks to what one former employee called Mr. Pinsky’s “savant”-like facility with financing and structuring deals, a number of projects first proposed in the ambitious early years of the Bloomberg administration have begun making real progress. Some of the projects, like Willets Point, have “bedeviled administrations for decades,” noted Mr. Pinsky. And then there’s the EDC’s ultimate sleight of hand: convincing Cornell and Stanford to engage in a bitter rivalry to build a $2 billion tech campus, all by waving a $100 million grant and a swath of land on a sleepy East River isle.
Does Pinksy deserve credit for that "rapidly-metastasizing arena" (which strikes me as a rather poor choice of words)? The article actually doesn't make that case, though NYC EDC did, from the beginning (and before Pinsky's presidency) coordinate the role of other city agencies.

NYC EDC did, however, recommend the use of EB-5 immigrant investor money, in which Forest City Ratner raised more than $200 million of low-interest financing from foreign (mostly Chinese) who were told they were investing in an arena. That may be crafty tactics, but I'm not sure Pinsky should be too proud of it.

The tech campus

Pinksy certainly played a much greater role in such things as the tech campus. Did the city merely "wav[e] a $100 million grant and a swath of land on a sleepy East River isle" to get the tech campus?

Actually, the Applied Sciences RFP included a promise "to work with the Developer to raise money from philanthropic and other sources," to "assist with publicity and public relations efforts," to "explore other efforts to promote the commercialization efforts of the Project," and to help gain city, state, and other "economic development benefits,"including tax-exempt financing and EB-5 financing.

Criticism: argumentative

The Observer states:
Mr. Pinsky’s successes have not come easily. Over the years, he has acquired a reputation in the city’s development community as a fearsome negotiator. Detractors complain about overzealous demands. “There’s a widespread belief that Seth tries to get every friggin’ nickel off ya,” said one source. You wouldn’t know it by looking at him. Narrowly built with a long face, Mr. Pinsky gives off something like a young Woody Allen vibe.
...“His personality can be a little grating on people sometimes,” noted Mr. [Robert] Lieber. “He’s very picky and argumentative, but I think that has evolved as he’s been there.”
Argumentative is correct. Consider, for example, his bravura face-off in July 2008 with then-Assemblyman Richard Brodsky.

But Pinsky has not been a "fearsome negotiator" on behalf of the public regarding Atlantic Yards. Consider his appearance on the Brian Lehrer Show in January 2010 when he defended some questionable aspects of the deal or his defensiveness when questioned in March 2011 by Council Member Brad Lander about the need for an updated cost-benefit analysis.

Criticism: transparency

The Observer states:
Meanwhile, community advocates and urban planners decry the EDC’s corporate structure and lack of transparency. “They pass for being a government agency, and in fact they have more power than many of the line agencies under the mayor,” said Tom Angotti, director of the Center for Community Planning and Development at Hunter College and the author of New York for Sale, who noted that by the time neighborhoods are consulted, the EDC has typically already made up its mind.
“If [closing deals] is the only criterion, he’s been a success. But for me that’s not the only criteria, nor should it be for the public. The question is what’s the quality of the deals,” added Mr. Angotti, a technical advisor to the alternative plans for the arena at Atlantic Yards. He cited the Brooklyn stadium as an example of selecting a more suburbanized approach over a plan that would benefit locals. “It divides three neighborhoods instead of uniting them and it just creates another giant super block in the middle of Brooklyn.”
In this case, NYC EDC was not the driver behind Atlantic Yards in the first place; it was merely an enabler for a state-led process.

The change at NYC EDC

The Observer states that the agency has moved beyond a focus on real estate:
Sometime that winter, Mr. Pinsky took a walk around Brooklyn and ended up in East New York. “Again, it’s a little bit embarrassing to admit, but what hit me was that we’re called ‘the Economic Development Corporation,’ but what we really are is the ‘real estate development corporation.’ And we really didn’t do that much with the underlying economy itself.” Spending months luring a company to Lower Manhattan with an incentive package to secure just 300 jobs wouldn’t cut it.
Earlier that year, Mr. Pinsky had brought in more “strategically minded” hires from the private sector. “Nobody really knew what do with them and I’m not sure they knew what to do with themselves,” he recalled. That group became the Center for Economic Transformation, tasked with reaching out to individual industries, like the tech community—an approach that’s garnered copycat interest from London to Austin.
That is a significant change, but it's one likely too late for Atlantic Yards. The revenues projected relied significantly on office jobs. Those are fewer than originally projected, and significantly delayed.

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