Acadia was awarded development rights to City Point in downtown Brooklyn—a huge, three- phase building project that is replacing a once-vibrant mall and public meeting space with luxury retail, residential and commercial space. The development has already displaced approximately 50 locally-owned small businesses, and more than 200 workers. Construction was jumpstarted in 2010 by a $20 million Recovery Zone Bond meant to help distressed neighborhoods. Instead, this public assistance is being used for a luxury development in the third-most-profitable retail corridor in the five boroughs.
City Point is sponsored by a city agency, sits on city-owned land, and is receiving millions in public subsidies. Despite the subsidies, Acadia is creating poverty-wage, no-benefit jobs. The majority of construction workers on Acadia’s Phase I received low wages and no retirement, health, sick pay or other benefits. Some workers reported making $15/hour– less than half the average wage paid for similar work. Furthermore, there are no commitments that the permanent jobs at this development will pay living wages or be made available to local or displaced workers. So far, Acadia has only committed to creating 108 construction jobs and 68 permanent full-time-equivalent jobs—far fewer jobs than previously existed at the mall.
For Phase II, Acadia selected BFC Partners to develop the 15-story residential tower that includes so-called affordable housing, despite the fact that residents in at least three other BFC developments in Manhattan and Brooklyn have had to seek legal help to address problems with construction quality. Acadia stepped back up to the tax break plate, and is currently trying to score a $400-million tax-free loan from the city’s affordable housing financing agency, the Housing Development Corporation, for Phase II of the project.
An honorable mention goes to the NYC Economic Development Corporation, the city agency responsible for putting together this deal with Acadia. The EDC could have leveraged taxpayer money to create quality local jobs, assist displaced small business owners and workers, and create much-needed and truly affordable housing for downtown Brooklyn, but instead it let the developer take a walk on delivering benefits to the local community.
Acadia Realty Trust is a publicly-traded Real Estate Investment Trust (REIT) and one of the largest real estate owners in New York City, owning nearly 2.3 million square feet. Acadia specializes in community shopping centers and mixed-use properties in urban areas, primarily in the Northeast, Mid-Atlantic and Midwest, with nearly half of its properties in New York State. The company has $1.65 billion in assets.
Out of Business: The Crisis of Small Businesses in Rezoned Downtown Brooklyn, Families United for Racial and Economic Equality (FUREE) and the Urban Justice Center at http://www.urbanjustice.org/pdf/publications/oob_31jul08.pdf
Kept in the Dark: Poor Reporting on New York City's Recovery Zone Bond Deals, Good Jobs New York at http://www.goodjobsfirst.org/sites/default/files/docs/pdf/rzfbreport.pdf
See Carpenter prevailing wage, pg. 11: http://www.comptroller.nyc.gov/bureaus/bll/2012-pdf-files/220Jan2013-Final.pdf
NYCEDC, Albee Development LLC, NYCCRC Project Cost/Benefit Analysis, at http://www.goodjobsny.org/sites/default/files/docs/crc_albee_public_hearing_package.pdf
CB11 Letter to Mathew Wambua http://ny.curbed.com/archives/2011/04/29/toren_ignorin_instead_of_explorin_warring_residents_flooring.php
The Brooklyn Paper, Dec 12, 2008 at http://www.brooklynpaper.com/assets/pdf/31_49bp.pdf