New Yorkers Kept in Dark About Outcomes of Recovery Zone Facility Bond Program
UPDATE April 7
After the release of our report, and as reported in Crain’s Insider last week, we have confirmed that New York City Economic Development Corporation officials agreed with one of our recommendations regarding transparency and are considering ways to update the agency’s website to better inform New Yorkers on the status of proposed projects.
A city entity charged with allocating $122 million in Recovery Zone Facility Bonds regularly announced preliminary approvals and held public hearings on projects but left New Yorkers in the dark when deals fell through according to new report released today by Good Jobs New York. The report: Kept in the Dark: Poor Reporting on New York City's Recovery Zone Bond Deals exposes a confusing and un-transparent process that prevents New Yorkers from holding companies accountable for job creation. The report is available at www.goodjobsny.org.
“Despite historical changes in subsidy disclosure at all levels of government as part of the Recovery Act, the Recovery Zone Facility Bond Program fell dramatically short,” said Bettina Damiani director of Good Jobs New York and an author of the report. “GJNY spent countless hours breaking down the byzantine approval process to determine which projects received these special bonds when basic details should be at every New Yorker’s fingertips.”
The report reveals that the Capital Resource Corporation (CRC is a local development corporation administered by New York City Economic Development Corporation) failed to provide adequate information to the public about proposed and approved projects. The program expired in December 2010. For example, officials at public hearings, in press releases and media reports indicate that eight Recovery Zone Facility Bond projects (RZFB) would create 675 full-time equivalent permanent jobs and 954 construction jobs. In fact, only four projects won a total of $66 million (of the $122 million of RZFBs allocated to New York City) and are expected to create approximately 281 full-time equivalent permanent jobs and 498 construction jobs.
The report pieces together which projects fell through and which received RZFBs and urges the city to establish a streamlined process to make the information more easily available, similar to the worthwhile New York City Stimulus Tracker. There may be legitimate reasons why a project was unable, or unwilling to complete the approval process, but the public deserves to know why.
The report also includes a chart of the proposed and finalized projects, an interactive map and summaries of five projects that garnered attention from the public: Albee Development, Arthur Management Corp c/o St. Barnabas, Broadway Stages, ESmith Legacy and WytheHotel, LLC.
The report includes the following policy recommendations:
Follow through – Once a proposal has been posted in a public notice or on the agency’s website there should be a way to track it all the way through the allocation process. If the deal falls through, the public should be told why and when.
Ensure the community benefits - Though economic development officials staunchly oppose local hiring requirements at subsidized projects, at minimum, officials should create a broad measure of local hiring goals and if an applicant chooses to agree, that should factor into the economic benefits of that application.