Wednesday, September 2nd, 2009
7

Bloomberg's Rich Friends, and His Silence on Affordable Housing

CAW!As you might expect, today's big story on Mike Bloomberg's financial tentacles and the city, from the Voice's Wayne Barrett, is long and winding, and not nearly as exciting as one brave bird's suicide attack on the mayor's plane. Much of it is innuendo and unanswered questions. (That's sort of fine and right, though: it's important, with such a mayor as ours, that you acknowledge that there's lots we cannot find out!) But there are a couple of things that, if you can parse them, you might want to give some attention.

1. Remember when all the businesses downtown, in the "aftermath of 9/11," decided that they had to bluff about their plans to move to midtown, which were patently fake lies, because when they ran the numbers, it was obviously far more expensive for them to move to midtown than to stay downtown? We're still getting hosed over that, which is completely Bloomberg's fault. Still, it's impossible to parse the web of lobbying from the just plain old rich-people-palling around aspect of how the city works. Maybe the lobbying is useless! But how else to explain the bad outcomes of pro-business decisions?

Citigroup, which was the only other office tenant in the Bloomberg LP headquarters building and is now subleasing its vacated space to Bloomberg LP, even lobbied City Hall… on behalf of the Alternative Investments Group, the very unit located in the Lexington Avenue tower. Goldman Sachs had so many issues before the administration that it took seven pages to list its lobbying activities in the city clerk system (it spent almost a million dollars). When the city and state approved $1.6 billion in low-cost, tax-exempt bonds for Goldman's new downtown headquarters in 2005, [the mayor's office] justified it by saying that Wall Street's top firm might otherwise leave the city. Last year, the Daily News editorialized that Bloomberg was "taken to the cleaners" in the Goldman deal. The city and state "are in line to forfeit a whopping $321 million to Goldman because the governor and mayor agreed to contract terms that were downright foolhardy…" [N]o one knows how big a Bloomberg customer Goldman was when it won this largesse.

The end is sort of where Barrett goes wrong; it's irrelevant how big a client anyone was of anyone! The way they are in bed goes deeper than that. Of course it does! This is New York, baby!

2. The other is the dismantling of affordable and middle-class housing, as epitomized by the to-market race of Stuyvesant Town, purchased by the Speyers, who are deeply entwined with the mayor, in cooperation Merrill Lynch, which also owned 20% of Bloomberg LP, until Bloomberg bought them out (for pennies) last year. The mayor quite clearly does not want Stuy Town tenants protected.

[W]hen the Stuy Town tenants brought the Roberts v. Tishman Speyer case in January 2007, and when they won that unanimous Appellate Division decision this March, Bloomberg once again took a "neutral" nosedive, refusing to join other city officials on the side of the tenants. Since a city tax subsidy, J-51, is at the heart of the suit, the city's silence is deafening. The complaint alleges that Speyer et al. want to have their cake and eat it, too, seeking to retain millions in tax breaks linked by law to rent regulation, while, at the same time, deregulating thousands of apartments.

Manhattan Borough President Scott Stringer, hardly a Bloomberg critic, filed amicus briefs in support of the 3,000 tenants covered by the Roberts complaint twice already and is planning a third. Quinn joined an overwhelming majority of the Council in filing papers in support of the tenants last month, contending that Speyer and company "would unwork decades of commitment" by the Council and, by extension, the government that implements the laws it passes, "to require that J-51 units be rent-stabilized."

Instead of joining them, Michael Cardozo, the mayor's corporation counsel, issued a statement in March indicating that the city "takes no position on the merits" of the case. Stringer says that the mayor should "absolutely" have joined him in siding with the tenants in court….

There, now you did some learning today, go watch some funny cat videos for a while to relax.

7 Comments / Post A Comment

HiredGoons (#603)

HE can afford the housing, Choire.

NinetyNine (#98)

The Goldman breaks were pretty shoddy, but one counter-argument is they did lead to the only new major commercial construction downtown in over a decade (7WTC doesn't count, since it was all funded by insurance). At the time, Pataki was still pushing for a West Street tunnel as a sap to Brookfield properties (World Financial Center landlords), a feature that would presumably benefit GS also opposite West Street. But GS didn't care for the tunnel (which no one besides Brookfield wanted), and only wanted to have the construction done. Pataki finally gave up on his white elephant tunnel, and West Street is still years from completion. It would have been ten years further down the line. I expect Goldman will make some grand gesture with the money (donate it to the Memorial or something), just to poke a finger about how right they were about just how bad the delays would get.

NinetyNine (#98)

Sorry, meant to say if the tunnel went through, it would have pushed completion ten years down the line.

Rod T (#33)

Does Bloomberg even own a cat?

HiredGoons (#603)

as Mayor, by default all the feral cats in the 5 boroughs are his property until such time (if ever) he leaves office.

I don't know, I thought all of the downtown largesse was really at the behest of Shelly Silver, whose district is there. Now, moving largesse intended for downtown to, say, 8th Avenue and 40th Street, that's a different story – a purely municipal decision, I believe. Andyou don't need to get exotic to find financial connections between Bloomberg and GS or any other Wall St firm – they bought his products and made him a multi-billionaire.

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