Forest City Ratner paid former U.S. Senator Al D’Amato’s lobbying firm $400,000 in 2006 and 2007 to lobby federal legislators regarding eminent domain and other issues important to the developer of the $4 billion Atlantic Yards project in downtown Brooklyn.
Forest City paid Mr. D’Amato, who left the Senate in 1998 after his defeat by Charles Schumer, about $200,000 in 2007 through the lobbying firm he founded, Park Strategies, according to federal lobbying records. Mr. D’Amato, who made headlines for getting paid $500,000 to make a phone call in 1999 to clear the way for a $230 million deal, listed “states use of eminent domain” as the subject of his efforts on behalf of Forest City, among other issues.
Park Strategies was also paid about $200,000 in 2006, then listing as its targets specific pieces of legislation that would have restricted the use of eminent domain, a key ingredient in the successful development of Atlantic Yards. Most of the potentially restrictive eminent domain legislation came as part of a backlash to the Kelo v. City of New London Supreme Court decision in 2005 upholding a government’s right to seize private property for private development.
The payments to Mr. D’Amato’s firm continued for a year following the state’s approval of Atlantic Yards. Forest City, in fact, continues to spend relatively heavily on lobbying, both in Washington and in New York, records show.
The firm, led by chairman Bruce Ratner, listed more than $1.14 million in lobbying-related expenses in 2007 at the city and state level, according to numbers from the New York Temporary State Commission on Lobbying.
For 2006, the developer took third place on a New York list of organizations’ lobbying expenses at the city and state level, listing some $2.1 million in spending. At the time, Forest City was in the midst of gaining approval for Atlantic Yards.
After the Kelo decision, Mayor Bloomberg in 2005 also advocated against one of the leading Congressional bills that would have restricted the use of eminent domain, saying it would do damage to cities’ economic development efforts. And while the bill, introduced by U.S. Representative James Sensenbrenner, passed the Republican-led House 376 to 38 in 2005, it did not make it out of the Senate. The bill would have blocked federal economic development funds to states that used eminent domain—a piece of legislation that the city argued would have made initiatives like Times Square’s revitalization impossible.
With no major eminent domain legislation pending in Congress—and over two years since Kelo—Mr. D’Amato’s lobbying targets aren’t quite clear. Park Strategies lists “funding of real estate development linked transportation projects; [and] real estate project infrastructure development,” as lobbying subjects, as well as eminent domain. Park Strategies did not respond to requests for comment.
AS FOR LOBBYIST spending in New York State, Forest City spent far more than any other major developer (though Columbia University, which last year pushed through City Council approval of its plan for a 17-acre, $7 billion expansion into West Harlem, listed more than $2.2 million in lobbying expenses).
In a statement, Forest City said it strives for transparency with its lobbying reports, suggesting an explanation for the high numbers. “When it comes to lobbying reports, we definitely err on the side of disclosure, including even law firms that do work for us,” Forest City spokesman Loren Riegelhaupt said in a statement. “When it comes to sharing information with the public and governmental bodies, there’s no such thing as too much, as far as we are concerned.”
Compared with Forest City’s $1.14 million in state lobbying between nine firms, developer Sheldon Solow, trying to gain approval for a $4 billion riverfront development just south of the United Nations, listed about $700,000 in lobbyist spending; Stephen Ross’ Related Companies, with projects throughout the city, listed more than $245,000, not including money spent with Vornado Realty Trust on the Moynihan Station project.
“This is a huge project involving many different branches of government and agencies,” said Dick Dadey, the executive director of Citizens Union. “It’s an exorbitant amount of money, but I’m not surprised given how much [Mr. Ratner] has fought to build this development.”
For Mr. Ratner, a bulk of the spending appeared to go into land-use legal fees, as the land-use attorneys at Fried, Frank, Harris, Shriver & Jacobson LLP recorded more than $715,000 in lobbying payments from Forest City. The bulk of expenditures for other developers often goes to land-use law as well.
Forest City hired other firms outside of land-use law, including the Albany-focused Patricia Lynch Associates, Geto & de Milly, and Wilson Elser Moskowitz Edelman & Dicker. The targeted subjects listed by the lobbying firms range from general economic development to issues with Atlantic Yards, along with other Forest City projects outside of the city.
So if Atlantic Yards is already approved, why spend so much on advocacy?
According to elected officials and others involved with the project, there are still various awards and government processes in the project for which it could be beneficial to have access to city, state and elected officials.
Such was the case last summer when legislative changes to a residential tax break, known as 421-a, would have affected Forest City’s plans to build housing at Atlantic Yards. After a lobbying push, the firm, with the help of the Real Estate Board of New York, successfully advocated to have a carve-out inserted into the tax break with a value estimated by the city at $300 million—an exception that was later scaled back.
Also on the horizon is the receipt of tax-exempt bonds for affordable housing, for which Forest City will likely be competing with numerous other developers. The city and state are limited in the amount of housing bonds they can issue, and as the city seeks to add tens of thousands of units of affordable housing in coming years, demand is outstripping supply.
The awarding of the bonds is something of a subjective process; the president of the city’s Housing Development Corporation, Marc Jahr, said there are numerous factors that go into choosing which developers get the tax-free bonds.
“There’s no one single factor that would go into making a decision,” he said. “We’re going to look at a number of factors with project readiness.”
As for Atlantic Yards specifically, Mr. Jahr said he thinks Forest City will ultimately be able to find financing to build the affordable units, calling it an “important project.”
“How the financing will shape up with Atlantic Yards in its totality is yet to be seen,” he said.
Beyond the housing, efforts such as building community support for the project continue, said lobbyist Richard Lipsky, who was brought on by Forest City in 2004.
“The effort to create community support for the project also becomes important when you’re looking to create a fan base and support for the team,” said Mr. Lipsky, who is seeking to enga
ge the community in youth sports programs connected to the project, which will include an arena for the New Jersey Nets.
Forest City’s business outside of Atlantic Yards could also explain the high post-approval lobbying amounts. The firm is engaged in a major development project in Yonkers, and is involved in another downtown Brooklyn project to build a CUNY lab and a residential skyscraper.
More generally, Mr. Ratner tends to be involved in numerous city- and state-administered development projects, including eminent domain for the new New York Times building at 620 Eighth Avenue; and Brooklyn’s MetroTech Center. For such types of projects, government access remains beneficial, and, in many cases, necessary.