A Cool $5 Million

money 782707 A Cool $5 Million
For a long time now, opponents of Forest City Ratner’s Atlantic Yards project said that a grassroots group supporting it, BUILD, was astroturf.

BUILD, which was formed for the express purpose of supporting Atlantic Yards, helped create a community benefits agreement, signed in June, that spelled out how many jobs and affordable apartments at the project’s basketball arena and 16 office and apartment towers should go to low-income or neighborhood people. The agreement also stipulated that BUILD would be in charge of the job training program.

Which made skeptics wonder, was this a “community benefits agreement,” or a “BUILD benefits agreement”?

Now comes word from Develop—Don’t Destroy Brooklyn that BUILD has been given $5 million by Forest City Ratner. Not just word, but rather persuasive evidence (digitized for your convenience), in the form of an application last year to the IRS, on which are scrawled the words “Forest City Ratner Companies – $5 M.”

When asked whether his organization had received any money from Forest City Ratner, BUILD President James Caldwell told The Real Estate, “Absolutely not.”

The $5 million, he said, was a reference to the amount BUILD expects to receive in the next two years. Not that BUILD actually expects to receive $5 million.

“At no time have they said they are going to give us $5 million,” he said. “They would never be in business if they just threw around $5 million.”

BUILD’s lawyer, Sharia Erima, said that the IRS form asks new organizations to project budgets two years in advance, and to list anyone who contributes more than 2 percent of that budget. Out of an excess of caution, he says he listed Forest City as the likely donor.

“It’s a best guess estimate.,” he said. “If you have ever dealt with the IRS, you know you have to be very careful.”

The application, dated Dec. 30, 2004, is an outdated IRS form that was revised in October 2004 and for which the IRS website no longer has instructions. Nor was the IRS press office able to supply any readily. However, the instructions (PDF) for the replacement form specify that in listing large gifts, an organization should consider “amounts from completed tax years only” (PDF) in calculating the budgets.

DDDB spokesman Daniel Goldstein said BUILD had an inherent conflict of interest whether it had received money or not. “If they weren’t paid, then they were promised to be paid,” he said.

The community benefits agreement states, “The Developers and BUILD will seek and secure adequate public and/or private funding for this initiative.” (PDF p. 7) Yet the IRS application lists no one else other than Forest City Ratner as a potential contributor. Does that mean that BUILD’s “best guess estimate” estimates that this job training program won’t inspire a lot of contributors?

Again, Erima said he was being cautious in filling out the form. He said he met with the IRS and went over the application and the agency approved it.

We have a call into Joe DePlasco, but Juan Gonzalez, who had the scoop in today’s News, quotes the Forest City Ratner spokesman as saying that the company has given BUILD free office space but has promised no specific amount of cash in the future. Gonzalez also quotes City Councilmember Letitia James, who represents the neighborhood and who has fiercely opposed the project. She said it “raises questions of conflict of interest” because BUILD directors are also members of the Community Board that will potentially review decisions regarding the project.

Caldwell is listed on the application as receiving a salary of $125,000. But he said that amount was what he expected to receive and that nobody was getting paid now.

“We have volunteers,” he said. “We haven’t been paid for the last 20 months. People don’t think that black people volunteer—I don’t know why—but we do have some people in the community who saw this as a good thing for the future and they are volunteering to make it happen.

“I’ve been working 18, 20 hours a day on this thing. I just have good credit. Like anybody else in this country, when I need money, I borrow it.”

As for the public relations firm that is representing them, Caldwell said he didn’t know who was paying them.

The Terrie Williams Agency just called us up one day and said they would be doing our p.r.,” he said.

–Matthew Schuerman