Last Wednesday, the city approved a proposal that could lead to $17.8 million in tax breaks for the Related Companies, the developer that plans to transform the massive landmarked Kingsbridge Armory into a shopping center.

The city’s Industrial Development Agency (IDA), an arm of the Economic Development Corporation (EDC), voted to provide Related with a preliminary tax break inducement, a non-binding agreement that will allow Related to secure funding from banks and purchase supplies.

The vote occurred during the agency’s board meeting despite a motion by a representative for city comptroller and board member William Thompson to delay the vote. All but two of the agency’s 14 board members — Thompson and a representative of Manhattan Borough President Scott Stringer’s office — voted to provide the preliminary inducement.

For the Kingsbridge Armory Redevelopment Alliance (KARA), a coalition of community groups, unions, religious leaders and local residents backed by support from local politicians, the decision was a setback. The Alliance hoped the agency would postpone its decision until Related committed to negotiating a community benefits agreement (CBA) that includes living wage jobs (40 hours per week at $10 an hour, plus benefits), more community space for youth and seniors, schools to alleviate overcrowding, and an option for employees to unionize.

A week earlier, KARA held a rally on the morning of an IDA public hearing on the steps of City Hall and brought approximately 80 members of the community to demand negotiations with Related.

Electeds Rally for KARA
Several elected officials came to voice support for KARA, including Council Majority Leader Joel Rivera, Councilman Oliver Koppell and Thompson. During the hearing, representatives of Congressman Jose Serrano and State Senator Pedro Espada urged the board to postpone its decision until Related met with KARA.

“While I am in favor of this project moving forward, I am concerned that the salary levels and number of future employees may be inaccurate,” Thompson said in a statement. “I also am concerned that the [agency] voted today on a project that is not allowed under its own policies.”

The IDA provides tax benefits exclusively to commercial and industrial organizations that are expanding in empire, empowerment, and industrial business zones. Under these requirements, the development project at the armory would not qualify for tax benefits. [The IDA has also approved millions of dollars in tax breaks and subsidies for the new Yankee Stadium project and Related’s Gateway Center Mall project at the Bronx Terminal Market.]

Janel Patterson, an EDC spokesperson, said the board was making an exception because the armory is in a “distressed” neighborhood.
“It’s not an empowerment zone,” said Patterson, “but it’s very underserved.” She added later, “It’s a criteria that we always judge proposals by.”

KARA supporters say the IDA decision will exacerbate the travails of the working poor.

“Would you be willing to live on 30 hours [of low pay] a week with no benefits?” asked the Rev. Doug Cunningham, pastor at New Day United Methodist Church in Bedford Park. “I experience the social costs of jobs that don’t pay. The IDA has the responsibility to the public, not just to the developer. We are not blocking the project, but it needs to benefit everyone and not become a center for working poverty.”

Citing CB7 Support
Despite Thompson’s concerns and KARA’s protests, EDC Chairman and IDA board member Seth Pinsky pointed to Community Board 7’s approval of the project as proof that local residents support the tax breaks, even though the board never voted on whether to support them.

CB7 Chair Greg Faulkner admitted there had not been a vote, but said he sent a letter to the IDA in support of the project on behalf of the board’s Executive Committee, which is made up of six of the board’s 32 members.

[Usually, before a community board takes an action such as writing a letter of support, a quorum must be present and then a majority of members must vote in support of an action. Faulkner said that he now needed to get support for the project on the record.]

Faulkner said the board agreed in principle on almost all of KARA’s demands and will continue to fight for community benefits.
Faulkner hopes to create a negotiating committee that includes members of the community board, City Council, borough president’s office, and KARA.

“We’re going to be tough on [Related],” Faulkner said. “I’m not going to vote for a project without a strong community benefits agreement.”

Related did not specifically mention a community benefits agreement, but spokesperson Joanna Rose said in an e-mail that Related wants to ensure the armory project “is a benefit to the entire community.” She added, “We are working closely with the local council member, community board, borough president and other area stakeholders, and are hopeful that KARA will join the ongoing discussions in partnership with these stakeholders.”

Neil Stephenson, legal counsel for KARA, says a successful community benefits agreement should be negotiated between the developer and an organization that represents the community, as has been the case with most substantial CBAs signed in other parts of the country.

He added that although elected officials and community boards play an important role in supporting community organizations, they should not negotiate or sign community benefit agreements because it would compromise their role in the land use review process and might make the CBA difficult to enforce.

Related must now go through the city’s uniform land use review procedure (ULURP) and draft an environmental impact statement that outlines how the community will be affected by the development project.

KARA plans to continue urging Related to negotiate an agreement before the ULURP process takes place.