Hold 'Em Accountable: Developer Filing Proposed

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With controversy erupting around practically every major new development in New York City – the new Yankee Stadium, Ground Zero and Brooklyn's Atlantic Yards, to name a few – concerned citizens have been looking toward the public review and approval process for a stronger voice. The help they seek may have arrived recently, in the form of the introduction of City Council Bill 801, titled Community Impact Reports.

Aimed at those seeking economic development benefits such as direct project subsidies, low-interest financing, tax benefits, tax-exempt financing, and tax-exempt bonds and grants, the bill would require the developer of each project to submit a comprehensive report to City Council outlining the intended social and economic effects of the project on the surrounding communities. Organizations in contract with the city for the purpose of providing social services, or those that create affordable housing units exclusively, are exempt from the requirement.

“We need to have a way to monitor the benefits that are given to developers,” said Councilman Thomas White Jr., a Queens Democrat who chairs Council's Economic Development Committee. Around the city, such benefits are legion: In fiscal year 2006, the New York City Industrial Development Agency alone granted at least $700 million in tax breaks to individual firms.

Councilman Albert Vann, in consultation with Councilmembers White, Bill de Blasio, Letitia James and others, created the bill to “help us to understand how city funds are being used in communities, to help them directly,” according to Vann’s legislative director, Dottie Conway. Introduced June 29, the bill is now being further shaped by feedback and is not yet scheduled for a hearing or a vote.

Intended to increase transparency in the development process, the bill requires reports to be submitted to Council 60 days prior to approval of benefits by any city agency or entity. Information gathered will be accessible to potentially affected communities to give them a chance to react, and any councilmember can hold a hearing on the matter.

“The reports disclose information that can be used by communities and legislators to leverage outcomes, which will strengthen communities by way of affordable housing, improving neighborhood services, and creating jobs,” Conway said. “This bill goes beyond job creation and types of jobs. It reveals information about the quality of jobs, whether they are permanent, part-time, seasonal, salaried or hourly, and asks to know how residents in those particular communities are able to access these jobs.”

The legislation was originally proposed around the time of the unveiling of the mayor’s Five Borough Economic Development Plan, as part of a strategy to tie together economic development with poverty issues. A large portion of the required report is dedicated to acquiring an exhaustive level of detail about social and economic effects of development within a given neighborhood. The bill also addresses displacement of residents and businesses, a common concern of those currently living in areas subject to redevelopment.

But Tom Angotti, director of the Hunter College Center for Community Planning and Development, notes that the bill does not distinguish between direct displacement, or how many people will actually lose their apartments and how many businesses will be forced to relocate – and the “more damaging” indirect displacement, or the eventual number of businesses forced out when rents and prices go up.

“It seems to be very quantitatively oriented: number of jobs, number of displaced people—it tends to be a quantitative, not a qualitative analysis. They need to look at the fine points, the details of projects, not just fill in tables and numbers,” Angotti said of the legislation.

He praises the goal, but says this isn’t the best path to achieve it. “I’m guessing this is a response to a lack of accountability by city agencies when they subsidize developments and support developments that may have impacts on communities,” Angotti said. “I’m not convinced this is the best instrument to do so. I think the best way to increase transparency and accountability is by changing the way that the city does development, engaging community planning and consultation.”

Hope Cohen, deputy director of the Center for Rethinking Development at the Manhattan Institute for Policy Research, also thinks the wording of the legislation needs to be more detailed and is not sure the legislation will be effective. “Their heart is in the right place, but most economic development projects are going to have mostly state funding, which City Council won’t have any jurisdiction over,” Cohen said.

That’s true in some cases, but it depends on the project, according to Bettina Damiani, project director of Good Jobs New York, a government watchdog group that focuses on public subsidies. GGNY welcomes a new point of leverage to demand developer accountability. “What I am excited by is any effort to sort of put together the impacts of economic development in a more holistic approach. Right now it is sort of in silos, with ULURP working over here, and MOUs [memoranda of understanding] in place over there,” Damiani said. Her organization has just released a new web utility to view the location in each community district of companies receiving subsidies.

ULURP, which is the city's Uniform Land Use Review Procedure, and SEQRA, the State Environment Quality Review (or CEQR, the city’s process for implementing SEQRA), are currently the two primary ways in which communities have a chance to understand development. Though CEQR has a section that looks at social and economic impacts, that information is used to assess whether or not an environmental impact study is necessary.

Councilman White asserts that the Community Impact Reports bill is different because those other methods are not as detailed and not as focused on addressing social and economic issues.

Michael Slattery, senior vice president at the Real Estate Board of New York, thinks Community Impact Reports would be duplicative of other efforts. “Many communities have their own opinions and already know the impact a development will have on their community, without these reports. I think this is one more way to make it more difficult for projects that [provide community] assistance to receive it,” he said.

Cohen of the Manhattan Institute noted that in the case of Environmental Impact Statements, developers forced to submit such reports sometimes felt the need to overdo it. “Sometimes the project sponsor may feel the need to cover themselves against being sued and throw everything into a document, making it hard for the community to wade through it to find problems,” she said. Cohen speculates this could occur with Community Impact Reports as well.

The proposed new reviews are similar to existing environmental reviews, she added, in that when the developer is responsible for doing the review, it is in their interest what the turnout will be. Thus, the community may not trust the product.

The bill includes provisions to ensure legitimacy, however. If prepared by the developer, the report must include a description of how the statistics were acquired and the report’s accuracy must be certified by the department, in consultation with other appropriate city agencies.

Presently, the legislation does not include penalties if a Community Impact Report is not submitted. It is not yet known if lack of a report would cause benefits to be denied. For now, since the legislation has only just been introduced, Conway said the primary sponsors will focus on getting reactions and receiving comments from their colleagues, communities and advocates from both sides of the issue.

– Lauren Victory