Forest City Ratner
1 MetroTech Center
Brooklyn, New York 11210
April 12, 2004
Dear Mr. Ratner and Members of the Forest City Ratner Company Board:
I took the liberty of visiting your company’s Website the other day since, as a Brooklyn resident, I’ve been very concerned about the proposed Atlantic Yards development project. I also tried to look up Mr. Ratner’s home address since, having noticed that the Ratner Company was located in the 1 MetroTech Center, I thought Mr. Ratner might also reside in Brooklyn and understand some of the concerns that local residents have about this new project. Sadly, I was not able to find his home address, so I have to assume that he does not live here. If he did, I don’t think he would be proposing to ruin his own neighborhood with irrational development projects.
You must forgive my momentary lapse into emotionally charged language—I know you are little persuaded by that. Instead, this letter is—as you yourself claim to be—strictly concerned with business. I am writing only to urge you to follow highly rational principles in your decision making, to maintain your focus on the bottom line, on doing what makes economic sense, on increasing profits and "building superior, long-term value for shareholders," to quote briefly from your company’s mission statement.
So let’s talk about the numbers. While I am not so good at math, I’ve been pretty struck by what these statistics seem to say. The goal of your plan, as described by the City of New York Economic Development Corp., "is to attract corporate jobs to Brooklyn by creating 5.4 million square feet of office and retail space by 2013." This will ultimately require at least 300 business to be displaced, hundreds of buildings to be demolished and thousands of residents to lose their homes. And, yes, I momentarily forgot that these are small businesses, little individuals, low tech (or as some say historical) buildings, most of which will not show up on your corporate radar screen and do not matter in the least to your shareholders.
Those individuals may, however, be interested in hearing that, as of January, 2004, there was a little more than 15 million square feet of vacant office space in Manhattan, that your fully built Atlantic Center project is one third empty and lacking an anchor tenant, and that your latest development, 12 MetroTech, which will be completed sometime this year, has, in addition to 1 million square feet of office space currently leased to the federal government, 175 thousand square feet of available retail space that has yet to be rented.
Sometimes, when things get too abstract, it helps to concretize them through easy to understand analogies (ones I’m sure your shareholders would appreciate in trying to make sense of the existing 15 million square feet of vacant office in Manhattan and your proposal to build 5.4 million more in Brooklyn). Well, the Empire State Building has two million square feet of office space (10% of which happens to be vacant). So, if you multiply two times seven and a bit, you get fifteen. Oh my, that does sound like a lot of office space.
But perhaps a stadium analogy will even better help your shareholders understand what you are proposing: Madison Square Garden (the stadium part at least) is a million square feet. So your plan is to build 5.4 Madison Square Gardens right in the heart of Brooklyn. With seven Empire State Buildings worth of vacant office space in Manhattan, and with your proposal to build the equivalent of two and a half Empire State Buildings right in downtown Brooklyn, one does have to wonder who is going to be leasing this space. Well, you say, someone will, because it is the kind of office space that large corporations need, i.e., less expensive, contiguous, and newly wired for today’s economy. Plus, it will create jobs for Brooklyn.
I hate to be such a stickler for numbers, but it seems that those white-collar jobs that you are talking about creating have actually been declining in the city, even in the wake of the late-’90s economic boom. In fact, of the 132,000 jobs that were created in New York City between 1997 and 2002 (yes, I too was surprised by how small that number was), the financial sector actually lost 21,000. The construction sector is doing well (thanks to your company, I suppose), as are lower wage positions in the "information" and "business service" sectors, but I guess it will come as no surprise that jobs in sectors with historically higher wages—manufacturing and transportation, for instance—steeply declined.
Exactly how many jobs do you plan to bring to Brooklyn? You will be, de facto, destroying from 900 to 1500 with the 300 small businesses that will be displaced. And while that doesn’t seem like that many I suppose when we’re talking global multinational corporate development, I think you will be interested to know that there were only about 7,000 new retail jobs created in New York City between 1997 and 2002. Can we really afford to destroy a thousand existing jobs? And even if you are hoping to create more net new jobs, what will these jobs pay anyway?
The Forest City Enterprise Strategic Equation is, I read on your Web site, quite catchy and quite simple: creativity plus diversification plus consistency equals new value. So, regarding the creativity part, I have to ask whether you have seen the PC Richards/Modells building that you erected? In terms of diversification—though I’m sure you will agree that we have covered this subject pretty extensively thus far—can you explain why you keep building the same thing? As for consistency, I too applaud this as a value, but don’t you agree that it is probably a good idea to try to fill the space you’ve already built? And since, Mr. Ratner, it is clear that you are not very responsive to arguments about community values, I hope that this discussion about financial values has at least made you question whether you and your shareholders really want to invest here in Brooklyn.
Park Slope resident