Over his 12 years as mayor, Michael Bloomberg reshaped New York through massive rezonings and city-sponsored development. Critics pointed out he subsidized wealthy and well-connected developers with generous tax breaks, direct payments, and low-cost financing, as well as free land and infrastructure. When Bloomberg left office, the big question was, “Will Bill de Blasio change that approach?”
That question took on a new urgency this week, as two lawsuits challenged the legality of New York City’s Willets Point redevelopment plan, a “legacy” project of former Mayor Bloomberg. As detailed in a three-part Investigative Fund series in 2013, Willets Point featured the most questionable hallmarks of the former administration’s economic-development policies. Developers stood to collect on hundreds of millions in tax breaks and other subsidies in order to build a large shopping mall on public land, while a new nonprofit, started to oversee an underfunded park in a low-income community, traded acreage in return for the developers’ donation. Though major land-use proposals must go through a seven-month public vetting known as the Uniform Land Use Review Procedure, the lawsuits condemn the Bloomberg administration for skirting the ULURP process.
Mayor de Blasio has promised change. He’s vowed to trim the $3 billion in annual tax breaks now granted to “wealthy corporations” and to confront the growing gap between rich and poor in his “tale of two cities.” The new lawsuits find these same concerns at the center of the Willets Point plan, approved in Bloomberg’s final months in office, yet a spokesperson for the city’s Law Department refused to comment yesterday: “We intend to respond to the claims at the appropriate time and only after we have been served with the papers.”
Bloomberg’s original plan called for the creation of a new neighborhood on the full 62-acre site, with almost 2,000 units of affordable housing, but that plan radically changed in the aftermath of the Great Recession. The latest scheme entails just a first phase and cuts the number of affordable-housing units in half. It also won’t deliver on any of that housing for another decade. More importantly, the focus of the project has shifted away from Willets Point to a 30-acre parking lot across the street. This lot is in Flushing Meadows-Corona Park.
Both lawsuits charge the city can’t use the parkland for a shopping mall without getting the prior approval of the state legislature. The state’s highest court has ruled that parkland is “impressed with a public trust,” requiring the state’s OK before it can be “alienated” or used for an extended period for “non-park purposes.” In order to take the parking lot now used for Citi Field, the Bloomberg administration cited a 1961 state law that made way for the financing and construction of Shea Stadium. This law listed temporary uses permitted for the parking lot, all claimed to be in the public purpose, including “recreation, entertainment, amusement, education, enlightenment, cultural development or betterment, and improvement of trade and commerce.”
“The state legislature didn’t intend to allow a shopping mall — that’s clearly not a public purpose,” says attorney John Lo-Beer, who’s filed one of the lawsuits on behalf of Queens State Senator Tony Avella, citywide nonprofits the City Club and NYC Park Advocates, neighborhood businesses and residents, and users of the park. One of the plaintiffs recently attended a circus on the Citi Field parking lot. The circus is a permitted use under the 1961 law, Lo-Beer says, but the shopping mall is not. The mall isn’t temporary, and it’s not improving but rather engaging in trade or commerce.
Lo-Beer also says the mall was not voted on by other city government entities as required under ULURP, and the lot was not zoned to allow for the project. The developers — the Related Companies and Sterling Equities, the real estate firm of Mets owners Fred Wilpon and Saul Katz — are supposed to clean up a first 23-acre slice of Willets Point before construction of the shopping mall can begin. Yet they have long claimed the mall is necessary to generate revenue for a more costly future cleanup before housing can be built on that Willets Point parcel. The city is already giving them almost $100 million for site work. The developers can pay a $35 million penalty if they choose not to proceed with the housing. Lo-Beer notes the city has never shown a written agreement providing for mall profits to be used in a cleanup. The city contends that cleanup is purely the developers’ responsibility.
Sterling and Related initially proposed to build a casino and hotel on the Citi Field parking lot and to pave over all of Willets Point. “Nobody’s seen their revised proposal,” Lo-Beer says. When The Investigative Fund had asked for the developers’ final proposal, the city instead sent the project’s revised Environmental Impact Statement and slides used by Bloomberg at the plan’s unveiling. In their first submission, adds Lo-Beer, the developers “clearly indicated that they had to modify the zoning and alienate the parkland.”
“Bloomberg just pushed this through without any regard for state law or the ULURP process,” complains Avella. He describes this behavior as “typical” of the last administration. Avella hopes the lawsuit will convince de Blasio to kill the deal. “He should say, wait, the city can’t do this, because it’s his administration that has to respond to the lawsuit.”
Another plaintiff, the City Club, is a good government group founded in 1892 to fight Tammany Hall. It was resuscitated last year in reaction to Bloomberg’s plan to rezone 73 blocks of East Midtown to allow for taller buildings. “There has been a tendency for the city to take the most efficient routes to accomplish development, and people are reacting to the lack of public process,” says the club’s president, Michael Gruen.
Now Bloomberg’s grand plans have put the spotlight on de Blasio, as well as some of his chief allies in city government, like Julissa Ferreras, the new chair of the City Council’s Finance Committee. Ferreras has already accepted the Willets Point developer’s offer of $15.5 million over 25 years to fund a new nonprofit aimed at fixing up Flushing Meadows-Corona Park. Earlier last year, Ferreras’s park nonprofit took $10 million over 23 years in exchange for her support of the US Tennis Association’s expansion in Flushing Meadows.
“Flushing Meadows is a park under siege by commercial development, and the mall is just the most egregious example,” Gruen says. “No one would propose a mall for Central Park. The outer boroughs ought to be treated equitably.
“We don’t know much about the new mayor now — we’ll have to wait to see what happens,” he says. But the plan’s loss of affordable housing should sting de Blasio, because “affordable housing is his key issue.”
The second lawsuit has been filed on behalf of dozens of merchants still on Willets Point who employ an estimated 200 workers. The Bloomberg administration’s offer of relocation assistance was deemed inadequate by these plaintiffs, who wanted to move together, arguing their businesses depended on each other and functioned as a auto-services market. One of the city’s three relocation programs has now expired. More than 50 of the merchants have recently found a viable location in the South Bronx, according to plaintiff Marco Neira, but they still need money to move. “We continue to seek relocation,” says Ted De Barbieri, an attorney at the nonprofit Urban Justice Center.
“The businesses have been treated very shabbily by the city,” Avella says. “They’re all minority workers, too. I doubt the same situation would happen to more middle-class workers and business owners. Everything they’ve been promised has not come to pass.
“It’s disgraceful, especially when you consider the city is trying to fund some of the richest developers in New York. It’s indicative of the Bloomberg administration and how they treated ordinary people.”